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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (36902)	9/11/2005 7:32:42 PM
From: NOW	Respond to of 116555

economagic.com

To: Crimson Ghost who wrote (36902)	9/12/2005 12:11:29 AM
From: John Vosilla	Respond to of 116555

"As you know I have long felt that a major correction in home prices will not happen until mortgage rates move considerably higher. Saville now seems to agree. If you are correct that long rates will drop even lower then housing speculation may ramp up even more in 2007 and 2008 IMHO" My guess is if rates continue to stay very low the bubble spreads to many other areas of the country. But, those specific areas with overbuilding certain property types with rampant speculators and few end users plunge very soon no matter what. Put our south Florida new high end condo market at the top of that list. However, on the flip side the median priced single family in built out areas down in south Palm and Broward have no inventory for sale and it's never been tighter than today.

To: Crimson Ghost who wrote (36902)	9/12/2005 12:53:08 AM
From: mishedlo	Respond to of 116555

If you are correct that long rates will drop even lower then housing speculation may ramp up even more in 2007 and 2008 IMHO. Long rates depend on the Fed's action. If the FEd keeps hiking those on variable rate loans get F*d regardless of what the 10 year does. If the FED pauses the 10 yr will sell off which will F housing going forward. There is no way out IMO and thus Saville is wrong. BTW - I think the FED keeps hiking and the long bond rallies. The crucial point is when the FED pauses. IF it is now gold will stage one freaking rally but I think the FED will overdo it both ways as they always do. Mish