When is a stock on the NYSE like a taxi?

From Paul Montgomery we learn that in the 1970's people were so worried about the future of equities that you could buy a seat on the New York Stock Exchange for the same price as a New York taxi medallion. You can't sell stocks on the exchange without purchasing a seat...and you can't drive a legal cab in New York City without buying a medallion. Apparently, the rate of return was about the same for a stockbroker as for a taxi driver.

But now the financial industry is flush and the ratio is 18:1...with a seat on the NYSE going for $5 million and a taxi medallion for only $275,000. There must be a lot more money in stocks than there used to be. Whether measured by the VIX or by the DOW, Wall Street and its johns have never been so fat or so happy.

No break in stocks...no fall in the dollar...no fumble in America's faith in its financial technology, its economy, and its empire...

Ergo, those things must still lie ahead.

The dollar/euro exchange rate has barely budged in many months; it seems to have put down roots - at $1.28 per euro.

And if you want to get rich buying stocks, dear reader, it looks like you'll probably have to wait a few years more. Right now, stocks have no 'wall of worry' on which the shares can climb. Nobody worries about anything.

One exception is supposed to be the builders. While the market as a whole is blithe and rosy, the builders face little grumpy walls of worry all of their own.

They've been hit hard by the slump in housing that everyone sees coming.

"Home Sales Fall in 38 States," says yesterday's AP report.

Falling home sales is bad news for the builders. Still, in terms of trailing earnings, many of the big home building stocks are now pretty cheap. Some of our friends think they've become value stocks - trading below 10 times earnings. Besides, these companies have a lot of experience with downturns in the housing market; they know how to get through tough times.

The big question is: How tough will times be? If they are as soft and easy as most people expect, the builders will probably bounce back and the bulls on building stocks will be proven right. But what if the slump is worse than expected? Wasn't this the biggest boom in housing the world has ever seen? Wasn't it funded by an 'emergency' interest rate policy...with the Fed's key lending rate held lower for longer than ever in history? And wasn't the whole thing aided and abetted by the most reckless lending in the mortgage industry since compound interest was invented?

If the force of a correction is really equal and opposite to the deception that preceded it, won't the slump in housing be one for the record books too? We don't know, but we wouldn't leap to the conclusion that since the building stocks are cheaper than they were a year ago, they must be a bargain.

A new boom in housing will require two things: a new source of money...and a new pool of buyers. Where will they come from?

Well, there's the next generation. But wait...what's this?

"Twenty-Somethings Drowning in a Sea of Bills," reports ABC News. "Young people struggle with the kiss of debt," adds USA Today.

This next generation is the one that paid a fortune to go to college...that learned to run through a credit card before it was licensed to drive down a road...and that likes saving even less than the generation that went before it.

Of course, even when you're drowning in a sea of bills, you can still buy a floating island of a house - at least in today's wet markets. All you have to do is borrow. It comes altogether too easily. And as it comes, it goes.

There was a time (we recall it dimly) when people bought a home quite differently...as if they were getting married. The decision might have been taken after solemn contemplation or sans frivolity, but it was expected to stick. For better or for worse, people stayed put.

It was because people once expected to stay in the same house for the rest of their lives that they didn't feel secure, or even comfortable, with a big mortgage hanging over it. It threatened them. They worried about it. So, they saved...they scrimped...and they dreamed of the day when they would be free from the burden. Then, if they lost a job...or lost their savings...at least they would still have home sweet home.

Today, those ideas may persist in Europe. But in America, everything and everybody seems to be in perpetual motion. Houses have become as exchangeable as spouses. People come and go. They get rid of one house and take up with another. When their fortunes improve, they give the old working-class house a major face-lift or they ditch it altogether and trade up...to a sleeker, newer, more fashionable model. And then, later in life, when that becomes too much for them, they downsize.

Houses are just places to live now, it seems...people appear to have much less attachment to them. They choose them more on the basis of convenience and economy rather than sentiment and tradition.

Nor do they have any deep-seated fear of being 'homeless.' There are houses all over the place - many of them empty. And in every suburb of America, new houses are springing up by the thousands.

Home ownership today is a financial strategy, not a family imperative. Since people no longer regard a particular house as a permanent member of the family and never expect to pay off their 30-year mortgage, they have no particular desire to own one - at least not in the traditional sense. The whole idea of 'buying' a house has been transformed, anyway. 'Buying' no longer means owning. It only means that the buyer has taken a financial position that allows him to participate in capital gains (or losses). He may have put no money down. He may have accumulated no equity. He may intend to leave the place within nine months - or never live there at all. The house and its owner stay together like a modern couple - as long as it works for both of them, and not a minute longer.

As long as prices are rising, 'buyers' tell themselves that they are getting in on something good. But what happens when prices go flat, or fall? Will the next generation of house buyers have any interest in the sacred ties of home 'ownership' at all?

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.