Templeton feeling bearish -- Economic Commentary

HeraldTribune.com ^ | 10/16/03 | MICHAEL BRAGA

[arete]

The impact of rising interest rates on the real estate market, is why Templeton is advising investors to sell residential real estate investments, Moore said. The reason Templeton is advising against U.S. stocks is that they never do well in a period of stagflation.

And the inflation, deflation and stagflation debate continues.

Richard W.

[arete]

FYI

Comments and opinons welcome.

Richard W.

[Keith]

Sir John is very wise and has seen it all...he often says his scenarios don't always play out...and that he doesn't have a timetable...but if he is right on this, it has serious political implications as well. President Rodham...yikes!

[Keith]

Sir John is very wise and has seen it all...he often says his scenarios don't always play out...and that he doesn't have a timetable...but if he is right on this, it has serious political implications as well. President Rodham...yikes!

[Ff--150]

He's also suggesting they buy bonds -- not U.S. bonds, but Australian, New Zealand, and Canadian bonds.

4CJ, this was your advice, IIRC??? But not Canadian bonds?

Ff

[OneTimeLurker]

I heard Steve Forbes a couple of weeks ago talking about how he thinks the economy is moving along but he was VERY concerned about the implications of a weak dollar policy. I suppose this is the scenario he had in mind.

[Orangedog]

Rising interest rates make it more difficult for home buyers to borrow money. According to Business Week, someone wanting a $200,000 mortgage must have an annual income of $57,500 when interest rates are at 6 percent, but when interest rates rise to 8.6 percent, that same person needs an annual income of $74,700.

Anyone with a pre-tax income of $57,500 who gets a $200,000 mortgage is foolish, IMO. The bank who gives it to him is just as bad.

[arete]

concerned about the implications of a weak dollar policy. I suppose this is the scenario he had in mind.

The administration is now caught in a spider web of its own making. They can't keep borrowing and spending without higher interest rates. At the same time, they are being forced to weaken the dollar cause they can't pay the debt already on the books which will cause foreign investors to sell their dollar assets, and raise interest rates. No win situation. That is why everyone from the FED govornors to John Snow sound so confused.

Richard W.

[1Old Pro]

Templeton, who is 92,

If he's so brilliant an investment picker, why is he still working?

[arete]

The bank who gives it to him is just as bad.

The bank doesn't care. The will just sell the mortgage off to someone else who will package it as a securitized vehicle and then sell it to a bond fund who will then sell it to Joe-6-pack for his retirement account. That is how the big boys pass off high risk to the average sheeple who are clueless about how the system really works.

Whenever you drive around and see new contruction in areas doomed to fail, don't laugh -- you are somehow probably going to pay for it.

Richard W.

[arete]

If he's so brilliant an investment picker, why is he still working?

He grants occasional interviews from his mansion in the Bahamas. Hardly what I'd call working.

Richard W.

[1Old Pro]

He grants occasional interviews from his mansion in the Bahamas. Hardly what I'd call working.

So he doesn't do any research, he just makes predictions?

[Semper Paratus]

This will be the lead economic news story tonight.

[Beck_isright]

"Moore says Templeton is telling investors to avoid U.S. stocks and sell off excess residential real estate."

And the band plays on.

[arete]

So he doesn't do any research, he just makes predictions?

Do you know that he doesn't do research or are you just guessing and hoping to somehow discredit him as I suspect that you are?

Richard W.

[Lael]

Comments and opinons welcome

I don't know...but if this comes to pass, expect hard times worldwide...

A weakened dollar makes it less attractive to dump here...and with the backlash building anainst "offshoring", places like India would have to absorb more local content.

Who knows???

[litehaus]

Liquidated real estate.....cash now 70%...still 30 stocks to go.

[arete]

Don't get caught holding the bag on those stocks. My advice -- take your profits and run like a thief in the night. It's a gift. Then, stay out of the casino until after the dust settles.

Richard W.

[microgood]

If this happens, would gold be a good investment?

[headsonpikes]

The $64 question is - can a bubble be deflated slowly?

In my experience, a big spike down is unavoidable at some point. That will shake the system, at least.

And inflation-thermometer gold is still being submerged in ice-water by the PTB! They'll give up the ghost on that dodge sooner or later.

;^) Buy gold and gold stocks.