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Originally Posted by al_bundy
and earlier this week they had an executive from ML on CNBC and he said some of the firm's wealthy clients have cashed out of RE and into bonds
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Bonds are a great buy. When bond prices go up, rates go down, and rates have nowhere to go but down from these 70-year historical highs.
Wait a second...
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Originally Posted by al_bundy
a lot of people see australia as a leading indicator and things have started to cool off there as well
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That market was a lot more overheated as well, though. See, for example:
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Originally Posted by al_bundy
On Squawk Box on CNBC this morning they said that the Chinese wanting to buy UNOCAL is an indication that they are branching out of the bond market. less money going into bonds mean rates are going to go up
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Rates go up... prices go down... Why is this a good time to get into bonds again?
Directly from Barry Habib:
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The mini-rally we’ve enjoyed the past two days is undergoing a bit of a pause this morning, but the party isn’t necessarily over quite yet. As could be expected, profit takers are grabbing their recent gains and pulling some money off the table, and this morning also brought slightly better than expected news in the form of a modest decline in the number of weekly Initial Jobless Claims.
At this point, Bonds have only given up yesterday’s mid-day gains, so rate sheets shouldn’t look much different this morning over yesterday's. It’s not unusual to see Bonds move around a little after a nice move higher, and we’ve got dual support just underfoot at the 25 and 200-day Moving Averages. With a slim economic calendar this week, these levels of support will act as our barometer. If we are able to hold ground and close above these levels, it shows Bonds may have some legs to potentially improve further. If we close below these levels, it may signal further price weakness ahead.
Another look at the health of the housing market today, as Existing Home Sales were reported basically in line with expectations at 7.13M units. In our recent exclusive interview with Frank Nothaft, Chief Economist of Freddie Mac – he noted that housing is experiencing the lowest levels of inventory available in 30 years, which definitely indicates that demand for housing is still plenty strong.
Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow will be hitting the airwaves this morning, testifying before the Senate Finance Committee on China. Topics of discussion will be their “undervalued” currency and China’s interest in purchasing Unocal, one of the largest US oil refineries. Traders will be tuning in to the proceedings for any comments of note from Greenspan or Snow.
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Now, Barry Habib is about as bullish as you can find someone on the housing market, so take his words with a grain of salt.
I think "the housing market" is just the latest thing that newspapers can carry stories on. Slow news week? Run that housing market bubble story we've been holding onto for the past 10 months...
I'll put money on this statement: You will only see any major drops in nominal prices in investment and vacation homes and certain metropolitan markets (CA, NY, DC, a few others). The "bursting" of the bubble won't affect 95% of homeowners.