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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (44960)	1/22/2006 8:05:22 PM
From: Tito Smiles	Read Replies (1) \| Respond to of 116555

Greetings to mish and the thread from a longtime lurker. Excellent post, BC. I likewise don't see how they can keep the game going once the RE bubble falters, which appears to have started happening already. The RE bubble is the economy's Achilles heel and the "soft landing" consensus is oblivious to it (or in denial).

To: Perspective who wrote (44960)	1/22/2006 11:12:54 PM
From: mishedlo	Respond to of 116555

BC you are correct. I have indeed concluded the same thing. I have commented on it may times. It is even conceivable to me the FED knew it and did ut on purpose. I can envision that late in the game Greenspn reralized what he had done. Thy might have chosen to risk a larger consumer housing bubble to prevent a collapse in banks at the time. The problem as you say is "what's next" but corporations in general are better off than in 2002 and the question remains is how much of the worst trash were banks able to unload into pension plans, consumers, hedged funds, etc etc etc. Is it remotely possible that although the bubble is bigger now, it is more evenly spread out, or at least spread out in ways that corpoarations now have enough cash on hand to attempt to bust the bubble now? Then again, the FED has been totally stupid so why should they have any clues now? Regardless, of the answers there is no conceivable bigger bubble that can be blown. Mish

To: Perspective who wrote (44960)	1/22/2006 11:55:14 PM
From: Claude Cormier	Respond to of 116555

- Now, the big question is whether anyone knows how to rescue a real estate bubble. Could it be that the last one will be the dollar bubble?

To: Perspective who wrote (44960)	1/24/2006 10:40:00 AM
From: rudyt	Respond to of 116555

The thing about real estate is that to me the bubbles are area specific.I'm not an expert but from what i can tell not all area's are at bubble proportions.In Toronto Ontario(where I live) which I concider a world class city the price of the average home has gone up about 70-80% in the last 10 years.While this is a good increase I wouldn't say its a bubble.Area's like California and Florida, which are in bubble territory could continue if artifitially low interest rates continue. Also if you believe that commodities will continue to rise in the long term you have to believe that this bubble still has some legs since it takes many commodities to build a home. To me the bubbles will continue and the next round of inflation(money supply growth)will go into commodities and gold. The Fed's refusal to let the 'tech bubble' bursting take its course, taking interest rates to 1% created the next bubble in real estate.Now with the Fed raising interest rates coming to an end they're setting the stage for the next bubble in gold and commodities. Anthony