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Strategies & Market Trends : SiliconInvestor All Stars Forum -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (404)	3/2/2007 12:11:00 PM
From: SouthFloridaGuy	Read Replies (1) \| Respond to of 1718

Doomsday scenario can come into play if you have simultaneous overvaluation of stocks + real estate because it infers something much more dangerous in the real economy. As it stands now, with real estate deflating, subprime imploding, and yield curve inversion becoming deeper, it looks like we're headed for 0-1% growth mid-year. That's not a great backdrop for stocks and the correction after such a run was to be expected, but it by no means implies bear market because 1) overall liquidity is high 2) the downturn is primarily focused on real estate (and the various temporary knock-on effects vis a vis consumption. It also sets the stage for an inflationary rally in stocks and some real estate (probably anything outside of Florida) in 2008 and beyond if the Fed feels it has the leeway to cut.