Actually, I agree with all of you at the same time.
-I agree with no_such_reality that things ARE good at this moment and that the perception IS for things to be ok and getting better.
-I also agree with powayseller that going forward things MIGHT NOT be that good.
-And I totally agree with heavyd that it only matters how the perception will CHANGE from now on.
While nobody knows exactly the future I am certainly leaning to the side of perception being soon be adjusted to the downside.
First, we had an incredible rally and everything comes in swings, so maybe we swing back to the mode we were before July, i.e. rising interest rates and oil.
Second, there is one single piece of information that this board believes in and that is different from the mainstream perception. This one piece is housing and credit. Both are so huge, that people cannot even comprehend what it means if real-estate drops 10% or more. It wipes out about 3 trillion dollars that somebody thought he had, but nobody really had, including owners, lenders, builders, contractors, mortgage brokers. Yeah, the government can print 3 trillion which they probably want to, but hey, good luck to all the different market participants.
The second question is, does it drop 10%, or maybe only 2% as some suggest. Well, it can also drop 20% if we consider where it came from or by what empty speculation it was driven, or by what it compares to rent. So 10% is a totally reasonable guess. If someone thinks the market just drops 2% and then goes up again next year 5%, like some coworkers of mine do, I can only say that even mathematically it wouldn’t add up. Nobody could afford to buy any property anymore, with all the bills coming, and to service all those buildings in the future. Especially, where rents and salaries lag behind so badly.
