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

To: russwinter who wrote (46998)	12/10/2005 4:56:13 PM
From: Ramsey Su	Respond to of 110194

Russ, don't forget Feb 1, 2006 - GREBB DAY <gggggg> I am simply going over the events between now and then AND how I may be able to make a buck off it. As ild pointed out in that excellent Bloomberg report, the liquidity that these subprimers enjoyed for too long may soon be frozen. Yes, they can raise the rates to satisfy the bond purchasers but they will not be able to find borrowers. Also of consequence are the 2 FOMC meetings, one next week and one the day before GREBB day. Are economic conditions and indicators going to be negative enough for the FEDs to change the standard statement that they had been repeating for a few meetings now? Certainly not next week but it is possible by the Jan 31 2006 meeting. So far I see nothing that is changing our encounter with GREBB day. Ramsey

To: russwinter who wrote (46998)	12/10/2005 6:10:24 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 110194

THERE IS NO HOUSING BUBBLE AND IT IS NOT ABOUT TO "DEFLATE." We don't see a bubble in the housing market. It's true that homebuilding, real-estate transactions and mortgage credit are industries that have boomed thanks to low interest rates. We also agree it's about time for them to contract with the next phase of the business cycle. However, we find that housing prices have very little to do with interest rates. On a national-average basis, U.S. house prices rose 29% between the end of 2001 and the end of 2004, and 20% when deflated by the CPI. But this is a mismeasurement of the "real" increase, since housing and other assets trade in fluid and fast-moving markets, while the CPI is one of the tardiest imaginable measures of inflation. When the price of housing is deflated instead by the best benchmark we know for expressing the dollar's falling value -- an index of gold, silver and platinum prices -- we find that it has actually been declining in real terms since the end of 2001. With precious-metals markets continuing to advance, we anticipate that housing prices, measured in nominal dollars and on a national basis, are more likely to accelerate than decline as inflation takes hold. online.barrons.com