Bubbles in real estate, for the last 30 years, have tended to be regional in nature. Personally, I think it has to do with the mobility of capital in the US, and the desire to live in particular areas. However, that could be wrong...just haven't seen anything to dispute it.
I don't think lower interest rates will do much to hamper investor sentiment UNLESS it is another rapid fire set of declines in the rate. Fine tuning from here is appropriate, however, and most economists have, for the last few months, been assuming one more final cut. It had been priced into bonds, but it looks like they're reversing mildly right now.
There are several sectors of the economy that are suffering. One of the worst, however, was insurance. I was told to follow that closely back in August. It appears to be slowly pulling back from the precipice, and that's very important. Of course that could reverse with a horrible terrorist attack or troublesome hurricane season.
On the other hand, several other sectors are very robust. I can speak for my own 2 (real estate and media) and while everyone has heard about the RE bubble, nobody follows ad spending much. Ad spending is WAY, WAY up. Typically, that's been a lagging indicator, but since 9/11 it's reversed and been leading. Primarily because post 9/11 alot of advertisers pulled budgets and held them until they felt there was a possibility to help stimulate demand.
I can speak from my own situation and make a further point. I was laid off in Dec. I consulted in the interim, and was just hired last week at a 30% increase over my previous position. Some weak economy, personally... |
