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View Diary: They Are the 1% - A Really Scary Follow Up (95 comments)

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  •  Tulip bulbs. (0+ / 0-)

    The ultra wealthy have sucked all of the equity value out of everything that had been building up equity value since the end of WWII. Housing values continuted to rise because the market was very boring and stable. And it was tied in to rates that were controlled in the S&Ls. Without those controls, the stability ended, and the assumptions that housing would continue to appreciate in value disappeared, too.  Rapid turnover of real estate - expecting to buy a house and sell it three or four years later at a huge profit - was based on false assumptions.

    Now the ultra wealthy have accumulated that equity wealth.  But there is no more growth, and their assets are grossly overvalued because they assumed that the appreciation would continue. They'll figure it out when they try to cash in, and there is no one there to buy their tulip bulbs.

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