The Home Equity ATM

…Accordingly, if “values” were the basis for the Bush victory last November, they were property values not moral principles or religious prejudices. In the face of the perverse housing bubble, the Kerry campaign, as with healthcare costs and the export of jobs, was simply running on empty. It offered no compelling alternative to the status quo. But the Republicans have more serious things to worry about than Democrats. As the real-estate bubble reaches its peak, George Bush may discover that he has been surfing a tsunami and that a towering cliff looms ahead.

The bubble has already burst in San Francisco, and the April 11th issue of Business Week headlined fears that a general deflation – perhaps of international magnitude – is nigh. What will life be like in the United States (or Britain or Ireland) after the home-equity ATM shuts down?”