U.S. & Japan: 'eerie similarities'

[Christian Gregory]

> I think they mean that optimists aren't as concerned about spiraling
> debt if the money is used to purchase assets (as opposed to spending
> it on crack I suppose).

But wouldn't the relevant point be whether the assets produced income? In
which case, crack could be a good investment . . . ;)

A question about the Japanese/US comparisons. I've always had the impression
that Japan's bubble would not have been nearly so severe were it not for
their illiquid real estate market underpinning the whole thing. Because of
the tax disincentives to sell, the valuations of real estate were always
complete fiction--banks and individuals borrowed against real estate
investments that were hard to unload at any price, and that made the cash
crunch when Mieno raised interest rates even worse. Is there any validity to
this notion?

Christian


> /jordan