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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Crimson Ghost who wrote (174582)	6/22/2002 10:22:37 AM
From: yard_man	Read Replies (1) of 436258

1) interest rates are not the ONLY determinant of housing demand (it is rather funny how all pundits were telling us that inflation and interest rates being low == support for the stock market -- would be translated into an increasing demand for equities. Where are they now?) 2) it is not a given that stocks will not keep going down or that yields will not keep going down it is possible that foreigners could start dumping treasuries and push rates up -- but the fact that, if they have been dumping, it hasn't pushed rates up makes me think the lower yields are predicting a very rapid slowdown in the economy. It may well be that as foreigners pull out -- much treasury debt can be absorbed here. The dollar may stabilize or bounce for a bit, but I think we'll see lower yields AND lower housing demand. This doesn't compute for a lot of folks, but wait and let's see what transpires over the next 3 - 6 months. To be sure -- when housing cools -- given the current interest rate environment -- the builders will have over-shot to some extent. The awareness of excess will be a quick thing that happens overnight, much like the bloom coming off the tech flower.

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