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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: NOW who wrote (46529)	12/4/2005 2:38:06 PM
From: kailuabruddah	Read Replies (1) \| Respond to of 110194

Hawaii RE disconnected from its underlying economy in 1987 or so... Prior to that, prices essentially tracked rents and wages which were in a clear uptrend due to: 1. 1959 Statehood (increased govt/military spending) 2. Legitimate robust growth in tourism 3. 1971 closing of gold window 4. Strong labor union presence 1987 was the start of the Japanese liquidity domino effect - which ceased (very clearly) in 1990-91. The latest bubble/boom has been driven by: 1. Very little new inventory built since 1996 (changing now) 2. Tech Stock options being cashed in 1998-2000 3. AG's War On Savers (FF at 1%) 4. California RE Bubblonians cashing out 5. 1997 RE Tax Law Change - $500K tax-free in RE Capital Gains Obviously #4 (which is the most important driving force) is/was dependent on #3... Thus as the upstream dominoes fall, the downstream domino which is Hawaii ultimately falls...