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

To: GraceZ who wrote (48722)	1/4/2006 12:39:32 PM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

Grace I think the glass is half full. You are all right in your own way but these are unique times unlike any before us due to this housing and credit bubbles. Greenspan, the bankers, RE industry and short term focused nature of younger Americans have created this monster before us. I really start to feel old at 45 when I see all the new age stuff and now popular beliefs going on around me that didn't even exist 7 years ago<g>

To: GraceZ who wrote (48722)	1/4/2006 2:04:12 PM
From: anachronist	Read Replies (1) \| Respond to of 110194

So when someone sells their previous house they are spending the proceeds on something else and borrowing 100% to buy the next one? No, and I never made that claim. Equity appreciation is capital gains, not savings. Savings is foregone consumption. So when someone sells their house today 90% is capital gains, and 10% is savings (the amount of the principle of the loan paid back). My assertion is that most 1st time home buyers are not using savings to buy homes, and trade-up buyers are using their capital gains from their previous home to buy their next one. So to repeat what I said before, house price inflation is not consuming savings. It is consuming people's income and ability to save, as evidenced by the net negative personal savings rate for the year 2005.