Here's my two cents on the U.S. housing bubble, mentioned at the end of the LAT analysis that Jim D. posted below:
http://www.commondreams.org/views02/0720-08.htm By the way, housing prices in Sacramento are skyrocketing, due in part to the exodus of workers from the S.F. Bay Area. Seth It's Greedspan's Fault? by Devine, James 21 July 2002 Title: It's Greedspan's Fault? Even if the analysts quoted below are right, it's not entirely AG's fault. If he stopped pumping up the stock market bubble, that would have encouraged the very-fragile economy to sink. If he keeps the economy up (saving LTCM, containing the Asian and Russian contagions, etc., etc.)that encourages the stock-market bubble. Between a rock & a hard place? JD -------------- http://www.latimes.com/business/la-fi-greenspan21jul21.story NEWS ANALYSIS Fed Chief Now Blamed for Inflating Stock Bubble By PETER G. GOSSELIN Times Staff Writer July 21 2002 WASHINGTON -- Americans desperately seeking to understand what happened to their once-ballooning investments and retirement nest eggs were offered a striking answer last week by the nation's premier economic policymaker. (clip) Indeed, some analysts worry the central bank's decision to reverse course last year, driving interest rates to a 40-year low and hold them there to limit the market damage and cope with fallout from Sept. 11, could be setting the stage for the next bubble, this one in housing. Greenspan said recently he does not see a housing bubble in the works. In the late 1990s, "an irrationally exuberant equity bubble was ... rationalized by a Fed that embraced the new economy with open arms," Morgan Stanley's Roach recently wrote. "Today's script seems hauntingly familiar." An overly long rise in housing prices "is being legitimized as a sustainable source of economic expansion," he said. "From bubble to bubble, there seems to be no stopping the follies and perils of [stock-] and debt-driven economic growth." Copyright 2002 Los Angeles Times _________________________________________________________________ Chat with friends online, try MSN Messenger: http://messenger.msn.com
