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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: mishedlo who wrote (74149)11/15/2006 9:45:17 PM
From: SouthFloridaGuy  Read Replies (1) of 110194
 
Who said housing is "killed"?

"Killed" to me implies some type of pervasive undervaluation - like a stock trading at 4x EBITDA when its peer group trades at 10x. Or some type of crisis like Asia in 1998 where you saw asset values plunge to below replacement cost.

Ever notice that every other article the bears pull on housing deals with Florida. Florida condos are NOT the entire economy of the US. So the f*ck what if some dumass can't sell his condo flip.

There are plenty of areas that are still showing Year over Year appreciation - whether it be in the midwest, New York, or even many areas of California (gasp!). It's taking a crowbar to push prices down in many areas because 1) people have jobs and 2) the overall environment remains liquid

Theoretically asset prices have an exhaustion point because there is a level of interest rate that provides a ceiling on asset valuations.

However, what your analysis ASSUMES, is that some type of crash inevitably follows.

That is not the case and I think the evidence is quite apparent despite the bears attempts to paint the current housing situation as a "disaster". It isn't. Price your home correctly and it will sell. That is not a disaster, that's just a market returning to normalcy. There is plenty of money on the sidelines to pick up housing at fair value, no overshoot is going to happen without CORPORATE stress because that leads to job losses.

Meanwhile, equity lost in homes is now being replaced with equity gained in the stock market which you have also failed to include in your 1 dimensional analysis. And the cycle goes on.

Face.
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