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Lagging Vs. Leading Implosion Indicators
invite response
2005 Dec 15, 3:13am 16,320 views 157 comments
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Go away for a day, and I miss this huge racial/Nazi tangent. Hmmm... that's probably a GOOD thing.
Anyway, I'm all for free speech and making whatever point you like, as long as it doesn't degenerate into some pointless personal flame war, which this has come very close to doing.
Btw, "Nazi_punk" is really iceman in disguise. Like SQT, I doubt very much he is being serious with the anti-Semitic comments and is just trying to rile everyone and show how ridiculous/extreme the whole rascist/Nazi tangent was getting.
Ok, back to real estate everyone...
@SQT, I think by now EVERYONE can agree to that sentiment.
New thread: Blog Party Tales
Peter P
2005 Dec 18, 3:07pm
How do you guys think the receival of year-end bonus will affect the market in Spring next year? I’m planning on getting my nut in mid-February, about a month later than other firms in my industry.
I thought bonuses have more effects on retail or equities. :)
20% of 200K is only 40K. Not enough as a reasonable downpayment. :)
Peter P
2005 Dec 18, 3:08pm
20% of 200K is only 40K.
A highly optimistic view already...
It is more like 10% of 100K or less... a plasma TV? :)
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Posted by DinOR in "Blog Party!!!" thread:
"While some of the Bulls may find this hard to believe Foreclosures are a “lagging indicatorâ€. Ex post facto. Considering most people will do anything to save their home like let go of their toys, cancel memberships to health clubs, deplete savings, get a third job and then borrow from relatives this may be the “ultimate†lagging indicator. The article Mr. Up cites actually reaffirms the bear position. Banks have legions of motivations to show home loans as “performing†and they are not waiting for gov. intervention to bend over backwards for delinquent borrowers. If lenders start taking partial payments look out! If your parents rely on “pass-through†income from mortgage backed securities you might want to have that heart to heart.
Massive foreclosures are not a requirement at all. Think of it like a margin call. The market/stock has to crash first and then you have a margin call! Cause and effect. Engineers live in a black and white world, this is “gray†world, more art then science. Simply because the bears don’t have an exact date, time and percentage of equity implosion formula doesn’t mean our position is ill-advised. You don’t have to have a 75% correction for this to forever change your life. If you put 25% down on a million dollar home a 25% price correction just wiped you 100% out! You’ll need a 50% market appreciation to get back to break even. Under current conditions, good luck. The proceeds that I kept from the sale of my last home had better uses (kids college) than to be sacrificed to the housing crash god!"
Do you agree with this assessment? Why/why not? What do you consider to be leading indicators that we're past the peak and the bubble is deflating? Do you have any predictions about how the sequence of events or timing might play out?
What do you think of Peter P's "negative feedback loop" theory ? This is basically a 'tipping point' concept that postulates that once one domino topples, this will undermine market psychology and eventually cause the others to fall. If this is true, then we might expect that the bubble implosion process will look something like the reverse of the process that inflated the bubble to begin with.
Discuss, enjoy...
#housing