Bits Bucket And Craigslist Finds For January 1, 2007
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Cramer on Today:
A. Housing has been in the doldroms for ‘a couple of years now’ and
B. Anyone not buying a home or buying home builders stock is making a big mistake.
So for ‘A’, let’s wewrite history from what you have been saying and for ‘B’, let’s fool the masses once more. What a Capital A Jerk.
He has lots of good advice,but why builder stocks
1. no exclusivity
2. no chance of a dividend
3. history shows downtruns to last years and not quit till you get to 120x monthly rent
No he does not. He is an entertainer, athough not very entertaining and has no advice worthy of consideration. He rarely has a position himself in anything the touts nor does he acquire one after recommending.
He’s a joke and an embarrassment. If I were one of his kids, I’d be afraid to go to school.
I shudder to think how much I would have lost if I had listened to Cramer and gone “all in” in the stock market last summer.
Wait, you say the market’s up significantly since then?!
Or maybe if you’d listened to me and bought the homebuilding stocks in August.
You just like to argue. Who cares.
Even a stopped clock is right twice a day. Cramer, that bulbous headed jerk, screams “all in” constantly. He has to be right once in a while so I really miss the point here. He’s still screaming “all in”.
I don’t know how anybody can still be watching that show.
“I don’t know how anybody can still be watching that show.”
He obviously appeals to some niche market for mass media’s steady diet of bread and circuses.
When I post a point or observation that conflicts with the prevailing world-view on this site, that’s considering arguing.
OK, I guess it is. So I take it back. Cramer was wrong, the market went down from July to now.
from 2000/2003 Cramer called the bottom on every minor/major bounce for 3 years. if you say it enough times, sooner or later you will be right.
http://bigpicture.typepad.com/comments/2006/03/cramer_on_today.html
Bill, I think the lesson on this blog has been that you need thick skin to post. There are a lot of sharks and comments are made and constantly challenged. Cramer was right from July until now. But what about his screaming to “buy buy buy” from May - July of 2006.
I think the point here is that trying to side with Cramer, on anything, is a sure way to get shouted down. He is to stocks what David Lereah is to real estate. He gets to run his mouth freely and there are no negative consequences for those time when he is severely wrong.
beat nas lagged dow and S&P slightly
http://www.yourmoneywatch.com/index.php?name=Stocks&op=tools&PHPSESSID=deb585c79%208a8987b989ceb749185ab8dstill fun
S&P Total Return was 15.80% (with Dividends, 15.75% after ER) so he wast short by almost 3%. Factor in time, trading costs, taxes, and his fees, and you’re way under the Index 500. And Crammer has a Harvard Law degree, experience at Goldman Sachs and running his own hedge fund, and lots and lots of connections and resources at his disposal - and he still can’t consistently beat the S&P over time. And neither can most fund managers with all of the resources at their disposal. Tell me - How is the average schmo, at home day trading at their computer in their coffee-stained pajamas going to do it? (Hi TXCHICK!)
The answer Gekko is, slowly and over time. Time is on your side.
au contraire! day traders may win some battles here and there, but over time, they will lose the war. performance vs. the index lags the longer the time period.
The point I was making was look at Warren Buffets investing style. It is for the long term. Pull 25 year charts on WAG, MDU, GE, WWY etc. etc. Sure there intermediate downs but the long term charts are quite telling.
And exactly how many Warren Buffets have there been in the market this past 100 years?
Oh yes, all I have to do is study what Warren Buffet and Charlie Munger did for the past 30 years, and I too can be successful!
lmg-I for one, have been in the market for 30 years. I do not worry about all the short term crap and latest fad. Am very happy with my returns, and I sleep well at night.
sounds like you’ve created your own closet index fund. i just don’t think that’s the most efficient, low cost way to invest.
GEKKO-I keep well diversified on the stock side. Pick up stocks when they are cheap. Always keep 30-40% in fixed income, about 10% cash. I like to have about 30 stocks in the portfolio. I am not smart enough to know what interest rates are going to do so I pick up bonds when I can get at least 5% return.
PG - i’m not saying that’s a fatal strategy, i just think for your equity position, you’re better off buying 500 stocks via the index 500 vs. thinking that you are smart enough to pick the “right” 30 from year to year. also, funds allow you to inexpensively and monthly add to your positions with low costs. invetsing monthly prevents you from trying to time the market. best of luck in 2007.
Gekko-I do not change the 30 stocks yearly. Only a couple. Most of my stocks give me good return year after year. That is why I said pull charts on the stocks I mentioned. Make no mistake, I am not saying folks should do what I do. If you find something in investing that works for you keep doing it.
i didnt mean that you change the 30 stocks every year - my pint was the question - are you holding the *right* 30 stocks every year? too much risk exposure IMO. if you held WCOM or ENE (two Fortune 50 companies) your portfolio would have taken a huge beating. i’d rather own 500 of the best - not try to pick 30.
Gekko-What knucklehead owned those stocks? A little work by an investor told you it was all smoke and mirrors.
Go check the charts I just posted on my blog. I for one get better over time… and according to you am beating Cramer hands down
http://moominhouse.blogspot.com/2006/12/accounts-restatement.html
Never heard of him, but might he be a useful contrarian indicator?
Why Homebuilder stocks ? Beaten down way too much in an up market, thats why. The fool will not admit they are wounded ducks. With “winners” like HOV taking losses in the 4thQ, respected analysis predicting that ‘07 will be a poor year for builders (does he ever look at the fundamentals like earning ??? NAAA Insiders selling out like nuts (TOL, HOV, …) The GFs will caught again holding the empty BAG.
Bob –
Haven’t you heard of Wall Street’s new paradigm? Fundamentals don’t have any role in valuations any more. The only things that matter are whether the Fed will lower interest rates soon, and whether analysts rate the stock a “buy.”
GS: how true, … mind warp …. (don’t think independently, don’t look look at Morningstar) we are take control … Just do as Cramer says….
I nominate the MSNBC creeps for the governing board of TrickleDown Liars Club of America.
I saw this also. I have no idea what his credientials are but he is a showman. He does get paid to spout about investing and to advise you stay in cash and invest in nothing really would not benefit him or the investment profession that he represents. Warren Buffett recently talked about how investment advisors actually result in a reduction in wealth for investors, as they are just like Realwhores and earn commissions only if transactions happen. Basically, its all just biased speculation and no one really knows what is going to happen. I like the MIT paper that is at this link:
http://econ-www.mit.edu/centers/wel/housingcycles.pdf
It is worded in an even handed manner & the author does not have a vested interest in things going one way or another. He is neither gloom and doom nor pie in the sky, just objective analysis and points out all the contingent/possible risks.
that is good- lower int rates may get you to 150x rent, but after that it’s pure speculation……..imo
Joe, this is a fantastic article. Very well written and the thought process is great. Must reading for bubble bloggers. A straight forward conclusion. The basic conclusion: Most likely, the housing correction history will repeat itself…except for two wild cards: Economic downturn and a liquidity crises…those two lead to real catastraphies.
Hmmm.
That article (by Wheaton & Nechayev) points out the central role of subprime lending in creating the bubble.
….which will be ending very soon. The decline of sub prime lending will take 60% of the existing buyers and 90% of the stupid buyers out of the market.
In Sacramento, there are hundreds of sub prime loans being done at 150% of market value, where the buyers are committing fraud and getting $250,000 cash back. Think what that does to the sale comps: $500,000 sale reported at $750,000. Some class action legal firm should roll some heads in the lending business. We are all getting hosed by this activity.
The sub prime lenders must think “If we give the borrowers enough cash out, they will not default during the first year…..and we will not have to buy back the loan after 12 months.” What a crock. The party is going to end. Fitch, S&P, and Moody’s are starting the downgrades on the bonds, which will devistate the value, and the sub primes will finally crash. The greater fool bond buyers are actually starting to pay attention.
Yes, subprime needs to go, just a bunch of greedy SOB’s.
“The greater fool bond buyers are actually starting to pay attention.”
I hope they get wiped out as a just reward for their collective efforts to screw up the US housing sector.
You know who are some of the greater fool bond buyers, your local bank. All banks in general, but small banks are loaded with MBS.
Part of the problem is they do not get “wiped out”, they just get their returns diluted badly. The underlying asset usually has residual value. So if they lend $100 and lose 20%, they just offset that aqainst the other 9 $100 loans that are paying 7%. Thus the $49 in interest pays for the $20 in losses. So the $1,000 portfolio earns $29. It is still a positive number, just a 2.90% return. Of course if one or two more loans go under, they will get to some losses.
Glad to see the article is stimulating debate. I found it on another blog but it did not seem to grab anyone’s attention. Yes sub-prime lending & investment/speculation/2nd home purchases have driven the bubble unlike previous upswings in housing. The one piece they did not address was the reinforcing affect due to the confluence of the two variable. How much of the 2nd home/investment/speculation has been done using exotic mortgage products and/or that are sub-prime? If investors balk prices drop, if investors hold then we maybe ok, but if investors are forced to sell awemass due to the mortgage products they used then we’re in big trouble systemically depending upon the scale of the confluence of the two variables. This paper is just a draft and its a bit dated. I cannot find a more recent final version so hopefully the author saw this potential and it will be addressed in the final version.
–
During a trip to visit friends in N. California, a year ago, I was shocked to find highly educated people, 50s-70s age group, who were impressed with Cramer and they told me that he provides “very useful information.” I saw no point in arguing further.
We are dealing with an “educated” population that has been brainwashed from birth, thanks to the most aggressive and manipulative Propaganda Machine operating from NYC. That is the real story of the present-day America. I collectively refer to this group as B-a-BAD (Born-and-Bred American Dupes)! Trust me, the Housing Bubble had a LOT to do with B-a-BAD. The same was also true of the 1990s tech bubble. I knew many B-a-BAD in Silly.con Valley during 1999. It was fascinating to talk to them about their reasons for holding a huge amount of local tech Scams. Many of them turned into sad stories after the tech bubble burst. Guess what? The same B-a-BAD learned nothing from their losses during 2000-2002.
Stupid and manipulative people that many posters here talk about are not just in RE; they are everywhere. That is very important to note.
Jas
I know two engineers who gush about Cramer. I didn’t have the heart to tell them what I think about him. He’s not the only one. I bought JDSU at $2200 per share for 100 shares in 2001 or so on the advice of Money Magazine. It dropped down to $2 for several years. That was it for me. I don’t buy individual stocks on advice from others but do my own investigation instead. I got out of tech stocks and focused more on bricks and mortars large companny stocks paying dividends.
i remember Crammer yelling in 1999 - “JDSU - Just Don’t Sell Us!!!”
I was surfin’ thru the channels in my morning stupor and came upon a morning show that was doing a piece on “things you had to own in ‘07″. As you’ve probably guessed, I’ll do just fine without any of the “must things” highlighted. But the “Dupes” you speak will, I’m sure, be the first in line to get in line to obtain these things because “They” said so. To say that mass manipulation doesn’t occur on a grand scale is to have ones head firmly planted in ones stink-hole.
Dumb baby boomers
Crammer is a clown and his picks are usually wrong. It’s futile to try to consistently time/stock-pick and beat the market over time year to year. Betting on the long-term historical averages and simply riding the Index 500 in a low cost fund via DCA is the way to go.
HAPPY NEW YEAR!
heavy foriegn weighting is treating me well
this year’s retunrs seem excessive espc w RE coming down
yes - international funds have done well and I have no exposure to them directly. Vanguard is coming out with a new international index fund soon which i may or may not by. i take some comfort that about 40% of the earnings from S&P 500 companies come from overseas. if you look at the 10+ year performance, the S&P 500 beats the international index by a few points. BUT for diversification, it may not be a bad idea to have some direct international exposure.
Here’s a snipet from my hero on this subject which makes me wonder whether international funds are needed:
“I would add that I am not persuaded that international funds are a necessary component of an investor’s portfolio. Foreign funds may reduce a portfolio’s volatility, but their economic and currency risks may reduce returns by a still larger amount. The idea that a theoretically optimal portfolio must hold each geographical component as its market weight simply pushes me further than I would dream of being pushed. (I explore the pros and cons of global investing in Chapter 8.) My best judgment is that international holdings should comprise 20 percent of equities at a maximum, and that a zero weight is fully acceptable in most portfolios.”
http://tinyurl.com/ykw5td
Gekko, 20% is my current allocation in international funds out of my equities. As for currency fluctuations, it appears the Dollar is going to fall more the next few years relative to a variety of currencies (yuan, yen, euro). As a result, that should make foreign equities appreciate in value relative to the dollar. I’m planning to start dollar cost averaging in VEIEX this year - hopefully it will not close before I accumulate the minimum purchase price.
actually, i do have the Vanguard Health Care Fund (since 1995) and that has quite a few international pharma companies in its holdings - so i do have a significant direct international exposure there. 19%+ average annual returns since 1984 inception!
I’m envious. It’s closed to new investors, so is the Admiral form of the health care fund. One of my 401ks that I did not roll over has me in Vanguard Primecap Admiral. Now that’s a keeper. It’s the only reason why I did not roll it over to a traditional IRA into the Vanguard family.
VG Health Care has been a good fund for me - but who knows what will happen with a Democratic Congress and a President Hillary or Obama. Confisicatory Socialists aren’t too good for capitalism.
John Boogle on mutual funds, makes a good case for indexing. I have his Life strategy growth fund which diversifies for you. I also have index total stock market, index total foriegn market , REIT fund and index total bond market. I also have index value fund. As you can tell Boogle coverted me some time ago.
nobody can accurately and consistently predict the short-term movement of currencies, interest rates, or stock prices. if you think you can, there is a nine-figure job waiting for you on Wall Street.
I only have a few bearish spec stocks, but everyone I respect keeps telling me about a coming correction.Historically we are way over due for at least a 10% correction. The fact the market is hitting records while all signs point to a serious economic downturn tells me the pumpers are trying to get the herd ‘all in’ so they can get ‘all out’…..
>but everyone I respect keeps telling me about a coming correction.Historically we are way over due for at least a 10% correction.
Nobody knows. Nobody has a crystal ball. IMO - hedge your bets and stay diversified and have a position in all asset classes - cash, bonds, and stocks.
Yes, but the insiders are selling 35x more than they’re buying. Of course, what do they know…
Actually, according to Barrons, it was up to 55X in the first 2 weeks of december.
“I only have a few bearish spec stocks, but everyone I respect keeps telling me about a coming correction.”
My friend’s father is a stockbroker and her brothers and husband are in various positions in the financial world. She said the Christmas vacation discussion was quite gloom and doom for the nation as a whole with particular concern for the future of the state of NY in particular.
They felt that if CNY didn’t have some major turn around soon, things were going to go downhill fast. Seeing as one of her brothers was once a state rep, I took their prediction seriously.
I found it interesting that although she never mentioned the blog…and she knows I spend hours here, many of our themes seem to have been repeated at her dinner table during those discussions.
it’s futile to time the housing market. I just buy and hold. I think housing will slow to a more normal rate of single digits, these 10%+ declines are just nosie.
BUY AND HOLD!
Careful, John… some people here don’t recognize sarcasm very well!
OMG I saw that first thing this morning! I wanted to scream…ok was screaming at the tv. my hubbie watches him purely on entertainment value, but when he said that all I kept thinking was, who in there right mind will ever take him seriously again?!
Danni
The “Am I Annoying” site on Cramer:
“He stole his catch phrase, ‘BOO-YAH’ from ‘Sportscenter.’
He has been accused of being a ‘stock pumper,’ meaning he makes positive comments on some stocks because he wants to see the stock’s price skyrocket”.
http://www.amiannoying.com/(iu5z1v553ferfe45d0lbr2il)/view.aspx?ID=15629
Important questions to consider when asking how much faith to put into the “advice” of MSM pundits like Cramer or Gary Watts:
1) Have they always been right in the past?
2) Were the times they were right due to some better understanding of the situation than the rest of the worlds’, or to shear luck (randomness)?
3) Will they get paid anyway if their advice turns out to have been off target by 180 degrees?
Cramer knows as housing goes so does the economy, God forbid people start making money the old fashioned way by earning it. It so much easier to shake down joe six pack for a few bucks than going to school and learning how to do something. I hate subprime.
I remember him screaming and yelling on January 2, 2000 to buy AOL up $10 in the premarket on the news of the Time Warner merger.
AOL never saw that price again.
And then 6 months later instructing the stoopid to “buy on a dip”.
At the time of the merger, I kept thinking that AOL would screw up my perfectly good Roadrunner cable service from TimeWarner. As it turned out, the only thing that screwed was some of my mutual funds that had heavy stakes in TimeWarner, as AOL was cordoned off from Roadrunner.
Oh well, good internet service is probably more important, in the long run.
Searching through some old email I stumbled across an email exchange I had with a RE agent in May 2005. I had mentioned to some friends I was considering buying a home, and surprise surprise, one of their spouses had decided to recently become a RE agent.
He started an email exchange about where to look for housing stock and prices online. After I said I wanted to save up a 20% down payment before seriously looking, he told me to expect yearly price increases of 20%. Needless to say, I declined the offer.
I talked to my friend about a month ago and he’s no longer a RE agent. He went back and got a 9-5 job; having a baby probably started squeezing the finances.
I’m very much a DIY type of person, especially with finances. It’s a little scary to think of what would have happened if I blindly listened to this guy. We haven’t exactly seen 20% YOY increases… and knowing your “knowledgeable” RE agent only lasted 18 months in the business doesn’t exactly give you a warm and fuzzy feeling.
Talking about real estate bubbles, the UK bubble is really interesting. I think the UK real estate bubble is far worse than the US one. Prices are not correcting. In November prices went up another 1,2% and personal bankrupties in the UK are setting new highs in the meantime. The UK is one nice nut case like Tony Blair.
I’d say any place where 100-year mortgages are easily available is doomed.
Is the UK going to raise the interest rate again? And is RE going up all over the UK or just some areas?
More bad news for the Colorado market. Do you think this little story hitting the airwaves will make people want to rush to that hot Denver market?
http://tinyurl.com/yftdaw
When I read something like this I’m saddenned and don’t think about its implications for people’s wallets.
Catch yourself.
I’m saddened too but this is Denver, Colorado we’re talking about. Why the hell are there drive-by shootings at 3 a.m.? Is there something we are not finding out in this story, as usual?
Call me old fashioned but you don’t go out and celebrate the demise of your season in a stretch Hummer limousine even if it is New Years Eve. Where did values go in this world?
I disagree. This was a hard-working guy who excelled at his job and was paid well. And he was only 24. After a great season, why not gather your friends and party on New Year’s Eve? And if he could afford a limo–why not? It’s not like he needed a credit card to finance the evening. His death is deeply sad and frightening.
Makes me wonder, NYCBoy–weren’t you ever this young?
Yes, I was young. But I was never a professional athlete that was making hundreds of thousands of dollars to represent a community. These guys forget that it is the community that is paying their salary. They represent the city of Denver.
The Broncos had just lost 26 - 23 in OT against the 49ers. This knocked the team out of the playoffs. I’m sure the Denver community was upset with that. This is the same Denver community that pays hundreds and thousands of dollars to attend Mr. Williams’ games. The coaches and every player should have known not to be seen around town partying like it was 1999, even if it was New Year’s Eve. That, to me, is an obligation they had to their community.
If something awful had just happened to the company that you worked for would you go out and celebrate in a stretch limo until 2 a.m.? Out of respect, I know I wouldn’t. Darrent Williams death is sad. The death of values is also sad.
I’m betting there is more to this story than we are being told right now. Let’s hold final judgment until we find out all of the details.
the problem is that these guys find it hard to leave their old “posse” from the old neighborhood behind. the posse brings the trouble.
>If something awful had just happened to the company that you worked for would you go out and celebrate in a stretch limo until 2 a.m.? Out of respect, I know I wouldn’t.
the multi-million dollar paychecks, the fame, and the groupies quickly make them forget about any losses on the field. players are in it for the money. win or lose, they’re all laughing together in the locker rooms at all of the dumb fans who support their extravagent lifestyles through exorbitant ticket prices.
That’s true, Gekko. Athletes appear to be more juvenile each year. But I guess as long as he doesn’t put it on his credit card all the rules are waived for these guys. That seems to be what I get from Spike66’s post.
“Gentlemen, you’re here in the NFL for money and memories. When you leave, you want to make sure you take as much of both with you as possible.” - Cris Carter to the NFL Rookie Class
“The Broncos had just lost 26 - 23 in OT against the 49ers. This knocked the team out of the playoffs. I’m sure the Denver community was upset with that.”
The team’s owners pay the player’s salaries…fans who attend games pay their money to the owners. The “community” does not own the team or the players. We are still talking about America, right?
I’m sorry you never made enough money to splurge with your friends on New Year’s Eve when you were young. But why so sour about a young athlete spending money he honestly earned. So , his values may not reflect yours…so what, it’s a free country.
And “the community” may be upset with him–so he should anticipate getting shot to death by disappointed members of ” the community”? Sounds like Saddam’s sons killing the members of the Iraqi football team who lost a match game.
“The “community” does not own the team or the players. We are still talking about America, right?”
Who paid for that fancy new stadium in which the Denver Broncos play? It wasn’t the Broncos or Darrent Williams. It was the taxpayers of Denver. Sports teams are unique in that they are more closely woven into a community than any other business.
“And “the community” may be upset with him–so he should anticipate getting shot to death by disappointed members of ” the community”?”
Yes, that’s exactly what I implied. He deserved to be shot. I love when people jump all the way off the deep end with things like that. You don’t even know who killed him yet.
“So , his values may not reflect yours…so what, it’s a free country.”
And his values may have gotten him killed. If he was out with a bunch of thug friends and this was a retribution shooting then obviously his values were wrong. So, now what’s your point?
” But I was never a professional athlete that was making hundreds of thousands of dollars to represent a community. These guys forget that it is the community that is paying their salary. They represent the city of Denver.”
Just for the record, your post and your response continue to be muddled. Once again, football players do not get paid “to represent a community”. They get paid to play football. “The commmunity pays their salary”–nope, the owners do.
“They represent the city of Denver”–only in the minds of some fans. And if the owners of the team can convince a city’s elected officials and its taxpayers to foot the bill for a stadium and secondary roads, et.al., then more power to the owners. Taxpayer funding in this instance does not transfer any “ownership to the community” and said community can expect when owners find a better deal elsewhere, they will move the team. So much for “representing the community”.
It looks like we’re losing track of the point here. I posted the story on a housing blog as an incident that would have impact on a local housing market. Drentzel tried to turn it into something else.
It has turned into a discussion on the role of sports teams in their community. I believe sports teams are tightly woven into their communities in a unique way from other businesses. Clearly, you do not.
I think Darrent Williams’ actions last night were irresponsible. He should not have been out partying at 2 a.m. This is a guy with 2 little kids, after all. Maybe those responsibilities should be his main focus.
I do not believe he deserved to get killed. But I don’t know all of the details of this incident. It has the feel of the Ray Lewis incident to me. But instead of the NFL player being the killer he may have been the one getting killed.
My conclusion is that this event will have a negative impact on the local Denver conscience thus having an indirect, or direct, effect on housing in Denver. Sports teams can lend a lot of prestige to a city, just look at the Bulls when Jordan was playing in Chicago or the Cowboys to Dallas in the late 1990s. They can make living in a particular city a lot more enjoyable. Think of New York without the Knicks, Giants or Yankees. Teams can also take away from a city’s image, such as Charlotte, North Carolina where Rae Carruth killed his stripper girlfriend, Fred Lane was killed by his estranged wife and Bobby Phills died while doing 107 miles per hour in his Porsche. That did bad things for the mindset of people in Charlotte.
Charles Barkley was wrong. Athletes are role models by virtue of their wealth and fame. It’s up to them to decide if they are positive or negative role models. In disagreement with you I also feel they represent their communities. It’s a matter of how they choose to represent those communities.
A 24-year old is dead. The father of two. You want to say he’s irresponsible for being out late on NEW YEAR’S EVE? Obviously he deserved to die for being irresponsible and drinking and driving. Oh wait, there’s a flaw in that argument. Well it was irresponsible to leave two small children alone. Really, an adult was there? Hmmmm. Myabe he simply deserved to die for being in the wrong place at the wrong time since so far the reports do not indicate he was having any kind of altercation with the ones who shot him.
The glee people are taking in other misfortune on this blog is getting more and more disheartening. Fine, anyone who loses a game cannot go out like every other young person on New Year’s Eve. They should sit home alone all night reflecting on their sins. How dare they try to go have some fun in life after a season of hard work. Heck, maybe they can do a little self-flagellation. Maybe than they can be as miserable as you are.
Happy New Year All! This is in hopes you save a lot of wealth and preserve the principle before the severe economic storm comes up. I don’t know which way the wind blows, so I diversify in everything I can dollar cost average to: Equities, government securities, money markets, and precious metal bullion. Please accumulate several years worth of living expenses. 3 months is not enough for the bad times ahead. My latest purchase order 30 minutes ago was a Series I bond through http://www.treasurydirect.gov.
Excellent advice, Bill.
Regardless of what the future holds, people who are prepared will always come out ahead.
p.s.: The one thing that gets me about you is how forthcoming you are on your personal finances. Please be careful with that. My dad once went into a gun store in Boulder and overheard a survivalist bragging about his heavily stocked cave in the mountains. When he asked the store owner about his own preparations, the owner pulled out a huge knife. The guy laughed and said “and just what are you going to do with that?” The store owner said “I’m going to come take your cave away from you.” The owner was joking, but the survivalist didn’t appreciate the humor and stomped out. Hopefully he took the message to heart. Take care.
Thanks. What is my street address? See my point?
While re-reading a history book this morning I stumbled upon a quote that is just great for this blog. This is chilling. It comes from “Modern Times” written by Paul Johnson.
“About the only thing in plentiful supply was the paper ruble, which the printing presses poured out ceaselessly, and which had now fallen to little over 1 percent of its November 1917 value. Some of the Bolsheviks tried to make a virtue of necessity and boasted that inflation was deliberately created to smash the old regime of money. One described the presses of the state mint as “that machine gun of the Commissariat of Finance pouring fire into the arse of the bourgeois system.” Zinoviev told the German Social Democrats, ‘We are moving towards the complete abolition of money.’ In a sense that was true: paper money has never recovered its old significance in the Soviet Union. But the price has been permanent shortages in the shops.”
This was written about 20 years ago but feels oddly familiar. Happy New Year to Misters Greenspan and Bernanke.
The Twilight Zone - “The Rip Van Winkle Caper”
To escape the law after stealing $1 million worth of gold bricks, a band of four gold thieves, led by scientist-mastermind Farwell (Oscar Beregi), hide in a secret cave in the desert. Farwell has designed suspended animation chambers and set them for 100 years, figuring that by 2061 nobody will remember the robbery and the gang will be in the clear. When they wake up, everything starts to go awry. One of the gang is already dead, a mere skeleton, because a rock had fallen and shattered his glass chamber. Greed soon begins consuming the others. DeCruz kills Brooks by running him over with the getaway truck, losing control of the vehicle and wrecking it. Consequently Farwell and DeCruz must walk through the desert in summertime, carrying as much gold as they can. Later, Farwell, who is older and somewhat obese, loses his canteen, and DeCruz forces him to ante up one gold bar for each sip of water. When the “fee” goes up to two bars, Farwell strikes DeCruz with the gold bricks, killing him. Farwell then continues to a highway, lugging the gold he refuses to abandon. Finally, weak and dehydrated, he collapses. A futuristic car drives up and Farwell offers his gold to the couple inside in exchange for water and a ride to the nearest town, but expires a few moments later. As the man gets back into his car to report Farwell’s death to the police, he quizzically remarks to his wife, “Funny. He offered me this like it was really worth something.” The wife vaguely recalls that it had, indeed been valuable sometime in the distant past. The husband replies, “Sure, until they found a way to manufacture it,” and tosses the gold bar away.
Nice post, Gekko.
NYCityBoy –
Do you and the G-man live across town from each other? Maybe you ought to “get together” — do you know what I mean
lol
They just had that episode on SciFi’s annual Twilight Zone marathon….pure classic.
Still, there are limits to what science can do. We can synthesize perfectly good, gem-class diamonds, but cheap production of gold is not on the event horizon. Actually, the cost of gold productin is more closely tied to the price of a barrel of oil, and that has been going up.
I wonder how they would have done with “Federal Reserve Notes”?
LOL. Or stock certificates. They certainly don’t have any technical barriers to manufacturing shares.
Twilight zone suits you Gekko. Keep bashing gold while it keeps outperforming your vaunted s&p. I wonder though, why don’t you bash Europe, emerging markets, energy, China funds, etc. etc. After all, they all outperformed your s&p.
please print this and paste it directly above your computer monitor.
http://tinyurl.com/trwmm
Nice chart. I remember 1802 well, it was a great year for wine. I have no idea how they arrive at their numbers but if you want something more relevant, try this:
http://www.moneychimp.com/features/market_cagr.htm
gekko, my investment horizon is a little less than 200 years. I’ll be more impressed with you telling me what is going to happen in the next ten years.
Gold up 23%
Silver up 45%
This year if the S&P goes up 5%, I will be happy. I think gold will go up at least 10%. 40% if the Iran crazies unveil their nukes. Forbes this week showed the range of Iran’s missile technology includes Israel. Gold, silver, and platinum will react as if the world is going to end, if that SHTF.
This is a contrarian blog, and gold is a contrarian investment. Funny how so many seem to miss that.
Come on, guys… use your head. Any investor with a lick of sense knows that the best time to buy (stocks, RE, etc.) is when no one else will; conversely, the best time to sell is when everybody is buying. So, if you think an investment idea is crazy, consider the majority opinion; if it’s the same as yours, it’s time to re-think your position.
When rents reflect peoples real earnings you get this:
http://www.pattinson.co.uk/public/Content/Commercial/Investments/AnhaltGermany.aspx
(Gross return is 45.600 euros on asking price of 525.000 euros or 8.7%)
But I’m sure english investors will bet on the HUGE appreciation within a few…..(fill in as you like, days, weeks, months, years, decades, centuries)
JMF, could it be that Germany reflects the ‘real’ home value? If so, you’d better keep out the Brits or you’ll have a bubble in no time.
Keep in mind that what was once East Germany is awash in empty Soviet-era apartment blocks. Younger people left for more economically robust areas, and the remaining population is old and dying off. It’s no surprise that much of Germany escaped the bubble. So did Rochester and Buffalo.
and SWZ where foks remained sane
up 15% in 5 years
rochester and buffalo didn’t escape the bubble.
http://www.housedata.info/NY/Buffalo.NiagaraFalls/
http://www.housedata.info/NY/Rochester/
I just “zillowed” my parents’ house I sold in 2000 for $75,000. It dropped another $3,000 in December. It was estimated as much as $290,000 and is now estimated at $248,000. It’s in an industrial/crime area of Fresno. I would guess proper value would be $105,000.
Here’s a craigslsut find:
http://tampa.craigslist.org/rfs/255383348.html
I looked him up on zillow and he is indeed taking a loss (if he does actually sell).
Can you imagine?
Down payment: gone; equity: gone.
Wow! That’s a helluva typo. I obviously meant “craigslist.”
By the way, I read somewhere that correcting someone’s grammar during a discussion is a sign of contempt; something to remember while blogging.
Funny, how the mind works when reading, I didn’t even notice the typo.
It may have been a typo, but I think you may have coined a new word.
craigslut: a homeseller who continually lists their overpriced POS in great frequency and refuses to significantly lower their price in the hopes of finding that elusive greater fool.
OT on the housing bubble. Did anyone see ‘Megatrends’ J.Neisbitt?
His conversation on populations,economies.
Number of cities over 1 million.
UK -1
USA-15
China -160
and they have 6 cities over 8 million of which I’m sure you have never heard their names. Commodities, namely oil money flows will be affecting our way of life very soon.This RE bubble may have very well been an economic last hurrah.
Maybe dramatically higher oil prices will make imported goods less attractive and therefore provide incentives for people to produce more consumer goods locally and therefore result in a more evenly balanced economy and view of life. Sure there will be an oil hangover, but maybe in the end people will be less focused on get rich schemes like endlessly swapping houses and be forced to do something productive.
These are reasons I’m optimistic for the future after the coming depression:
1) Our government will necessarily be scaled back to a fraction of it’s current self, taking the monkey off everyone’s back.
2) [As you state] The skyrocketing cost of importing goods will cancel out the effect of cheap overseas labor, thereby bringing manufacturing back to the US.
3) Technology & innovation — areas America still excels in — will be the key to meeting future needs and eliminating dependence on imported oil & gas.
4) [As you also state] Hard work, thrift, savings, self-sufficiency, etc. will return as core American values.
I’ve got more.
“This RE bubble may have very well been an economic last hurrah.”
Nahh! We are in for some tough times but don’t count us out. Americans are a highly solution oriented and inventive people. Most Americans just need to get up to speed on the global competitve market realities we face. After this occurs, we’ll reinvent ourselves and economy all over again.
One of the major emerging trends I see is a return to and emphasis on quality and value added services/products. Most and by all means not all Eastern made products are poor quality copies of European and American products.
Americans are a highly solution oriented and inventive people
Wishful thinkin’. The only reason we are where we’re at is because all the major industrial player’s lay in ruin following WW II.
This country’s hey-day was in the early to mid-60’s before LBJ’s Great Society and the Vietam War wrecked it all.
Doubt me? Go look at a quarter from 1964, and compare it to that cheap-azz piece of tin rattlin’ around your pocket today.
Ya can measure a country’s direction by the quality of it’s coinage. Not much to say for the good ‘ole US. From the top to 3rd world in a couple generations.
Pols & the international bankers stole it all.
Show me a man who is pessimistic on the future of America and I’ll show you a loser.
The best is yet to come!
Damn G, I never thought I would never agree with you, but you are spot on. Our best year are ahead of us.
Year should be years. Sorry, please shoot me now.
Yeah, I just don’t get why anyone would be pessimistic about America’s future. Well, other than the fact that we have a generation of men raised by women, who never learned how to be men. Oh, and the popular culture scorns success earned through hard work and sacrifice, when Madison Avenue tells us we can and MUST have it all now, even if it means debt slavery. The pathological victimization of the Great Society and a huge overage of litigators means everyone is a victim, and no one is accountable for their own actions, poor choices, or stupidity. The huge and growing underclass, combined with the AARP geezers with their huge voting bloc and gimme-gimme-gimme mentality, means entitlement spending is completely out of control - oh, but let’s just pass that to future generations. Our foreign policies - not our way of life - have vastly multiplied the number of people who hate America and Americans, and wish us harm. The “shareholder value” corporate culture sees obscenely huge bonuses awarded to the undeserving, while formerly great companies are run into the ground and pension funds are looted. Our “prosperity” is built on a gigantic debt-and-credit bubble. The productive, law-abiding classes in this country are being squeezed to extinction by taxation and the cost of living. Too many of our children are obese little monsters plugged into X-boxes and Ipods, and as uncultured, greedy, stupid and lazy as the fat-assed, minibus-driving slobs who spawned them. Our insatiable appetite for Middle East oil leaves us at the mercy of Islamic fanatics and time is running out for the corrupt, debached Sheikhs we call our “allies” in Saudi Arabia and the Persian Gulf. So other than the trivial little concerns I just mentioned, the future is so bright we should all be wearing sunglasses.
” Show me a man who is pessimistic on the future of America and I’ll show you a loser.”
..well, just for the record we will a power,and rise to the challege. I love this country, but if I’m pessimistic I’m a loser ??
Who are you exactly Larry Kudlow. ..Yeh, I know’Mission accomplished..give me a break.
We have the ability for anything ,but the future dosn’t look great to me..Call me pessimistic.
Greatest debt in history
an economy based on house flipping,
and mega bonus for non producing CEO’s.
No energy policy since the 76′ gas crisis.
Sure we’ll come through,but I’m not optomistic
on the probable short term.
..Oh I guess if I’m agin ya..I’m one of those..
Give me a break
EofO, this ranking may be faulty. Many of the U.S. population centers exceed 1 million people, but they do not register on the “list” because the “city” has a narrow geographical boundry. San Francisco is a great example: 750,000 people, but 7 or million in the bay area. China may have city boundries that actually encompass the whole region. Even if this measurment is faulty, the point about China is valid.
You are right. Just look at Minneapolis and St. Paul. Minneapolis has about 700,000 people. St. Paul has about 350,000 people. The metro area is now about 2.2 million people. But nowhere in there can you find a city of 1,000,000 people. Lies, damned lies…….
The post about China also shows why I do not think the 21st century will be so easy for the Chinese. All of those people are going to cause major challenges to a capitalist, totalitarian regime. We’ll see what happens when they experience their first major economic downturn after giving people a taste of prosperity. The Commie leaders may want to bring out the tanks again but the tank crews may not be willing to fire. Then what???????
There are about 50 million cities in the US and 5-6 in the UK.
> Minneapolis has about 700,000 people.
No, much less, around 400′000. OTOH, our metro area has more than 2.5 Mio inhabitants, so the main point remains valid.
Why the UK housing bubble will continue!
Or how much migration can one country have in such a short time?
Migrants: New rush to Britain begins
01/01/07
by Nick Fagge
in Sibiu, Romania
TENS of thousands of new immigrant workers will start flooding into open door Britain from today as Romania and Bulgaria join the European Union.
Bus and plane tickets have sold out as Romanian and Bulgarian workers seek to enrich themselves in the UK.
They now join a tide of low paid workers including Poles, Slovaks, Czechs, Lithuanians, Estonians, Hungarians, Latvians and Slovenians who are already here, enticed by our higher wages, health system and generous benefits.
In Bulgaria, bus operators have been forced to put on extra services for the New Year rush to Britain.
In Romania, new budget airlines have sprung up virtually overnight with new routes to cater for the thousands of migrants heading for Britain and other EU countries in the coming days.
Some of the flights to Britain cost less than £10 and bookings are solid for much of the rest of the month, we have learned.
A spokesman for Bulgarian travel agency Posoki said: “The situation about travelling to London is becoming frightening these days. There are no tickets available until January 15 for any of the airways.”
“An estimated 600,000 Romanians and Bulgarians are expected to leave their homelands for the UK from today, prompting the Home Office to launch a £300,000 advertising campaign in a last minute attempt to stop them.
But the campaign is likely to be futile as Romanians and Bulgarians are free to travel to Britain and say that they are self employed. Many will simply join the thousands of illegal workers already on the black market.”
http://www.express.co.uk/news_detail.html?sku=977
Imagine what happens when there is an economic downturn and they all become unemployed, leaving to return home, which always happens in the end.
Bulgarians and Roumanians will also put downward pressure on already low wages of Polish, Letvians, Slovakians, etc.
Will be interesting to watch the outcome.
The boiling pot. The EU is a disaster for so many of these countries. I guess that is the price for surrendering your sovereignty. And the average Brit probably had no say whatsoever in all of this.
Just like NAFTA, CAFTA, and FTAA.
Are the average wages of Eastern Europeans so dismal that they pack up and leave for the UK? What does that say about wages in China? You can find tons of stuff made in China but not much made by Eastern Europeans sold here in the USA. What will fill that void left in Europe?
“Are the average wages of Eastern Europeans so dismal that they pack up and leave for the UK?”
Floor tiler Adrian Ungureanu, 29, from Bucharest, said:”When I travel to Britain there is a job waiting for me and I will earn more than four times the amount that I can earn here in Bucharest.
“I can work for six months and have enough to keep my family for two years.”
Mesmerized by the mortgage mania.
Tales from Tampa.
A couple of anecdotal stories to say the kool-aid drinking is still fashionable here………………..
I was at a New Years party last night at an old girlfriends house.
She told me she recently sold her albatross. I was surprised and happy for her, but I found it a bit fortuitous, considering the condition of the house, the timing and the relative ease with which it sold.
Purchased 1996 for $45k, as a HUD repo.
First attempted sale 2003, after vacating and renting for 75k. No takers. It needed new roof, 2 new bathrooms and complete painting/carpet, etc. 4/2 with enclosed garage about 1800 s.f.
Ad method: flyer at local restaurant and word of mouth.
Day on market: 30. (She wanted is sold by Oct 30th) after Hurricane season.
Selling price from bid war with 3 buyers: 101k after costs plus 30k under the table to hide the additional money for expenses/taxes.
Total price 131k plus change, in need of 30k in additional work.
As an added feature, the house fronts I-275 in North Tampa.
Last month, the yard was stripped of all the shrubbery and small trees to make is more exposed and a sign put up in front: FOR SALE. New asking price is 225k. The flipping continues. Good luck!
And another: a chance meeting at lunch in Clearwater Beach. Young guy(early 20s) working at bar, talking with buddy, wants to start to get his life on track. Thinking about buying a house or condo. He has been looking in Tampa. I interrupted and asked why he was thinking about buying in the current market? He said he was “tired of throwing his money away on rent” and tired of having roommates. (current rent $500). He is looking with some female agent. Thinks the past few years have show RE to be a good investment. I could not convince him otherwise. Too soon we grow old, too late we grow smart.
The bubble-mania continues. He says it’s a “buyer’s market”.
When will this all end??
Oh! and I forgot to add one more thing…………
The Donald Trump Circus is coming to town. I got two invitations in the mail to make sure I didn’t miss out on my chance to turn a few part-time hours into real estate riches.
“One year and counting down — Beginning at 12:01 a.m. Jan. 1, 2008, the first Boomers will turn 62 and become eligible to collect early-retirement Social Security benefits”.
http://www.chicagotribune.com/news/opinion/chi-0701010143jan01,1,5643938.story?coll=chi-opinionfront-hed
When will people truly face the music with respect to Social Security and how will this impact Boomers, GenXers and EchoBoomers?
I’m a Gen Xer and I’m going with the assumption that SS will not be around for me and thus taking the appropriate action now. i’m not counting on the government or my employer or some union or anyone else to take care of me. it’s called taking personal responsibility for your financial future.
Gekko, what is a good fund for my wife and I to start dollar cost averaging into? My demographic is the same as yours. If you had to start now what would you start with?
Use a chart and Vanguard index funds. Most mutual funds are incredible ripoffs via management fees and expense ratios plus loads.
Ignore the troll tag team (NYCityBoy and Gekko).
Pretty amazing how fast you turn on people Stucco, especially when they are not even addressing you. I guess by your definition I’m a “troll”. From now on when you call anybody a “troll” it will be hard to believe you have any credibility. Is that really what you want?
I think your hatred of Gekko is really eating away at you. Seriously, you need to let it go a little and deal with Gekko on a post-by-post basis.
You guys need to start your own blog,you are driving people from this site.grow up people this is a RE blog who cares about the stock market.Stucco do you have to post 300 posts a day?
Bottomfeeder, that is a good point. But a valid component of a housing blog is strategies to protect assets against the real estate crash that we all feel is taking place. That puts the stock market, gold and any other investment as very valid topics on a housing blog. This is probably the place where you can find the most balanced discussion of markets so I find it to be great reading.
I don’t think this drives people away. Do you really feel that way? Plus this discussion is taking place in the bit bucket where it belongs. Go Michigan!
Great way to start the new year, guys.
I hope you aren’t looking for financial advice on a housing bubble blog. Certainly not from the G man.
I hate to tell you this but I trust the people on this blog more than almost anybody else that I know. I have found that there is more knowledge and common sense here than I could ever hope to find in my day-to-day life. Ideas are posted and challenged endlessly. The good ideas hold up while the bad ideas get run off like ants at a picnic. I trust TXChick and Gekko more than I trust Jim Cramer and Larry Noseblow.
Gekko seems to hold his own pretty well. I don’t always agree with him but he does add to this blog. I am looking for a low cost fund for the long-term. I would bet Gekko and TXChick could steer me better than any of the scumbags that work just down the block from where I live.
The G man and NYCityBoy make a good tag team, don’t they?
Diceman, I trust the people on this blog. The ideas here are better than what I see any place else. Should we turn to Jim Cramer or CNBC? I trust TXChick and Gekko more than the MSM.
As for Stucco’s bitter little comments that is fine. He is what he is. I will not get into a pissing match with the self-proclaimed king of this blog.
can’t we all just get along
NYC - assuming that you have a long term 20+ year time horizon and $3K to start, I like the Vanguard Index 500 Fund or the Vanguard Total Stock Market Fund for my equity position. Index 500 is the S&P 500 and the Total is basically the Wilshire 5000. I would start with $3K and then automatically have $100 (or more) deducted from your checking account automatically and invested every month (or two weeks). Vanguard offers this auto service - it’s great.
The Vanguard STAR Fund is good to and only requires $1K to start. The STAR is a balanced fund with Bonds and Stocks and a little Cash. I prefer to own individual funds vs. a balanced fund.
IMO, the IDEAL portfolio is this:
1. Vanguard Prime Money Market (or tax-free equivalent)
2. Vanguard Total Bond Market (or tax-free equivalent)
3. Vanguard Index 500 or Total Stock Market
Put $3K in each one to start the funds and then dollar cost average a fixed equal amount every month automatically into each and forget about it. Put yourself on investing autopilot and go live your life. Increase the auto amounts as your incomes rise.
Be sure to do your own research. Good luck!
Hey Stucco, please read Gekko’s post and let me know if I can read it or not. Thank you.
I would consider VGTSX to get some additional international exposure.
Gekko,
Good selections. After being in those funds for awhile, NYCBoy and wife should save up another $3,000 minimum purchase and get into a Vanguard international mutual fund. But yes, the 500 Index fund has international exposure by virtue of being made up of large U.S.-based companies doing business around the world. I have Dodge & Cox International fund. It’s a value fund in stable countries, such as Japan, France, and GB. But I want to get into the emerging markets, so that’s why I am eager to save up the $3,000 to get into VEIEX. Dollar cost averaging $100 per month is good enough for me.
Gekko, I am now retired, and assumed my entire working life that I would never see any of the FICA money contributed over the 40 yrs that I paid into it. However, now collecting $25K a year of unplanned for SS payments. Finding it comes in handy when traveling to the islands. The challenge now is to stay healthy so I can recover all of the $$ paid in to it. Your point is still valid however: Don’t count on the Gov’t for your financial future.
congrats on your retirement. just curious - how long have people been concerned that SS won’t be around for them? were they saying this 20-30 years ago?
Yes, SS has been worrisome for a long time. Many changes over the years have changed the risk profile for better and worse as the political winds change. It is not a static program, even though it seems that way over short periods such as 10 years.
History here:
http://en.wikipedia.org/wiki/Social_Security_(United_States)
lol
http://washingtondc.craigslist.org/nva/wan/255991001.html
Whatever it was, it’s gone…
http://www.safehaven.com/article-6616.htm
Another article bullish on stocks. Too much money chasing too few stocks. Kind of like RE a few years ago. This person is big on Bank stocks.
Personally I’m getting much more bullish on stocks never mind the inverted yeild curve. The reason? The FED is increasing the money supply and will cause high inflation to bail out the housing bust causing a stock market bubble.
Of course if the FED does raise rates and decrease the money supply then we have our recession, this is what I thought would happen last spring. Its not happening.
Mixed emotions, buddy. Like Gekko going off a cliff in my new Maserati. -wall street
Seriously, Nasdaq never has reflated. Maybe they can push the Dow up because it is so easy to move a small number of stocks, but in such a scenario other things will inflate faster.
Maybe they can push the Dow up because it is so easy to move a small number of stocks
Not to mention attempt to pick & choose future winners (and dump the losers) in their 30 bellweather stocks.
“London, some 200 years ago, became the first city since ancient Rome to reach a million inhabitants: now, there are more than 200 such cities. About 20 of theseare “megacities” exceeding 10 million, and one, Tokyo, has become a “metacity”, with more than 20 million. Reports by Washington’s Worldwatch Institute, published next month, and by the UN Population Fund, due in the summer, will describe the imminent transition and grapple with how to cope with the rapidly swelling cities”.
http://news.independent.co.uk/environment/article2114489.ece
Come to Tampa and live FREE for 2 years.
The pimping continues……………………
$60k cash-back for buying.
http://tampa.craigslist.org/rfs/255926271.html
Gene Sperling: Economists can’t figure out housing outlook
Posted by the Asbury Park Press on 12/31/06
FOR ECONOMIC FORECASTERS divided over the strength of the economy in 2007, the elephant in the room remains the house, or more precisely, housing.
While very few forecasters predict growth of more than 3 percent for next year, and most agree that the cooling of the housing boom may hurt consumers, one major question remains: Is the worst over?
Housing played an outsized role in the most recent recovery. Beyond the surge in residential investment — which accounts for 5 percent to 6 percent of the economy — rising home prices and billions of dollars in home-equity extraction fueled household spending at a time of stagnant wages and low private saving.
Few dispute that a slumping housing market will have a depressive effect on consumer spending. What is less clear is whether we can now officially declare a soft landing, or whether we should expect more turbulence from the unraveling of the housing boom.
Some of the smartest economists in the U.S. now say the worst of the housing cycle is over. Indeed, two-thirds of economists in a recent Wall Street Journal survey answered affirmatively that “the worst of the housing bust is behind us.” Their case is that even after a 17 percent fall in new-home prices and a significant decline in home-equity withdrawal in the third quarter, consumer spending defied gravity and remained at 3.1 percent.
http://www.app.com/apps/pbcs.dll/article?AID=/20061231/BUSINESS/612310336/1003
“Chief economist for North America at Merrill Lynch & Co. Rosenberg’s contention is that when you take a close look at homes for sale, including those being completed and those under construction, the glut in supply seems likely to get worse, not better.”
Worst is behind us because why? Inventory is going to increase, all the ARM foreclosures are increasing, subprimes goinig bankrupt daily, Fannie Mae tightening, how is the worst behnd us? I think the worst is in front of us. Anybody can see that dang.
The Future for Investors
by Jeremy Siegel, Ph.D.
Outlook for 2007: Markets and the Economy
by Jeremy J. Siegel Ph.D.
January 1, 2007
No one can reliably predict the future, but I find the demand for such prognostications is so high that I am happy to offer you my thoughts about the coming year.
Markets here and overseas are still reasonably valued and corporate earnings should continue to move upward. Hence I believe 2007 will be another good year for stocks, although returns will not be as high as 2006. U.S. stocks should return about 8%, with foreign stocks doing perhaps a little better.
http://finance.yahoo.com/columnist/article/futureinvest/18829
Did you ever have an original thought in your life since day one?
Gekko, you need to go start your own blog. This is getting as bad as JMF. Out of the dozens of posts you’ve done this morning, how many had anything to do with housing? .01%?
Honestly, I can’t see that you expect to convince anyone and probably just like to start arguments. That is very close to my definition of trolling.
sorry, but if you go back and look - most all of my posts were in specific response to other people’s questions or posts and were relevant in that context in a free flow of discussion. if you really think i’m trolling then i’ll just stop posting. i get the feeling that you disagree with me on politics and some markets and hence you continue single me out. i don’t need the aggravation. good luck and happy new year.
Housing please. Enough with the “my portfolio is up 100000000%.” I am invested in the market and acutally wish it would crash so you would shut up.
lol crispy
i enjoy some financial stuff to read but this is the housing bubble blog. sure it is related but let’s hear about some flippers in trouble or a new gary watts prediction
Sorry if the S&P500 sales tag team doesn’t care for my flack, but I think you guys should use some of your fabulous stock gains from last year and take out a full-page ad in the WSJ if you want to find GFs on whom to dump your overvalued stock shares, and let this blog serve its intended purpose as a forum for discussing the housing market situation. If there are any stock bulls in the room whom I have not offended, then I apologize.
Gekko, let us know where you go to post comments if you don’t feel comfortable on this site. I find most of your postings to be of value and interest (even off topic).
Lars –
You might also consider reading Cramer.
Thanks, Ben, for issuing a warning. The incessant and largely irrelevant stock market posts by the Usual Suspects gets old. Yeah, we all know the fate of the markets is tied to the economy and the “wealth effect”, and housing isn’t isolated from these trends, but these ad nauseaum flame wars and market-touting are distracting and annoying.
2007-01-01 11:08:25
Many people feel that the income tax deductability of mortgage interest is the deal maker in their decision to buy a house. Most don’t seem to realize that it is an advantage only to the extent that the interest and other allowable deductions exceed the “standard deduction”. Many times, it doesn’t: or not by enough to make buying a house an otherwise good decision.
“Stucco do you have to post 300 posts a day?”
I wish the attacks would stop. If Stucco wants to post all day long, that should be fine. If you don’t like it, don’t read it. I don’t always agree with him but he’s a very bright guy who has thought about what he writes about. If you read all of Stucco’s posts and for that matter most of the posts on here, you will learn more than they teach in most university courses. In fact, if a college were to build a course around discussing this blog, it would be an excellent course - a portal into more than just housing.
From Forbes:
The Big Trend
Though mortgage rates are expected to continue to drop, 2007 home sales in the U.S. are expected to remain flat. New home construction will decline as builders attempt to sell off inventory, until at least mid-2007 when the glut of new homes is expected to lessen. Prices are still out of whack and until they are adjusted, expect no major upswings. The luxury market, on the other hand, will see prices rise as demand for rare high-end properties such as pre-war, multi-room Manhattan apartments and townhouses outweighs supply.
The Unconventional Wisdom
It’s really not that bad. The momentum of the past few years has made buyers and sellers forget that the current market, while softer than in recent years, is pretty normal and that a dip in home sales, mushrooming inventory and sluggish appreciation is to be expected. It’s been so long since we’ve had a normal market, we’ve forgotten what it’s like.
The Misplaced Assumption
That the Midwest is immune to market volatility. No more. Steady job losses coupled with layoffs this year in the auto industry are likely to result in fewer home sales and more foreclosures for residents in Michigan, Indiana and Ohio.
The Watch List
Flippers — Markets such as Miami, Las Vegas and San Diego, which saw heavy interest in investment properties, will experience continued price drops as these homes languish.
http://www.forbes.com/2006/12/09/real-estate-2007-predictions-sneakpeek_sp07_13_lucymaher_realestate.html
Anyone care for some rotten apple?
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The nasty taste left by Apple’s options
Published: December 29 2006 22:05 | Last updated: December 29 2006 22:05
Investors in Apple breathed a sigh of relief on Friday when the company largely exonerated Steve Jobs, its chief executive, from blame in the backdating of share options at the company. But the way in which Apple conducted, and disclosed details of, its inquiry leaves a lot to be desired.
http://www.ft.com/cms/s/09b24c78-9788-11db-a680-0000779e2340.html