How low does the stock market need to go....

Are individual investors that invested in the stock market. A lot less than in past decades. Today its more via 401k and mutual funds. It's just not that correlated.

I think it's relevant. It's not so much peoples $$$ as it is Wall Street. In this kind of market, it's difficult for IPOs to price, companies to raise money, deals to happen, credit to flow, etc. These things have still been happening this week but if it continues ...

Some pullback from the gains we've seen in the past 6 months was needed - the capital markets overpriced in an economic recovery (we may be seeing a slight one but the speed and strength were probably overpriced). If we stabilize here it's probably not a huge deal. But if the roller coaster (which isn't really the right word since it's been nothing but down this week) continues there is no arguing it hurts Wall Street which hurts NY prices.

If bidding wars and offers at open houses are really back, I doubt they'll be many this weekend.

RSer yes it is correlated. Esp. in NYC with IBers.

You are confusing employment with stock market levels. The question was about a target on the market. And not everyone on Wall Street is tied to equities. A fair number are involved with other products. I do agree that Wall Street employment levels are a factor in NYC housing.

My sarcasm here is that the stock market level is bullshit....its the level of employment and earnings. I will be interested to see how sentiment is impacted if the market comes in another 20% or more.

Yes, but the volatility is affecting debt markets too - at least the people I know in this are worried about it. But there was some volatility earlier in the year that stabilized. It's too early to say. If the slide continues it'll matter.

Do I have to spell it out for you? A sig. of IBErs have their net worth tied up in the stock market because they are (drumroll) paid in stock.

A 50 dollar drop in GS stock, for example, is a drop in the order of a few hundred million dollars in the net worth of quite a few families in the NYC metro area.

It affects NY real estate in several ways. In my view, it's in this order of importance.

1) Wall street's dependence on functioning capital markets - not just IBers, but hedge funders. Most hedge funds aren't actually hedged; they are far more "long" than "short." That said, many on the sellside profit from volatility.

2) Confidence / sense of "urgency" / willingness to be aggressive in bidding wars, etc. - if people ever had this to begin with post-Lehman (which brokers say started to happen in winter/spring of 2010, it doesn't help

3) Stock-based comp for Wall Streeters: I think in the short term this is the least important, because everybody pretty much sells in Jan/Feb when the latest batch vests. At current levels, though, most people have made huge gains from the bonuses paid in the beginning of 2009, and are only a little below '10 levels. This stuff doesn't even begin to vest until 2011, so in the short-term, it's not a big factor, except for how it affects confidence.

A stabilization in the markets will help all 3. If it goes down much more, it's an issue.

Wow! Kspeak. Such intelligent babble.

It's like a grizzly bear clawed out your innards. In my view it's time to panic, if you just bought NYC re. This is in addition to the mauling that's been happening in slow mo thru the political process to limit leverage, trading and debit card fees etc etc etc. ALL of which afffect banks and how much ultimately they pay bankers bonuses and more importantly how much of the GDP financial services firms represent.

Flmao, you must have a very pretty unicorn.

kspeak thats just plain wrong on the hedgies, but deflating assets across the board won't help them either. bidding wars??? geez, i need to dust off my checkbook!

"In my view it's time to panic"

Yeah, panicking is always a good response - you can really accomplish some good stuff while panicking. Not that anyone's trying to drum up fear or anything.

>> kspeak thats just plain wrong on the hedgies

Not it's not. Far more hedge funds are not market neutral than are market neutral. This is commonly known.

>>> bidding wars??? geez, i need to dust off my checkbook

I said "broker's say ..." and " if people ever had this to begin with post-Lehman" and used "urgency" in quotes

When did I say I believe there were really bidding wars? I indicated I didn't believe this really existed to begin with and that I'm not sure how much urgency there was anyway

kspeak, where are you getting such insights on the hedgies? 2008 shut many down not because of their long bias but because of deflation amongst all asset classes and lack of liquidity. other outperformers were almost all-in on the short side but to suggest that they are commonly long-bias based is not accurate.

I don't disagree that many shut down in 2008 because of lack of liquidity.

But, first, in theory "deflation amongst all asset classes" wouldn't affect those who are market neutral (in whatever asset class they are in - stock, bonds, oil, etc.).

Second, it was all over the papers that more funds were in the red in 2008 - not quite as much as the S&P (down about 35%), but down 15% to 18% on a reported basis, but most think that due to the forced redemptions and underreporting most were down 20%+. Again, it's likely that if the AVERAGE hedge fund were market neutral, they would not be down as a class in 2008. I realize that a specific FUND could be market neutral - e.g., focus on one industry and short some stocks and long others and have bad investments so bed down that way - but on the whole for most hedge funds to be down with the market indicates the average one is not market neutral. That, or they are just really bad at their jobs ..

Third, this is just a matter of common knowledge. It's been talked about for years that hedge funds aren't really hedge funds now ..

However, I don't disagree that as a class hedge funds are MORE market neutral than say, most funds managed by a Fidelity.

Kspeak r u serious? Bc all asset classes deflated, no biggie? Where'd ya get your GED? Devry?

Tell ya what didn't deflate, my cash in my FDIC acct. Didn't even need to pay $9.99 to get into cash.

One other thing, who wants black pearls? Frenchie just got back from bora bora. 4 ppl in the entire hotel, same in Tahiti. Glut of black pearls. 100 unstrung for $3k, retail Tiffany at $40k. Forget Hawaii, tahiti it is.. Let the euro burn mofokers.

Oh string it there and avoid the 21% VaT. W67, info you can rely on.

i won't even bother.

Have an endless supply of white pearls. 3 to 20 minute processing time, depending on stimulus package.

W67th - This is literally the last time I will respond to your posts ever.

Your lack of reading comprehension is staggering, as is your arrogance.

Being balanced in my approach i can actually acknowledge what is NOT good for nyc real estate. and that includes the market falling.

I was saying that if hedge funds were actually market neutral, on the whole, they would not be affected by the direction of asset classes - up or down.

except if everything was deflating with scarce liquidity, correlations don't matter.

w67th, I'm stunned you haven't made a pearl necklace reference yet - I'd imagine you'd be pretty familiar.

truthskr, touche. Hilarious.

I am tempted to make a rude joke about pearlz. But I won't.

how did i miss that, perfect.

>>> except if everything was deflating with scarce liquidity, correlations don't matter

This was a factor, but you're really tellling me you think all hedge funds are really hedged now? You really think this? Yes, some are. Yes, they used to be, but over the last 10 years this changed.

I quote:

"Hedge funds, it turns out, were not "hedged" in any meaningful sense of the word. Too few shorted enough stock or managed risk prudently."

http://articles.moneycentral.msn.com/Investing/Extra/the-coming-hedge-fund-shakeout.aspx?page=2

well I guess you wont' respond to this.

Time to change tampons... it's starting to affect you economic cognitive abilities.

Oh and 2004 pricing is kaput bf summer '10 is out.

bj... too low lying even for moi'.

kspeak.. ever hear of winner's bias? You know 10K hedgies in 2008, all are in red, 8K disappear... in 2010 they talk about how they're back to watermark?... the remaining 2K that is...

Ya kspeak.... teach me something...

Ever talk to a wall? Think w67thStreet.

True, its not just about the stock market, employment factors in in a major way. But perception is huge, of course. Fear drives a lot of things.

Though, overall, if we're talking about the non-fear contributor, the lawsuits and the regulation will factor into that heavily I assume. The whole nature of the banks could shift (I haven't seen the latest bills).

oh, and right...

hedgies... most who don't actually hedge... are going to be making a LOT less this year.

"Are individual investors that invested in the stock market. A lot less than in past decades. Today its more via 401k and mutual funds."

And you think that somehow insulates them from fear of market tanks? Also, we might be off the highs of the boom years, but individuals are a LOT more invested in stocks than decades ago....

Finally somebody who understands that most hedgies don't actually hedge!

ericho75, exactly. He can type but it's unclear if he can actually read.

kspeak. cmon, you are going to further your "thesis" from a business article from msn. you and steveF should be watching CNBC now to get your next big idea. btw, i never said hedge funds are perfectly hedged - i was responding to your common knowledge comment that they are long-bias vehicles. thats lemmingjuice speak (since your no longer speaking to w67, i thought i would invoke his spirit).

erichooooooooooo69..... therez you be....

r u serious? a wall?

let's see your wall has been for 2 yrs:
1) Buy LIC RE;
2) BUY equities/commodities... anything you could get your hands on and if you can get 10x leverage the BETTER!

Me for 2 yrs
1) NYC RE $500psf
2) Buying into equities/gold/commod.... represents a much higher risk than even a 30% run -up is compensating you for....

So ericho... mini-rally today.. sell or buy... LMAO.. left off the F in deference to our long relationship.

You bears magnify the decline of the stock market might have a big effect on NYC housing, but ignore the big rally over the past 12 months.

Think w67thStreet.

You're backing up now that you realized what I said is true. Grant the source isn't grea, but itt's hard to prove something so obvious, so that was the best I could do. It's like proving santa claus doesn't exist.

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think w67thstreet

Ericho - I don't magnify it any way. Depending on who you talk to, I am either a huge bull or a bear - I see flat to 15% down from here (so 20%-40% off peak), which probably makes me a bull on this forum.

So yes, generally I think gains in the stock market are good for real estate. The gains over the past 6 months were, which is why you saw deals happen again, albeit at levels well below Lehman.

But I'm not going to pretend that stock market declines are good.

One can certainly debate the magnitude of the effect, but not the direction of it.

well i must be working in some phantom industry then and you must be working in the "real" hf industry -crap, maybe i'm in kansas too looking for my bright red shoes. anybody see a tinman? or a lion? and, no i am not referring to the president or rhino.

Open Houses
Sunday, May 23
Manhattan
» more search options
2628 open houses found.

No effect....... hhmmmmm oK

Me: "Most hedge funds aren't actually hedged"

Rangerfan: "kspeak thats just plain wrong on the hedgies"

then "i never said hedge funds are perfectly hedged"

Relax.
The market is down a bit over 12% off the highs.

It's not the end of the world.
We'll get another push at the highs again in a month.

http://finance.yahoo.com/q/bc?s=SHIAX&t=2y&l=on&z=m&q=l&c=

Lower grade bonds haven't even come close to the Feb lows. You folks worry too much. If a 12% decline is causing you to lose sleep, then you are over weight (not fat like Aboutready) in stocks. Cut back your allocations.

truthy.. did they add another 200 open houses in the last 3 hours?

OMFG....

rangersfan... forget it... kspeak was a 1st year analyst from kansas, got shagged and decided to have babies and convinced her husband with a myriad of charts and graphs to buy NOW bc/ it'll never drop below their in price. 15% decline is nothing in her emotional state... .

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let's try that again
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DubyaSixSev, I thought I'd have a last looksie before puchin out today.
You'd think the late ralley might have cancelled 400 open houses instead :D

supposed to look like a F and a U

damn SE!

kspeak. thanks again for making the obvious so clear to me. very helpful, now i need to find a job at a real hf - those long-bias ones that have all that alpha. oh, wait most of them went under in 2008.

reanger.. .thatz what I said to kspk...

truthy have a good weekend... that'd be quite the swing... w/o rally 3K open houses... LMAO... the brokers they are a "working" but getting paid is another matter...

w67 agree. still working on the mindless ambition that will lead to the greater good thing.

"You bears magnify the decline of the stock market might have a big effect on NYC housing, but ignore the big rally over the past 12 months."

Funny, because Ericho simply misses that for all the highs and lows, we're still 30% down.

So, if anyone is ignoring that impact... its you.

You too.... and all enjoy the weekend.

I'm expecting to leave a few brokers with a salty taste in their mouths this sunday with my lowballs, no pun intended.

can you swing them left to right?

gotta go hit some balls...

ranger.. .look you still got a job at hf, no? Even if your compensation has gone down and your taxes have gone up.... the other 8K hedgies that went under=> makes you a winner.

For the most part, living thru cycles is the key in finance... not a one off huge bonus.. unless it's in the $20MM range... then let me shine your shoes this weekend.

ha, not yet, not yet. have a good one and be careful not to mistakenly take a swing at truthies low hangers.