Posted on 03/19/2009 9:03:40 PM PDT by Professional
Not at all. Real Estate is only worth what someone will pay for it. If there's no demand for Real Estate, prices will fall even in a time of great INFLATION - Let me ask you, how much do you think a condo in Zimbabwe is worth today?
Second, stocks will absolutely fall during times of high inflation - check out the stock prices for companies between 1929 to 1939 - not pretty although inflation was substantial.
But, you're right about inflation not coming - just yet. But, I temper that with one caveat. We truly are in times like no other. Historical precedent could be worthless. Historical precedent says inflation should come later, then again, it could come much more quickly if the historical models are worthless.
Didn’t fall for y2k eh? Yeah, I hear that a lot. I even try to convince myself I didn’t fall for it sometimes.
People later, will claim that in this dark time, they didn’t sell out, or think the world was ending either. Oh yeah, and if I’d have had some cash, I would have bought at the market lows...yada, yada, yada.
Baby, and you don’t have a good enough crowbar to have removed folks from MSFT at the top, KKD at the top, or SBUX at any of their tops. People are fools, and they are fooled almost all the time.
The market from here is going to spike higher, it will be jaw dropping. Duh, just like what happens after ALL market crashes. Then, we’ll get warm and fuzzy, everything will be fine, and right when EVERYONE thinks things are better, watch out. We’ll crash to bits even faster than this time, and the new fear will be better than the last time. People might just get really freaked out, bad. And then, just when all hope is lost, and everyone is literally on their last breath, last dollar, BAM, straight up again, and then we’ll have relatively smooth sailing for a good while.
That is how I see it, and I’m going to be very decisive about it. The big nasty downspike will be as inflation runs away from us, just like Bernanke has been muttering about. Bernanke is smart, and currently honest. Listen to him.
Stocks were up nearly 400% during the 30s, what are you talking about?
Adjust for inflation, get back to me.
I have a very complex view on real estate. And my fingers are tired.
Hey...you Big Monkey... Ha, I like that. If you’re a pessimist right now, you’re in good company. If you’re an optimist, you’ll probably make money. I made that up the other day, as right now 99.9% of folks are suicide basket cases that have no faith in the laws of gravity. F politics, I’m talking econ and gravity.
BM, if you believe, what nearly everyone else believes, then what chance you got of typically being right?
BTW, I was a screaming maniac about being bearish on r/e a couple years ago at the very top. I got called every name in the book. I in fact said it would be “the worst real estate market since the great depression”. I’m sure if I tried, I could find some of my old “the bridge is washed out comments” here at FR.
And that said, we might just have one big upmove in r/e over the next couple years. Trouble is, inflation later will be a major head wind on r/e. Because people don’t buy houses with cash, they buy it with monthly payments...
Ok, now I’ve talked and typed too much, brain hurts...
Deflation was the problem in the 30s, not inflation. Hoover decided not to be the savior the others had been, and while he though people could survive a jump out the window, nobody at the leverage point of 29 could handle it, it was 20 floors, not two. By the time he realized the mistake, it was too late to stop the avalanche of destruction.
There were two stock market crashes in the 30s, not one. The up move from 32 to 37 was 400%, and trust me, that money was good stuff. Really good stuff I’d bet. Maybe make a dynasty for yossef.
The seeds of 29 were probably mostly planted in 1907. Are you familiar with what happened in 1907? If not, check it out. Tell you a whole lot about what we might be doing now, and what it will mean maybe 20 yrs from now.
In the summer of 1907, the American economy was showing signs of weakness as a number of business and Wall Street brokerages went bankrupt. In October, the respected Knickerbocker Trust in New York City and the ¹Westinghouse Electric Company both failed, touching off a series of events known as the Panic of 1907.
In the wake of the initial business collapses, stock market prices plummeted and depositors made a massive run on the nation’s banks. The U.S. Treasury pumped millions of dollars into weak banks in the hope of saving them, but the string of collapsed institutions lengthened.
Sounds familiar.
As much as I hate the guy, he’s right.
bookmark for later.
You’re right, you were one of those ringing the bell a few years ago. I’ve followed your posts for a few years due to your economic and investment opinions which I’ve found to be pretty accurate.
Thanks for sharing your knowledge.
: )
Looks like you called it right. The Greatest Heist is in play. Did you pick your island yet?
Familiar, yes, so much so that it helped me figure out WHY the depression happened. And, if we solve the problem the same way they did in 1907, we’ll wind up with the same ending that came with the total economic collapse of the country in about 15 or so years. Hey, some bonus reading, and you’ll get a kick out of it too, check out Herbert Hoover on Wikipedia.
Thank you for the kind words. Please, don’t ever make any financial decisions based on what I, or anyone else posts on a board like this. Do your own homework, and if you can find a smart, honest knowledgeable pro to work with, your chances are even better.
Frankly, I’m right a pretty fair amount. My “secret” is to view things honestly, not the way I want to see them, or in a way that puts my interests first. I think this is why folks after the fact, insist in hindsight “it was obvious”. The truth doesn’t hide, so much as we try to deny reality.
Dot coms, oil, tulips, real estate, whatever bubble, yes, they typically look quite absurd after the fact. My favorite was the beanie baby, and the golden oldie cabbage patch doll craze...
Thanks. “It” needs a name, something fitting.
I’ve been calling it the greatest heist, or the Great Train Robbery of our times, but somewhere is something that will stick.
Hedge Funds, George Soros, Acorn, Democrats, Obama, Regulators, Financials, they all took the world to the cleaners.
Unfortunately, the last part of the act is the one that will be the most disturbing of all. This is where Obama takes, and gets, the credit for saving the world.
Plan out the investment before you buy it, that plan must clearly define how and why to buy, as well as how and why to sell. As I'm sure you know, the hardest part for most investors is to follow the sell end of the plan, many times they become emotionally attached or their pride doesn't allow them to admit they made a mistake and cut bait on it. Me personally, I invest mostly in stocks and ETFs along with occasional hedges with options. Every single stock I own has my plan for it in place, especially the GTC trailing stop loss sells I set right after I make the purchase. LOL I was just commenting that your outlook and opinion on economics and the market has always seemed very objective and unbiased to me. It has helped me look at the greater picture of our markets, history, and the economy in general. Just wanted to say thanks!
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