For those of you on ET who are into building true wealth and not just banging on a key board.... The current housing numbers should be an eye opener. While the Pundits stand around and yell BULL MARKET, and Morgan Stanley clowns call for 5% GDP heading into next year, Home values have now fallen 26%, since their high back in June 2006. Depression Erra level was around 25.9%....between 1928-1933. End of 07 was close to the first of the crash. We are now into 2011, first month. The Depression back in 1928 did not happen until 2 years after the 28 crash in markets. IMHO, we are heading into the Second Depression. However, this Depression is not going to look like the first. It is a stealthly one. The News Media, Fianancial Fools and the rest will beat their drums and say we are not in a Depression, there will be major spin. The buying power of Americans will be destoryed but as long as you purchase goods in the US...you will not feel the effect much, other than in Food and Energy. Second, the Depression will de distributed through out the EMU. So, the pressure will slightly be even across the board. In other words, it will bring the EMU, THE US and Parts of LATIN AMERICA down to low levels of GDP, Consumption combined with inflated cost in Education, Energy, Food, and Super high unemployment. This is just an observation I have as I deal world wide. IMHO, there will be either a basket of currency to compete with the dollar or there will be a "choice" of how to conduct transations globally, with the dollar being the last choice. It has already started.
House Prices are still overvalued, they are artificially being propped up through historical low 30 year fixed mortgages under 5%, new programs to help people out of foreclosure and those first time house buyers who received billions of dollars worth of free tax credits to go out and buy new houses. The list goes on and on of how they have come in and drawn an artificial line in the housing market. Without any stimulus or QE or other programs in place to help the housing market housing prices would be 25-50% lower than they are right now. Housing prices surged for years, up hundreds of percent in a only a few years, no one stopped the bubble in the housing market but they sure ran in to save it from collapsing. Bubble ben bernanke thinks he is fixing the broken economy but all he is doing is creating the next financial crisis. This economy is in worst shape today than it was yesterday. How many more trillions are they going to spend. Remember the key phrase is asset bubbles, thats the only way to grow the economy today and Bubble ben bernanke is doing a fine job of creating the next one!!!
In my area(SE Michigan) - prices are down around 30-60% from the peak, and are where they should be IMO. Also, the people shorting now are mostly the ones that have been short for the past 600 points.
I just started building a short position in the SPY.s I plan on being heavy short by mid month. Housing is going to drag on the markets, as will oil as it heads to 100, Inflation in Food and poor forward guidence through this earnings season. Of course keep in mind that I do not trade for a living. I make very good money so I can take risk and if I'm wrong, I make it back with my Private Equity Deals. Nevertheless, its better to put your cash to work than have 6 figuers or more earn less than 5% a month in a money markets.
Top 20 Best Performing Cities of the Decade Not a bad decade considering the idiot hoopla regarding housing as a bad investment. Also, there's a reason why Texas isn't on the list. The same reason why you shouldn't bother with people from that state. In another thread by the OP, BDI is in a serious decline again, he gets it wrong as today we get some data about shipping, Too many damn ships coming online. BDI does not have reliable predictive value as other indicators.
As usual EMR, right on spot. I went to a tax seminar today discussing the tax implications of the health care bill. It cost me $65 and saved me researching what's actually in that monster. Without having to repeat any of the fines that businesses are going to be exposed to, I can easily say this is the biggest anti-job bill I've ever seen. Employers will be afraid to hire even part time employees because of what constitutes a "qualified employee" in this bill. They are going to get stung pretty hard is a person says they have health insurance (let's say medicaid) and they actually don't. There's a bunch of other pitfalls that employers will be unknowingly falling into because of this bill. The only good thing I can see coming out of it is employers will probably have to hire a full time person for health care compliance because it's gonna cost 1000's of dollars if they flub it up. Oh Yes! And then you mentioned something about the prices of houses! Stealth depression for sure.
Introducing actual facts to an ET Economics discussion is as useless as trying to bring water to the desert: no matter how much you bring, it'll never accomplish much more than disappearing into the sand. Still, thanks for the data. Good stuff.
BTW, the cited BDI nonsense is a truly hilarious marker for just how clueless the OP is. It's as clear a way of teaching the difference between anecdote and data as there is.