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

To: Jim McMannis who wrote (240326)	3/8/2010 3:19:57 PM
From: patron_anejo_por_favor	Read Replies (2) \| Respond to of 306849

In honor of the upcoming 10th anniversary of the Dot Com crash, I'm starting a new feature on the thread: "10 years ago on All Clowns Must Be Destroyed". Past is prologue, hope you like it! Message 13117569 To: cfimx who wrote (15538) 3/8/2000 1:03:00 PM From: pater tenebrarum of 42517 twister, there's a special situation here i believe. the vast increase in margin debt over the past few months and the big inflows into tech funds in Jan/Feb are an indication that everybody is actually fully invested at this point. so it would probably not take much to topple the house of cards. as i have mentioned here before, in '87 only 3% of the invested capital actually left the market...the problem was that they all got the idea on the same day. i remember one of the Fidelity funds put in sell orders of about 2 bn. dollars on the day of the BK. that's all it took. right now the mutual funds have virtually no cash reserves. so where is the money going to come from to stop a fall? there's a pool of highly flexible ST traders money and there are shorts that could be induced to cover, but otherwise there seems to be limited buying power. note that trimtabs has diagnosed a liquidity deficit in spite of the huge inflows, as new offerings and insider sales proceed apace. therefore the entire rise in the NAZ can be attributed to margin debt. that's a dangerous situation... it's not necessarily selling that kicks off a waterfall decline...it begins in most cases with a lack of bids.

To: Jim McMannis who wrote (240326)	3/8/2010 4:04:10 PM
From: ChanceIs	Respond to of 306849

>>>I wonder if home and auto prices would drop...how far.<<< LOL I think that things would revert to close to cost after a while. And just remember, when you start raking in all of those dividends, you will be buying a new car every year - just like in the '50s. Every now and then it is good to recall that rather glaring statistic that by in large, Americans have something like 80% of their equity in their house. How stupid is that? Not so much that it is undiversified - I am not a big believer in diversity. But because it is so totally illiquid. And lots of bad things can happen because of that. You know...Patron moves in next door <G>. County raises taxes.