Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Elroy Jetson who wrote (78806)	6/4/2007 11:18:21 AM
From: John Vosilla	Respond to of 306849

Interest rates spiked in 1987 prior to the crash... Perhaps more important for that period was that inflationary pressures had substantially declined while rates remained quite high. Contrast that period or the subsequent bottoming of the housing market in 1992-93 at much lower rates as the disinflationary period continued with what is going on today. Scary times these days IMHO. No interest rate relief coming to create recovery or even stabilization in housing.

To: Elroy Jetson who wrote (78806)	6/4/2007 4:38:26 PM
From: SouthFloridaGuy	Respond to of 306849

What differentiates me from others is I don't fight when I know I've mistyped. I wrote the post without access to my Bloomberg. I actually went and checked the stats and you're right. A sustained increase in rates would not be good for the markets. So no false memory here. I will say, however, is similarities to the 1980's will be continued Private Equity activity in the face of rising interest rates (at least for 1/2 of the rate hike cycle) due to the discrepancy between cash flow and financing rates as well as relatively liquid global rate environment. That I will not retract.

To: Elroy Jetson who wrote (78806)	6/5/2007 3:19:13 PM
From: SouthFloridaGuy	Read Replies (1) \| Respond to of 306849

Parallels to 1987. I forgot to mention that before the market crashed, it had a huge run-up in the face of rising rates. I expect the same here until a global equity and debt crash whenever that may be. I expect our markets to go "Chinese" as supply of stock has continued to dwindle. It will be too early to sell at the beginning of a rate rising campaign because momentum will be too strong, IMO. But Bernanke will break its back no doubt. One has to be very long and strong here. forbes.com

To: Elroy Jetson who wrote (78806)	6/5/2007 8:30:22 PM
From: George K.	Respond to of 306849

Yes, rates rose quite a bit in 1987 with both rates and market topping in the late summer-fall. 10-10.5% was the high - somewhere in there. So that chart is either misleading, maybe too long a time frame, or maybe the years of sniffing glue got my memory. Another thing is that crash was really 3 or 4 days. The Dow tanked the week prior 200 or more points (that was a lot) - then the whopper came on Monday. Also most world markets fell. Always blamed James Baker for that one. It had been a bad market week and he ran his mouth at the Germans that weekend on a dispute over the mark. He kind of vanished after that. Few agree with me on Baker though. Geo.