drbubb

Fair enough. (and It think we are doing pretty well on GEI, if the stock market turns down now.) But listen to his podcast sometime anyway. It may not help your trading, but it will open your mind. Here's one about the need for a new economics / Interview with Prof. Chas. Hall: http://c-realmpodcast.podomatic.com/player...T10_47_10-08_00 Both KMO and I (& others here on GEI) deliver much for free. But KMO really needs donations more than I do. So I am now tending to make donations on behalf of GEI to podcasters and bloggers now. And I will also be subscribing more to newsletters etc.

If you make a tonne, send me a small donation, and I will pass it on to some podcasters I listen to. Like the excellent KMO: xx Or listen to him, and do it directly.

Actually, What he is really saying is the Stocks have moved PAST the point of unpredictability, and are becoming more predictable again. He sees the present Rally terminating somewhere between SPX-1300 and 1350

10-minute interview with Glenn Neely, recorded in November 2010. http://www.neowave.com/company-nov2010interview.asp chart : http://www.neowave.com/audiointerviews/Cha...recastvsact.pdf "I’m pretty confident that this count is not only still on track but that the fourth wave that’s at the bottom righthand corner of the chart is not going to end with that C-Wave. The CWave will be part of a larger pattern that will involve a D-Wave and an EWave. This is going to go on for another five to 10 years." Interviewer: Where are we now? We’re past the midpoint of this 20-year correction. It happened around 2009 or 2010. We’re past that point, and from this point forward, predictability should be better, though not great, for the whole next 10 years. It will be better than it was during the late 2008, early 2009, and late 2009 period. Interviewer: Glenn, as this eight-year forecast plays out, we’re at about 6.5 years into this forecast with about 1.5 years to go. Can you address what you think will happen with the S&P through the end of 2010? Glenn Neely: You can tell that the drop in 2008 was quite vertical and violent, and it broke comfortably below the lows of 2002. It was so violent, and the recovery has been slower and more choppy, that it’s extremely suggestive that we’re in either in a contracting triangle (which would be a contracting phase for the next two years, probably into late 2012 or early 2013) or that we’re in a flat pattern with the B-Wave rallying very soon to finish. On a large scale, the final phase of the bear market, which will conclude Wave-C, should begin sometime this year or early next. That will bring us back down toward the lows of 2009. I don’t know if it’s going to break it, but it should get pretty close. (2) On September 5, 2000, the S&P began a 20-30 year correction for wave-4. Why 20-30 years? Because wave-3 took nearly 20 years and 4th-waves must take more time than 3rd waves (at least when they are part of a standard impulsion, which this one is). While in wave-4's "downtrend," any rally must be counter-trend (i.e., corrective). So, for the next 20+ years, any large rally in the S&P MUST be - by definition - counter to the larger downtrend (i.e., the rally must be wave-b, wave-d, wave-x, wave-2 or wave-4). In this case it appears to be wave-( of a larger C-wave that began January 2008. So, no matter how large the rally off 2009's low becomes, it will be counter-trend (i.e., a correction of the ongoing downtrend - not a new, bull market). This is reinforced by the fact the rally off 2009's low is designed like a correction (not an impulsion), which means it does not contain 5-waves. When corrections get very large and last a year or more, it is confusing to non-Wave analysts how a large rally cannot be called a "bull market," but it is a matter of "definition," not duration or size of the upmove. This question exposes a crucial flaw of wave analysis, which I've stated many times in the past - that markets, under Wave theory, are NOT predictable all the time, especially during the middle of corrections (i.e., B-waves in Flats and Zigzags, C-waves in Triangles, X-waves in complex formations, D-waves in Diametrics and E-waves in Symmetricals [the last two are NEoWave formations). The rally since 2009's low appears to be the (-wave of a correctively designed, downward-moving C-wave that began January 2008. That puts the S&P in the middle of the middle of a 20-30 year correction, which is the time when wave structure is the most difficult to decipher and when forecasting is highly prone to error. The forecasts released by most EW analysts since mid 2009, including myself, attest to the difficulty of predicting markets while Wave structure is close to the middle of a large, complex, multi-year (or multi-decade) formation. /more: http://www.neowave.com/qow.asp

Taking BDEV, it looks like they rallied back to key resistance. This these time is usually a seasonally good time for Builder stocks, and it may be ending early this year

AGREED - as posted elsewhere: I missed something important, which the Telegraph article did not make clear. This item was only clear in Hometrack's own release : The DROP in Supply was much less than the HUGE DROP IN HOME BUYING DEMAND in January: + 2011 began with a sluggish start. The latest survey of over 5,000 agents and surveyors showed a slowdown in both supply (-5.4%) - the largest monthly fall for 4 years - and demand (-9.5%). Falling demand in particular is likely to impact on pricing levels over the first half of 2011. + In January 2010 demand stood at -2.7%, a sharp contrast to today’s figure of -9.5%. This suggests that the housing market is facing more fundamental underlying issues than the usual post-Christmas slowdown. + With recent rises in the cost of living, household budgets will only come under further strain if concerns over rising inflation translate into higher interest rates. Mounting concern over a possible interest rate rise will act as a further dampener on demand. + A considerable number of households will not be directly affected by interest rate rises. Two-fifths of house sales are driven by cash buyers and Hometrack estimate that over 45% of households who own their home do not have a mortgage. This said all owner occupiers will feel the impact of weaker consumer sentiment. /source: http://www.hometrack.co.uk/commentary-and-...ey/20110127.cfm This does not bode well for UK home prices. Meantime, this key Builder bellwether stock looks set for a possible steep drop: BDEV.L / Barratt Development ... update

I missed something important, which the Telegraph article did not make clear. This item was only clear in Hometrack's own release : The DROP in Supply was much less than the HUGE DROP IN HOME BUYING DEMAND in January: + 2011 began with a sluggish start. The latest survey of over 5,000 agents and surveyors showed a slowdown in both supply (-5.4%) - the largest monthly fall for 4 years - and demand (-9.5%). Falling demand in particular is likely to impact on pricing levels over the first half of 2011. + In January 2010 demand stood at -2.7%, a sharp contrast to today’s figure of -9.5%. This suggests that the housing market is facing more fundamental underlying issues than the usual post-Christmas slowdown. + With recent rises in the cost of living, household budgets will only come under further strain if concerns over rising inflation translate into higher interest rates. Mounting concern over a possible interest rate rise will act as a further dampener on demand. + A considerable number of households will not be directly affected by interest rate rises. Two-fifths of house sales are driven by cash buyers and Hometrack estimate that over 45% of households who own their home do not have a mortgage. This said all owner occupiers will feel the impact of weaker consumer sentiment. /source: http://www.hometrack.co.uk/commentary-and-...ey/20110127.cfm This does not bode well for UK home prices. Meantime, this key Builder bellwether stock looks set for a possible steep drop: BDEV.L / Barratt Development ... update

"Reluctance to Sell"? - Wait until the panic sets in ! The average cost of a home in England and Wales dropped by 0.5pc this month to stand at £153,600 - 2.2pc less than in January 2010, according to housing intelligence firm Hometrack. Potential buyers continued to sit on their hands in the face of house price falls, and uncertainty over the economy and future interest rate rises. Estate agents reported a further 9.5pc fall in the number of people registering with them, the seventh consecutive monthly decline, contributing to a 26pc fall in demand during the past six months. But there were also further signs that homeowners are becoming increasingly reluctant to put their properties on the market, with the supply of new homes for sale falling by 5.4pc during the month - the biggest drop for four years. (Might the weather had something to do with the drop in "supply" for sale?

I would agree... Provided you use Incomes to calculate "real" prices, rather than Inflation

That's Hometrack. Is the data accurate?

Unlikely. I think it will be late 2012 or 2013 or later before you see the sort of drop that you want. I still think a 0.50-1.00% per month drop is a realistic expectation.

Interesting to see Mortgage approvals falling to record low levels. Are we back to 2008 then?

RENTS UNDER-PRESSSURE - A logical expectation "Bank of England chief Mervyn King: standard of living to plunge at fastest rate since 1920s <H2>Households face the most dramatic squeeze in living standards since the 1920s, the Governor of the Bank of England warned, as he reacted to the shock disclosure that the economy was shrinking again. Families will see their disposable income eaten up as they "pay the inevitable price" for the financial crisis, Mervyn King warned. With wages failing to keep pace with rising inflation, workers' take- home pay will end the year worth the same as in 2005 — the most prolonged fall in living standards for more than 80 years, he claimed." /source: http://www.telegraph.co.uk/finance/economi...ince-1920s.html A landlord would have to be either: incredibly greedy, stupid, or both to think he is going to find it easy to get rent rises in an environment like that. A more logical expectation would be rent cuts, which may have started already: "In December, the average UK rent dropped by 1.2% to £684 per month - the lowest average since July 2010 according to the figures. . . . Rents fell fastest in Wales, down 2.6%, while the average rents in the south east and London decreased by 2.5% and 2.3% respectively." /source: http://www.mortgageintroducer.com/mortgage...n_11_months.htm Was it just a "seasonal thing", or the beginning of a downturn? We should know soon. "The boom in rental growth is likely to be at an end, think-tank Capital Economics has warned. Property economist Paul Diggle says the boom is on its last legs and warned that if its unemployment forecasts are correct, more tenants will be struggling to pay rents. Eviction specialist Landlord Action disagreed that rents would go down, but said its instructions relating to rent arrears increased by 12% over the last year, and now comprise 80% of its cases." /source: http://www.introducertoday.co.uk/News/Stor...e=news_features 2011 is likely to be "The Year the squeeze on Landlords" starts. Look at the last decade or so, and it is obvious, UK and London landlords have had it "too good for too long" and a period of Yin may followed the profitable Yang.

ONE HYDE PARK - FLYING OFF THE SHELVES? Or the next iconic failure ? ================== Two fully sold (to the owners and developers)... Just 84 to go! Truth about the most hyped luxury flats in the world Last week’s lavish launch party for One Hyde Park, the giant glass and concrete block of flats sandwiched between Harvey Nichols and The Serpentine, was breathlessly billed as the return of the super-rich to London’s property market. At an asking price upwards of £6,000 per square foot, the luxury development – designed by Lord Rogers and masterminded by developer brothers Nicholas and Christian Candy – is said to be the most expensive residential property in the world. Indeed, one of the penthouses has reportedly been sold for a gargantuan £135 million to a buyer who made a casual inquiry on the internet. Stretch limousines were on hand to ferry 350 selected VIPs the hundred yards or so to the plush Mandarin Oriental Hotel next door. Liveried guards asked for photo ID, the least you might expect for entry to a complex at which security is said to be ‘fortress-like’ and which includes iris-recognition systems in the lifts, panic rooms and bullet-proof glass. Fifteen different types of precious marble have been used in the construction and whole forests of European oak felled. Already described as the most desirable address on the planet, the development would set the benchmark for global house prices for the super-rich. Sixty per cent of the 86 apartments have sold, say the developers, and the rest are going fast. After all, One Hyde Park has a private cinema, a 21 metre swimming pool, saunas, a gym, a golf simulator, a wine cellar, a valet service, concierge and room service from the Mandarin Oriental next door. The cheapest home on offer, a humble one-bedroom flat, is said to cost £6.75 million, with developers claiming that the majority cost between £27 million and £33 million. Even the service charge is record-breaking. At £150 per square metre per year, the owners of the biggest units can expect to pay more than £100,000 annually. But The Mail on Sunday can reveal that, despite last Wednesday’s lavish ‘opening’, sales of only two of the homes have been completed – and for remarkably low prices. Land Registry documents show that a hugely desirable triplex penthouse, occupying the entire 11th, 12th and 13th floors of one of the four buildings which make up the development, was sold last August. It went to Park One, a company based in the Cayman Islands, which was almost certainly set up specifically for this purpose. The real owner is His Excellency Sheik Hamad Bin Jassim Bin Jaber at-Thani. The Sheik, a father of 13, is the Prime Minister and Foreign Minister of Qatar and the second most powerful man in the gas-rich gulf kingdom after his cousin, the Emir. /more: http://www.dailymail.co.uk/news/article-13...sold-84-go.html

I was disappointed when I first arrived in London, fresh off the plane from the US, that I did not hear the accents that I expected from the Poppins movie. Dick Van Dyke - Chim Chim Cher-ee 1,12 min His movements were as remarkable as his accent

The drop is not finished in Dublin. Nor is it finished in the UK, where it is just beginning. Where are this "wealthy foreigners" going to come from (with many countries headed into economic slowdowns) ? And why should they choose the UK, if the tax regime begins to change?

Dip, dippery. Dip, dippery. Dip, dip, de-roo. A double-dip is coming. and it's good for you ! "The UK's economy suffered a shock contraction of 0.5% in the last three months of 2010, figures have shown. The severe weather hit activity in the quarter, but the Office for National Statistics (ONS) said even if the weather impact had been excluded, activity would have been "flattish". The Chancellor, George Osborne, said the numbers were disappointing. But he added the government would not be "blown off course" from its austerity programme. The figures are set to raise concerns over prospects for the economy, with large public spending cuts expected to come in this year. The BBC's economics editor Stephanie Flanders said people were right to worry about where the UK's growth would come from in 2011, especially as higher-than-expected inflation had dealt a further blow to household budgets. . . . 'Horrendous' The contraction took economists by surprise, as forecasts had been for growth of between 0.2% and 0.6%. The construction industry was a large contributor to the fall, with activity decreasing by 3.3% in the quarter." A surprise ? I think not. This post anticipated the dip:

: Since the "2007 peak", London has benefitted from: + Out of control housing benefits, with "rents rising with the market" + The "stability" afforded by sector jobs in the Capitol city (quangos included) + The rescue of too-big-to-fail financial institutions based in London + Foreigners attracted to London as a "safe and low-tax" city Now "the bullsh/te needs sweeping away", and with it may go some of those once-protected sectors. And I wonder how much longer wealthy foreigners will be allowed to treat London and the UK as a tax haven. I think it will be "tapped hard by the hammer" in the years to come, and London will soon outperform on the downside. In a deep recession / depression (as we are headed into IMHO) even the rich suffer. Just look what is happening to the "best addresses" in Dublin

Thanks for that posting, M. Truly, we have a TRI-FECTA for those looking for lower prices in the UK

HK property price increases are being sustained by ultralow rates (mortgage rates near 1%), rising incomes and rents, and a lack of other investment alternatives for an increasing wealthy population. What will give first? Interest rates go up, or growth come down? It is hard to say, but as long as real rates stay negative by so much, prices will be under-pressure. In fact, Property is much more "affordable" in HK than Aus., and Can. because of the ultra-lower rates, low tax rates, and much lower transportation expenses. You can happily live in HK with experiencing traffic jams and high gasoline prices. So those high prices in Aus., and Can. are more vulnerable IMHO. Here's something that I wrote back in early 2008, when property prices were riding high in both the UK and HK, and I was being told that HK prices were less affordable, and more risky than those in UK:

"At least 100,000 first-time buyers who have no help from the ‘bank of mum and dad’ were unable to enter the housing market last year, as the number of low deposit mortgages slumped to a record low." Alternatively, FTBers "got real" and worked out that it no longer makes sense to waste their money, chasing overvalued property. Seeing reality more clearly than some reckless buyers, they have decided to wait.

You are confused. If people have money in savings, and use it to go out and buy Property, that pushes up Property prices. Indeed, we say that in 2009, and the early part of 2010.

PUMPING Cold Air into flat tires ? / Rightmove: We begin 2011 with the first increase in new sellers’ average asking prices for three months, as January prices rose 0.3% (£711) following substantial falls amounting to 6.2% during November and December. This month’s report provides some early indicators of potential buyer and seller activity, giving a timely insight into the property market patterns that may emerge in the year ahead. New stock levels this month are at a two year low, and we expect this lack of property coming to market to assist an upward trend in new sellers’ average asking prices for the next three months as it coincides with the run in to the spring moving season. Miles Shipside, director of Rightmove, comments: “The opening skirmish in the 2011 price battle looks to be going marginally in favour of scarcer sellers, especially in locations preferred by tooled-up cash buyers or those packing a hefty deposit. With the number of new sellers at a two year record low, prices are being under-pinned by muted new supply just managing to fight off the downsides of lender reticence. However, in less popular locations, the smokescreen of New Year price optimism is temporarily masking the collateral damage that the new era of tighter credit will continue to inflict”. A national rise of 0.3%, while small, is a timely positive sign for some new sellers as it breaks the downward spiral of falls in five of the previous six months. It is not unusual for traditionally optimistic January sellers to ask more for their property, though 2008 and 2009, post the Northern Rock and Lehman Brothers collapses, did record falls of 0.8% and 1.9% respectively. Sufficient confidence had returned by January 2010 for new sellers to increase their prices by 0.4%. /more: http://www.rightmove.co.uk/news/files/2011...anuary-2011.pdf A 0.3% rise is hardly meaningful after back-to-back drops totaling 6.2% !

Bold, If savers cannot earn a real rate of interest on their savings, they will shift their money elsewhere... Like into buying property. And that will mean less savings for various lending activities.