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hipmatt
ParticipantHome sales are up, but inventory is at an all time high. We are clearly far from the bottom. The only arguments for upwards prices are emotional and rhetorical. Fundamentally things are getting worse.
The BIGGEST driver of prices is supply and demand. Well the big news today is another record high supply. And as the knife catchers buy, the demand will weaken too. With tougher lending standardsmore people loosing jobs, and others spend more of their income on food and energy
They are helping drive prices lower in the long run. Most recent/active buyers I know will be or are stretched way to thin from their purchase. This means that after they close escrow, even less discretionary spending out in the economy. With companys big and small reporting weaker earnings, the reduction in consumer spending will only add to the unemployment.
Most knife catchers now are buying out of past regret/envy or FEAR of being priced out in the future. Both motivators are highly emotional and illogical. Usually the current buyer/k. catcher is not paying attention to the real fundamentals and economic indicators, which are poor and point to further price reductions.
ParticipantHome sales are up, but inventory is at an all time high. We are clearly far from the bottom. The only arguments for upwards prices are emotional and rhetorical. Fundamentally things are getting worse.
The BIGGEST driver of prices is supply and demand. Well the big news today is another record high supply. And as the knife catchers buy, the demand will weaken too. With tougher lending standardsmore people loosing jobs, and others spend more of their income on food and energy
They are helping drive prices lower in the long run. Most recent/active buyers I know will be or are stretched way to thin from their purchase. This means that after they close escrow, even less discretionary spending out in the economy. With companys big and small reporting weaker earnings, the reduction in consumer spending will only add to the unemployment.
Most knife catchers now are buying out of past regret/envy or FEAR of being priced out in the future. Both motivators are highly emotional and illogical. Usually the current buyer/k. catcher is not paying attention to the real fundamentals and economic indicators, which are poor and point to further price reductions.
ParticipantHome sales are up, but inventory is at an all time high. We are clearly far from the bottom. The only arguments for upwards prices are emotional and rhetorical. Fundamentally things are getting worse.
The BIGGEST driver of prices is supply and demand. Well the big news today is another record high supply. And as the knife catchers buy, the demand will weaken too. With tougher lending standardsmore people loosing jobs, and others spend more of their income on food and energy
They are helping drive prices lower in the long run. Most recent/active buyers I know will be or are stretched way to thin from their purchase. This means that after they close escrow, even less discretionary spending out in the economy. With companys big and small reporting weaker earnings, the reduction in consumer spending will only add to the unemployment.
Most knife catchers now are buying out of past regret/envy or FEAR of being priced out in the future. Both motivators are highly emotional and illogical. Usually the current buyer/k. catcher is not paying attention to the real fundamentals and economic indicators, which are poor and point to further price reductions.
ParticipantHome sales are up, but inventory is at an all time high. We are clearly far from the bottom. The only arguments for upwards prices are emotional and rhetorical. Fundamentally things are getting worse.
The BIGGEST driver of prices is supply and demand. Well the big news today is another record high supply. And as the knife catchers buy, the demand will weaken too. With tougher lending standardsmore people loosing jobs, and others spend more of their income on food and energy
They are helping drive prices lower in the long run. Most recent/active buyers I know will be or are stretched way to thin from their purchase. This means that after they close escrow, even less discretionary spending out in the economy. With companys big and small reporting weaker earnings, the reduction in consumer spending will only add to the unemployment.
Most knife catchers now are buying out of past regret/envy or FEAR of being priced out in the future. Both motivators are highly emotional and illogical. Usually the current buyer/k. catcher is not paying attention to the real fundamentals and economic indicators, which are poor and point to further price reductions.
August 25, 2008 at 8:56 AM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #261384ParticipantFormerSanDiegan…
Jim Browne helps point out why your investing in stocks has actually been a bad move. Maybe you should have considered commodities a bit more.
…
So with the dollar appearing to recover (as recession is forecast in Europe and elsewhere) and with foreign stock markets having experienced corrections, is it time to look again at U.S. equities? If the past decade is any indication, the future looks bleak.Although the recent U.S. stock performance has indeed been bad, many would be surprised to know that the weakness stretches back much further. In fact, the major U.S. averages for the first years of this bold, new 21st century are anything but impressive.
On October 12, 2007, the Dow Jones Industrial Index, against which many investment returns are measured, closed at a nominal high of 14,693. The media, of course, reported it as a sign of good things to come.
On May 23, 2008, the Dow closed at 12,480 — down just over 15% from its record close. Not too bad, on the surface, at least. However, if adjusted by the official CPI inflation from January 2000 of approximately 4% per year (which in reality is far below the rate of actual inflation experienced by real people), the Dow in May of 2008 was worth only 9,856. If this inflation adjusted figure is compared to the Dow close of 11,723 on January 14, 2000, U.S. stocks were down more than 15% after eight years! And that’s using the government inflation figures which are ridiculously optimistic.
In sum, assume an investment of $11,723 in the Dow average high of 11,723 on January 14, 2000. The same money could then have bought approximately 460 barrels of oil, 40 ounces of gold and 9 percent of an average family home.
Some eight years later, the money in the Dow would have increased to $12,480, for a nominal gain of $757, or 6.4 percent. But the $12,480 will now buy 355 less barrels of oil (down 77%), 27 less ounces of gold (down 66 %) and, despite a massive fall in house prices of 15.8%, only some 6 percent of an average family home (down 33%). In short, the investor of 2000 should feel robbed in ‘real’ terms, despite a ‘nominal’ rise in the Dow of 6.4 percent!
On the other hand, many foreign stock markets and currencies have risen substantially, and have outpaced the costs of typical consumer necessities. These are the kinds of returns which attract people to stocks in the first place.
With growing evidence of international recession, and increased credit woes, it is likely that the earnings of many American corporations will fall, not rise. Shrinking earnings will cause PE ratios to rise, based on present stock prices. This should make the current prices of many stocks look ‘expensive,” as they move violently sideways with a downward bias.
So beware the current rally in the dollar and U.S. stocks. The fundamentals remain miserable, and stock performance will ultimately reflect this reality.
August 25, 2008 at 8:56 AM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #261586ParticipantFormerSanDiegan…
Jim Browne helps point out why your investing in stocks has actually been a bad move. Maybe you should have considered commodities a bit more.
…
So with the dollar appearing to recover (as recession is forecast in Europe and elsewhere) and with foreign stock markets having experienced corrections, is it time to look again at U.S. equities? If the past decade is any indication, the future looks bleak.Although the recent U.S. stock performance has indeed been bad, many would be surprised to know that the weakness stretches back much further. In fact, the major U.S. averages for the first years of this bold, new 21st century are anything but impressive.
On October 12, 2007, the Dow Jones Industrial Index, against which many investment returns are measured, closed at a nominal high of 14,693. The media, of course, reported it as a sign of good things to come.
On May 23, 2008, the Dow closed at 12,480 — down just over 15% from its record close. Not too bad, on the surface, at least. However, if adjusted by the official CPI inflation from January 2000 of approximately 4% per year (which in reality is far below the rate of actual inflation experienced by real people), the Dow in May of 2008 was worth only 9,856. If this inflation adjusted figure is compared to the Dow close of 11,723 on January 14, 2000, U.S. stocks were down more than 15% after eight years! And that’s using the government inflation figures which are ridiculously optimistic.
In sum, assume an investment of $11,723 in the Dow average high of 11,723 on January 14, 2000. The same money could then have bought approximately 460 barrels of oil, 40 ounces of gold and 9 percent of an average family home.
Some eight years later, the money in the Dow would have increased to $12,480, for a nominal gain of $757, or 6.4 percent. But the $12,480 will now buy 355 less barrels of oil (down 77%), 27 less ounces of gold (down 66 %) and, despite a massive fall in house prices of 15.8%, only some 6 percent of an average family home (down 33%). In short, the investor of 2000 should feel robbed in ‘real’ terms, despite a ‘nominal’ rise in the Dow of 6.4 percent!
On the other hand, many foreign stock markets and currencies have risen substantially, and have outpaced the costs of typical consumer necessities. These are the kinds of returns which attract people to stocks in the first place.
With growing evidence of international recession, and increased credit woes, it is likely that the earnings of many American corporations will fall, not rise. Shrinking earnings will cause PE ratios to rise, based on present stock prices. This should make the current prices of many stocks look ‘expensive,” as they move violently sideways with a downward bias.
So beware the current rally in the dollar and U.S. stocks. The fundamentals remain miserable, and stock performance will ultimately reflect this reality.
August 25, 2008 at 8:56 AM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #261593ParticipantFormerSanDiegan…
Jim Browne helps point out why your investing in stocks has actually been a bad move. Maybe you should have considered commodities a bit more.
…
So with the dollar appearing to recover (as recession is forecast in Europe and elsewhere) and with foreign stock markets having experienced corrections, is it time to look again at U.S. equities? If the past decade is any indication, the future looks bleak.Although the recent U.S. stock performance has indeed been bad, many would be surprised to know that the weakness stretches back much further. In fact, the major U.S. averages for the first years of this bold, new 21st century are anything but impressive.
On October 12, 2007, the Dow Jones Industrial Index, against which many investment returns are measured, closed at a nominal high of 14,693. The media, of course, reported it as a sign of good things to come.
On May 23, 2008, the Dow closed at 12,480 — down just over 15% from its record close. Not too bad, on the surface, at least. However, if adjusted by the official CPI inflation from January 2000 of approximately 4% per year (which in reality is far below the rate of actual inflation experienced by real people), the Dow in May of 2008 was worth only 9,856. If this inflation adjusted figure is compared to the Dow close of 11,723 on January 14, 2000, U.S. stocks were down more than 15% after eight years! And that’s using the government inflation figures which are ridiculously optimistic.
In sum, assume an investment of $11,723 in the Dow average high of 11,723 on January 14, 2000. The same money could then have bought approximately 460 barrels of oil, 40 ounces of gold and 9 percent of an average family home.
Some eight years later, the money in the Dow would have increased to $12,480, for a nominal gain of $757, or 6.4 percent. But the $12,480 will now buy 355 less barrels of oil (down 77%), 27 less ounces of gold (down 66 %) and, despite a massive fall in house prices of 15.8%, only some 6 percent of an average family home (down 33%). In short, the investor of 2000 should feel robbed in ‘real’ terms, despite a ‘nominal’ rise in the Dow of 6.4 percent!
On the other hand, many foreign stock markets and currencies have risen substantially, and have outpaced the costs of typical consumer necessities. These are the kinds of returns which attract people to stocks in the first place.
With growing evidence of international recession, and increased credit woes, it is likely that the earnings of many American corporations will fall, not rise. Shrinking earnings will cause PE ratios to rise, based on present stock prices. This should make the current prices of many stocks look ‘expensive,” as they move violently sideways with a downward bias.
So beware the current rally in the dollar and U.S. stocks. The fundamentals remain miserable, and stock performance will ultimately reflect this reality.
August 25, 2008 at 8:56 AM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #261645ParticipantFormerSanDiegan…
Jim Browne helps point out why your investing in stocks has actually been a bad move. Maybe you should have considered commodities a bit more.
…
So with the dollar appearing to recover (as recession is forecast in Europe and elsewhere) and with foreign stock markets having experienced corrections, is it time to look again at U.S. equities? If the past decade is any indication, the future looks bleak.Although the recent U.S. stock performance has indeed been bad, many would be surprised to know that the weakness stretches back much further. In fact, the major U.S. averages for the first years of this bold, new 21st century are anything but impressive.
On October 12, 2007, the Dow Jones Industrial Index, against which many investment returns are measured, closed at a nominal high of 14,693. The media, of course, reported it as a sign of good things to come.
On May 23, 2008, the Dow closed at 12,480 — down just over 15% from its record close. Not too bad, on the surface, at least. However, if adjusted by the official CPI inflation from January 2000 of approximately 4% per year (which in reality is far below the rate of actual inflation experienced by real people), the Dow in May of 2008 was worth only 9,856. If this inflation adjusted figure is compared to the Dow close of 11,723 on January 14, 2000, U.S. stocks were down more than 15% after eight years! And that’s using the government inflation figures which are ridiculously optimistic.
In sum, assume an investment of $11,723 in the Dow average high of 11,723 on January 14, 2000. The same money could then have bought approximately 460 barrels of oil, 40 ounces of gold and 9 percent of an average family home.
Some eight years later, the money in the Dow would have increased to $12,480, for a nominal gain of $757, or 6.4 percent. But the $12,480 will now buy 355 less barrels of oil (down 77%), 27 less ounces of gold (down 66 %) and, despite a massive fall in house prices of 15.8%, only some 6 percent of an average family home (down 33%). In short, the investor of 2000 should feel robbed in ‘real’ terms, despite a ‘nominal’ rise in the Dow of 6.4 percent!
On the other hand, many foreign stock markets and currencies have risen substantially, and have outpaced the costs of typical consumer necessities. These are the kinds of returns which attract people to stocks in the first place.
With growing evidence of international recession, and increased credit woes, it is likely that the earnings of many American corporations will fall, not rise. Shrinking earnings will cause PE ratios to rise, based on present stock prices. This should make the current prices of many stocks look ‘expensive,” as they move violently sideways with a downward bias.
So beware the current rally in the dollar and U.S. stocks. The fundamentals remain miserable, and stock performance will ultimately reflect this reality.
August 25, 2008 at 8:56 AM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #261682ParticipantFormerSanDiegan…
Jim Browne helps point out why your investing in stocks has actually been a bad move. Maybe you should have considered commodities a bit more.
…
So with the dollar appearing to recover (as recession is forecast in Europe and elsewhere) and with foreign stock markets having experienced corrections, is it time to look again at U.S. equities? If the past decade is any indication, the future looks bleak.Although the recent U.S. stock performance has indeed been bad, many would be surprised to know that the weakness stretches back much further. In fact, the major U.S. averages for the first years of this bold, new 21st century are anything but impressive.
On October 12, 2007, the Dow Jones Industrial Index, against which many investment returns are measured, closed at a nominal high of 14,693. The media, of course, reported it as a sign of good things to come.
On May 23, 2008, the Dow closed at 12,480 — down just over 15% from its record close. Not too bad, on the surface, at least. However, if adjusted by the official CPI inflation from January 2000 of approximately 4% per year (which in reality is far below the rate of actual inflation experienced by real people), the Dow in May of 2008 was worth only 9,856. If this inflation adjusted figure is compared to the Dow close of 11,723 on January 14, 2000, U.S. stocks were down more than 15% after eight years! And that’s using the government inflation figures which are ridiculously optimistic.
In sum, assume an investment of $11,723 in the Dow average high of 11,723 on January 14, 2000. The same money could then have bought approximately 460 barrels of oil, 40 ounces of gold and 9 percent of an average family home.
Some eight years later, the money in the Dow would have increased to $12,480, for a nominal gain of $757, or 6.4 percent. But the $12,480 will now buy 355 less barrels of oil (down 77%), 27 less ounces of gold (down 66 %) and, despite a massive fall in house prices of 15.8%, only some 6 percent of an average family home (down 33%). In short, the investor of 2000 should feel robbed in ‘real’ terms, despite a ‘nominal’ rise in the Dow of 6.4 percent!
On the other hand, many foreign stock markets and currencies have risen substantially, and have outpaced the costs of typical consumer necessities. These are the kinds of returns which attract people to stocks in the first place.
With growing evidence of international recession, and increased credit woes, it is likely that the earnings of many American corporations will fall, not rise. Shrinking earnings will cause PE ratios to rise, based on present stock prices. This should make the current prices of many stocks look ‘expensive,” as they move violently sideways with a downward bias.
So beware the current rally in the dollar and U.S. stocks. The fundamentals remain miserable, and stock performance will ultimately reflect this reality.
August 13, 2008 at 8:43 AM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #256404ParticipantPlus the summer/suckers rally is now fizzled out…
U.S. mortgage applications declined last week-MBA
http://www.reuters.com/article/bondsNews/idUSN1251997020080813
NEW YORK, Aug 13 (Reuters) – Applications for U.S. home mortgages edged lower last week as home loan rates jumped, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 1.5 percent in the week ended Aug. 8 to 425.9, nearing levels seen in late July which were the slowest in more than seven years.
The MBA’s seasonally adjusted index of refinancing applications slumped 4.2 percent to 1,074.6 last week, erasing most of the gain seen in the previous one-week period.
The rise followed a jump in the average 30-year fixed mortgage rate to 6.57 percent from 6.41 percent in the previous week.
The gauge of loan requests for home purchases was steady at 315.2, just above July lows.
Sluggish applications are a sign the U.S. housing market remains in the throes of a downturn that started more than two years ago. House prices by some measures have declined nearly 20 percent since mid-2006, exacerbating a rise in foreclosures and turning potential buyers away from the market.
Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the housing funding giants, are also making it harder to get a mortgage by raising fees on loans they purchase, including increases announced in the past week. By doing so, the companies are ceding market share to government loan programs backed by the Federal Housing Administration, analysts said.
The MBA’s government mortgage index rose 0.8 percent last week to 360.3, a level lower than four weeks ago, but more than twice that of a year earlier. (Reporting by Al Yoon; editing by Gary Crosse)
August 13, 2008 at 8:43 AM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #256584ParticipantPlus the summer/suckers rally is now fizzled out…
U.S. mortgage applications declined last week-MBA
http://www.reuters.com/article/bondsNews/idUSN1251997020080813
NEW YORK, Aug 13 (Reuters) – Applications for U.S. home mortgages edged lower last week as home loan rates jumped, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 1.5 percent in the week ended Aug. 8 to 425.9, nearing levels seen in late July which were the slowest in more than seven years.
The MBA’s seasonally adjusted index of refinancing applications slumped 4.2 percent to 1,074.6 last week, erasing most of the gain seen in the previous one-week period.
The rise followed a jump in the average 30-year fixed mortgage rate to 6.57 percent from 6.41 percent in the previous week.
The gauge of loan requests for home purchases was steady at 315.2, just above July lows.
Sluggish applications are a sign the U.S. housing market remains in the throes of a downturn that started more than two years ago. House prices by some measures have declined nearly 20 percent since mid-2006, exacerbating a rise in foreclosures and turning potential buyers away from the market.
Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the housing funding giants, are also making it harder to get a mortgage by raising fees on loans they purchase, including increases announced in the past week. By doing so, the companies are ceding market share to government loan programs backed by the Federal Housing Administration, analysts said.
The MBA’s government mortgage index rose 0.8 percent last week to 360.3, a level lower than four weeks ago, but more than twice that of a year earlier. (Reporting by Al Yoon; editing by Gary Crosse)
August 13, 2008 at 8:43 AM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #256592ParticipantPlus the summer/suckers rally is now fizzled out…
U.S. mortgage applications declined last week-MBA
http://www.reuters.com/article/bondsNews/idUSN1251997020080813
NEW YORK, Aug 13 (Reuters) – Applications for U.S. home mortgages edged lower last week as home loan rates jumped, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 1.5 percent in the week ended Aug. 8 to 425.9, nearing levels seen in late July which were the slowest in more than seven years.
The MBA’s seasonally adjusted index of refinancing applications slumped 4.2 percent to 1,074.6 last week, erasing most of the gain seen in the previous one-week period.
The rise followed a jump in the average 30-year fixed mortgage rate to 6.57 percent from 6.41 percent in the previous week.
The gauge of loan requests for home purchases was steady at 315.2, just above July lows.
Sluggish applications are a sign the U.S. housing market remains in the throes of a downturn that started more than two years ago. House prices by some measures have declined nearly 20 percent since mid-2006, exacerbating a rise in foreclosures and turning potential buyers away from the market.
Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the housing funding giants, are also making it harder to get a mortgage by raising fees on loans they purchase, including increases announced in the past week. By doing so, the companies are ceding market share to government loan programs backed by the Federal Housing Administration, analysts said.
The MBA’s government mortgage index rose 0.8 percent last week to 360.3, a level lower than four weeks ago, but more than twice that of a year earlier. (Reporting by Al Yoon; editing by Gary Crosse)
August 13, 2008 at 8:43 AM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #256648ParticipantPlus the summer/suckers rally is now fizzled out…
U.S. mortgage applications declined last week-MBA
http://www.reuters.com/article/bondsNews/idUSN1251997020080813
NEW YORK, Aug 13 (Reuters) – Applications for U.S. home mortgages edged lower last week as home loan rates jumped, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 1.5 percent in the week ended Aug. 8 to 425.9, nearing levels seen in late July which were the slowest in more than seven years.
The MBA’s seasonally adjusted index of refinancing applications slumped 4.2 percent to 1,074.6 last week, erasing most of the gain seen in the previous one-week period.
The rise followed a jump in the average 30-year fixed mortgage rate to 6.57 percent from 6.41 percent in the previous week.
The gauge of loan requests for home purchases was steady at 315.2, just above July lows.
Sluggish applications are a sign the U.S. housing market remains in the throes of a downturn that started more than two years ago. House prices by some measures have declined nearly 20 percent since mid-2006, exacerbating a rise in foreclosures and turning potential buyers away from the market.
Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the housing funding giants, are also making it harder to get a mortgage by raising fees on loans they purchase, including increases announced in the past week. By doing so, the companies are ceding market share to government loan programs backed by the Federal Housing Administration, analysts said.
The MBA’s government mortgage index rose 0.8 percent last week to 360.3, a level lower than four weeks ago, but more than twice that of a year earlier. (Reporting by Al Yoon; editing by Gary Crosse)
August 13, 2008 at 8:43 AM in reply to: Peter Schiff: Housing prices will go back to 2000 or lower… #256696ParticipantPlus the summer/suckers rally is now fizzled out…
U.S. mortgage applications declined last week-MBA
http://www.reuters.com/article/bondsNews/idUSN1251997020080813
NEW YORK, Aug 13 (Reuters) – Applications for U.S. home mortgages edged lower last week as home loan rates jumped, an industry group said on Wednesday.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity declined 1.5 percent in the week ended Aug. 8 to 425.9, nearing levels seen in late July which were the slowest in more than seven years.
The MBA’s seasonally adjusted index of refinancing applications slumped 4.2 percent to 1,074.6 last week, erasing most of the gain seen in the previous one-week period.
The rise followed a jump in the average 30-year fixed mortgage rate to 6.57 percent from 6.41 percent in the previous week.
The gauge of loan requests for home purchases was steady at 315.2, just above July lows.
Sluggish applications are a sign the U.S. housing market remains in the throes of a downturn that started more than two years ago. House prices by some measures have declined nearly 20 percent since mid-2006, exacerbating a rise in foreclosures and turning potential buyers away from the market.
Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), the housing funding giants, are also making it harder to get a mortgage by raising fees on loans they purchase, including increases announced in the past week. By doing so, the companies are ceding market share to government loan programs backed by the Federal Housing Administration, analysts said.
The MBA’s government mortgage index rose 0.8 percent last week to 360.3, a level lower than four weeks ago, but more than twice that of a year earlier. (Reporting by Al Yoon; editing by Gary Crosse)
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