Monday, July 25, 2005

Is The Housing Market A Ponzi Scheme?

Quote of the Day
"Housing turnover is now reaching Ponzi-like proportions."— Stephen S. Roach, chief economist, Morgan Stanley
A "Ponzi scheme" is a fraudulent investment scheme, sometimes used to describe a pyramid scam, in which money from new investors is used to payoff previous investors. In other words, there are no real profits. The first people in may make money, but those who buy in after them get robbed. If this housing market is a bubble about to pop, the comparisson wouldn't be too far off the mark.