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

To: tejek who wrote (260410)	7/13/2010 2:13:16 PM
From: RetiredNow	Read Replies (2) \| Respond to of 306849

Hey tejek, I want to believe that we've turned the corner, but all I do is look at metrics. I don't trust the news media, so I ignore them and focus on hard numbers. ECRI WLI continues to deteriorate, now at it's lowest reading since the internet bubble collapse. The Dry Baltic Index has deteriorated for 13 weeks and continues to move lower. M3 money supply is on a sharp downwards trajectory. Housing sales have fallen off a cliff now that the tax credit expired. Meredith Whitney thinks we're about to see another major housing price correction. Retail sales are soft. Real unemployment is increasing. Government stimulus from the Recovery Act is ending right about now. None of the root causes of the 2007-8 collapse have been fixed, nor will those root causes be addressed by the FinReg bill making its way through Congress. Europe is on the skids and is implementing severe austerity measures, which will have a huge impact on global GDP and the US, which gets a sizable chunk of our GDP from exports to Europe. China is in a huge real estate bubble and is on the verge of seeing that explode. I read somewhere that 60% of China's GDP is construction related, most of which is coming from government expenditures. Just wait until they ratchet that down. Back here in the US the Census Worker bubble in employment is now reversing and we'll see the effects of that in June and July numbers. Small businesses are surviving off of credit card debt and consumers are deleveraging at a very rapid pace. In short, we are in the midst of a severe contraction. The government has been able to put a nice facade on it with money printing, stimulus, and bailouts, but the free markets are now exerting themselves again and the US gov't is out of bullets. Is it possible that the economy powers ahead despite all of the above and avoids negative GDP growth? Is it possible that the stock market doesn't collapse in the next few months back to March 2009 levels? Yes, but the odds are about 70% that the we see a double dip and the stock market goes down sharply by October. If that doesn't happen, then maybe the economy and stock market can muddle along in a lackluster sideways to slightly up pattern for the next 2-3 years. But I am not betting on that scenario.

To: tejek who wrote (260410)	7/13/2010 4:28:24 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 306849

lending is contracting for the economy as a whole - and that includes $1.6 trillion in annual federal deficits. businesses hoard cash because the economy sucks. tax rates to go up significantly. housing prices resumed down trend. states are broke - CA to pay workers $7.25/hour. federal government is about $5 trillion closer to going Greece, as it were. Fed is full of $2.4 trillion in trash that will make its way to fannie and freddie. Fed says banks have another $2.6 trillion they want to put on the Fed balance sheet (before the Fed moves it to Fannie and Freddie - the tax payer). banks still have to mark to myth because they are still bankrupt. but the market can continue to go up - there is a lot of hot cash out there in the hands of people who can go "all in" and then keep their winning and pass their losses off on to the tax payer. the $1.6 trillion deficits will have to stop at some point - what happens then?