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

To: robert b furman who wrote (10102)	9/28/2008 4:34:35 PM
From: Hawkmoon	1 Recommendation Respond to of 33421

Robert.. if I might offer an opinion.. If we look at the historical prices of housing, this isn't the first time we've seen this. Right after WWII pent up demand (and full bank accounts) resulted in something very similar: graphics8.nytimes.com No one who bought a home from 1950 through 1980 actually made much money: So if these policy makers are smart, they will act in such a manner that real-estate price averages will be leveled out over time, as opposed to requiring a deflationary slump. Buy up these Mortgage backed securities, restructure them by stripping out the toxic portions and refinance them via FHA, then either resell the restructured MBS, or the actual mortgages, to be carried back on the Bank's balance sheets. In fact, I think we've seen the end of Mortgage backed securities. They are just inherently too complex to be trusted. And MBS's, being part of the shadow banking system, are a threat to financial soundness since they aren't regulated. Hawk