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

To: RetiredNow who wrote (259539)	7/9/2010 10:55:12 AM
From: James Hutton	Read Replies (1) \| Respond to of 306849

Given that their chart only goes back a couple months or so, and that the correlation was only viable for a portion of that time, how confident can one be in the correlation? AJC must not read their research.

To: RetiredNow who wrote (259539)	7/9/2010 11:02:23 AM
From: RetiredNow	Read Replies (1) \| Respond to of 306849

Hi all, ECRI's WLI is now at -8.3%, down from -7.6% last week. The last time prior to this recession it was down this low was in 2000-2001, as you can see from the chart below. The economy is still headed downwards and I believe that any bounce in the S&P 500 is just a dead cat bounce...wishful thinking. The WLI is now below the mean minus 1 standard deviation, which is a low probability event (32% probability). If it gets below the mean minus 2 standard deviations (5% probability), then that's an exceedingly low probability event. Just for reference, the WLI went below the mean minus 3 standard deviations in 2007, which was a 0.3% probability event and the first time the WLI had done that in recent memory. Mean = 1.5% M-1 = -6.9% M-2 = -15.4% M-3 = -23.9% Normal curve with standard deviations for reference: