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

To: SouthFloridaGuy who wrote (71378)	2/3/2007 10:51:12 PM
From: ChanceIs	Respond to of 306849

>>>So? The price of cheese is too.<<< If you are arguing that the absolute value of the current margin debt is diminished relative to 2000, then I will go along with you. If you argue that the overall market has increased nominal value due to inflation, and that the new nominal record for margin debt has less significance, then I will buy that too. If you want to throw in organic market growth further diminishing the nominal record margin debt, then I will accept that. But the debt is way up there, and accelerating. How high can margin borrowing go??? It can't grow to the sky. The chart below shows the SP500 with its P/E ratio back ten years. The P/E is lower relative to the 2000 blowoff peak, suggesting more room for expansion today. Can it get from 1,500 to 1,700 in the next two years?? A 14% increase?? That doesn't seem like too much. What will drive it? We need a four month correction soon. Are earnings growing or shrinking? I think that the economy is slowing, jacking up those P/Es a bit as earnings fall. (I have to question the chart - that large discontinuity in the P/E in Q1 2002 makes no sense.)