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Been looking at how housing prices paid are linked to tech company valuations. Employees sale of options/shares has help drive houses prices higher, not debt like in the past. LTV’s are somewhat reasonable. However if tech / growth stocks do continue to dive this liquidity form that helped push the market up might be the missing piece that causes it to go down.

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Employee sale of options/shares allow for 1% of the population.

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That’s fair but disproportionately higher in certain areas.

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author

Housing is very tricky as it has a certain momentum factor to it... when prices are rising, equity in a mortgage rises quickly, which allows more borrowing etc etc.. when this goes into reverse it can be very hard to turn. See Japan, Spain etc..

Also as far as equities are concerned, its hard not to see at least part of the equity rally being driven by ultra low corporate bond yields... so if rates do rise, support from housing from equity markets should also fall.

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always great to listen to your economic comments. Please only write notes when you have something relevant, not because you have to write weeklies.

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always great to listen to your economic comments. Please only write notes when you have something relevant, not because you have to write weeklies.

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author

Dont worry - i only write when.things are interesting- and they are very interesting at the moment. One way or another...

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