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Mind you readers I use technical analysis to trade. I have been happily bullish these past 3 months as stocks enjoyed a vicious bear market rally. However the charts are looking a bit sickly lately. Key sectors such as housing, transportation and banking are starting to roll over. Sentiment indicators are flashing red as well. We can correct the techinical damage done but the odds are looking like we go down and re-test the March lows. Do we break through them? I think we do not but an erasing of all these gains is going to hammer the tiny green shoots the RE bulls have been fertilizing here. There are others on this board(urban) who are much better at fleshing out the macroeconomic implications for the stock market. That is secondary to my style of trading but it seems to be in synch with what I am seeing.
i guess i'm in good company then!
ericho75? what should I do... oh my... what should I do.....?
just don't tell me to buy LIC RE m'okay!
The stock market is 100% correlated with NYC real estate when stocks are up, but totally unrelated when stocks are down.
We're still above the 200-day moving average... unfortunately the average is trending downwards, so we can go down further and still be 'technically bullish.'
I don't think we are going to retest the lows - I think we reached the top of a trading range and will move back down, but not all the way back down. If nothing else, a weakening dollar and inflation will inflate equity prices, its not real earnings growth, but it will inflate valuations enough to keep us from re-testing the bottom.
gotz it jason... got it... LIC logic.... got it...
ha, love it Jason
Real divergence in the market today. Nazz strong but S&P weak due mostly to hammering of financials. This market is going to make a marked statement soon as to it's intentions. While I have my own technicals I follow I do look at others such as Elliot Wave. The best forecaster out there just got way bearish. Looking for a 50% decline in the S&P by years end:
I think the March lows hold but always willing to admit I'm wrong. This bear market rally was the strongest green shoot supporting RE. SRS, FAZ, and SDS charts looking good to me.
cfranch, i went to cash again the last week of May. I missed a bit of the commodities up -- which now I see as oversold. I expect a significant retest -- and am happy to be flush with cash. I am up 40% this year -- having exited early. It seems so good I had to take the chips off the table. Rolling down would make me sick...
"and am happy to be flush with cash"
Cash is the worst possible asset - at the very least put your cash into t-bills or something if you don't want market exposure. IMO, nobody can predict the short term movement of the stock market (although obviously that doesn't stop everyone from trying).
Sorry, very busy today.
Sideways trading over the next few weeks. Expect S&P 880 then off to the races. S&P 1,000 by year end.
Mark this post.
Thank me later, and please stop talking behind my back. I'm watching you...
bsexposer -- tbills are not a panacea
UPDATE: Treasury Bond Bubble?
Posted By:Lee Brodie
Topics:Treasury Department | Stock Market | Stock Picks
Make no mistake. America has become the port of choice in this financial storm. There’s even more evidence suggesting that investors are seeking safe haven in government bonds.
History In The Making
30-Year Bond Price(US@?US30YY)
4.611 0.091 ( 2.01%%)
KRF - US
Earlier in the week, 10- and 30-year T-bill yields reached five-decade lows as investors sought out the relative safety of bonds after getting spooked by another sharp sell-off.
And on Friday shorter term T-bill yields neared zero. (Remember yields move opposite to prices). It goes to show that in an increasingly uncertain world, investors would rather earn next to nothing than take on risk. (The three-month bill yields a microscopic 0.02 percent).
0.161 0.02 ( 14.18%%)
KRF - US
"It's pretty rational what's occurred," explains Mohamed El-Erian, the chief executive of bond giant Pacific Investment Management Co. or PIMCO. "people are scared and Friday's employment number was pretty scary."
"We're already at (yield) levels we've never seen before. It's just difficult to continue buying Treasuries at these prices," adds Kim Rupert, managing director of global fixed-income analysis at Action Economics in San Francisco.
In fact Kim Rupert’s sentiment is shared by many investors. And that’s left them asking, might bonds might be the biggest bubble of them all?
Treasury Bond Bubble?
"If you draw a line it tells the whole story," says Oppenheimer chief market technician Carter Worth on the Fast Money Final Call. "The sheer steep day after day appreciation of Treasuries is no different than the appreciation in tech stocks in 2000, or a REIT in 2006 or an energy stock just 6 months ago.”
In other words, Worth believes the movement in bonds is every bit a bubble like we saw in those other securities. “At some point gravity comes into play. The overshoot in the bonds, is just that. An overshoot,” he says.
Behind The Moves
There's another side to this story. You’ve probably heard the talk about $25 oil. And you might know that gold [US@GC.1 934.0 -1.40 (-0.15%) ] had a terrible run when it really should have gone higher. As far as Worth is concerned that’s a "tell"; a major factor in the flight to safety.
"The panic out of commodities is what’s sparking the panic into Treasuries," Worth tells us.
“The race into Treasuries was also fueled by a growing appreciation that the economy was possibly going into more than a recession and talk that the Fed could start buying Treasuries, adds Mohamed El-Erian.
What’s the bottom line? When the panic subsides, the T-Bill bubble could very well burst.
I agree hiding in cash at certain periods makes lots of sense. the t-bill bubble has already burst. the market loves to confound. just when everyone is leaning one way and things look great-watch out.
T Bill bubble crashed?
You got it wrong. Just like last year, China cuts back on buying at this time of the year. Our buddies (UK) overseas did most of the lifting.
This move up in yields is over. We should grind lower until year end with occasional spikes.
Growth in China picking up full steam heading into the later part of the year. Policy makers are now trying to push the latest round of stimulus back into 2010. All that growth will have a direct effort on T bills.
Good day to state that on a day where the 10 year is once again getting crushed and yields are spiking...
"Stock market are for losers.
It absolutely no relations to NYC property prices.
Hey CorumbiaCounty. How come you no make own name? What for you use other person name? Is because you mad at people? Why you mad? You talkie us and we listen.
We'll know by year end.
"Good day to state that on a day where the 10 year is once again getting crushed and yields are spiking...
garelj - that's exactly ericho75's MO. Predict the opposite of what is precisely happening at the moment.
I guess a 4% loss for the 10 year in ONE DAY is considered "grinding lower"...
So much for the little respite on the Mortgage rates....
"Sideways trading over the next few weeks. Expect S&P 880 then off to the races. S&P 1,000 by year end."
"This move up in yields is over. We should grind lower until year end with occasional spikes."
Bonds have been rallying and yields have started coming back down since.
S&P hit 888 (missed by 8 points) and currently at 915.
Looks like i'm not that crazy after all. Trades looking good.
And of cause, most of you don't have a clue about markets.
garelj & beatyerputz,
You're both an idiot.
I pointed out to you fellas why bonds are usually weak this time of the year. I even included a link to the source of my argument. And what do you have to counter it? Mock me? LOL! Typical...
Yes i am!
Yes i am!
Yes i am!
Now bow and kiss my crusty toe.
"end of quarter
pump and dump"
OMG!!! You can't be serious!! You're telling me end of the quarter dress up starts 4 days prior????
If you have no idea, you should consider shutting up.
Want to tango?
Cha cha cha...cha cha cha...
You're an idiot.
There's 4 trading days left in the quarter.
The market is up 40% off the lows because of end of 'semi' year too.
Cha cha cha!
Cha cha cha!
ericho75: "And of cause, most of you don't have a clue about markets."
please teach me how to be wealthy and successful like you--i can only dream of ahieving the financial success you obviously have..
You like 'The Bumished Blade'?
You don't happen to be a girl right? If so, let's cha cha cha! cha cha cha!
Look, i didn't start this thread. The people that did made an incorrect call and assumption. I addressed their concerns with data to show it. What's the problem with that? I even made the call about a pullback into 880 for S&P. Did it not hit 888 the other day and took off?
Maybe you're a 'sensuel' person. If that's the case..i'll lead!
Cha cha cha!
Cha cha cha!
Cha cha cha!
Cha cha cha!
"LIC cesspool and rot, you asshole."
So much venom my darling. Music and dance might be the medicine you need.
W67thstreet..."Tango Misterioso" please....
Cha cha cha!
Cha cha cha!
Cha cha cha!
Cha cha cha!
Today is 1st trading day.
6/26 is 2nd trading day.
6/29 is 3rd trading day.
6/30 is 4th trading day.
Uno, Dos, Thres, QUATRO!!!!!
You know you want me..
You know i want ya!
"when the real effects of unemployment and reduced PCE start to really show up."
You said that after the 1st quarter too!
"I'm lov'n it"..
Hey, that's a great movie. The movie runs pretty deep and really explore the deep side of human emotions. I highly recommend it...even for a sister like you.
"banks, real estate, stock market and top 1% of the heap or bust. bust, bust, bust. did you see the Rivlin interview? the Buffet interview? the Immelt report? no? maybe you should look beyond CNBC. maybe you should give a shit about people, and not just YOUR bottom line."
woah! Just because i disagree with you and the bears here on a number of things, doesn't mean that i don't give a chit about people. You're doing it again. Jumping into conclusions and accusing others of doing things that they haven't.
A GOOD stock market which i'm hoping for is GOOD for people.
My thoughts on why the 10 year yield will be grinding lower are good for rates which is also GOOD for people.
You need to look yourself in the mirror and see who the bad person is. I'm not the one that wrote this..and i never will.
"i really hope you lose your job, you thoughtless sob. and you lose that LIC pad. and i've never hoped that about anyone before, ever."
there is re-balancing of the Russel indices on close of tomorrow 6/26
tech will be sold and the players have used that knowledge to hammer down tech.
Today was a serious and as it looks right now successful attempt to short squeeze the tech shorts - nice big rally throughout the whole day :)
Next week I expect a big rally into July 4th - afterwards I am on vacation and could care less.
Technically we have retraced 50% of the last downswing (as of now), tomorrow could see more of a squeeze or a countermove by the shorties....
ahhh...a fib guy. I'm a big fan of fibonacci retracement.
What is your primary trading vehicle?
> A GOOD stock market which i'm hoping for is GOOD for people.
Good stock market, sure.
But you seem to be confusing that with a wish for bubble RE prices, which wasn't a good thing.
"maybe you should look beyond CNBC. maybe you should give a shit about people"
What's the deal with always trying to twist and distort it so that people who are optimistic and bullish somehow don't "give a shit about people"??? Not sure how you make that conclusion??
jsmitty... howz that $1MM RE equity ride at the Grand Mill?... don't worry, the fun has just begun....
Ericho69, shouldn't you be over by the Powerhouse thread...
oh ericho75 meet jsmith9005, who's just taken a $1MM up and down ride on his H line unit at 1965 Broadway (at least it's in Manhattan).... jsmith9005 meet ericho75, who is in complete denial about how SO SO SO under the chimichurri sauce he is in the Powerhouse... Ericho be a sport and tell me how under water you are? come on, for old times?
aboutready, howz the fish and chips? or have you chunneled your way to the land of brie?
hey columbiacounty... the J-29 was a no go, but I'm taking a look at a beneteau 281 this Monday... :)
ahhh. the British sense of humor knows no bounds. Enjoy the European tour... I am SO SO SO jealous... can't wait till the kids are of traveling age...
I truly hope your daughter appreciates this trip.... :), my first trip abroad was to America w/ $2K in total life savings for the entire family and no job or prospects for my parents... but the Hot Dog tasted good, as I remember it. :)
If you're talking Knightsbridge, Mayfair, much of the commercial property is owned by one or two people (Duke of Westminter owns a big chunk). Not quite sure what his strategy is, but I would imagine that keeping the street scene looking "filled" is a part of it. A few of the UK retail chains are perpetually in trouble.
W67: just take 'em anyway. That's what we do.
Have you read Greenblatt's 'Breakthrough Strategies for Predicting Any Market" ?
Great fib book - have not tried it yet on forecasting Manhattan RE due to lack of good data LOL
how low can we go?
When I was in London a month ago, pretty much every suit and shirt shop in the Square Mile had a pretty hefty sale on. Other than that I agree that the shops didn't seem to be suffering too much. Outside of London is getting hammered, even in relatively wealthy places like Berkshire
Posted on June(24th).
Cha cha cha!
Cha cha cha!
Cha cha cha!
Cha cha cha!
markets up, ericho chimes in, markets down, ericho disappears, market comes up again, ericho quotes himself, market goes down, we wont see ericho anymore.
ericho you bring so much to this forum. I for one THANK YOU! I am learning alot
Com'on, give me a little credit here. I went out and made the call a few weeks back when bonds were getting destroyed and everyone was saying lower rates will be gone forever. I also put my reputation on the line and said market will trade sideways down to 880 (low close was 879). If the both the bond market and equity market would had done the opposite, i'm sure you bears would had tore me up. Noah, you can't have it both ways. Now give it up...
Cha cha cha!
Cha cha cha!
Cha cha cha!
Cha cha cha!
"ericho you bring so much to this forum"
But Noah..i've been SPOT on, i haven't I?
And think back 3 months ago when i was on here chatting about green shoot and how it 'might' stablize this housing decline. Was i NOT right then too? So, maybe..just maybe i'm not that crazy after all.
Do you really want me to dig those up?
ericho - i think I noticed you here starting about 4-5 months ago, or so. Maybe less. Is this correct?
Where were you in late 2007 and all through 2008?
I was renting and didn't stumble on to this site until early 2009 when i decided that the time is right to make my first purchase.
If S&P rallies from here and touches 1K before year end, would you give me 'some' credit then? Or if the 10 year trades below 4% yield?
What does one got to do to get some respect around here? :p
good for you, it was a good time. but know that many of us were here for 12-15 months here prior to you, when many were arguing against why this crisis was so severe, and contained, and how it wouldnt hit manhattan, ever!
Your comments simply point out the positives/the stock rallies, and ignore what was done, why, and negatives. For example, M2M is changed, and FASB tweaked off balance sheet rules to help banks technically look solvent and boost TCE. Yet you are cheering the effects of this as a recovery sign. Understand? If you were around this whole time, arguing your case, and why, i would take your posts more seriously. But coming here after markets hit their lows, and talking about stabilization and green shoots, isnt quite impressive. The shit already hit the fan! You had nothing to lose
NO! I will admit that I was way wrong in regards to the effects of stimulus and engineering of system to recapitlize the banks. I didnt expect a sustainable rally yet, and I was wrong. I admit it. It happens. I think there is a very good chance that we rally to 1,000, and possibly higher by years end! But trust me, many will get complacent and believe deeply in the recovery and I will continue to question it and expect a double dip. Look at all the stimulus/credit facilities/bailouts/QE printing/0% rates that was poured on, so predicting a 15% from here in equities, really isn't a ballzy call at all
"The shit already hit the fan! You had nothing to lose"
You're wrong. If property prices are to drop 40-50% from here as some of the bears have stated back in Spring, then i have a lot to lose.
Also, i never disagreed with the bears here 12-15 months back. The fact that i was renting during that time puts me in the same camp as they were. The difference in opinion is the severity of this decline and duration. Some here think Armageddon is upon us and we should go hide in our bomb shelters for the next decade. When i was arguing about signs of stabilization 3 months back, most of you thought i was crazy. Look what has happened since? None of you saw the bottom even when it smacked you right on the face.
in the interim, with cit, commercial real estate ans cc write offs -- the screams for a ridiculous second stimulus package -- I suspect that the the market will endure a W.Though wider bottoms...
We are not out of the woods...
But in order for us to rally to S&P 1,000, the economy has to continue to IMPROVE going forward. This will contradict your work in regards to the next shoe dropping in NYC housing market later this year. This housing market isn't going to collapse with a strong equity market.
I agree, we are not out of the woods yet...but i think the heart of the storm has past us.
And please, don't confuse 'collapse' with 'weakness'. NYC housing prices might stay weak over the next few years (5-10% decline)....this is far from the 30-50% collapse that some of you here are calling for back in Spring by later on this year/early next year.
but I did the same thing, yet you think I didnt. Thats the thing, and I said those things publicly and in conferences! Its the nature of markets. Nothing goes straight down forever, and of course after a sharp downturn, eventually the data will get less worse, and pace of change will slow. This is not rocket science!
from a JAN 7th conference - before you even bought and started blogging here! You act like I didnt see this stabilization or pace of decline slowing, coming. What I underestimated, was how greatly the fed's actions/engineering/printing/stimulus would impact banks, stocks, and confidence. But I still question the sustainability of it, and I always will.
BRAD INMAN - Where will we be in a year from now?
NOAH ROSENBLATT - You will see unemployment close to 9% by the end of the year (clearly too positive!), and you will start to see the pace of national housing metric declines slow. I'm less bearish today because the process is happening, as a year and half ago I was way more more bearish than I am today. And as time goes on, I will probably become even less bearish.
Now, at the time I stated this, stocks sold off about 15% to hit lows. The ofcourse bounced. You talk about 40-50%, who cares! I never put any number on it. All I know is that so many arged that a drop in prices was even possible in late 2007 and early 2008! You werent here then. I argued my case, with every stock bounce and fed rescue. Bulls argued their case. Yet, here we are, you bought, and now you are a bull bias...thats the thing, your biased. You cant accept or even consider that this growth spurt is stimulus driven, acct gimmicked, and natural order of markets bouncing after a HUGE move down. Difference between you and me is that you argue its smooth sailing from here, while I disagree and think we have more pain ahead and another wave ahead and unintended consequences of what was done to give you your green shoot growth spurt. Severity of the decline. Umm, stocks fell 60% to their lows! Thats a very painful move my friend, and you act like those warning about a move like that was wrong because we bounced from it. Here in Manhattan, I get calls from distressed sellers at least a few times a month, and I hear stories of sellers that just cant move property, even with tons of traffic. You dont hear these stories from me. And for what its worth, this market has been slowing continuously for past 2-3 weeks as seasonal element kicks in. And yes, I will write about this on UD as I wait to make sure my observation is accurate. If I wrote about every slowdown and pickup on a weekly basis, my credibility would be out the window.
1. the implication that the entire world is based on the stock market is difficult to swallow---what about all of the unemployed people and the unemployment to come?
2. how long will the government be able to keep interest rates ridiculously low?
3..all of these percentages being bandied around are silly. is nyc real estate down from its peak? yes....somewhere between 20-30% depending on who is counting. so, are talking about percentage declines from where we started or from where we are?
You're a smart guy. Unemployment is a lagging indicator..always has and always will be.
Have a look at the last 5 recessions and compare employment data and you'll see the full picture.
I respect your work and you were actually calling for stabilization in housing during the spring. I apologize for grouping you with the other doomsday cronies.
when are you going to wake up and realize that this is:
1. not armageddon but...
2. not like any other recession.
these problems have been brewing for years. we're broke, busted, bankrupt...call it what you will. there is no political will to do anything about this and without that, what's the answer? we are in love with getting something (everything?) for nothing.
many, many, many of the unemployed and soon to be unemployed are unemployable because of the economy that we have all created. look around carefully...we are a land of over capacity....too much of everything but no reasonable method of allocating it amongst everyone so many, many go without.
ericho - in regards to your collapse vs weakness, dont forget that I too said this but 3 months ago! You keep putting me in the perma bear camp, which is so wrong, especially if you consistently read my stuff since mid 2007, when the crisis first started.
"By the end of the 4th quarter of 2009 and more likely the 1st quarter of 2010, I think the bulk of the adjustment will be complete - unless the world changes again by some unforeseen event."
I think the bulk of the adjustment probably is complete now, but that does not mean we cant see deals at 10-15% lower by this time next year. Just watch out about this complacency thing! yes, we can easily rally above 1,000 on S&P, easily, but its when everyone is on board for a recovery that surprises come.
"All I know is that the process is taking place at great speeds, and I would not be surprised to see the bulk of the adjustment complete by this time next year. After that, a muddled L shaped market is highly likely for years as we as a nation deal with the unintended consequences of policy actions and over-regulation taken to both stem this crisis and ensure that it never happens again. I'm way less bearish today than I was 12 months ago now that the process has started and equities have adjusted."
BAMM! an acknowledgment 14 weeks ago that the adjustment in equities has occurred - I even got bullish on these forums in mid March and told people I was buying stocks! Where I went wrong was selling them early and building short positions early in late April/early May. And I admit that trading mistake that saw positions hit stop losses.
CC - exactly. state budgets are getting whacked and you know we will see issues there contributing to unemployment as time goes on.
ericho - thats all I ask. its easy to tag someone as a permabear, but fact is markets and dynamics change and you change with it. Process is happening, but I cant get bullish yet with UE about to go over 10%, and tons of lost wealth. Everyone wants stimulus and their stocks to rise and political will to deal with a debt/spending problem with more debt/spending, can only last for so long before we see the consequences of that!
"these problems have been brewing for years. we're broke, busted, bankrupt...many, many, many of the unemployed and soon to be unemployed are unemployable because of the economy that we have all created. look around carefully...we are a land of over capacity....too much of everything but no reasonable method of allocating it amongst everyone so many, many go without."
CC - cheer up, dude (or dudette) - just 70 years ago this country emerged from the worst ecomonic depression in its history and over the ensuing decades we were stronger than ever - the same thing will happen again. It will just take some time. People have turned into savers, rather than spenders. We will work our way out of the debt slowly but surely. The best and brighest days for the good ole US of A are definitely ahead of us. Take heart!
ericho - MARK MY WORDS on this one - lagging Manhattan reports will show what happened, as it did in Q2, and then show the pickup in action and contracts signed later on, perhaps Q4, not sure. when that report comes out, EVERYONE, and I mean EVERYONE, will look at quarter to quarter improvements in sales volume and perhaps even deal levels from the horrible Q42008-Q12009 period, as a concrete sign that Manhattan has bottomed and is on road to higher prices.
Just mark me down for this occuring in say 6-7 months!
forgive me but "state budgets are getting whacked" is a huge under statement. we have not yet seen what is going to happen (nor do I for one have any idea) as every state (not just a portion of the country but every state) faces revenue shortfalls of 20 %. This is just one example of a phenomena that has never taken place in our lifetimes.
I repeat: I am not suggesting armageddon but considering this as a blip on the financial landscape is burying your head in the sand.
i fear you are correct cc about that one. I dont have any idea either.
cc - it's OK to be bearish on the US economy in the short term, but anybody who isn't wildly bullish on this country's prospects for the long term is a fool. Just 200 years ago, we were a country of 4 million people with minimal wealth. Today it's 300 million with the highest standard of living in the world. There is NO DOUBT in my mind that this trend will continue over the next 100 years - but with periodic pullbacks such as we are now experiencing.
so...you figure we'll come out of this in ten-twelve years?
It will be a slow process of deleveraging / rebuilding over the next 3-5 years. Unemployment should bottom next year, then slowly decrease over the ensuing decade. GDP should start increasing by the end of this year. The govt averted the worst case scenario IMO.
Sorry, UE should "peak" next year.
I'm starting to enjoy these forums more.
No name calling. Sound arguments that are respected between parties.
...the bottom line is that the US has the best system for wealth creation that the world has ever seen. We got seriously off track the past 10 years, but our system inevitably corrects itself (luckily).
where does the money come from in the mean time? what types of deficits do you think we are going to run up during this period of time? is there really no amount of government borrowing that is unsustainable? if so, why don't we just pay everyone in the country $100K per year from the government?
For the record, I have 90% of my net worth invested in US equities, so I'm in for the long haul (next 30 years until I retire).
"the bottom line is that the US has the best system for wealth creation that the world has ever seen. "
we certainly did and then we broke it.
The US debt was much higher as a % of GDP at the end of WWII, but the strong post-war economy allowed the debt to be worked off. It will happen again - entitlements will get cut, taxes will prob be higher, govt spending curtailed. We'll work our way out of it, but it will entail some pain.
cc - it's not broke, just gummed up. The system works over the long term (but sometimes not in the short term).
the concentration of wealth at the top and the elimination of millions of jobs in order to promote greater corporate profits has lead to a situation quite different than post WWII. that's what's broken and to think that will fix itself somehow is to buy into the alan greenspan self policing regulation fantasy. the only thing that can change that is through politics and i just don't see the will to do so.
the zuckerman piece that AR just posted is quite chilling...no one can accuse him of being an end of the worlder.
Yes, there was too much wealth concentrated at the top and now that is dramatically reversing. Taxes are going up on the rich and UE and other benefits [tax credits for new homeowners, etc.] are going to the middle class. Jobs will be created after this cycle is finished and the US economy will get back into gear. It will just take somewhat longer than the typical recession we've been used to over the past 50 years.
huh? dramatically reversing? are you talking about the proposal for the surcharge for paying for healthcare?
cc - I'm not getting into an argument w/ you - let's just agree to disagree. Cheers!