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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (27692)	1/23/2003 10:30:25 PM
From: energyplay	Respond to of 74559

Hi Jay - There has been speculation that someone might buy out Countrywide, since they are a very efficent and large mortgage originator. They have a better reputation than HI Household International, which was bought by HSBC. There is some indication (about a 35% chance) that Uncle Al KBE will cut another 25 bias points. Only a little of that (maybe 15 bp) will flow to mortgage rates, but could induce another bunch of people to refinance, helping Countrywide in particular. I think your bet of lower equity prices in the U.S. in general is a good one. Note that Dow stocks have been getting hit - AT&T, Eastman Kodak, and McDonald's and Alcoa a few weeks before that. The homebuilding 'bubble' can go on for some time - two reasons - 1) During the stock market boom 1993-early 1999, many people avoided buying houses to keep or put more money in the stock market, so housing prices, which had dropped a bit during the 1991-1993 mini-recession, was well below trend for a few years. So there was some pent-up demand, and prices lower than trend. 2) Look at London for a real property bubble, and how long it's gone. I think there will strong efforts, maybe even special tax breaks, to keep the housing boom going until there is a general economic recovery, or the 2004 election. Raymond Duray can tell you why.... So I think your bet is in the right area, wrong sector. I would look at consumer finance companies (COF, KRB etc.) electronics retailers like GoodGuys, Best Buy, Circuit City. (you can't eat electronics, it's a luxury item, and prices will rise with a falling dollar). Retailers in general will be having a hard time, especailly since the Automakers, both Detroit, Japan, Korea, and European, seem determined to keep sales up buy subsidizing the U.S. consumer. Re: Fearless Leader Mugabe - There's a cover article about Zimbabwe in the latest Spectator about him, controlling food supplies, setting up for genocide. Zim has 12 million people, one of his deputies has been speculating it would better with 6 million.