Re: Shiller on housing bubble

[Marvin Gandall <marvgandall@xxxxxxxxxx>]

The "refi" factor also adds a new dimension to this particular bubble.
Mortgage money is being used not only for homebuying and furnishings, but
consumption in general, so the effect of a slowdown will be more widely felt
beyond the traditional sectors tied to real estate.


----- Original Message -----
From: "Michael Perelman" <michael@xxxxxxxxxxxxxxxxx>
To: <PEN-L@xxxxxxxxxxxxxxxx>
Sent: Saturday, June 18, 2005 1:22 PM
Subject: Re: [PEN-L] Shiller on housing bubble


> The aftershocks of the housing bubble could be more important than the
> bubble itself.  This
> is not a prediction of a speculation.  The Maestro has claimed that the
> wealth effect of
> the housing bubble is greater than that of the stock bubble.  If so, then
> the effect on
> aggregate demand could be significant, especially because construction and
> the spending
> that follows it, such as furniture and appliances, is a significant part
> of the economy.
>
>
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail michael at ecst.csuchico.edu