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To: Dale Baker who wrote (47628)	8/7/2006 8:08:39 AM
From: John Carragher	Respond to of 118717

When housing took a similar turn in the 1970s, remember the $2000. tax credit if you bought a brand new house. had to be brand new never lived in, tax was incentive to help housing construction. ps you had to live in house for 24 months or lose the tax credit. no expections idea was prevent flippers from buying. even if you got a corporation relocated job etc you lost the tax credit unless you bought another brand new constructed home. irs formed task force to post audit all the tax forms and got back a lot of the credits issued on folks who moved prior to 24 months and do not purchase another newly constructed home.

To: Dale Baker who wrote (47628)	8/7/2006 8:26:41 AM
From: JohnM	Read Replies (1) \| Respond to of 118717

Krugman argues this morning that the housing market is in for a harder landing than anticipated and that the smoky wisps of a recession can be smelled. Op-Ed Columnist TimesSelect Intimations of Recession By PAUL KRUGMAN Published: August 7, 2006 select.nytimes.com Unfortunately, the piece is behind the Times Select wall. Interesting reading if you can find it elsewhere.

To: Dale Baker who wrote (47628)	8/7/2006 1:45:01 PM
From: Rarebird	Respond to of 118717

The economic data being released is very poor. The real estate market, which has been one of the powerful engines for the economy in the last several years, is showing signs of wear, to say the least. Over the last year, new and existing home sales are down 11% and 9%, respectively. Likewise, the supply of existing homes for sale has increased a staggering 39%! Finally, with mortgage applications for home purchases down 20% from a year ago it seems likely the housing market bubble will show much deeper cracks in the future. Moreover, I'm a bit concerned about the markets reaction to relatively bad economic news. Previously, equities rallied with the underwhelming GDP numbers. Then on Friday, the initial reaction to the poor job growth numbers was to rally again. Why? Because it was perceived the data was finally poor enough to make the FED quit raising rates. Not only do I think that rooting for poor economic data is not likely to be profitable in the long run, but it's morally reprehensible.