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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: Broken_Clock who wrote (6442)	9/18/2007 8:52:08 AM
From: RonMerks	Read Replies (4) \| Respond to of 50006

Broken Clock, Re- 'the housing/debt crisis' You, Jim and a few others here have all made some great points. But, I think you are all missing the 'MAIN' point. And that is- that you're telling us what we (and the market) already know. The markets have already priced in everything you've all been posting and talking about. It's the unknown and the fear of the unknown that will tank the market. I think that's the reason the bears have been frustrated and the DOW is only 4% off it's ALL TIME HIGH here. On the Fed meeting- I don't think it matters much at all what the cut is- as much as what they talk about in the Fed minutes. And on top of that- I think what Bear Stearns, Goldman and Bank America say- will be even more important than what the Fed does- rate cut-wise. The market wants to turn the unknown- into the known; and how the market reacts this week will be determined by how much information comes out of the Fed and the Financial players. Just my .02 cents. Great discussion lately by the way, and we are actually all getting along rather well- of course I've been warned (3 times) <vbg>. Ron

To: Broken_Clock who wrote (6442)	9/18/2007 10:42:51 AM
From: SwingTrader2006	Respond to of 50006

BINGO!! "Owners' equity as a percentage of household real estate continues to decline. It sank to a record low of 51.7% in the second quarter from 52.2% in the first quarter. What does that mean? Homeowners on the whole own a smaller and smaller chunk of their homes after you take into account the amount they owe on their mortgages. This downtrend has been going on for years (as shown in the chart above, which goes all the way back to the early 1950s), so your first impulse might be to dismiss it as nothing remarkable. But consider how much home values surged between 2001 and 2006. All else being equal, that surge in home values should have left people sitting on larger and larger equity positions. Think about it in simple terms: If you buy a house for $100,000 with a $100,000 mortgage, your equity position is 0%. If your house doubles in value to $200,000, and your mortgage stays roughly the same, your equity position jumps to 50%. But as these figures show, owners' equity has NOT increased. Instead, it has gone down. That means U.S. consumers have borrowed every last penny of additional equity generated by rising prices -- and then some. Or in layman's terms, there is something to the argument Americans have used their houses as ATM machines." B-B-B-B-iiiingo!!