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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (244)	7/21/2003 5:39:48 PM
From: Silver Super Bull	Respond to of 110194

RW, re: "This substantial rate backup will have more impact than most realize." Just glancing at the charts for the five and ten-year Treasuries, it looks like the yield for each is up about 100 basis points in a month. Must be very painful for those who bought at the highs. These kinds of sudden and large rate rises can lead to derivative problems, as we saw in '94. DB

To: russwinter who wrote (244)	7/21/2003 5:43:04 PM
From: Little Joe	Read Replies (2) \| Respond to of 110194

I agree it has not, but that is not the issue. The point of contention was "is real estate a hard asset" I think it is and will appreciate markedly if they get the inflation going. Russ, I remember buying my first home at the beginning of a strong real estate market at 24,000 and selling it less than five years later at 65,000 it nearly tripled in less than five years. Was that a bubble. I don't think so, because that home is worth about 200K plus or minus today. Little joe

To: russwinter who wrote (244)	7/21/2003 10:06:31 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

Gold in this cycle hasn't been purchased with borrowed funds, real estate has and big time i believe the "equity percent", so to speak, of gold assets is probably in excess of 100% when you consider how much is owned by the unmargined CBs, and add in the shorts. on the other hand, it's not easy to short a suburban neighborhood, and homeowners' equity in American RE is at an all-time low. This substantial rate backup will have more impact than most realize RE sure has a lot going against it. in the near and medium terms, increases in interest rates will take the wind out of the easy money sales. longer term (beyond 2010), increasing gas prices are likely to have a negative impact on large parts of the suburban landscape, which is predicated on car transport relying on cheap oil (which will no longer exist in 2010). on the other hand, perhaps for the same reason urban real estate will trade at an even steeper premium than now.