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

To: John Vosilla who wrote (59298)	8/7/2006 1:36:54 PM
From: ChanceIs	Read Replies (1) \| Respond to of 306849

>>>How long can the US and other developed countries continue to monetize the long end of the curve before the bond markets start do demand a premium?<<< I will use your query to take a swap at the analysts, and further pound the recession drum. First lets start with crude. There was certainly bad news this AM out of Alaska. Bernanke now has a bigger problem than ever. Surely we will be purchasing more foreign crude and at higher prices (SPR releases notwithstanding). The balance of payments just got worse. Bernanke has to prop up the dollar, and a pause won't cut the mustard IMO. Further increases would KILL housing according to some analysts. Of course I bought my first house at 10%. The current 7% or so 30 fixed seems like a great deal. I think that it is the long end of the curve that regulates housing (absent option ARMs), and that is precisely the end over which Bernanke has little or no control. Cramer is in there stating that we should wait until say October for FED cuts to jump into the homebuilders. What a joke!!! With the employment report on Friday, the long end dropped - or alternatively the yield curve became more inverted. I don't see what will push housing up anytime soon. The McMansions in exurbia will be toast with continuing high gasoline. I think that the growth in housing might be the small guys doing custom rehabs on older units close in.