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> Does it matter that asset prices have gone into the stratosphere if it's not
> having a perverse effect on the real economy?
The other question is _which_ assets we are talking about. Sure, tech
stocks are way up there but the average NYSE stock is down for the year
and sitting at P/E levels where the value players are interested.
Same with real estate which is always regional. Sure, it's hard to buy a
house in Silicon Valley but you can't necessarily translate that to the
rest of the country. Many regions have real estate bargains available.
Where I live is seldom in sync with real estate values and "recessions"
reported in the media, which are based in New York and Los Angeles. We
were booming during the late 80s and early 90s while the northeast went
through a recession, some California real estate was crashing and the
media was full of doom and gloom. Things are okay now but there aren't
any signs of a bubble in the local economy and growth is slower than it
was ten years ago. Locally, wage inflation is almost nonexistant.
It's fun to focus on the problems of the instant tech millionaires and
what will happen to them if their stock options suddenly become
worthless and their house values plummet but how much of an impact will
that really have on the people in the rest of the country who live in
regular houses, work at regular jobs and don't own any (or many) tech
stocks? Ugly? Maybe. The end of western civilization? I doubt it.
--
Dennis
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