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

To: SouthFloridaGuy who wrote (75247)	4/2/2007 12:11:20 PM
From: $Mogul	Respond to of 306849

Individuals Reduce Stock Allocation from Near the 70% Warning Area Looking at the numbers for individual investors, their bond allocation edges up to 13% from 12%. Their stock allocation declines to 62% after nearing the 70% warning mark. Moving counter to the individual allocation and the rate of change would have a stock allocation increase to around 60%. The bond allocation would be around 20% near the average norm) and 20% cash. That's without factoring in the economic setup that favors bonds. Seasonality should benefit bonds in April and May, however. Individual investor cash increased after reaching the lowest since the before last recession. We would expect some sort of rally around mid-April but generally weaker stock prices in April and May. Market Comparison Economic Cycles While investment stategists continue to report that nothing has changed with the fundamental setup, we agree but that isn't much to brag about. 2007 economic indexes show a fully recovered lagging index with weak leading indexes, so composite indexes are inverted. We also have negative growth rates for the leading inflation index which is the main positive for stocks. Fed Fund funds is above the combination of economic growth and inflation growth rates, so is too tight. The combination provides economic support for the bull market in Treasuries. Metals benefit when the Lagging index show positive growth rates but the highest growth rates, so the economic setup for gold isn't a positive as many suggest. Looking at the numbers for individual investors, their bond allocation edges up to 13% from 12%. Their stock allocation declines to 62% after nearing the 70% warning mark. Moving counter to the individual allocation and the rate of change would have a stock allocation increase to around 60%. The bond allocation would be around 20% near the average norm) and 20% cash. That's without factoring in the economic setup that favors bonds. Seasonality should benefit bonds in April and May, however. Individual investor cash increased after reaching the lowest since the before last recession. We would expect some sort of rally around mid-April but generally weaker stock prices in April and May. From an economist standpoint, recessions are a positive for the economy as they wring out the excesses and bring prices back in line with assets. Without recessions, we allow inefficiencies to grow and balance sheets to become over-leveraged. With economists at the Federal Reserve focusing on inflationary concerns, investors have to fight the Fed to invest. While the stock market is said to have predicted 10 out of the last 5 recessions, even the NBER's recession calls vary depending on who is sitting on the committee. Growth slowdowns can be as disruptive as recessions in some cases, so equities are still one of the best leading economic indicators. Economic indicators are behaving similar to where we were in mid-1990 and the stock market seems to be similar. The S&P in gold terms hasn't rebounded since late 2002 following a decline of over 50%. This makes us worry that we aren't seeing the full picture. Currencies around the world are less valuable in commodity terms, so much of the stock market rally is suspect. We've actually taken another leg down in 2006, so the chart looks somewhat like Microsoft and WalMart's. The fact that these major Dow stocks have remained so weak shows that much of the market strength has been commodity related stocks and financials.

To: SouthFloridaGuy who wrote (75247)	4/2/2007 12:16:16 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 306849

So you changed your tune on buying a house too then. That's probably a good thing. You said you were ready to go out and buy a few months ago. When I suggested that you wait to buy you pretty much ridiculed the idea. Now you are suddenly waiting another year. Isn't it a bummer when people aren't as dumb as your firm's clients? Some people actually remember the things you say, which makes it hard to change your story. I suspect you are going to be unemployed soon.

To: SouthFloridaGuy who wrote (75247)	4/2/2007 12:36:32 PM
From: John Vosilla	Read Replies (2) \| Respond to of 306849

I actually started with no money and a couple of high interest credit cards.. A fascinating convergence of different viewpoints and experiences as this bubble unwinds in the internet age. Looking at the perma bears, bubbleheads, appreciation sluts, ivory tower Wall Street types flush with cash, and savy long time RE investors on the ground make their statements all over the net. I find I agree with none of them these days except the ultra cautious savy long time investor who took the last couple of years off and agrees with me the mania was insane and best to step aside and do other things with your life till real estate made sense again as the best investment out there to financial freedom. But there are few in that camp it seems who just dropped out of the game or relocated to Oklahoma or the rust belt. Most in the game actually became bubble heads themselves without realizing it..

To: SouthFloridaGuy who wrote (75247)	4/11/2010 11:07:48 AM
From: John Vosilla	Read Replies (1) \| Respond to of 306849

'Once again John, you are the voice of reason in an otherwise unreasonable thread.' I thought this was interesting considering how bad the economy is there and how high prices were.. I didn't expect prices to rise much anywhere for a couple of more years....Keep 'us' posted on NY metro.. Most of the USA outside of a few areas now appears to be as affordable as it has been in well over 40 years. I might need to adjust my strategy sooner than I thought... 'U.K. House Prices Rise at Fastest Pace Since 2007 (Update2) April 08, 2010, 7:52 AM EDT By Jennifer Ryan April 8 (Bloomberg) -- U.K. house prices advanced in March at the fastest annual pace in 2 1/2 years as low interest rates boosted demand and a shortage of properties persisted, Halifax said. The average cost of a home rose 6.9 percent from a year earlier to 168,521 pounds ($256,000), the mortgage lending division of Lloyds Banking Group Plc said in an e-mailed statement today in London. Prices increased 1.1 percent from February and are up 9.1 percent from a trough in April 2009. U.K. banks expect demand for mortgages will increase in the second quarter as interest in housing revives, a Bank of England survey last week showed. The Bank of England held its bond- purchase plan today at 200 billion pounds and kept its key interest rate at a record low while it assesses the strength of the recovery and awaits the results of next month’s election. “Interest rates are so low, that’s helping mortgage affordability and that’s helping to boost demand,” Martin Ellis, housing economist at Halifax, said in an interview. “At the same time, a supply squeeze is pushing up prices.” On a quarterly basis, house-price growth slowed to 0.6 percent in the first three months of the year from the previous quarter after a 3.6 percent increase in the final three months of 2009, Halifax said. Further price gains may be limited as more Britons offer properties for sale, and house price growth may be flat in 2010, Ellis said. ‘Out of Kilter’ “The overall significant house-price rises that have been seen since early 2009 are out of kilter with the overall economic fundamentals,” Howard Archer, an economist at IHS Global Insight in London, said in a research note. “The overall economic environment is still far from supportive for house prices while credit conditions remain pretty tight.” Lenders granted 47,094 loans to buy homes in February, Bank of England data show. That’s up from a low of 26,600 at the trough of the financial crisis in November 2008, though still less than half the 120,000 reading at the peak of the boom. A net 39.8 percent of lenders responding to the central bank’s credit conditions survey for the first quarter said demand for home loans will grow. As well as maintaining the target for its asset-purchase plan, the Bank of England kept its key interest rate at 0.5 percent. --Editors: Jennifer Freedman, Kevin Costelloe businessweek.com