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. . . I think we are going to see a serious recession coming up here in the not so distant future from the housing bubble collapse which will have major quality of life ramifications throughout the world. This housing bubble collapse will not only break those who were crazy enough to pay into bubble prices, but could cause a huge number of people to put the breaks on spending on some of the finer "luxuries" of life like Sirius Sat. radio. Want to scare yourself silly, research the subject on the fool's discussion boards and on the web. The careless use of mortgage loans given to anybody who wants one is about to bite us on the ass and will make the bubble seem frivolous. . .

Good Grief. You sound like Chicken Little! OK, Mr. Sky-Is-Falling Reveldevil. Run and hide. Or, consider this:

Have you picked up a copy of the Financial Times lately? It's the "pink" paper at the news stands. Worth a read. Try it.

Just yesterday it said:

* Lower Energy Prices Damp Down US Inflation
* US Tax Figures Show Sharp Fall in Deficit
* Bernanke [Chairman of the WH Council of Economic Advisors] Upbeat on Outlook for US Economy


Though the main-stream media (including the Brit-published magazine “The Economist” from which you likely garnered much of your pessimism) likes to ignore the outstanding good economic news that is all around us and loves to dwell on "Doom! Gloom! Woe is US!" pessimism (primarily, I suspect, because it means that the Bush43 economic policies and tax cuts are working, and the main-stream media loves to hate Mr. Bush43, and is galled when he pulls a rabit out of his hat in spite of the ongoing WOT and the pernicious, disingenuous screeching we constantly hear from the likes of Dean, Pelosi, Ted “Chappaquiddick” Moral-Conscience-of-the-Democrat-Party Kennedy, Ried, et. al.), there is LOTS of very good economic news out there.

The US economy is continuing to tick along at a 3.4% growth rate (which is ten times the 0.3 percent growth rate now projected in the Euro Zone (France, Italy & Germany) for the remainder of the year. Do you suppose that 1,000% better US performance is a good platform for the pessimism of the Brit's “The Economist”?

The drop in the budget deficit of $94 Billion, according to the Houston Chronicle, is the result of a "14 percent spike in tax receipts". Mr. Kevin Hassett, an economist at the American Enterprise Institute, as quoted by the Chronicle's Jessica Holzer, ". . . tax relief has sparked a 'productivity-driven growth cycle . . .' caused by a surge in business investment." The Laffer Curve is proven yet again by Mr. Bush43, just as it was by President Kennedy and President Reagan, much to the displeasure of the main-stream media and the above-mentioned Democrat hate mongers.

The Financial Times reports that the core US inflation rate is ". . . hovering at around 0.2 percent . . ." that ". . . retail sales in June rose 1.7 per cent – a larger-than-expected jump . . ." and that ". . . there have so far been no convincing signs that consumer spending is slowing in the US. . ." That sure doesn't sound like the “serious recession coming up here in the not so distant future” that you're calling for, Reveldevil!

On top of this, according to Reuters (which loves to minimize good news and typically can't tell the bad guys from the good guys – witness their policy regarding use of the word “terrorist”), the most recent figures show the unemployment rate in the US has dropped to about five percent, ". . . to its lowest since September '01". Please note that 1) 5% is generally considered “full employment”, and 2) that number is less than half the unemployment rate in France which, according to Bloomberg, stood at "10.2 percent in May". Maybe Mr. Chirac could learn a thing or two from Mr. Bush43?

Sure, there are pockets of over-valued real estate here and there, especially on the Florida coast and some locations in California and Puget Sound. If it really worries you then stay out of REITS and sell your real estate. But, really, other than that you aren't likely to be seriously affected by the collapse of one or more of these bubbles. If some more-money-than-common-sense putz is so foolish as to pay millions for a house that's objectively worth only hundreds of thousands, why should any of us Regular Joes care? The fact is that over-valued real estate doesn't affect us much, one way or the other. We don't live there, we don't work there, and money spent & lost on luxury isn't going to harm us. The cost of a house in a ritzy LA neighborhood or in the Buckhead area of Atlanta just doesn't affect the price of my home in Cookeville, TN. Your doom and gloom is a non-sequitur.

As always,

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