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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 (29789)	3/31/2005 1:06:47 PM
From: ild	Read Replies (1) \| Respond to of 110194

Here are the charts idorfman.com idorfman.com idorfman.com CI's definition of "cash" for above charts: A very simplistic definition of cash includes the following: Checkable deposits and currency, time and savings deposits, money market funds and foreign deposits. ... For the sake of giving households the total benefit of the doubt when looking at supposed liquidity and accumulated savings, let's include all bond holdings as a form of cash in addition to what we showed you above. This would include Treasuries, savings bonds, open market paper, muni and corporate bonds, agency securities, mortgage paper and foreign bonds. We're trying to cover the waterfront here and assume these are relatively liquid assets that could be tapped at a moments notice, so to speak.

To: russwinter who wrote (29789)	3/31/2005 4:40:49 PM
From: Crimson Ghost	Respond to of 110194

Housing tulips ** A remarkable email showed up in my box this morning. I was going to quote a couple of things it said, but after I did little digging I realized it's worth including from start to finish. The author does indeed appear to be a real estate professional with listings in Manhattan. Beyond that the text speaks for itself. (I did replace a few words with asterisks so that my page can keep its "PG" rating). Be Scared--I sell real estate in Manhattan by ----- Mon Mar 28th, 2005 at 09:45:57 PST ...The real estate situation is so bad that I thought to assist fellow Kossacks, I would tell you what's happening at the epicenter of the bubble. 1) Be afraid, be very afraid. 2) It's actually quite simple: normal people are absolutely, totally priced out. They are priced 100% out of Manhattan and virtually all the surrounding bedroom communities. Those who can or choose to buy in this very dangerous environment are taking interest only loans because this is the only way they can buy at these alarming prices. 3) Real estate brokers don't even need to lie any more to close a sale since the internal mania--and it is mania of the buyers, is propelling all sales. Apartments that say, sold for $500,000 12-18 months ago are now selling for $1.3! 4) A revolting piece of one bedroom walk up-- 500 square feet, sells at $500,000 or more. Does this sound normal?? 5) Interest only loans are the scams of the century. They allow the borrower to increase his purchasing power by lowering the INITIAL monthly payment. These are adjustable rate loans so they will increase dramatically over a relatively short period of time. Then as housing prices plummet--and they will plummet--these hapless home/apartment owners will have what is called NEGATIVE EQUITY. Negative equity is when the value of the asset (real estate) is worth less then the outstanding mortgage. Then when the recession hits, they will lose their jobs, the banks will foreclose and once that starts it will affect housing prices for everyone. If your neighbors are selling at 50 cents on the dollar, you sure as hell cannot sell for 80 cents on the dollar. I lived through the housing crash on 91-93. You could not give away apartments in Manhattan! I will say however, the people who made money in those days were the ones running in when everyone else was running out and really offering 45-50 cents on the dollar and guess what, the offers were accepted. On a personal level, it is scary and sad and it is the end of the bubble because people are hysterical and insane to buy and buy at any price. New York City (Manhattan) has become a city devoid of character. It is a city of, by and for the very rich. There is simply no room for anyone else. Period. This state of affairs cannot last indefinitely. There is not an infinite number of hedge fund managers able to sustain the high end of the market. For the rest of us, when interest rates start to surge upward, and they will, even interest only loans will not be enough to hold up the middle of the market, which is no longer a middle market when ty apartments are priced at well over 1 million. I am sure this is true in other areas of the country where the bubble is about to explode, but in Manhattan people who bought a couple of years ago and have watched the alarming rise in prices recognize that in a million years they could not afford to buy THEIR OWN APARTMENT today. Most of the speculative hysteria is being driven by college educated people who were wiped out in the Nasdaq bubble and seem not to have learned. Greenspan has done his job so very well, he's snookered them again! My advice, stay calm. Don't **ing buy. Sit back and wait. This brutal, "on the ground" assessment confirms what we see from the outside looking in, all the data that we've presented to subscribers via charts and analysis. The Special Section on real estate led the March issue of The Elliott Wave Financial Forecast: It's yet another opportunity for you to read tomorrow's headlines today.