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8:30 AM EST Monday, August 28, 2006: Are we sliding into a recession? No one knows. Predictions range all over the place. Housing has buoyed the US economy -- from the frenetic building of new houses to the frenetic spending of mortgage money squeezed out of old houses.

Defined broadly, the real estate sector has accounted for 44 percent of jobs created since 2000. The real estate sector employs more than one in 10 American workers. The weekend's Economist ran a piece:

IF YOU could watch just one indicator to gauge America's economic prospects over the next few years you should pick house prices. A year ago most economists thought that average prices were unlikely to fall across the nation. Now many of them have begun to worry about the consequences of falling prices for America's economy. Figures out this week from the National Association of Realtors show that average home prices barely rose over the past year, compared with annual growth of around 15% in mid-2005. In some parts of the country, prices are already falling. Adjusted for inflation, the average home is worth less than it was a year ago.

The housing boom has been the main engine of America's economic growth in recent years. Indeed, it is the main reason why the American economy held up better than expected after the stockmarket bubble burst at the start of the decade. Since 2000 the real wages of most American workers have barely budged, yet surging house prices have allowed consumers to keep spending. Over the past five years the total value of American homes has increased by more than $9 trillion, to $22 trillion. These gains helped to offset both the slide in share prices and feeble wage growth.

This is the biggest bubble in American history: In real terms home prices have risen at least three times as much as in any previous housing boom. In the past, average nationwide house prices have experienced year-on-year declines for the odd, isolated month, but they have not fallen on a sustained basis since the 1930s. However, most states have seen prices drop at some time in the past three decades. Since the housing market is looking bubbly in more states than ever before, prices could simultaneously fall in enough places to give America its first nationwide price decline since the Great Depression.

On the surface America's housing boom looks more modest than booms elsewhere. Since 1997 average prices have doubled, compared with a gain of almost 180% in Britain. But the economic consequences of a bust could be more severe, because the economy has become so addicted to rising prices.

The boom has lifted the economy in three ways: it has boosted residential construction; it has made people feel wealthier and so encouraged them to spend more; and it has allowed home-owners to use their property as a gigantic cash machine, taking out money by borrowing against their capital gains. Merrill Lynch estimates that the three together accounted for more than half of America's total GDP growth last year. Counting construction, finance and estate agency, the housing boom has also been responsible for one-third of all jobs created since 2001. If house-price rises level off, GDP growth could dip below 2% in 2007. If prices fall, expect a steeper slowdown.

If house prices do slide, the Federal Reserve will probably slash interest rates so as to save the economy from recession. But the Fed's ability to do this would be limited if inflationary pressures remain strong. And it would surely be wrong for the Fed to support the property market when a slowdown in spending is part of the rebalancing America needs to increase its saving rate. The Fed saw off a fall in spending at the start of this decade after share prices tumbled. To do the same again could damage the long-term health of the economy.

The tech bubble left behind a modern capital stock that continues to yield productivity gains. In contrast, the investment stimulated by a property boom does little to boost long-term growth. Expensive houses merely redistribute wealth to home-owners from non-home-owners. Worse still, the boom has diverted resources away from productive sectors and caused households to save less, exacerbating America's economic imbalances. It is surely better for Americans to start saving in the old-fashioned way by spending less of their income rather than relying on rising asset prices. The party has been fun; but it has to end.

InSite Vision (ISV) announces FDA Acceptance of New Drug Application. InSite Vision today announced the U.S. Food and Drug Administration has accepted for filing and comprehensive review, InSite Vision's NDA for AzaSite (azithromycin 1% ophthalmic solution), indicated for the treatment of bacterial conjunctivitis. The NDA contains data from two phase 3 clinical trials in which 698 patients were treated with AzaSite. Data from these studies demonstrated that when AzaSite was administered twice daily on the first two days, then once daily on days 3-5, it provided clinically and statistically significant improvements in clinical resolution of symptoms, and bacterial eradication compared to placebo, and was equivalent in clinical resolution and bacterial eradication when compared to tobramycin administered four times a day.

S. Kumar Chandrasekaran, Ph.D., InSite Vision's chief executive officer stated, "Today's announcement of the FDA acceptance and review of InSite Vision's NDA is a significant milestone which brings us one step closer to achieving our ultimate goal of the commercialization of our lead AzaSite product in early 2007."

Although expected, this is good news. InSite's stock is lagging because its management dumbly promised a marketing deal with a big pharma and hasn't delivered. I remain confident it will deliver. Meantime, at $1.61, InSite's market cap is only $137 million, low for a company about to have an FDA-approved drug with serious real-world demand.

Watch your forwarded emails. True story: A dear friend sent me an "analysis" of his girlfriend's family. It wasn't kind. I replied with housekeeping on his upcoming trip. Without checking, he forwarded my housekeeping and his "analysis" to his girlfriend. Big mistake. She is now mightily miffed -- justifiably so.

Lessons:
1. Be careful what you write in emails. Always assume the world and his brother will see your emails.
2. Be careful with emails you forward.
3. The telephone remains the best medium for sensitive material. Most people don't record their conversations.

Free spyware: My DSL line was crashing. The nice technician said it might be spyware. I should load Microsoft's Windows Defender. I did. I had no spyware. Still, it's not a bad idea. You download Defender rom Microsoft -- click here. Once installed it will run and tell you if you have any nasties. Once that's done, go into Tools/Options and uncheck "automatically scan my computer" and uncheck "use real time protection". That way it won't run all the time and slow your PC down. You should run Defender and your virus protection manually once a week.

Eat less. Live longer.
Cutting calories may slow down the aging clock as well as peel off pounds. For more, click here.

It's always the cable: When PC things go awry, check your cables. Sometimes they just go bad. Jiggling sometimes works. Replacing them always works. When wiring houses with low voltage cables -- such as Ethernet and coaxial (for video) always install twice as much as you'll need. You'll need them. I promise.

DSL is far less reliable than cable TV broadband: My telephone company DSL line is always busted and slow. My cable modem is always up and always fast. I know there are readers with reliable DSL lines. Given the choice, always choose a cable modem, even if it's more expensive. You get what you pay for.

Serious about your PC? Shoot your cats and your babies. On Thursday, I made fun of Pawsense, keyboard protection software. A reader writes:

One of our beloved cats, Boo, who just passed away, would spend hours finding a nice warm place to nap on. Unfortunately I would find her often sleeping on one of our IBooks. One time, I could never reboot the machine. I brought it over to the genius bar at Apple and they told me the mother board was fried and it wasn’t worth the repair costs to fix it.

If you have cats, turn off the laptop when done. If you have a two-year old boy, keep him away from any keyboard. Two-year olds love to pick off the keys. I’ve been over at the Apple store about three times now for them to replace keys; good thing, they are nice about it and don’t charge. Back up, back up, back up. I had to pay Apple $75 to move all my data over to another IBook after the last mishap.

New airport security check-in procedures:

Kinda puts the fun back into flying.

The US Tennis Open starts officially today:

US Tennis Open 2006 -- TV Schedule for August
All times are Eastern Standard
Monday August 28
11:00am-5:00pm
Early rounds USA
Monday August 28
7:00pm - 11:00pm
Early rounds USA
Tuesday August 29
2:00am - 4:00am
Match of the day (taped) USA
Tuesday August 29
11:00am - 5:00pm
Early rounds USA
Tuesday August 29
7:00pm - 11:00pm
Early rounds USA
Wednesday August 30
2:00am - 4:00am
Match of the day (taped) USA
Wednesday August 30
11:00am - 5:00am
Men's Early / Women's 2nd USA
Wednesday August 30
7:00pm - 11:00pm
Men's Early / Women's 2nd USA
Thursday August 31
2:00 am - 4:00 am
Match of the day (taped) USA
Thursday August 31
11:00 am - 5:00 pm
Second round USA
Thursday August 31
7:00 pm - 10:00 pm
Second round USA
CBS Sports also runs highlights from 12:37am to 1:07 am each evening
   
For the entire US Open TV schedule (including September), click here. Easiest: Tell your TiVo to record "Tennis."

Advice to begin the week on:
+ Accept that some days you're the pigeon, and some days you're the statue.
+ Drive carefully. It's not only cars that can be recalled by their maker.
+ If you can't be kind, at least have the decency to be vague.
+ Never put both feet in your mouth at the same time, because then you won't have a leg to stand on.
+ Birthdays are good for you. The more you have, the longer you live.
+ Some mistakes are too much fun to only make once.

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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