Rogue: Housing:
As I just stated in my response to R59, I'm not big into shorting stocks. But, FNM scares the CRAP out of me. That is a the biggest boondoggle of all time because it covers so much of our economy and anything associated with it - which means housing - which means virtually EVERYTHING - is in trouble.
Again, I identify a housing bubble breaking as -6% per year for 3 years. IF that happens, then the effect on the US economy would be devastating. I agree with your sentiments on the perceived wealth affect of home appreciation. I think it is safe to say that an incredible amount of what has kept this economy going so strongly has been the belief by the average person that their net worth was increasing steadily. As long as they believe that, they can justify overextending themselves on credit - or maybe in terms of vacations or new cars. You name it. Give that same person a 25% haircut over 3 years on the value of their home and see how much they are willing to spend!
Len