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

To: Les H who wrote (78797)	6/4/2007 9:27:56 AM
From: Paul Kern	Respond to of 306849

Fed Faces Growing Pressure to Raise Rates, Options Market Says bloomberg.com That's exciting news -- as exciting as a few months ago when the same market was forecasting an 80 per cent chance of a cut. These futures and options markets have an abysmal record when it comes to predicting movements. Remember, for every trade, there is a counter party with the opposite view. I don’t doubt that a rate increase is needed and coming, but, I wouldn’t place any bets based on the futures and options markets.

To: Les H who wrote (78797)	6/4/2007 9:44:48 AM
From: Les H	Read Replies (1) \| Respond to of 306849

The recent rise in long-term interest rates around the world - largely ignored by investors - is a bigger threat to Asian equity markets than any potential crash in China, and could trigger widespread corrections given stretched valuations in Asia, HSBC has warned. "Investors fixated on the bubble in the Chinese stock market over the past few weeks have missed, to our minds, a much more important risk to global equities: the steady rise everywhere in long-term interest rates," strategist Garry Evans wrote in a report Friday. Hong Kong yields have risen to 4.6 percent, from 4.2 percent, over the past three months, and three-month interbank rates have also jumped to 4.7 percent from 4.2 percent. These jumps are even more marked than the rise in 10-year US Treasury yields, Evans said. These risks matter because valuations in Asia are becoming increasingly stretched. The forward price-earnings ratio for Asia excluding Japan has reached 14.3 times, or 1.5 standard deviations above the post-2001 average. US Treasury yields have risen 37 basis points in the past three months, reducing the fair value of Asian equities by 7 percent. "What this means is that the market is likely to be vulnerable to any small downside surprises," HSBC said. thestandard.com.hk

To: Les H who wrote (78797)	6/4/2007 10:15:22 AM
From: Think4Yourself	Respond to of 306849

More problems for the feds? Factory orders up only 0.3%, but March was revised up. census.gov Economy lining up in favor of the stagflation followers (slowing economy and rising inflation)? When the homebuilders eventually ratchet production down far enough to match supply we should have a better picture. It looks like the manufacturing sector overbuilt goods expecting the typical strong annual spring home selling season. Now that it hasn't materialized we are in for at least a few months of no growth.