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

To: ChanceIs who wrote (67663)	11/30/2006 11:33:47 AM
From: Smiling Bob	Read Replies (1) \| Respond to of 306849

Considering the rates are already near historical lows and creative financing covers everyone else, further reductions are not the cure for HBs. I hope that more ethical analysts-if there is such a thing- begin to warn of these fallacies being spread. I suspect the big money has been selling puts for sometime now, knowing the HBs would be driven higher. A perfect world for them. These stocks rise like they've cured cancer using cigarettes. Another sure sign of manipulation is the irrational price movement today in a down market after these stocks have run up almost continuosly for nearly six months

To: ChanceIs who wrote (67663)	11/30/2006 12:18:01 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 306849

I think the dollar is the big wild card in the rate cut equation. If we're down to 80 or so on the DXY by Feb-March, does the Fed dare push short rates lower? I doubt it, unless we're already in a recession by then.

To: ChanceIs who wrote (67663)	12/1/2006 6:32:14 AM
From: Dan3	Read Replies (1) \| Respond to of 306849

Re: Why is the 10 year rising when the dollar is tanking. Well, if you're still willing to invest your Euros, Yuan, or whatever in dollar bonds, you will now get X% more dollars of bonds for each of your Euros. China recently said it was going to be moving away from investing so many of its dollars in US bonds - clearly that hasn't happened, yet. Another contributing reason is that the supply is down so the price is up. A major source of long term bond supply has been 30 year mortgages. As real estate sales tank, fewer new 30 year fannie mae bonds are sent to the markets, reducing the supply of long term bonds causing the price of the bonds to rise (and long term interst rates to drop). A significantly larger fraction of the US's wealth has been diverted to the top couple of percent of the population during the past 6 years. This money really cannot be spent on consumption (if you "earn" $100 million, you can't really spend it on consumption). Available income of the middle classes has actually dropped after payroll taxes and enery costs are considered - look at what it's done to WalMart sales. Real demand has been able to rise very little, so there's no opportunity for investment in real goods like factories. With real estate tanking there's no where else for the cash to go except to bid up long term bonds, causing rates to fall.