[Boomer]

This housing market (Whoops, I just caught a typo back there --I had typed 'hosing' market. . .Is there such a thing as a Freudian typo?) -- anyway, this housing market has an emotional component like none we have ever seen before.

Last go-round was fraught with screwy lending practices -- banks and mortgage companies having been given license to run amok with drive-by appraisals and stated-assets loans, mortgage rates at a low never seen before -- and then came the derivatives.

This time, those lending practices allegedly have been tightened, supposedly making mortgage qualification harder. This national housing market has been fast and crazy. It is creating what I believe to be an artificial sense of wealth in home equity. Can banks, and homeowners, resist HELOCs based on what I call phantom equity?

I just did a search of my own past posts. Since 2018-ish, I have thrown in an occasional mini-rant about about how I think the fact that corporations were/are spending a big bunch of that corporate tax-break money on stock buybacks is going to bite us in the azz. Stock buybacks have been creating an artificiality in the stock market -- resulting again in the psychology of phantom wealth. The old bull is tired, had been running for more than a decade -- on its own -- until the corporate tax breaks gave it more momentum than it deserved -- looks to me like it has been an old bull on steroids for a while.

Economic history tells us that the stock market and the housing market ride in tandem. We can only hope that what is coming will just be a deep breath. I personally think we need that -- just that -- but we have been living in Crazytown for years -- so who knows where we are headed.

Boomer

PS: The teetering can be felt right now. We are going to see -- already are seeing -- a scapegoating of the present. I wish more people would look at the big picture. But (sigh) a lot of people will think what they allow themselves to be told to think.