07/19/2002 Archived Entry: "We are in one of the greatest bear markets of all time - the third-worst bear market in stock market history"

Housing prices are going to be next, Still Blowing Bubbles, and that's when the political fallout will really start to happen. Up to know, capital has been shifted into this growing sector and appreciated greatly:

A downturn in the housing cycle could prove to be a formidable problem for the American consumer. That’s because individuals have become overly reliant on property wealth. Currently (1Q02), the value of household real estate assets stands at 159% of disposable personal income; while that’s down slightly from the record 162% in late 2001, it’s still equal to the prior peak hit during the housing bubble of the late 1980s. Moreover, since the popping of the equity bubble, there has been an important shift in the mix of household sector wealth. At Nasdaq 5000 (1Q00), household equity holdings of $9.4 trillion were nearly double the net equity of $5.6 trillion in residential real estate; by contrast, only two years later (1Q02), household equity holdings had fallen by nearly 40%, to $5.7 trillion, whereas net property wealth increased by 20%, to $6.7 trillion. Once again, the home is the average American’s most important asset.

One thing we can look forward to is baseball players having to wait for their $500K checks in the mail, Devil Rays Late Making Payments. It sounds like theirs a great deal of leveraged debt out there:

During last week's All-Star break he said one major league team was in danger of not making payroll on July 15 and said another club had so much debt it might not be able to finish the season. Selig did not identify the imperiled teams. But a top official of a major league club, speaking on condition of anonymity, said the Devil Rays and Detroit Tigers had cash-flow problems earlier this year. Both teams denied they were having financial trouble. All 30 major league teams made their payrolls on Monday.