Real Dow and Real Homes

[Ed]

We, the country, ignore above-trend of 1.3 GDP, to get more of economic activity = 0.016 GDP/yr

(Apologies: the following is put together from pieces, but “it’s all here”.)

from
http://www.itulip.com/forums/showthr...=3133#poststop
(where OVERAGE = above-trend):
OVERAGES of: homes + stocks = 1.3 GDP
Referring to Real Dow & Real Homes here
http://homepage.mac.com/ttsmyf/RD_RJShomes_PSav.html
I recently reckoned each as ca. 1.85x historical trend.
In trillions, for late/end 2005, USA: GDP = $13.0; homes = $21.5 (= 1.65 GDP); stocks = $15. (= 1.15 GDP).
The sum of the two above trend overages = 1.3 GDP.
(I reckon all the above is a little rough, not a lot.)

U.S. Equities’ Frictional Costs
from
Buffett’s Letter, released 3/4/2006 (dated 2/28/2006)
“... by the aggregate amount earned by its
companies. Today that amount is about $700 billion
annually. ... Today, in fact, the family’s
frictional costs of all sorts may well amount to 20%
of the earnings of American business.” From above,
annual frictional costs = 20% of $700 billion = $140
billion.

Residential real estate commissions
from
http://www.businessweek.com/the_thre...6_a_harsh.html
“Residential real estate commissions grew from less
than $25 billion in 1995 to over $63 billion in 2005.”

The preceding “2 Frictional costs” are coexisting with the very well-ignoring of dominant historical realities.

The “2 Frictional costs” sum to $203B/yr, while GDP =
$13,000B/yr.
SO, as a country, we have enhanced ‘economic activity’
to the enhanced size of 0.016 GDP/year -- MERELY(!) by
very well-ignoring the two above trend overages
summing to 1.3 GDP.

I just now remember that term for an individual: “non compos mentis”.