Hey uhm, check the time stamp on the posts in case you get confused. It's 2009 NOT 1989. 30k a year does not get you much, even in Florida. It's still poverty.
i respectfully agree that the market will go into another free fall....sure, the fed is "injecting liquidity"......what does this mean? Nada, unless people are willing to take out new loans. Don't know about you, but I am not in the mood for major purchases. And why? If prices keep going down, why buy now? This, my friends, is the death spiral call deflation....it also means less people are willing to use margin to buy stocks/commodities/forex. This downtrend is far from over.
We are in a political-economic death spiral. The government is trying to reflate a housing bubble (will not work and even if it did it is not a good idea), band-aid a broken banking model, reflate an auto industry which has way overbuilt and can't compete, telling people to be more responsible about debt while at the same time trying to get them to spend more, trying to cut medical costs while at the same time expanding entitlements which are killing us with a fatal debt overhang... all the political choices are designed to acquire and maintain power via the desires of the voting mob, however most of the choices are for more of the same of what got us into trouble and for more debt to placate the voting mob. Strongly negative goverment fundamentals with a very weak economy. Points lower, but I think Elliot wave is garbage.
While I am fairly sure at this point that adjusting for dollar depreciation we will take out March lows we may be headed higher 1st. We all know Q1 was a very profitable one for the IBs and chatter is now starting that Q2 was one for the record books. This could push or keep the the market up as it breaks to the media. Things will drop off markedly after Q2. FWIW I'm long FAS from the open and looking for 9.50-10 stop@BE More waves of housing about to hit later this year and even worse next. And this from Forbes: Real Estate Won't Recover Until 2017 Peter C. Beller, 06.24.09, 1:15 PM ET There's another bomb hidden in the real estate market, but unlike subprime mortgages, this one will take a decade to explode. Commercial properties--offices, hotels, malls--could suffer a wave of foreclosures like the one that hit the residential market last year, says Deutsche Bank analyst Richard Parkus. As tenants struggle to make rent, delinquencies are up, bringing down rents and values and hurting the already struggling secondhand market for mortgages that cover these properties. Since many banks, insurers and investment funds hold those mortgage-backed bonds, they could be looking at steep losses in the next few years. This could signal new and unexpected writedowns for banks with commercial mortgage backers, including large players like Bank of America and Citigroup as well as regional banks like Regions Financial, SunTrust Banksand Fifth Third Bancorp. Since 2007, says Parkus, commercial real estate values have dropped more than 40% nationwide, with some sectors (like office buildings in Manhattan) especially troubled. Rating agency Moody's, which uses different methods to calculate property values, says commercial real estate declined nationwide by 8.6% in April to levels last seen at the end of 2004. While home foreclosures show some signs of leveling off, commercial delinquencies are rising between 0.3% and 0.5% a month, according to Deutsche Bank. The cause: businesses struggling with lower consumer spending and high unemployment. When the financial crisis hit, some observers thought the long-term nature of many commercial leases would insulate the sector. Instead, tenants are demanding that landlords lower the rent. Landlords, daunted by the prospect of finding new tenants in the midst of the downturn, have little choice but to agree, says Parkus. That is bringing down rents in many markets and, with them, property values. With few buildings changing hands, valuation has become something of a guessing game, he adds, but some areas have lost more than 50% of their value and the pace of decline is picking up. "We're in the period of maximum deterioration," Parkus says. Anyone looking for a quick rebound in property prices and defaults is going to be disappointed. Issuance of commercial mortgage bonds peaked in 2007. Most CMBs are 10-year fixed-rate loans that mature in 2017, when a huge amount of debt comes due. Until then, though, landlords are facing a tough environment in which rents are slipping but opportunities to refinance are few. As a result, delinquencies, now just under 3%, will likely rise to 5% by the end of the year and could grow to as much as 9%. Parkus says property values won't turn around until 2012 and won't return to their 2007 peaks until at least 2017. The reason is that commercial property tends to follow unemployment and the Federal Reserve said it expects unemployment numbers to turn around in three years, says Parkus. After that, the market should see gains. But there could be huge losses for investors and banks before that. Nearly 40% of mortgaged properties are worth less than the mortgage, says Parkus. In a $3.5 trillion market, that could mean giant writedowns at investment funds, insurers, banks and others holding the paper. Commercial mortgage-backed securities already trade at large discounts to reflect that. Parkus suspects many banks hold big slugs of commercial mortgages they are reluctant to dump on the market--and the more local the bank, the bigger the risk to its financial health. Several changes might come to the commercial property sector's rescue. The government doesn't want banks to fail and could step in to boost refinancing or take the shaky loans off institutions' books. Then there are real estate investment trusts--public companies that own and manage commercial properties. From their peaks during the real estate boom to their lows after the financial crisis, REIT stocks lost 75% of their value. They've come back strongly, though, as many REITs have raised money with share offerings and now may be poised to acquire properties for half of what they would have paid in 2007. Any surge in buying could bring with it higher prices. Lastly, says Parkus, the dire need to refinance many loans means opportunity for investors willing to lend. If none of these come through, it could be a long, slow recovery.
What do you think about the interest rates? 10 year went up from a long term trendline. Even with deflation don´t you think rates can go up since risk might then be considered higher? Seems it could become a deflationary spiral.
i agree that interest rates are headed higher. some traders believe that interest rates have a 27 year cycle...they bottomed a few years ago and are now headed up. i remember 1980 and we were in a depression