Dow poised for a big drop?

[andviv]

With so many people's credit scores trashed, I think it will be way longer for the RE market to come back any time soon. Not even the tax credit helped as much as intended. Or at least that is my opinion.

About the european markets, tough to understand for me... tgeir macro-economic policies are not working at this point, so how the bail outs will play for them, and how will that affect us?

 

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[hakrjak]

With so many people's credit scores trashed, I think it will be way longer for the RE market to come back any time soon. Not even the tax credit helped as much as intended. Or at least that is my opinion.

About the european markets, tough to understand for me... tgeir macro-economic policies are not working at this point, so how the bail outs will play for them, and how will that affect us?

Interesting thought, could be true..... You know though, it seems like I've heard that lenders are willing to forgive a foreclosure or bankruptcy more easily now than ever before, if it happened over 2 years ago and you can show on paper that you can truly afford the payments, and you plan to owner occupy.

A secondary cause holding the market down right now, I think is the lack of money available to investors for purchasing rental property. As soon as those purse strings loosen up -- You can bet on a flood of money hitting the market!

Cheers,

- Hakrjak

 

[andviv]

Playing devil's advocate (i.e. let me refute you in a polite way, you @#$!@$@ )...

If investors could get more money due to more liquidity, why would they invest in RE when the market is throwing crazy returns in the past couple of years?

It seems the Dow is holding up, not sure why, maybe cause people want to believe, cause there is no other investment giving back similar returns... maybe that hope is what is really holding things up...

I hope those t hat really understand the markets better than me (basically everybody in this forum) could add their input.

 

[Guest3722A]

Playing devil's advocate (i.e. let me refute you in a polite way, you @#$!@$@ )...

If investors could get more money due to more liquidity, why would they invest in RE when the market is throwing crazy returns in the past couple of years?

It seems the Dow is holding up, not sure why, maybe cause people want to believe, cause there is no other investment giving back similar returns... maybe that hope is what is really holding things up...

I hope those t hat really understand the markets better than me (basically everybody in this forum) could add their input.

My .02...

According to Dow theory, A and B can't succeed without C and vice versa, meaning in it's simplest form, industry (A) and transports (B) can't operate if utilities (c) are down. Meaning, industry can't produce without utilities and transports can't transport without product. Any break in this circle, and the system is down. So, when the RE bubble took the entire market down, there were still great companies showing strong growth, that were crippled due to the overall system. Currently, the system has stabilized and rallied substantially and strong companies are still showing strength and growth, which equals higher valuations. Higher valuations attract investors. This is from a fundamental perspective. The markets though operate on two primary perspectives the first being fundamental geared more towards "investors" whereas the second perspective of that of a technical view which is used moreso by "traders". Currently I believe that the fundamentals are showing growth, and the technicals are showing that they are breaking through key resistance levels, and then testing for support. This in my opinion is what a healthy market is suppose to do but although still sick, it appears to be healing nicely!

 

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