Date: Tue May 24 2005 18:18
trotsky (Earl Grey) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
the 'Japan might take over the world' story was a major point in discussions about the Japanese bubble as i recall...the same people who fret about the RE bubble now were fretting about the bubble in Japan back then, although they were more focused on the stock market than real estate. as it turns out, the comparatively smaller RE bubble did immeasurably more harm...and the US RE bubble is definitely already larger than that of Japan was, at least in residential RE ( office buildings may have been more bubblicious in Japan ) .
oh yes, that bubble was of course also thought impervious by most...after all there was a 'land shortage', LOL ( land prices subsequently fell for 14 years in a row... ) .
Date: Tue May 24 2005 18:10
trotsky (Earl Grey) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
that is sometimes true, but actually, the 'bubble talk' isn't more pronounced than 'Nasdaq bubble talk' was when that bubble got into its final stretch.
you only THINK that lots of people are fretting about a bubble because you frequent a site where it is talked about, where the requisite stories are constantly linked to, etc. - for the vast majority of participants in the market it's regarded as a 'free lunch' and the 'guaranteed road to riches'. a frequently heard comment is 'but real estate NEVER goes down'. that is the most accurate description of the sentiment out there...the belief that it will never go down.
'it's not like the stock market, this is DIFFERENT' is also a comment i have come across a few times.
true, there IS a major difference...there are no shorts that can be squeezed.
as so often, a picture says more than mere words:
click here ...
b4-thebell.com
don't worry, be happy, yeeha! can only go higher!
Date: Tue May 24 2005 18:00
trotsky (frustrated) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
no, i got it now...they want to buy back "$100 million worth of shares" not 100 million shares.
in any case, a 250 million convert is quite a chunk of change considering the overall size of the company.
Date: Tue May 24 2005 17:54
trotsky (Ben) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
funny, i actually believe it will end as if someone had thrown a light-switch...fast and furious.
still, a bit of a lull will probably precede the event...when overpriced RE with too high selling prices sits awhile hoping for a greater fool, and only when he surprisingly doesn't arrive do the markdowns begin.
mind you, i'm using Japan as the template, but one could also look at the end of the last boom in the late 80's/early 90's. that was a far smaller boom, but its collapse still brought on the savings and loans crisis. in neither case was there a long drawn out topping process...that never happens when parabolic bubbles end, they always end with some sort of initial crash.
Date: Tue May 24 2005 17:42
trotsky (Bleuler@real estate) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
"But there was some evidence in today's NAR report of economic justification for bubblicious home prices..."
LOL...the same thing ( 'economic, rational justification' for inflated prices ) is heard at every stock market top too...it was the siren song of the 'pre-eminent economist of the land and his time', Mr. Fisher, in 1929 that lured the late-comers to their doom ( 'stock prices have reached a permanently high plateau' - he 'proved' it with his magnificant powers of rationalization... ) .
well, the supposed 'tight supply' is of course an illusion that is created by speculative demand. once a speculator has bought, the unit is thought to be 'off the market', but it really isn't ( no-one lives in it yet... ) . the specs in real estate are leveraging up their holdings instead of selling. iow, they use their imaginary 'paper profits' to buy more real estate - for the home run, so to speak.
a recent story in Forbes related how a couple that 5 years ago knew nothing about RE speculation is now 'engaged full time' in this new 'job' and has acquired altogether 20 properties - all on credit , naturally ( they also scrounged together a few hundred grand from friends and family, and have thereby involved a whole cross-section of people in their speculative adventure...there's a wake-up call in waiting for sure ) - they couldn't even remember all of them! ( wife lists properties they have bought...'did i forget something'? yep, she did...a pretty large chunk of apartment house or somesuch ) .
this is an out-of-control speculative bubble...it's already worse than Japan's was measured in terms of the infamous 'median house price'. it's going to end in exactly the same way...with the entire banking system and the economy in a protracted crisis.
Date: Tue May 24 2005 17:31
trotsky (frustrated@why) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
to pump up the stock price of course...it's the game of the 90' revisited, incur debt and buy back your stock with it...shareholders are happy, and the directors are even happier...bondholders otoh have reason to get worried.
Date: Tue May 24 2005 16:50
trotsky (BoS) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
mythical bacteria for a mythical figure? i have yet to see proof that this 'Al-Zarquawi' person actually exists...i note he STILL hasn't made the '10 most wanted terrorists' list. an oversight?
it seems now both sides in the conflict are using the mythical figure to their ends...it'll be interesting if he ever really turns up. i'll continue to doubt it until it actually happens...
Date: Tue May 24 2005 16:29
trotsky (art@Goog) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
that gap's in my sights...at the very least i'd expect it to be tested ( sometimes gaps act as support ) .
Date: Tue May 24 2005 16:22
trotsky (siempre@CSTL) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
yes, i do like those numbers. imo the market has simply overlooked it, but that could well change.
e.g. last year i picked a very similar situation, FORD ( Forward Industries, not the car maker ) . same story basically, mundane product ( holders for cell phones ) , good earnings growth, low p/e, very low float. it did nothing for almost a year, and then exploded on the 6th good earnings report in a row.
Date: Tue May 24 2005 16:17
trotsky (Hambone@top) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
consider it picked.
i think the bubble has already topped out, people have only not noticed yet due to the lower transactional velocity.
a sure fire sign were the TIC data of qu.1 - that big inflow of money was foreign 'investors' playing bag holder for yet another US asset bubble...by piling into real estate. as soon as a US asset bubble finally manages to draw the foreigners in as well, it is basically over.
and remember, in houses there can be no 'final short squeeze'...that's a market where everybody is long, and everybody is in and then some, up to their eyeballs.
Date: Tue May 24 2005 15:52
trotsky (Goooooogle) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
up over 10 bucks intraday, now up only a fraction....an ugly candle on enormous volume of nearly 30 million shares - blow-off top?
note, huge call OI resistance around current levels, put support far weaker.
also, put pricing reveals no concern...it's as if this was NOT a volatile stock, but it is.
Date: Tue May 24 2005 15:40
trotsky (stop the presses...) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
CNBC has an expert on who informs us that the house price bubble will defy the entire known history of asset price bubbles and will make nice and NOT burst. there's nuttin to worry bout.
wot a relief...
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