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

To: bozwood who wrote (18255)	3/7/2004 2:42:14 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 306849

I came to your conclusion also. But I even take it a step further. I don't think anything is really tied to corporate profits in terms of the economy except a tiny fraction of participants in those corporate profits, specifically executives. Anybody that uses corporate profits as a justification for the price of some item likely purchased by a US consumer is reaching, imho. Salary levels would be relevant but he doesn't mention that. And there is no relation to salary with corporate profits that I can see (walmart as an example of this).

To: bozwood who wrote (18255)	3/7/2004 9:34:23 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

I posted only the chart because I thought the conclusions of the person being interviewed lacked merit. Interest rates. either low or high, affect stocks and real estate equally. What is interesting is the way investors preferences swing between different asset classes, preferring real estate more or less than stocks. home.pacbell.net The only lagged linkage is the percentage of national income which is allocated by the market to corporations. Corporate income swings between 6% and 18% of total national income. When it was at 18% a few years ago, Warren Buffett pointed out that it was far more likely to decline from that point than it was to rise to a new record share of national income. After the last real estate bubble, home prices declined over a seven year period. Stocks hold the potential to decline much more quickly. That's how I believe this chart will arrive at under-valued stocks in the near future. I see declines in the future for both asset classes. It will just be quicker for stocks.