Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: shades who wrote (62578)	6/2/2006 6:32:40 PM
From: Broken_Clock	Respond to of 110194

It's possible shades. <<I definitely expect another year of positive real (inflation-adjusted) growth for residential remodeling, supported by a record level of homeowner equity (more than $11 trillion at the end of 2005). Everything included, the residential fixed investment component of GDP should top out in the first quarter of this year and then recede gradually during most of the 2006 - 2007 forecast period. Although home sales and housing production will be waning, ongoing increases in household wealth generated by positive (albeit slower) rates of house price appreciation will continue to provide solid support to consumer spending. The wealth effect will materialize whether or not housing equity is “withdrawn” via cash-out refis or home equity loans.>> But the downside risk is huge. Stats show 25% of "real" jobs(i.e. manufacturing) have left the country, never to return, in the past 5 years while 40% of new jobs are RE related. A downturn in housing that cascades from those over-leveraged will impact values for even those addicted to Heloc-oin.

To: shades who wrote (62578)	6/2/2006 8:06:42 PM
From: GST	Read Replies (1) \| Respond to of 110194

Savings from INCOME in Japan have historically run in a range of 20 to 25% of income. In China the figure is in the range of 45% of income. In the US it is 0%. Japan used property as collateral for loans to buy more property, but that was not a dominant trend. The dominant trend was for large corporations to borrow against RE to finance capacity for export. Home equity loans had nothing to do with Japan having money to spend -- they were and are a nation of savers. The largest pool of savings is controlled by middle aged women.