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

To: Smiling Bob who wrote (158156)10/17/2008 3:26:28 PM
From: damainmanRespond to of 306849
 
I agree in principle, so I just put some principal in MOS at 33.60.



To: Smiling Bob who wrote (158156)10/17/2008 3:56:26 PM
From: Think4YourselfRespond to of 306849
 
Geopolitics are actually stabilizing. Korea has started unloading fuel from their reactors. Iran is shutting up lately. No new "melamine milk" or "lead paint for kids" campaigns out of China either.

Now if we would just get our butts out of Iraq and concentrate on the real problems here at home. Maybe after the Shrub has been ripped out of the White House in January...



To: Smiling Bob who wrote (158156)10/17/2008 4:01:26 PM
From: PerspectiveRead Replies (2) | Respond to of 306849
 
<But how much lower can we possibly go? Worst case scenario is we drift for months or qtrs. >

Gotta be careful with statements like that. That is not the "worst case scenario".

I see a market where corporate interest rates - the yardstick for stock PEs - have doubled. The credit bubble has died. Even in the absence of a recession, stock prices should fall 50% in response to the interest rate increases. However, we face in the coming months the feedback from the financial economy into the real economy.

Never before have the valuation metrics for stocks changed so rapidly, with both interest rates and earnings turning on a dime. I'm not saying we go down from here - we'll probably be marginally higher a few months out - but I expect a 1930-2 style bleed from here on out.

And I would most certainly not say that we've already seen the "worst case" scenario. Look at Shanghai for an example of what *can* happen.

`BC



To: Smiling Bob who wrote (158156)10/17/2008 5:05:07 PM
From: bentwayRead Replies (2) | Respond to of 306849
 
"I think the majority of panicked sellers are out.What's more frightening than a historical 43% drop?"

I think as recession sets in, the grinding downward spiral of poor corporate profits, consumer non-spending, layoffs, failed government rescues, continues, the market will ratchet lower. It won't end until only us elite smartypants own any stocks, when 401ks are regarded as retirement vehicles for morons.


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