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 ...
My wife and I will buy our fifth house in socal by christmas. And we have three clients who will buy rentals. The market is not bad, it's just swinger over to the buyer's side.
10 to 1? Does Monex give you 10 to 1 in stocks?
>>Fact: if a person's income increases, the amount of money banks are willing to lend to them increases<<
Yep. That's one reason. Now, however, there are many others. One example: just a few years ago you could only take out a mortgage that had a monthly payment of 27% of your monthly income. It was recently increased to 50%. Suddenly you can borrow significantly more money, yet have no increase in income. This and other similar things are what are creating the conditions for a perfect credit storm.
>>Anybody got any ideas? <<
Ramblers.
I sincerely hope you guys are right.
>>Sounds a lot like goldbuggery.<<
Yeah, it also sounds like musical chairs.
Please explain how a $50,000 investment becomes a $500,000 investment from the start using margin. I must not remember what margin really is and I want to get in on it if it will multiple my initial investment base by a factor of nine.
No, max is 5:1.
I'd stay away from margin investing unless you A) know what your getting into and B) be prepared to lose a lot of money if things go sour.
On stocks? Because that's what he was talking about.
>>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.<<
They (we) do. The point is that, this time, that is a much smaller part of the equation than in past booms. MUCH smaller.
Margins are like playing Russian Roulette with a gun that has two chambers.
Won't do it until you show me how I can multiply my investment base by 9 times.
On gold bullion. You can use margin in a host of markets. Sometimes at insane ratios. Take currency traders/speculators for example. I don't know the exact number, but I remember hearing that some of them go out on margin in the hundreds to one. Yikes!
I have heard you can go out on margin by hundreds to one by trading currencies. I don't recommend it though. You could get slaughtered in a matter of minutes.
Using this reply to flame and personally attack me, was childish and shows just how cornered you are. It's also yet another case of your constant ignoring FR's posting rules.
Here's some factually accurate historical info re housing/real estate and the market.............
In March of 1928, foreign lending was abruptly cut off, as the market ascent began. The CRASH of '29 led New York bankers to limit credit to commodity brokers, depressing world prices. All of which led to depressed real estate prices. It isn't that when one market collapses, that another takes off; rather, it is a domino affect and a reverse of what has been previously stated on this thread.
I commend Homer Hoyt's ONE HUNDRED YEARS OF LAND VALUES IN CHICAGO for your reading enjoyment and enlightenment.
And margin CAN kill you. LOL
When was that, in 1927 or '28? :-)
As I initial knew and you have yet to admit, the investments are not comparable.
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