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Can Wall Street withstand weak housing?
Business Week Online ^
| September 19, 2006
| Peter Coy
Posted on 09/20/2006 10:26:44 AM PDT by GodGunsGuts
Can Wall Street withstand weak housing?
Some experts say real estate slump may spell trouble for equities
ANALYSIS
By Peter Coy BusinessWeek Online
Updated: 1:28 p.m. PT Sept 19, 2006
If your nest egg is made of 2-by-4s and you're watching the real estate slowdown with a mixture of fear and nausea, then this article is for you.
The question: If real estate tanks, will stocks follow? Or will the market ignore housing? Or maybe — just maybe — will a decline in housing trigger a rise in stocks? It's something you really ought to think about if you're trying to figure out where to put your money.
(Excerpt) Read more at msnbc.msn.com ...
TOPICS: Business/Economy
KEYWORDS: depression; despair; doom; dooooooooomed; dustbowl; endoftheworld; fearmongering; grapesofwrath; housing; housingbubble; realestate; realestateslowdown; theskyisfalling; tinfoil
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To: Mase
From your chart, it looks like real estate became more valuable in 1997 after the government changed the tax laws allowing for a capital gains tax exemption on the first $250K earned for single homeowners and $500K for married couples. But I guess that fact just detracts from the irrational FR housing bubble mania. You beat me to it, too. Unless that law is repealed, and I don't think that will happen, this boom is not going to correct very much.
121
posted on
09/20/2006 1:58:07 PM PDT
by
Moonman62
(The issue of whether cheap labor makes America great should have been settled by the Civil War.)
To: conservativecorner
I wonder when that that WWII bubble is finally going to pop.
122
posted on
09/20/2006 2:00:04 PM PDT
by
Moonman62
(The issue of whether cheap labor makes America great should have been settled by the Civil War.)
To: Moonman62
Unless that law is repealed, and I don't think that will happen, this boom is not going to correct very much.
Depends on how people react. If investors start dumping a ton of property on the market with the idea that "the party's over" and baby boomers decide to cash out on the downward slope, then there could be some ugliness. Also, when all those ARMs start to re-set...
123
posted on
09/20/2006 2:02:08 PM PDT
by
durasell
(!)
To: wideawake
I'll also point out that comparing internet stocks - which had no underlying assets - to the market for hard assets like real estate is laughable. That shouldn't matter to those who believe in market economics.
124
posted on
09/20/2006 2:02:30 PM PDT
by
Moonman62
(The issue of whether cheap labor makes America great should have been settled by the Civil War.)
To: wideawake
To: wideawake; RobRoy
Wealth and the availability of credit are highly correlated. I don't understand why these guys act so surprised by the fact that people borrow more money when they make more and when interest rates are at historic lows.
126
posted on
09/20/2006 2:04:54 PM PDT
by
Mase
To: Moonman62
Oh, I believe in market economics - I just don't believe in EMT.
127
posted on
09/20/2006 2:10:18 PM PDT
by
wideawake
("The nation which forgets its defenders will itself be forgotten." - Calvin Coolidge)
To: durasell
If..If...If...
When those ARMs start to reset people will refinance to fixed mortgages, and those rates have already started dropping. Early next year, short term rates will start dropping, which will make ARMs even less of an issue.
I think the boom is over, but it's looking like we're moving into a period of stability rather then a real estate bloodbath.
128
posted on
09/20/2006 2:12:25 PM PDT
by
Moonman62
(The issue of whether cheap labor makes America great should have been settled by the Civil War.)
To: durasell
These things simply don't play out as quickly as you'd think. Things may not play out at all. Housing is actually more affordable today than it was 28 years ago. Did you see the graph in post #100?
129
posted on
09/20/2006 2:12:31 PM PDT
by
Mase
To: GodGunsGuts
You're supposed to ping the person you're talking about.
What very BAD posting manners you have; n00b! Add to that, the fact that you can't spell ( my nic is all in lower case letters ) and I don't have a "posse".
Since when, exactly, in the history of FR, oh n00b, is disagreeing with and handily refuting another poster ( YOU ) against FR's posting rules? Here the answer...NEVER!
To: GodGunsGuts
131
posted on
09/20/2006 2:15:07 PM PDT
by
capitalist229
(Get Democrats out of our pockets and Republicans out of our bedrooms.)
To: Petronski
To: Toddsterpatriot
That's a much better chart! Thanks for posting it.
To: Toddsterpatriot
hehehehehehehehehehehehehe
To: wideawake
Emergency Medical Technology?
135
posted on
09/20/2006 2:19:57 PM PDT
by
Moonman62
(The issue of whether cheap labor makes America great should have been settled by the Civil War.)
To: wideawake
It's actually both. Very volatile in the short run during a bull market, very conservative in terms of inflation insurance for the long run.
To: Petronski
It's not very conservative to let your assets waste in a non-dividend-bearing ingot. Adjusted for inflation, gold's high is more than $2,500 dollars. It's conservative to trust the dollar which has declined 97% in value since the Fed was created ?
And that's using the official govt inflation figures.
BUMP
137
posted on
09/20/2006 2:23:34 PM PDT
by
capitalist229
(Get Democrats out of our pockets and Republicans out of our bedrooms.)
To: capitalist229
It's conservative to trust the dollar which has declined 97% in value since the Fed was created ?Let's see, which of the 2 bad choices will I pick? When is the last time the dollar declined 20% in 4 months?
138
posted on
09/20/2006 2:25:14 PM PDT
by
Toddsterpatriot
(Goldbugs, immune to logic and allergic to facts.)
To: capitalist229
It's conservative to trust the dollar which has declined 97% in value since the Fed was created ?Do you know of anyone who has suggested holding their investments in cash since 1913?
139
posted on
09/20/2006 2:26:30 PM PDT
by
Petronski
(Living His life abundantly.)
To: nopardons; expat_panama
That's a much better chart! Thanks for posting it.expat_panama did all the work, I just borrowed it.
140
posted on
09/20/2006 2:27:05 PM PDT
by
Toddsterpatriot
(Goldbugs, immune to logic and allergic to facts.)
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