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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (12882)	8/22/2003 10:57:32 AM
From: GraceZ	Read Replies (2) \| Respond to of 306849

I don't know how you can say you don't resent and then use the term "unproductive freeloaders" a sentence or two later. How much have residential rents risen in the last few years while you are trying to build your company? It was never real money of course, but neither is home equity here, it is propped up by this law No, it is propped up by the same thing that propped up stocks, marginal buyers willing to pay a price in excess of the value because they think someone else will come behind them and pay even more. How do we know this? Compare the cost of owning vs. renting. If it was simply people needing a place to live they'd be renting because it's a far better bargain in that area. Owners expect to re-coop the higher cost on owning with cap appreciation and it is that expectation which drives price up. If anything, the older property owners renting their property way below the ownership cost of a similar property has provided an alternative more affordable living situation.

To: Lizzie Tudor who wrote (12882)	8/24/2003 9:27:14 AM
From: Rarebird	Respond to of 306849

<It was never real money of course> I really don't want to get into a philosophical discussion as to what is "real" here, but the major brokerages do provide major credit cards like Visa or Mastercard for its clients. Lizzie, haven't you ever used one of those credit cards from your Brokerage house to buy something "real"? Moreover, haven't you ever used the checks from your Brokerage House to pay a "real" bill? I admit some bills are more real than others, especially since we now live in the realm of identity theft. "I don’t have a choice but to invest," the 51-year-old said. "If I don’t, I won’t be able to retire. I’m not necessarily perfectly at peace with it, but I feel like I don’t have any choice but to be in the market." 64.29.208.119 Ron Peebles of Prudent Bear points out, quite rightly, that this is an amazing statement. He then goes on to explain with both perception and wit WHY it is an amazing statement. By "market", of course, the lady quoted above means STOCK market. In the context of the past three and a half years on US stock markets, the statement that one HAS to be in the market in order to retire is especially ironic. It is fairly common knowledge that US corporate pension plans are now grossly underfunded and that they got that way, in large part, through their tenacity in "being in the market" all the way down from their 2000 peaks. Why do so many people in the US, and elsewhere, cling to the assertion that they HAVE TO be in the market? One reason is a very old one. They want to get the value of their portfolios back to where they were (or at least much closer to where they were) in the heady days of the turn of the century. Another reason is that they cannot find a way to make a positive (let alone a decent) rate of return in the traditional areas of actual saving, as opposed to "investment". Every week, the "REAL" picture of the US economy gets worse. Every week, more and more people succumb to the conviction that they HAVE to be in the markets, there's no other way to remain "solvent" and to provide for the future. Every week, more and more highly placed people at the Fed rush out to assure everyone that the recovery is HERE and that they have NO plans to raise interest rates. Fed Says It's Nowhere Near Raising Rates Thu August 21, 2003 06:25 PM ET By Victoria Thieberger NEW YORK (Reuters) - "Federal Reserve policymakers tried to reassure on Thursday that the U.S. central bank is a long way from raising short-term interest rates, even if the economy picks up smartly. The difference between the current patchy economy and previous postwar recoveries is that inflation is unusually low, which means there is no urgency to raise interest rates to fight it off. San Francisco Fed President Robert Parry, in a cautious speech about the economic outlook, said the Federal Reserve would not have to get an "early start" on hiking interest rates as it has done in the past, because inflation is so low." reuters.com On August 22, the US Commerce Department released its index of leading indicators: What Rose? 1. The interest rate spread 2. The money supply 3. Average weekly initial unemployment claims 4. Vendor performance 5. Stock (market) prices What Fell? 1. Average weekly MANUFACTURING hours 2. The index of consumer expectations 3. BUILDING permits 4. MANUFACTURERS' new orders for NON-DEFENSE capital goods 5. MANUFACTURERS' new orders for consumer goods On top of that, almost the entire much vaunted "rise" in the US second quarter GDP figures came from housing and mortgage related financial activities and from government (DEFICIT) spending.