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- Best and Worst Performing ETFs This Week [view article]
- U.S. Bank Dividend Yields Revisited [view article]
- ETF Update: Gold, Financials, Aluminum [view article]
- In Search of Low (or Negative) Correlation Between Asset Returns [view article]
- Key ETFs Furthest Above and Below Their 50-Day Moving Averages [view article]
- Housing Affordability Proves Elusive [view article]
- Exchange-Traded Funds and Closed-End Funds by Asset Class, Type and Provider [view article]
- A Good Time to Cover Bank of America [view article]
- Bullish on the Market, With Caution [view article]
- The Credit Crunch Is Far From Over [view article]
- The Real Threat of the Housing Bubble [view article]
- Financial Sector ETFs [view article]
loading ...Recent IYG Articles
- Best and Worst Performing ETFs This Week
- ETF Update: Gold, Financials, Aluminum
- REIT ETFs: Beaten by a Dart-Throwing Monkey
- U.S. Bank Dividend Yields Revisited
- Key ETFs Furthest Above and Below Their 50-Day Moving Averages
- Most Overbought and Oversold ETFs
- Housing Affordability Proves Elusive
- ETF Update: Gold Staging a Turnaround, Financials Stumble
- Bullish on the Market, With Caution
- John Hussman: Market Moves to the Risk Sectors
- Full List of Articles »
The Real Threat of the Housing Bubble [view article]
Nick, Any idea where I can find data history for average weekly wages in actual dollars? There are plenty of stats on "real" wage increases (if you believe in CPI and the tooth fairy) but nominal wage increases are hard to find.It is misleading to calculate housing affordability using Household incomes. Eventually we would see 10 people living in a one-room apartment while the government tells them that housing affordability has never been better. Reply
Parikshah
The Real Threat of the Housing Bubble [view article]
Less than 18 months ago, as the economy steamed forward, popular articles were being published about the rates of wages to corporate earnings. Although within the historical band, wages could have risen 10% without corp earnings rising, and still remained in that historical band - they were at a low. So we knew companies would have to pay employees more in the future - or earn/grow less. In the interim, prices of goods that drove earning for these companies would have to come down so that people could afford them. Now that prices have come down and earnings growth is slowing, will anyone be able to pay more? Maybe its time for non-banking firms to up their pay. ReplyThe Real Threat of the Housing Bubble [view article]
Why not let the market work by advancing credit to qualified buyers looking for bargains in the housing market. Now most of the best buyers are locked out of the market due to credit issues or fear of prices falling further due in part to a lack of market for the product for the before mentioned reasons. Right now continuing our current policies will only create a self fulfilling prophecy of housing price collapse. Boosting bank profit margins will not help the problem. Making money cheep money available to great buyers will. ReplyThe Real Threat of the Housing Bubble [view article]
Interesting data. It certainly backs up the marketplace reality that there is not yet enough inducement to buy. Also noteworthy is the fact that bank/brokerage capitial reserves are severely strained. Banks only keep 5% on deposit for housing loans so the decline in housing values has significantly diminished their ability to lend. The Fed is obviously helping and praying time will turn things around. The unfortuate case is that this 'help' delays the tipping point being reached as it delays final repricing of mortgage loans that were made based on excessive valuations. I think the Fed's focus to shore up balance sheets and timing bet to fix the problem may prove to be the highway to printing money as a final cure. ReplyThe Real Threat of the Housing Bubble [view article]
Its been clear to me for a long time that the Fed is really planning for wages to increase through an inflationary spiral. Its obvious that housing is unaffordable under 'normal' credit standards in quite a few parts of the country. There's only 2 choices - prices must fall or wages must go up. The ponzi scheme that juiced housing is done. ReplyThe Real Threat of the Housing Bubble [view article]
here's an idea for ben: let investment bankers trade their asset backed securities at the fed window for treasuries--then they can issue more of the same and sell them directly to the fed. this liquidity will permit existing homeowners to borrow more against their houses, and then the investment banks can securitize these loans and sell them to the fed for treasury bills. of course the fed should only do this for securities that are rated investment grade by moody's and s&p. this process will cure everything. ReplyAn ETF Package That Outperforms the S&P 500 [view article]
This approach combines elements of two investment approaches. The first, equally weighting market sectors, is similar to an equally weighted S&P 500 Index, which has been shown to outperform the market cap weighted S&P 500. This outperformance introduces a small cap bias to the equally weighted S&P 500, and small cap stocks have done well thsi decade. The second element, reinvesting in the worst performing sector, is simply buying out of favor stocks. Staying power is crucial to success with such investment strategies. Putting the two together may or may not result in excess returns over the longer periods than the seven years the author examined. ReplyBuying the Oversold Financial Sector [view article]
Why people rush back in to bottom fish when every technical indicator screams BEAR is beyond me. Why not wait for a higher low? If it is REALLY near a low then it will rattle around down here for the next year as the other sectors come crashing down around it.I really doubt it is a low though. As others have pointed out, there is still serious unwinding ahead with housing foreclosures, other forms of credit defaulting and additional mortgage backed debt imploding (because of the first two and the ratings games).
No sir, I think we are just about getting started here. Them financial folks dug themselves a nice big hole. Reply
Buying the Oversold Financial Sector [view article]
...whether or not...drop the "or not"; it's inferred ReplyBuying the Oversold Financial Sector [view article]
I'd rather put some BP away, paying a 5% dividend now, then expect banks to not go lower or cut dividends.The next bank cutting dividends crushes the sector again. Capital ratios may dictate they do. Replyrver
Buying the Oversold Financial Sector [view article]
Vahan,My view of the economy over the last year was the same as yours. I had sell stops in my managed portfolio and it is 98% in cash. Surely there is a better bank to recommend than C. It has been sick for several years and the latest bouts of turmoil makes it a basket case. Financial investors need to watch the regional banks with little or no sub-prime exposure to see how deep the credit problems are. If a bank like BBT begins retreating back to the 20s you can kiss a soft landing goodbye. Reply
Buying the Oversold Financial Sector [view article]
All the pain financials have felt so far has come from only a 10% correction in nationwide home prices. Imagine the level of devestation when prices fall another 30-40% necessary to return to their historic long term appreciation and price/income trends! Buying financials now means you believe none of these historic norms mean anything and that real estate is done correcting, which is obviously false. A simple Google on ¨Case Shiller historic home values¨ shows how far we still have to fall. ReplyBuying the Oversold Financial Sector [view article]
Seldom you read such a weird article.For example since I live in Holland I have emailed a few Dutch banks with a simple to understand question:
When calculating the reserves of your bank, are the off balance items taken into account?
Until now I am still waiting for the first answer...
So Vahan Janjigian, why not email Citi with the same question. Wanna bet they also don't answer? Reply
Guy
Buying the Oversold Financial Sector [view article]
I love the title of your book. Refreshing change from the adoration of the fans. ReplyBuying the Oversold Financial Sector [view article]
The market won't be ready to buy until the banks find out the true value of what they are holding. As of now they don't know what the value is of their assets. Stocks won't be ready to buy until the Dow gets down to 7000-8000. A 40-50% decline in the Dow will lead to a bottom. Investor would be foolish to invest in equities with the current uncertainty.There is a reason that the Bush administration wants to stimulate the market. Government just doesn't do it out of kindness of their heart.
I think it would be objective to stay out of the equity markets until after the presidential election. When the market falls it will be lighting fast. Reply