Gyroscopic Investing

The weather has cleared up in the Dallas area, which is a blessing.  The last five days have been the worst weather in about 15 years.

My prediction is the Packers will win, 31-28.

It should be a geat game.

Packers win 31-25.

Touche'.

Got any stock tips?

I think MT would say buy LT bonds like crazy.

moda0306 wrote: I think MT would say buy LT bonds like crazy.

LT bonds are the only thing that looks really cheap to me right now.

MT, I agree with you.  I think the story of the decade is going to be deleveraging (which tends to be self-fulfilling and definitely deflationary), and any releveraging is unsustainable and going to be bubblish in my opinion (like what we're seeing right now).

What do you see the housing market doing?

moda0306 wrote: What do you see the housing market doing?

It will continue grinding lower, with pockets of strength around the country.

Here's why:

1. Large shadow inventory of foreclosures and people who are trying to wait out the market

2. Rising interest rates will blunt demand for new mortgages

3. Tighter loan standards

4. Over-valuation of housing in general relative to income available to service mortgage debt

5. State and local governments raising property taxes to plug holes in their balance sheets (higher property taxes=lower property value)

6. Secular shift among consumers toward less debt in general will reduce appetite for high levels of mortgage debt

7. Fewer renters moving into home ownership because they cannot get the down payment together

With all that said, I would imagine that lower priced housing will hold up better than higher priced housing, as the higher priced people downsize into something they can actually afford.  Demographic trends should also strengthen demand for lower square footage (and presumably lower priced) housing.

That reminds me of this article:

"Why buying gold may be better financially than buying a house

http://www.philly.com/philly/business/p ... route.html