In a 2003 hit song titled 'It's my life,' the one and only recurring
question posed was, 'How much do you commit yourself?' There maybe no
doubt that the nature of the answer would be one addressing the
affairs of the heart, it would be somewhat pleasant to know that this
will be more the exception to the case than would otherwise be in
this world of ours 'cause the hidden answer to other 99 (out of a
hundred questions) is usually found in... money.

As my friends at Christie's have gotten back to me with a response
and i can't help recall an article that i had read fairly recently
entitled 'Money, is it overrated?' I found it to quite an
enlightening article to say the least and as far as the question
goes, it wouldn't be a surprise if in some circles to the opinion of
some, money was just that as the question may suggest, overrated. As
they say everybody is entitled to an opinion... Ah! but least we
forget that they can be pretty subjective and can often times be
wrong as they're right. What is it that they do say about one man's
home that it is sometimes another man's castle as you may have
heard... one man's trash is another's treasure and one's good fortune
is another's stumble... Homes and castles! Unlike bringing the
experience of royalty of living in an european castle to you and me,
the way we value goods, items and assets has always been to find the
most acceptable price for it and it is seldom ever found to be
overrated should the resultant transaction often find its way into
our pocketbooks if you were a seller or a proud owner of something
you've just acquired with a purchase. Would you believe that the most
unpretentious home that's found in my hometown is called 'The Red
House,' built and constructed by a certain Camille Pissarro in 1873,
painted on canvas, found in the local museum, is worth a mere 3
million dollars! 3.5 million to be exact would be the top dollar it
would fetch as appraised by the specialists at Christie's. 'A king's
ransom to a painter's imaginary home!' as my most loyal and trusted
maidservant, Alice puts it followed by an affirmative "Ruff" from
Otto, my loyal Westhighlandie in acknowledgement of the discovery.
Opinions like birds of a feather do, have their flocks of supporters
and its' equally honest and opposing disagreeing counterpart for it
is once said that honest disagreement is often a good sign of
progress...

One may add that there is and will be no shortage of differences of
opinion in determining the true health of the nations housing sector.
Hearings are being held by the subcommittee on Government Sponsored
Enterprises(GSE) chaired by Rep. Richard Baker of Louisiana to try an
ascertain what damage might have perpetuated into the housing sector
by the accounting improprieties of Fannie Mae and Freddie Mac, the 2
biggest GSE's that provide most of Americas affordable mortgages to
potential property owners. Washington is concerned and worried that
one of the pillars of this country's economy, the housing sector,
isn't built on so firm a foundation. It is easy to see why... 20% of
GDP(raw) growth in the 2001 and 2002 was attributed to mortgage
refinancing alone! It could have very well single-handedly saved us
from a much deeper and longer recession in 2001 which only lasted 8
months. But there's more than meets the eye to this canvas of a
picture called the U.S. Housing Sector. What could be the source of
our economic strength could easily turn into a weakness that it could
potentially damage a recovering lethargic economy.

More than half of all Americans own homes. Since 1992 mortgages of 1-
to 4- family mortgage account for more than 70% of all outstanding
mortgage and still growing and the price of real estate in the U.S.
have increased 65% in just the past 10 years. For a matured economy
such as the U.S., a handful of financiers and political figures saw
the potential of a housing sector to fuel the U.S. economy when the
housing sector was at its infancy. The U.S. is just one of a few if
not the only one that's able to repackage these mortgages into long
term debt instruments to be sold and speculated in the world
financial markets. It shouldn't be hard to see, the involvement of
eastern eyes and hands are not far behind when we realize that long
term debt instruments is just another word for bonds. The eyes and
hands that are our friends who we can influence.

Home ownership is the measure of wealth for 44% of the 72 million
homeowners in this country. Moreover, millions of families are
finding themselves spending a significant portion of their annual
income for mortgage and rent payments, some as much as 50%! These
homeowners would be the most vulnerable if the growth of the housing
sector is engineered by nothing more than exuberance, irrational
exuberance of what the market is willing to pay for a home. In fact
there is existence of a bubble in the housing market already
evidenced by the disparity of rent and housing prices. When was it in
your experience that you've been told that it'll be more prudent to
rent a home than to own one. Not until now!

So what are the million dollar questions related to our the national
debt, our foreign creditors, the housing sector, financial markets
and ultimately to our investments, your well-being, livelihood and
health? One thing is certain, there're no million dollars answers for
these questions if there should be problems that arise. It may take
more than just a finite monetary value. It may take time as well...
This brings me to a saying that only time will tell... but one thing
we should be aware of just like Enron showed us is, will there be a
loss of confidence in the world's ability to value our assets? Enough
to abandon, sell even diversify away from it... or will it be a mild
discounting complex that assets including equities will encounter for
the lack of potential buyers for a given price. Let's hope that
Washington's quest for transparency done on behalf of the people will
shed more light to correct whatever that maybe wrong.


PS. I've been spending much time analyzing current equity markets to
help me build a set of indicators are going to be most helpful for me
in determining when to buy and sell equity assets. Stay tuned for the
Mavin indicators and philosophy of trading equities.

of equity trading...