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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: THE ANT who wrote (76978)	7/27/2011 11:43:41 PM
From: Oblivious	Respond to of 218179

I don't care. I just want to make money!

To: THE ANT who wrote (76978)	7/28/2011 12:18:17 AM
From: THE ANT	1 Recommendation Read Replies (2) \| Respond to of 218179

This is why I disagreed when Americans had zero saving and some argued that Americans increase in housing wealth was the same as saving.It can only be considered real if the house is trading at 4-5X local income on average(this reflects income stream/cash flow)If interest rate drop to 1% then the house can double in price but it is now 8-10X local income and not real wealth and will fall when rates return to long term average.On the other hand if interest rates are 20% a year and housing trades at 3X local income then you are wealthier than you think.Thats why Brazil shot upwards.They were much wealthier than they thought as interest rates were so high and yet would fall in long run.The US was the opposite much poorer(less wealth) than we thought we had.Then why has housing not gone up with even lower rates in recent months?The third leg of the stool :Sentiment is not only not positive it is negative.We also know that if housing goes up the Fed will have to raise rates and housing will fall again hence the term "maintain rates low for an extended period of time" They want you to get back in the speculation game by promising not to wack you with the mole hammer yet you know when things get beter they will have to wack you so you stay out