sossij Posted March 5, 2007 Share Posted March 5, 2007 i think you will find that it's not falling...... it's risingyou must be refering to sterling........ which is falling agaist the yen. Ah yes.... silly me Well done that man. Quote Link to comment Share on other sites More sharing options...
#1 on West side Posted March 5, 2007 Share Posted March 5, 2007 (edited) I haven’t read through all 20 pages – so I apologise if someone else has mentioned this – but my worry is how many people out there are saying – the stock market is a looser let’s sell our shares and put it in property – that’s what seemed to happen in 2000 – can we expect the housing market to have a little surge after this stock market event – if it keeps going down people will look for better investments The argument of SM crash => house price boom has indeed been raised quite a few times. This line of thought conveniently overlooks a few steps between cause and effect: After the SM "crash" (OK, I will say downturn to avoid any arguments...) - does the BoE raise or lower IR (the credit tightening argument)? - are all the investors that were in the SM yesterday full of bullish energy, wanting to jump on the next investment opportunity? Maybe not... Gov Bonds anyone?? or even Oil? - let's for argument sake say that they are indeed flush with money (yes, the 5+% that evaporated from the market in the last week came out of other investor's pockets), just wanting to invest it again, why should property be the next best thing to the SM? No more yields here, mate... - whether you are a bull or bear, surely you would agree that property is much more volatile than one would assume such an asset to be. Why should investors gallop off into the "property boom" after an SM crash? IMHO there are many more key questions that need to be addressed before drawing a straight line between SM and HPI. Edited March 5, 2007 by new2HPC Quote Link to comment Share on other sites More sharing options...
LargelyIgnorant Posted March 5, 2007 Share Posted March 5, 2007 time to start stuffing uranium under the mattress, maybe? Or just buy shares in something like Nufcor Ltd if/when they have gone down a bit http://www.nufcor.co.uk Quote Link to comment Share on other sites More sharing options...
Realistbear Posted March 5, 2007 Share Posted March 5, 2007 The itulip thread defines treasuries as cash. Don't know about the 'smart money' but the herds are certainly going for govt bonds - maybe, as Pluto has alluded to before, that's the idea.Oil and Uranium have gone down less than most other investments - perhaps they are 'less unsafe' Before the Shanghai Shakeout I moved most of my money out of growth stock funds into balanced funds with a 60:40 mix of value stocks and govt bonds. Sold 100% of my UK shares on day one of the bust and may switch the proceeds back into USD as I think the pound may see a 10-20% correction soon. There might be better bets out there currency wise (Swissies and Yen--NOT the Euro--the imbalances will be exacerbated if this is the big one and Germany will decouple from the common currency)but the $ is, for me, a non-risk as I have a foot in the door over there. If this is the big one anything that has become a bubble will pop. And don't forget, anything is worth what people are willing to pay for it. Everything is therefore "fiat." Quote Link to comment Share on other sites More sharing options...
Guest wrongmove Posted March 5, 2007 Share Posted March 5, 2007 If markets crash, the yen carry trade gets paid back, cheap and easy credit goes. The decline of the carry trade also removes money available for securitisation, demand for mortgage backed securities falls, banks actually have to assume risk for the mortgages they give out, so credit further tightens. What, like 2000/2001 ? I know I am being flippant in my posts, but I see no direct correlation between SM and HPI in recent years. If you inherited a house today, would you be selling it, with all the associated cost, in order to pile into equities? Cash is showing negative real returns? I agree that property looks like a rubbish investment at the moment, but to many it is the lesser of 3 evils, I suspect. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted March 5, 2007 Share Posted March 5, 2007 NY update: 08:00 am : S&P futures vs fair value: -13.3. Nasdaq futures vs fair value: -17.2. Early indications suggest the long-awaited market sell-off that reared its head last week will continue when today’s opening bell rings. The bearish disposition is an offshoot of what transpired in foreign markets overnight, as a rising yen continues to fuel concerns of an unwinding in the carry trade. Japan's Nikkei plunged 3.3% while Hong Kong's Hang Seng led the way a 4.0% decline; the European bourses are all down in the neighborhood of 2.0%. Quote Link to comment Share on other sites More sharing options...
bugged bunny Posted March 5, 2007 Share Posted March 5, 2007 What, like 2000/2001 ?I know I am being flippant in my posts, but I see no direct correlation between SM and HPI in recent years. If you inherited a house today, would you be selling it, with all the associated cost, in order to pile into equities? Cash is showing negative real returns? I agree that property looks like a rubbish investment at the moment, but to many it is the lesser of 3 evils, I suspect. Maybe some money will pile into property, but, if it does, it's more likely to go to places like Eastern Europe and India than the UK, IMO. Quote Link to comment Share on other sites More sharing options...
Guest wrongmove Posted March 5, 2007 Share Posted March 5, 2007 Maybe some money will pile into property, but, if it does, it's more likely to go to places like Eastern Europe and India than the UK, IMO. I'm not even suggesting that it will pile in, just that it won't necessarily pile out. Quote Link to comment Share on other sites More sharing options...
LargelyIgnorant Posted March 5, 2007 Share Posted March 5, 2007 What, like 2000/2001 ?I know I am being flippant in my posts, but I see no direct correlation between SM and HPI in recent years. If you inherited a house today, would you be selling it, with all the associated cost, in order to pile into equities? Cash is showing negative real returns? I agree that property looks like a rubbish investment at the moment, but to many it is the lesser of 3 evils, I suspect. Don't understand the relevance of your unencumbered house/equities choice? You're talking as if people have money to invest. They don't. They borrow shedloads. The correlation is between bundles of cheap money and HPI. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted March 5, 2007 Share Posted March 5, 2007 (edited) Futures are getting uglier by the minute: 08:30 am : S&P futures vs fair value: -13.2. Nasdaq futures vs fair value: -21.0. The stage remains set for stocks to open sharply lower across the board as investors grow... Dow futures suggest the blue-chip index may fall below the psychologically significant 12,000 mark for the first time since November. That -21.0 figure is nasty. Edited March 5, 2007 by Realistbear Quote Link to comment Share on other sites More sharing options...
peemac Posted March 5, 2007 Share Posted March 5, 2007 What, like 2000/2001 ?I know I am being flippant in my posts, but I see no direct correlation between SM and HPI in recent years. If you inherited a house today, would you be selling it, with all the associated cost, in order to pile into equities? Cash is showing negative real returns? I agree that property looks like a rubbish investment at the moment, but to many it is the lesser of 3 evils, I suspect. Wouldn't it depend on the reasons for the crash? Didn't the 2000/2001 crash come largely as a result of financiers realising they were pumping far too much money into and placing far too high a valuation on companies that were never going to make a profit? You could argue that the money that was pulled out of high-tech stocks was then ploughed into property, which was still undervalued at the time. Surely this scenario is different, property is overvalued by most yardsticks (income multiples and rental yields) and the stock markets have been driven up by the force of easy money. On the point of the 2000/2001 crash I'm just reading boohoo at the minute which is the story of boo.com, who notoriously burned their way through $120M of venture capital in a little over 12 months. Total madness and well worth a read. Quote Link to comment Share on other sites More sharing options...
peemac Posted March 5, 2007 Share Posted March 5, 2007 Futures are getting uglier by the minute:08:30 am : S&P futures vs fair value: -13.2. Nasdaq futures vs fair value: -21.0. The stage remains set for stocks to open sharply lower across the board as investors grow... Dow futures suggest the blue-chip index may fall below the psychologically significant 12,000 mark for the first time since November. That -21.0 figure is nasty. If the dow opens down the FTSE will go into freefall, I'm convinced of it. Quote Link to comment Share on other sites More sharing options...
Guest wrongmove Posted March 5, 2007 Share Posted March 5, 2007 Don't understand the relevance of your unencumbered house/equities choice? You're talking as if people have money to invest. They don't. They borrow shedloads. Sure, many do. But the UK banks have as much invested in saving accounts as they have out in loans - just check the books of any major UK bank on digitalLook or similar. There is a tendancy to look at the mad extremes - which I agree exist - and then project this onto the whole market. Quote Link to comment Share on other sites More sharing options...
Guest wrongmove Posted March 5, 2007 Share Posted March 5, 2007 Wouldn't it depend on the reasons for the crash?Didn't the 2000/2001 crash come largely as a result of financiers realising they were pumping far too much money into and placing far too high a valuation on companies that were never going to make a profit? You could argue that the money that was pulled out of high-tech stocks was then ploughed into property, which was still undervalued at the time. Surely this scenario is different, property is overvalued by most yardsticks (income multiples and rental yields) and the stock markets have been driven up by the force of easy money. On the point of the 2000/2001 crash I'm just reading boohoo at the minute which is the story of boo.com, who notoriously burned their way through $120M of venture capital in a little over 12 months. Total madness and well worth a read. Are you saying it is different this time? Well, of course it is. But I still think that most people with a vested interest in property and not that involved, or that interested in shares. Mnat BTLs have liquidated their equity based pensions years ago to switch to property. The markets dropped by this this much just last May, and even prime London was unaffected. When the stock markets were rising, I didn't hear anyone saying "Oh no, property is going to rise because of this". Quote Link to comment Share on other sites More sharing options...
azogar Posted March 5, 2007 Share Posted March 5, 2007 ftse on the way up again - is this an indicator of revised bullish sentiment on the DOW opening? Quote Link to comment Share on other sites More sharing options...
Guest wrongmove Posted March 5, 2007 Share Posted March 5, 2007 ftse on the way up again - is this an indicator of revised bullish sentiment on the DOW opening? DOW futures are up to 12050 from 12000 where they were for most of the weekend. Quote Link to comment Share on other sites More sharing options...
Realistbear Posted March 5, 2007 Share Posted March 5, 2007 (edited) If the dow opens down the FTSE will go into freefall, I'm convinced of it. With the futures pointing that far south I think it is now inevitable that NY is going to have a bad day. Black Monday? 500 points down? IMO, it will be around 180 down for today as something really bad has to happen for 500 to drop off in a single session. FTSE should follow suit. 08:30 am : S&P futures vs fair value: -13.2. Nasdaq futures vs fair value: -21.0. The stage remains set for stocks to open sharply lower across the board as investors grow increasingly more risk averse. S&P 500 and Nasdaq 100 futures are decidedly below fair value while Dow futures suggest the blue-chip index may fall below the psychologically significant 12,000 mark for the first time since November. Don't forget that Asia is crumbling. A sea of red ink and big % drops: ^AORD All Ordinaries (Australia) 5,642.40 5:11 Down -132.80 (-2.299%) Chart, more... 000001.SS Shanghai Composite (China) 2,785.31 7:00 Down -46.22 (-1.63%) Chart, more... ^HSI Hang Seng (Hong Kong) 18,664.88 9:59 Down -777.13 (-4.00%) Chart, News, more... ^BSESN BSE 30 (India) 12,415.04 10:59 Down -471.09 (-3.66%) Chart, News, more... ^JKSE Jakarta Composite (Indonesia) 1,698.8199 10:33 Down -61.199 (-3.4772%) Chart, more... ^N225 Nikkei 225 (Japan) 16,642.25 6:00 Down -575.68 (-3.34%) Chart, News, more... ^KLSE KLSE Composite (Malaysia) 1,110.69 9:02 Down -53.99 (-4.64%) Chart, more... ^NZ50 NZSE 50 (New Zealand) 4,035.331 4:36 Down -63.356 (-1.546%) Chart, more... ^STI Strait Times (Singapore) 2,982.29 9:06 Down -96.45 (-3.13%) Chart, News, more... ^KS11 Seoul Composite (South Korea) 1,376.15 9:03 Down -38.32 (-2.71%) Chart, News, more... ^TWII Taiwan Weighted (Taiwan) 7,344.56 5:46 Down -285.59 (-3.74%) Edited March 5, 2007 by Realistbear Quote Link to comment Share on other sites More sharing options...
azogar Posted March 5, 2007 Share Posted March 5, 2007 With the futures pointing that far south I think it is now inevitable that NY is going to have a bad day. Black Monday? 500 points down? IMO, it will be around 180 down for today as something really bad has to happen for 500 to drop off in a single session. FTSE should follow suit. You have made a revision to your earlier forecast then RB? Quote Link to comment Share on other sites More sharing options...
Guest wrongmove Posted March 5, 2007 Share Posted March 5, 2007 You have made a revision to your earlier forecast then RB? It's not a mere forecast - it's a prophecy ! Quote Link to comment Share on other sites More sharing options...
mew too Posted March 5, 2007 Share Posted March 5, 2007 dow cash futures hit 100 points from its low at 12060, would guess US traders have just got to their desks and are buying the weakness to try to fill the gap to 12100...although it seems to have stalled here the gap may prove tough resistance...3pm ISM figs out could mark reversal time Quote Link to comment Share on other sites More sharing options...
Guest Cletus VanDamme Posted March 5, 2007 Share Posted March 5, 2007 Are you saying it is different this time?Well, of course it is. But I still think that most people with a vested interest in property and not that involved, or that interested in shares. Mnat BTLs have liquidated their equity based pensions years ago to switch to property. The markets dropped by this this much just last May, and even prime London was unaffected. HPC's Bobbins would argue that in fact prime London did take a dip last May as a result. I'm not convinced of this. However, this latest SM downturn seems to be being reported in the media with much greater anxiety than last May's correction. Last May's went by pretty much unnoticed by the general public, whereas right now everyone is talking about what's happening on the markets. Hard to say at this point what the medium term impact will be. Just looking at the FTSE right now it seems that the opening dip to 6000 could be seen as a 'buy' signal. FTSE still seems undervalued compared with the DOW. Quote Link to comment Share on other sites More sharing options...
dogbox Posted March 5, 2007 Share Posted March 5, 2007 Surely this scenario is different, property is overvalued by most yardsticks (income multiples and rental yields) Guys I think you need to forget rental yields now. The masses are happy to B2L as long as the interest on the mortgage is covered which means yields can go pretty low to accomodate this. WHY? Well because they get the capital growth more or less for free (in thier minds - and thats all that counts), whilst the interest is taken care of by a tenant.. Always keep in mind people will even invest with no yield present on land, gold and art. Quote Link to comment Share on other sites More sharing options...
peemac Posted March 5, 2007 Share Posted March 5, 2007 Are you saying it is different this time?Well, of course it is. But I still think that most people with a vested interest in property and not that involved, or that interested in shares. Mnat BTLs have liquidated their equity based pensions years ago to switch to property. The markets dropped by this this much just last May, and even prime London was unaffected. When the stock markets were rising, I didn't hear anyone saying "Oh no, property is going to rise because of this". Yes, different to the last time. Different to crashes previous to that I don't know. You know what, I don't think anyone really knows. We're all sat about being armchair economists, but I'm not convinced anyone on this site knows the real situation. I'm not sure the majority of professionals know what's coming. You know what they say - anyone idiot can make money in a boom. All these financial whizzkids making big fat bonuses might be contemplating the leap off the top floor should things start to go awry. Quote Link to comment Share on other sites More sharing options...
#1 on West side Posted March 5, 2007 Share Posted March 5, 2007 Don't understand the relevance of your unencumbered house/equities choice? You're talking as if people have money to invest. They don't. They borrow shedloads. The correlation is between bundles of cheap money and HPI. Finally. Someone who has put this argument to rest in simple terms: Cheap, freely available money => HPI Quote Link to comment Share on other sites More sharing options...
Realistbear Posted March 5, 2007 Share Posted March 5, 2007 You have made a revision to your earlier forecast then RB? Nah--I still think 500 off the DOW is a possibility. If I was going to bet on it I would stay around 180. They will put trading curbs on and slow the process down if the off is bad. Asia has dropped around 3% on average so if you apply that to the DOW that's around 360. We need this bear to stay around for a couple of weeks before the big City firms start thinking about mass layoffs of brokers etc. There is money to be made as people dump their portfolios but when they don't jump back in a lot of surplus people will be out of work. Many may be thinking they shouldn't have spent their City bonus of that BTL now. Whatever is happening, its bear time folks! With subprime collapsing (US Number 2 bank is going under now) house prices are all set for the big drop. Time for the "neithers" to leave and for the Bulls to go bear. Quote Link to comment Share on other sites More sharing options...
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