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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (69956)	9/19/2006 3:35:45 PM
From: RealMuLan	Respond to of 110194

Housing Index May Spell Trouble For Stocks by Chris Ciovacco September 19, 2006 EXECUTIVE SUMMARY * The correlation between a weakening housing market and the stock market suggests that a defensive investment stance is prudent at the present time. * While the recent advance in stocks is impressive on the surface, a more detailed look yields some cause for skepticism. * History tells us that the probability of the Federal Reserve being able to engineer a soft landing in the housing market is very low. * The economic impact of the recent housing boom has been greater than even the largest stock market booms. It will be difficult, if not nearly impossible, to replace this economic activity from another sector of the economy. * Since the interest rate cycle should be similar to what followed the Interest bust, a detailed review (see charts on page 2) of asset class and investment performance between March of 2000 and October of 2002 can help investors make better decisions should the stock market peak in the near future. * Since history rarely repeats itself in exact form (especially in the financial markets), it is also prudent to look at some possible differences between the previous cycle and our current environment. more here financialsense.com