Jump to content
House Price Crash Forum
Sign in to follow this  
Culpability Brown

Market Risk To The Bears -

Recommended Posts

Good Article worth a quick read from the US Fund Managers: -

Comstock Funds

Since consumer spending accounts for about 70% of GDP, it is apparent that much of the growth of GDP over the past two years was due to these mortgage cash-outs. In a solidly-based economic expansion consumer spending is based on a healthy growth in earnings with a substantial amount set aside for savings. Spending based on heavy borrowing from an appreciating asset is always a dnagerous way for an economy to grow. When the asset prices stop growing and begins to decline the wealth disappears, but the debt remains.


If we are correct that real estate in general and housing specifically have peaked, we wouldn’t be surprised if the stock market dropped by 40-50% over the next year to 18 months. This would take the S&P 500 down to the 600-700 level, and even if the earnings of $70 per share actually do hold up (which we doubt -see comment of Sept 22th) the market would drop to the normal bear market trough level of 10 times earnings or less.

Oh dear.

Share this post

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.