On Sat, 27 Mar 2004, Doug Henwood wrote:
> [lovely strategy - throw the government deep into debt to feed a
> housing bubble!]
Stephen Roach said that at Davos, this is the dominant view among the ruling class there in-gathered: that housing is the economic perpetual motion machine, the asset which can never fall:
<quote>
He went on to add that
property cycles had all but been abolished -- that the American home
was a lasting store of ever-rising value. Needless to say, if that's
the case, then I'm the one who's dead wrong. Ever-rising asset values
would then qualify as permanent sources of saving obviating the need
for consumers to rely on traditional income-based saving strategies.
Quite frankly, I couldn't believe what I was hearing. Here we are, just a
few years after Americas most devastating post-bubble carnage, and the
apostles of the New Economy were back with a vengeance.
http://www.morganstanley.com/GEFdata/digests/20040123-fri.html
And for those of us who think, like Roach, that all bubbles burst, Daniel Davies provides an alternate solution:
http://d-squareddigest.blogspot.com/2002_08_11_d-squareddigest_archive.html#80283743
which I thought was pretty funny when he wrote it, although now it doesn't sound like parody anymore, it sounds like the script they're following.
Michael