Soros Comment

Discussion in 'Economics' started by stocon, Aug 12, 2006.

  1. mahras2


    You have a reflexive process in which the market is appreciating because people are able to withdraw capital from their homes to purchase other homes resulting in appreciation. One knows that other factors such as income and savings of the participants are not being factored in due to the proliferation of 0 down mortgages and people buying homes that are significantly out of their reach.
    #11     Aug 12, 2006
  2. when? when people swear off of real estate, thats when... jsut like when they swore off gold, the market, tech stocks, mutual funds, etc. sit tight, if the market takes off, let it go. rates are still affordable based upon my adult life, so there will be dip buyers. if you love a place and will spend your life there raising family, then you'll do well over 30 years.

    if people lose their jobs, then r.e. tanks. i dont see many labor pools w/ pricing power, and the non-stop flow of illegal aliens continues to add supply to market. margins are being squeezed as costs increase, but fees/prices stagnate. classic stagflation set-up? you may get split labor market, but EE that i know is not seeing huge wage gains. r.e. prices have greatly outstripped wage gains, either prices haev to retrace or pause, or wages have to catch-up. the risk is to the downside in real estate - anyone know a labor market w/ pricing power, except perhaps doctors & dentists?

    to date, bond market has been very supportive of low rates. you'd think that buyers would demand higher yields given underlying inflation, but to date, that hasnt happened?
    #12     Aug 12, 2006
  3. They're all high on option premiums...
    #13     Aug 12, 2006
  4. A very reflexive process, from so many different angles.

    Something like ~30% of new jobs in the current upswing in the business cycle are directly tied to the real estate boom. Moreover, many of the ARMs and reverse mortgages are in fact taken out by neophyte real estate agents and mortgage brokers who leverage to the hilt because they are smarter than the rest of us. These same agents and brokers convinced much of America to leverage up their homes and gamble on ever rising real estate prices. These agents/brokers are the new dot-com chieftans with all that implies.

    It is very reflexive, much as the Nasdaq bubble was. Eventually it will come crashing down. Of course a housing crash will unfold much differently than a tech-stock crash. Likely it will be longer, and deeper, with wider ramifications for the larger economy.
    #14     Aug 12, 2006
  5. zdreg


    " They can take what was a kernel of truth and turn it into sheer flatulence(talking out of their asses) with their conclusions."

    it is unfair to the readers of ET threads to assume that they do not know the meaning of the word flatulence.. On the other hand i recently criticized the writing style of a poster on ET. It turned out he was editor of his school's newspaper. what can one say? you were correct to define the word.

    soro's comments are accurate if not late. housing stocks have been going down for month. soros has probably been short during the entire period.
    #15     Aug 13, 2006
  6. soros actually predicted dollar crash by end of 2006. buffet was short too, investing in other countries. the message is recession in 2007 U.S.
    #16     Aug 13, 2006
  7. stocon


    I think he's most concern with wide fallout global crisis and not just a bear in some housing stocks, I think Batman hit some of the concerns now if the consumer doesn't show up goodnight nurse:cool: the option will be the creation of paper so gold oughta head upwoody
    #17     Aug 13, 2006
  8. SteveD


    I believe if one looks back most real estate problems have been rising interest rates along with rising unemployment.

    We have neither at this time.

    Some "over heated" markets will see some consolidation, some speculators with lose some money.

    But people running down the hall screaming like their hair is on fire are just plain wrong.

    The VAST MAJORITY of people buy a house to LIVE IN.

    Why you people cannot understand basic economics is beyond my comprehension., LOL

    #18     Aug 13, 2006
  9. stocon


    I believe it is Soros who is hinting at this....
    #19     Aug 13, 2006
  10. agpilot


    So far no one mentioned the huge number of "baby boomers" turning towards retirement and down sizing. That is a large number of people who really don't need a house any more. Maybe a condo or a motor home but not a "family" type of larger home. Add this to rising interest rates and I see a flat realestate market at best. So much so that I sold my family home of 32 years just this last Spring and down sized to a small home on a hobby farm and a Winnebago. agpilot
    ( I wanted my own private airstrip anyway)
    #20     Aug 13, 2006