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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (89899)	12/26/2007 2:13:50 PM
From: Mike Johnston	Respond to of 110194

Yes, property definitely would get to rise, however, property still needs to correct around 30-50% in real terms to correct its overvaluation. My best guess is another 10%-20% down nominal and then another 1-2 years flat at the bottom, while inflation surges through 20% annual sometime next year, then as inflation pushes past 25%-30% sometime in 2009/10 real estate begins to rise at levels matching inflation. Only much higher rates, at least in double digits would negate my scenario. If rates rise to 10-15% then all bets are off. However, if inflation is allowed to rise to 30%, then even 15% interest rates are very stimulative in that environment. note: IMO current inflation is between 10-15%.

To: John Vosilla who wrote (89899)	12/26/2007 2:21:01 PM
From: Mike Johnston	Read Replies (1) \| Respond to of 110194

Another way to pinpoint a bottom in housing would be to watch gold. It is likely that the bottom in housing ( correction of overvaluation ) would be reached if gold crosses $1200 mark, while nominal housing prices decline another 20%, this is just my rough guess, i haven't done any calculations yet, but i will post them when i get to do them.