I wish the survey could have I wish the survey could have multiple choices because the first four questions are people’s perceptions and last four questions are more action oriented. Some times, people think one way and acts another way.
UCGal
December 21, 2009 @
9:53 AM
We’re not in the market We’re not in the market because we already own.
That said – I am encouraging friends to wait or to “shop for value” rather than paying “retail”.
I have one set of friends that already went through a short sale of their home and are now renters. We’ve had a short sale on our block. Another friend is a landlord – and had to decide whether to rent with people with bad credit due to a short sale. (They decided to.)
I think the pain train is just starting in the high end… But is probably mostly through in the low end.
sdduuuude
December 21, 2009 @
10:19 AM
I think we are in a “no way I think we are in a “no way out” scenario that will lead to a long-term languishing market.
The way I see it, the gov can’t let the housing market collapse much further because of the impact it will have on the banks, and they are all about keeping the banks from going under.
As banks raise capital and staff-up on managers for bad assets, they can take on more foreclosures, put them on the market and take the hit on their books. But, they aren’t really panic selling and I think they trust the govt to keep the prices stable so there is no need to panic sell. This means there won’t be another sharp, long-lasting price decline, but it does mean foreclosures will continue coming into the market for a long time, but in a controlled manner so as not to cause the banks to collapse.
Americans will start saving, and paying off debt while the govt borrows more, which increases the tax burden on the people, which makes it harder for them to pay off the debt, which means less spending on “stuff” which means there is nothing driving unemployment down at all for many years.
And the employed people still need houses so there is some demand. I think the next few years will see a “normal-ish” market with regular but light-to-moderate sales. Little Spring rallies and little Winter drop-offs will happen with little long-term price movement in any direction. Maybe a bit to the down side for several years.
Without gov intervention, we would be heading south fast, then out of the woods in a couple years, but I think we are in a “bouncing along the bottom” scenario. Or, maybe a “ball bouncing down a ramp” towards a new bottom that isn’t too much lower than the recent bottom. Though the high-end does seem poised to fall, the averages won’t be so terrible.
We aren’t dead, but we aren’t “out of the woods”, and will pretty much be living in the woods for several years. No so bad, if you like the woods, but not exactly bright and Sunny.
JC
December 21, 2009 @
2:21 PM
Interesting? Boom. Doom? Interesting? Boom. Doom?
Trillions Of Troubles Ahead
Bert Dohmen 12.18.09, 5:50 PM ET
Not too long ago, a billion dollars in a governmental budget was a lot of money. Then we got into hundreds of billions. People understood that this was a lot, just because of all the zeros. Now, unfortunately, the number has become small: the world “trillion,” as in $1.2 trillion for health care reform, seems so tiny. But it has 12 zeroes behind it, which is so easy to forget.
If the government stays on the course it’s been on for the past forty years without a radical change, the federal government will soon have a $10 trillion budget.
In other words, the federal budget deficit will be $1.4 trillion. Just to make the size more visible, that’s $1,400 billion.
Our colleague Rob Arnott, who always does terrific research, wrote in his recent report that “at all levels, federal, state, local and GSEs, the total public debt is now at 141% of GDP. That puts the United States in some elite company–only Japan, Lebanon and Zimbabwe are higher. That’s only the start. Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557% of GDP. Less than three years ago our total indebtedness crossed 500% of GDP for the first time.”
Add the unfunded portion of entitlement programs and we’re at 840% of GDP.
Gold is still near all-time highs. Curtis Hesler has been telling his subscribers to buy gold stocks since 1999, and the profits are huge. What’s Hesler’s latest call? Click here for instant access to Professional Timing Service model portfolios.
The world has not seen such debt levels in modern history. This debt is not serviceable. Imagine that total debt is 557% of GDP, without considering entitlements. The interest on the debt will consume all the tax revenues of the country in the not-too-distant future. Then there will be no way out but to create more debt in order to finance the old debt.
It assures a period of economic devastation. In a last, desperate attempt, politicians at the federal and local levels will raise taxes to astronomical heights to raise revenues. And that only assures destruction of the economy. Forget the fable of economic recovery. Unless there is a change in Washington by next year’s election, there will be no way to turn back.
Gary Shilling called the housing and stock market crashes, now he’s bullish on the U.S. dollar. How should you be invested right now? Click here for A. Gary Shilling’s Insight newsletter.
Japan’s recession is now 19 years old. It has the highest debt-to-GDP level (227%) of any industrialized country. The Fitch rating agency is talking about a potential downgrade of Japan’s debt. Japan’s stock market is still down 75% from the high in 1990. We predict it will make new bear market lows next year. That will make it a 20-year-long bear market on the way to 25 years. The bulls in the U.S. should consider that possibility in the formerly great United States of America.
I do not believe the bullish theory that the U.S. situation is different than Japan’s. Ours is so much worse.
Is it any wonder that our biggest creditors, China, Russia and the Middle East, are diversifying out of the dollar and into gold?
Bert Dohmen is the editor of Bert Dohmen’s Wellington Letter and founder of Dohmen Capital Research Institute .
cv2
December 22, 2009 @
2:47 PM
Looks like Piggs are evenly Looks like Piggs are evenly divided 🙂
December 20, 2009 @ 11:08 PM
I wish the survey could have
I wish the survey could have multiple choices because the first four questions are people’s perceptions and last four questions are more action oriented. Some times, people think one way and acts another way.
December 21, 2009 @ 9:53 AM
We’re not in the market
We’re not in the market because we already own.
That said – I am encouraging friends to wait or to “shop for value” rather than paying “retail”.
I have one set of friends that already went through a short sale of their home and are now renters. We’ve had a short sale on our block. Another friend is a landlord – and had to decide whether to rent with people with bad credit due to a short sale. (They decided to.)
I think the pain train is just starting in the high end… But is probably mostly through in the low end.
December 21, 2009 @ 10:19 AM
I think we are in a “no way
I think we are in a “no way out” scenario that will lead to a long-term languishing market.
The way I see it, the gov can’t let the housing market collapse much further because of the impact it will have on the banks, and they are all about keeping the banks from going under.
As banks raise capital and staff-up on managers for bad assets, they can take on more foreclosures, put them on the market and take the hit on their books. But, they aren’t really panic selling and I think they trust the govt to keep the prices stable so there is no need to panic sell. This means there won’t be another sharp, long-lasting price decline, but it does mean foreclosures will continue coming into the market for a long time, but in a controlled manner so as not to cause the banks to collapse.
Americans will start saving, and paying off debt while the govt borrows more, which increases the tax burden on the people, which makes it harder for them to pay off the debt, which means less spending on “stuff” which means there is nothing driving unemployment down at all for many years.
And the employed people still need houses so there is some demand. I think the next few years will see a “normal-ish” market with regular but light-to-moderate sales. Little Spring rallies and little Winter drop-offs will happen with little long-term price movement in any direction. Maybe a bit to the down side for several years.
Without gov intervention, we would be heading south fast, then out of the woods in a couple years, but I think we are in a “bouncing along the bottom” scenario. Or, maybe a “ball bouncing down a ramp” towards a new bottom that isn’t too much lower than the recent bottom. Though the high-end does seem poised to fall, the averages won’t be so terrible.
We aren’t dead, but we aren’t “out of the woods”, and will pretty much be living in the woods for several years. No so bad, if you like the woods, but not exactly bright and Sunny.
December 21, 2009 @ 2:21 PM
Interesting? Boom. Doom?
Interesting? Boom. Doom?
Trillions Of Troubles Ahead
Bert Dohmen 12.18.09, 5:50 PM ET
Not too long ago, a billion dollars in a governmental budget was a lot of money. Then we got into hundreds of billions. People understood that this was a lot, just because of all the zeros. Now, unfortunately, the number has become small: the world “trillion,” as in $1.2 trillion for health care reform, seems so tiny. But it has 12 zeroes behind it, which is so easy to forget.
If the government stays on the course it’s been on for the past forty years without a radical change, the federal government will soon have a $10 trillion budget.
In other words, the federal budget deficit will be $1.4 trillion. Just to make the size more visible, that’s $1,400 billion.
Our colleague Rob Arnott, who always does terrific research, wrote in his recent report that “at all levels, federal, state, local and GSEs, the total public debt is now at 141% of GDP. That puts the United States in some elite company–only Japan, Lebanon and Zimbabwe are higher. That’s only the start. Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557% of GDP. Less than three years ago our total indebtedness crossed 500% of GDP for the first time.”
Add the unfunded portion of entitlement programs and we’re at 840% of GDP.
Gold is still near all-time highs. Curtis Hesler has been telling his subscribers to buy gold stocks since 1999, and the profits are huge. What’s Hesler’s latest call? Click here for instant access to Professional Timing Service model portfolios.
The world has not seen such debt levels in modern history. This debt is not serviceable. Imagine that total debt is 557% of GDP, without considering entitlements. The interest on the debt will consume all the tax revenues of the country in the not-too-distant future. Then there will be no way out but to create more debt in order to finance the old debt.
It assures a period of economic devastation. In a last, desperate attempt, politicians at the federal and local levels will raise taxes to astronomical heights to raise revenues. And that only assures destruction of the economy. Forget the fable of economic recovery. Unless there is a change in Washington by next year’s election, there will be no way to turn back.
Gary Shilling called the housing and stock market crashes, now he’s bullish on the U.S. dollar. How should you be invested right now? Click here for A. Gary Shilling’s Insight newsletter.
Japan’s recession is now 19 years old. It has the highest debt-to-GDP level (227%) of any industrialized country. The Fitch rating agency is talking about a potential downgrade of Japan’s debt. Japan’s stock market is still down 75% from the high in 1990. We predict it will make new bear market lows next year. That will make it a 20-year-long bear market on the way to 25 years. The bulls in the U.S. should consider that possibility in the formerly great United States of America.
I do not believe the bullish theory that the U.S. situation is different than Japan’s. Ours is so much worse.
Is it any wonder that our biggest creditors, China, Russia and the Middle East, are diversifying out of the dollar and into gold?
Bert Dohmen is the editor of Bert Dohmen’s Wellington Letter and founder of Dohmen Capital Research Institute .
December 22, 2009 @ 2:47 PM
Looks like Piggs are evenly
Looks like Piggs are evenly divided 🙂