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Host, I find this very interesting from a professional perspective since residential construction currently accounts for about 45% of my income. While it's certainly true that the housing bubble has burst in certain places, what's true about politics - that it's all local - is true about real estate. There are current housing booms in 5 major cities that I deal with on a daily basis that aren't showing any signs of slowing down appreciably. Las Vegas is the most obvious one, especially for condos on the Strip.
That said, I think that you've drawn too narrow a window for a look at the fiscal health of the country. While I agree that the economy could be heading for a downturn, I disagree that the lending standards and housing boom are the cause. If we do see a recession, I think that it would be a minor one at best but the timing would be absolutely crucial for the 2008 election season. We've already seen how foreign regulations can affect our stock market, but the trends that I see in the industrial manufacturing arena don't really lend themselves towards a major recession around the corner. Sales on big-ticket consumer products are going up, and that's my most accurate assessment of national economic health. People are buying more RV's than they did last year, and that's been an excellent barometer for me for the past 10 years.
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