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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (8175)	8/26/2007 7:49:44 PM
From: MulhollandDrive	Respond to of 33421

That the heavy handed way of deflating the credit bubble is not necessarily the only way. All bubbles should be deflated as gradually as possible so that wide-spread economic dislocation is mimimized. In sum, avoid tactics where investors throw out the baby with the bath water. That's the pragmatic way to handle this. i see.... but otoh, the heavy handed way of inflating the credit bubble WAS. yes, it would be wonderful if you could deflate a BUBBLE gradually, but as we have seen, bubble valuations are wonderful until they STOP try getting credit to fund future purchases of bubblicious properties on a downward trajectory valuation wise... painful stuff, that All bubbles should be deflated as gradually as possible seriously? tell that to holders of the qqq's when the naz was bubbling around 5000 or the nikkei was at 40K why is it that pragmatism rules when it comes to DEFLATING the bubble, but is nowhere to be found during the inflation? oh i know... it's people's homes we're talking about now... somehow that is different..... so now we are insisting on pragmatism when during the RE ascent, nobody care about double digit yoy increases in RE valuations? had pragmatism ruled then, there would be no bubble? <gg> the truly pragmatic way to solve this problem is to revert back to traditional lending standards which take into account true property valuations and future appreciation, of course that will wash out a whole lot of speculative buying at a huge premium, but so what?