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Subject:  Re: Home Sales Date:  8/23/2006  2:51 PM
Author:  markr33 Number:  17996 of 36468

"Home Sales Fall to Unexpectedly Low Rate"

I don't quite understand the "unexpectedly" word in this article. Nowhere do they say what was expected. Frankly, sales going down by only 4.1% is unexpectedly high to me. In some of the previously hot markets, sales are down by 20-40%. In particular, I am shocked that sales in the South only went down by 1.2% (the least of all the regions) with Florida (and South Florida with a 30-40% decline in sales) included in the South!

As far as interest rate expectations, I've been wrong for a few months now, since I fully expected rates across the board to continue rising. Instead they have fallen at the long end and have steadied at the short end. I still think that credit demand (mainly by governments) should cause rates to rise, but apparently there is still sufficient levels of excess money that this isn't happening. When the next recession arrives, I have to wonder if the reduction of credit demand (at least among consumers and businesses) might offset the [increasing] credit demand of government, or if we might even see [long term] rates rising during the recession!
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