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Strategies & Market Trends : Anthony@Pacific & TRUTHSEEKER Expose Crims & Scammers!!! -- Ignore unavailable to you. Want to Upgrade?

To: ravenseye who wrote (4574)	9/10/2007 2:59:02 PM
From: ravenseye	Respond to of 5673

Sunday, September 9, 2007 - Page updated at 02:05 AM Real-estate funds plunge; Franklin, Fidelity slump By Sree Vidya Bhaktavatsalam Bloomberg News Fidelity Investments, Franklin Resources and Kensington Investment Group were the biggest losers in a decline by U.S. real-estate funds that wiped out $13 billion in a three-month period ended Aug. 14. Property funds, the best performers in 2006, slumped 16 percent, the most of any category tracked by research firm Morningstar in Chicago. The $5.9 billion Fidelity Real Estate Investment Portfolio, the largest among the group, fell 19.7 percent. The $718 million Franklin Real Estate Securities Fund and the $500 million Kensington Strategic Realty Fund each dropped 20.3 percent, the most among actively managed property funds with more than $100 million in assets. U.S. house prices are suffering their first annual decline since the 1930s as rising mortgage rates and stricter lending standards hurt demand, according to the National Association of Realtors. Investors pulled $4.5 billion from real-estate funds in the three-month period after a drop in commercial property shares slashed returns.... seattletimes.nwsource.com

To: ravenseye who wrote (4574)	9/10/2007 3:01:05 PM
From: ravenseye	Respond to of 5673

INVESTING IN FUNDS: A MONTHLY ANALYSIS Real-Estate Investing Homesick Star manager sees steep price declines looming for once-hot regions -- but no U.S. recession By DAISY MAXEY September 10, 2007 online.wsj.com ...On the financial side, the vulnerable mortgages are not held on a broad scale by the banking system [but instead are] held by pension funds, hedge funds [for institutional accounts and wealthy individuals] and foreigners. There could be some effect on the Manhattan and the Greenwich, Conn., economies [where many hedge funds are based], but no broad effect on the U.S. economy. On the housing side, [last year] I talked about a 50% decline in the inflated coastal markets; I think we will get there.... If you listen to home builders' conference calls when they talk about the concessions they make in the form of extras at no cost to the buyer, they can be 20% to 30% of the house price. So we may not see the full 50% show up in the [S&P/Case-Schiller U.S. National Home Price] Index, because it may come in other forms. I think the decline in housing prices will be broader and deeper than I originally thought. I have been surprised to see how weak [the housing market in] Detroit has gotten. We didn't realize the extent to which exotic mortgages have been used to finance houses. In 2006, about 40% of the mortgages were broadly defined as exotic, including pay-option ARMs, second mortgages or subprime. In the next six months, I think there is going to be another meaningful leg down in housing. Builders need to sell about one house a week to stay cash-flow positive, so they'll just cut the prices. Additionally, foreclosure activity hits the market with a lag. We've got to bring house prices down to the level where buyers who would use traditional mortgages can buy them. The need for housing has not gone away. It's just that, going back in time from the low to the peak in 2005, there has been increasing activity with exotic mortgages, which got people to bid the prices up to where the traditional-mortgage buyer could not participate....