Jim Rogers sees US real estate crash

[razorack]

Quote from MKTrader:

Let's see....$100 oil, Fannie May collapse, nothing but bearishness for U.S. stocks since the turnaround in 2003...

Question
Did you see oil at these levels say 6-7 years ago- Rogers did.
You seem certain that oil wont see $100 but that is based on what?

FNM collapse hasnt happened YET

Bearish stockmarket- OK 03 was an early call but the only thing keeping the US economy pumping is the artificial stimulus from too much money flying around.
If you took that liquidity back to normal levels then the US economy would be looking very sick. Dont forget this surge in liquidity was Greenspans end game ploy to fend off deflation which was a real risk back then and remains so. If there was a risk of deflation in 03 with assets at much more realistic levels than they are now, then surely the risks of deflation have increased immeasurably since then.
As a Japanese investor what are you going to do? Keep ignoring the increasingly obvious recovery in their own asset prices in order to keep their money in the US- which is increasingly looking like entering a stagnant phase (at best).
Or are you going to repatriate and in the same time end the carry trade that has financed so much cheap US money.

Remember these japanese investors are far more risk averse than US investors after such a fall out from their own RE bubble in the 80s. The carnage will still be a fresh memory for them even if it is a distant one for us.

 

[sunggong]

Quote from razorack:

Question
Did you see oil at these levels say 6-7 years ago- Rogers did.
You seem certain that oil wont see $100 but that is based on what?

FNM collapse hasnt happened YET

LOL, so if 10 years from now, FNM still hasn't collapsed, then Rogers is still not wrong?

So oil hasn't seen $100 yet but when it does (who knows how long from now), Rogers is right because he predicted it?
And until then, Rogers is NOT wrong! LOL!


It's like me saying GOOG is going to see 10% pullback in the future. I don't know when, but it will.

 

[MKTrader]

Thanks, Sunggong. You said it well. For that matter, the Dow 36,000 permabulls may be right, too, in a few more decades. But that doesn't make them accurate.

Quote from sunggong:

LOL, so if 10 years from now, FNM still hasn't collapsed, then Rogers is still not wrong?

So oil hasn't seen $100 yet but when it does (who knows how long from now), Rogers is right because he predicted it?
And until then, Rogers is NOT wrong! LOL!


It's like me saying GOOG is going to see 10% pullback in the future. I don't know when, but it will.

 

[razorack]

Quote from MKTrader:

Thanks, Sunggong. You said it well. For that matter, the Dow 36,000 permabulls may be right, too, in a few more decades. But that doesn't make them accurate.

The point to be made here is that in trading timing is everything. Now I realise that this is a trading forum and as such I expect you guys to focus on this aspect.

With someone like Rogers you have to take him from the right perspective.
Rogers gets out travels the world and visits the coal face. He is able to see first hand what you and I can only hear about in a filtered way through media sources.
He is not distracted by the short term . He is concentrating on the bigger long term trends whether they be a few years away , about to start or a trend already established.

It allows him to stay the long haul in moves that are fundamentally based and not short term sentiment/liquidity based. He does not get shaken out of his positions because he does his own research and is smart enough to be right in his analysis. He is also smart enough to know that there is a need to be constantly assessing and reassessing these fundamental trends. He knows that he will not get the timing right most of the time, but that is not the point. In fact it works in his favour , allowing him to establish huge positions without having to chase the market- something that the so called smart hedgefund money is increasingly having to do.

Traders have an addiction to short term gain and positive feedback .

Does the expression "can't see the forest for the trees" mean anything to you?
Jim looks at the forest whilst most are looking at the trees.

 

[ByLoSellHi]

For those of you who bothered to read the linked article, did you find this as intriguing as I did?:

""I've sold out of emerging markets except for China," said Rogers, long a prominent China bull.

Even in China, the world's fastest expanding economy, Rogers said stocks were overvalued and could go down 30-40 percent.

But he added: "China is one of the few countries in the world where I'm willing to sit out a 30-40 percent decline."


Also, why is he moving to Asia? To be closer to his positions in China?

 

[a529612]

Quote from ByLoSellHi:




Also, why is he moving to Asia? To be closer to his positions in China?

It's better to watch a sinking ship than to be in a sinking ship?

 

[Matt24SPFL]

Quote from ElCubano:

the condo market in my area is going to feel the biggest brunt of the drop...there is no way no how they are going to be able to withstand even the slightest hiccup...there are cranes as far as the eye can see....these buildings are lining up daily....and with the developers not being able to find any more fools there is going to have to be some kind of fire sale....i have friends already setting up large pools of money waiting to double dip

And I make frequent trips down there, as, it is only across alligator alley. I will substain from buying a house here in ST. Pete and I will wait for rock bottom down in MIA.. We'll have to get together and consume a few adult beverages when that day comes. Which will be soon, within the next 24-36 months.

 

[Matt24SPFL]

Quote from duard:

When that happens I'd like to pick-up a South Beach flat as well.....

We'll alternate weekends.. Party at my place the first weekend so I can show you old bucks how we do things nowaday!

 

[ByLoSellHi]

Quote from Matt24SPFL:

And I make frequent trips down there, as, it is only across alligator alley. I will substain from buying a house here in ST. Pete and I will wait for rock bottom down in MIA.. We'll have to get together and consume a few adult beverages when that day comes. Which will be soon, within the next 24-36 months.

Banks are already selling foreclosed properties on the wholesale auction market - used homes for as little as 10% of their last closing price - new homes for less than the cost of construction - to large scale vulture funds.

These vulture funds are either reselling the homes, or renting them out.

There was also a WSJ article about a guy in North Carolina who used to be a farmer, and is now buying homes, sight unseen, for - as an example that was cited in the article, $2,500 (not $25,000), when the last closing on the same house showed a closing price of $44,000. He then resells these homes to poor credit risk people at 12% interest rates, and sells the mortgage to private equity funds.

He is buying thousands of these homes a ayear, sight unseen.

 

[kowboy]

Quote from ByLoSellHi:

Banks are already selling foreclosed properties on the wholesale auction market - used homes for as little as 10% of their last closing price - new homes for less than the cost of construction - to large scale vulture funds.......

Interesting. Thanks for the post. The above is probably a regional thing.

The national foreclosure service listing Reo properties which I subscribe to, is showing substantially more inventory coming on the market in my area of interest, Nv, Wy, Mt, and northern Az. But no great weakening of prices and not very negotiable just yet. IMO, no fire sales so far, not worthwhile as far as buying. It may be just a matter of time.