drbubb

Please invite him. You have my full blessing, to do that ... I have already started a "tribute" thread ... see: LINK The Persistence of "Delusionary pricing" in the UK "My home hasn't fallen in value", or has it? ================================= RIGHTMOVE is doing a great job of feeding people's delusions, and lending comfort to those that cling to the delusion that their homes are somehow worth more than the average homes in the UK. The "Delusion" Index (using average prices) ... img For a long time, the Rightmove index hovered about 20% above the average prices as reflected in Halifax and Nationwide indices. I suppose one could argue that the Rightmove properties might be a larger, or higher standard home, or perhaps it was better located (?) Or maybe, Rightmove was mainly reflecting the inevitably wide Bid/Offer spread between what sellers wanted for their homes, and what buyers were willing to pay. But in the end it is the actual sales prices that matter. And this is why Halifax and Nationwide's indices are more useful, since they reflect the actual purchase prices in financing requests. The H&Nw indices were showing what Buyers ultimately agreed to pay, not what Sellers "hope" to achieve. However the price difference comes about, it has widened dramatically in recent months. Looking at the raw data, we can see that Rightmove's prices did not slide much, as H&Nw prices collapsed in the last few months. The widening gap is refected in the "The Delusion Index", as was originally proposed by Neon Tetra on his excellent thread. Following are my comments from that thread. I hope HPCers will continue to watch the progress of this index, as we wait to see when the mass of UK property sellers will finally face reality. I reckon it will be 2012-13, before we finally see realistic pricing reflected in a collapse in this Ratio to under 120%. (From GEI, where we have taken notice of this thread): The Three Main price Indices ... img Some have said that NeonTetra's Delusion Index is "like comparing Apples and Oranges". If so, why are Rightmove's Oranges so dramatically overvalued (in relation to Apples)? Actually, I think there must be some sort of delusion here: + Either, Rightmove has a delusionary way of collecting data, or + Rightmove's data set includes houses that have somehow withstood the price slide - How? + Rightmove's sellers are holding out for unrealistic prices, or + Rightmove's sellers must cut their prices dramatically to get a sale, and + The Bid/Offer spreads have widened dramatically, since sellers do not want to face reality I think the final explanation is most likely, with some combination of all of them at work. == == I thought this was such a great concept, I decided to start a thread about it in the Psychology section, so it will be easier to find.

So... I have decided to buy something. I'm taking the "easy option": I still have a spread on: Jan.2011 "Bull Spread": + Jan.2011.$ 90calls - Jan.2011,$100calls I am buying back some $100 calls, locking in a profit I sold them at $16, and am now buying back some at $11 or so, to lock-in a profit, and leave a full window to the upside, using the $90 calls. They cost me: $19-20, and this profit reduces my cost to $14-15, for a breakeven of near $104.50, and about 18 months to run. I am still a bit sceptical about this move, but the heavy volume convinced me to add to me longs. == == Two negative things: Corn has been wee\ak the last few days (& it tends to lead oil), and Meantime, oil has given up $0.80 of its gains, and may be rolling over. Will this weakness spill over into Gold in NY trading, and moderate the strength we saw in London? I dont know, but felt compelled to move by that London heavy trading volume in GBS.L

UNEXPECTED - to me, the break above $945 And with impressive volume too !

Right Shoulder for Barratt ... this week? - If so, it should signal that the Dead Cat bounce is about to die. Barratt Developments (BDEV.L) ... update : BDEV-2mos : http://yfrog.com/0azzz2tg Latest: BDEV.L : 168.00 +3.25 Open: 163.50 High: 169.75 Low: 163.50 Volume: 1,117,063 / Percent Change: +1.97% I note that BDEV is on the 252d.MA, and this would be a great level, and wonderful timing for a Right Shoulder high during this week. I also note that there was much stronger upwards momentum in April, and the actual high of the year (so far) was 184.75p back in early June.

Gold Watch - Commitment of Traders (COT) Report Anticipating Gold's next move Since I am preparing to put a substantial amount of money into Gold or Gold etfs, I have started to track the Commitment of Traders report for gold. Some of you may find this important indicator of value. /see: http://www.greenenergyinvestors.com/index.php?showtopic=7266 There was a significant Bullish improvement in Commercial Net Shorts from (200,241) to (186,243) in the latest week. I am target about (100,000) as a "Buy" signal

Thanks for the update, GF. Straight away, I want to draw trendlines...

Gold in Pounds is there, in the right column. The charts come from Kitco, mostly. So I can only have what they offer

I am now LIVE with the new: http://www.Goldstock.co.uk I will change the charts there gradually over time I think many here may find it to be one of the best GO-TO sites for an update on Gold prices

This is pretty clear - No bottom yet if Mish is right about 2011. From Mish Shedlock: http://globaleconomicanalysis.blogspot.com...-to-bottom.html I suppose what comes a year after two "Never a better time to buy" is "An Even better year to buy." Just a year or 18 months before capitulation. As of April 2009, average home prices across the United States are at similar levels to where they were in the middle of 2003. From the peak in the second quarter of 2006, the 10-City Composite is down 33.6% and the 20-City Composite is down 32.6%. . . . “The pace of decline in residential real estate slowed in April,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “In addition to the 10-City and 20-City Composites, 13 of the 20 metro areas also saw improvement in their annual return compared to that of March. Furthermore, every metro area, except for Charlotte, recorded an improvement in monthly returns over March. While one month’s data cannot determine if a turnaround has begun; it seems that some stabilization may be appearing in some of the regions. We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here. . . . The Case-Shiller charts suggest that the worst may finally be over. However, so far all we can say is that things are getting worse at a decreasing pace. This is not the same as getting better. Indeed it may take 2 years or more to cross the zero-line in the second Case-Shiller chart. That would be consistent with a bottom in 2011. Thus I see no reason to switch from my long-held estimate of a 2011-2012 timeframe for a bottom. Furthermore, even once housing does bottom, do not expect a V shaped recovery. Housing prices are likely to remain weak especially in real (inflation adjusted) terms for another decade. For a clue as what to expect, take a look at the period from 1991 to 2000 in the first Case-Shiller chart. Expect a similarly long "fat tail" once housing does bottom.

Beta- GS-site : http://tinyurl.com/goldstock Concentrate on the charts - You can get a quick overview in a glance or two what's happening around the Markets. I will probably change the stock charts at the bottom and am looking for suggestions of which stock charts to cover. Right now, I track all the Gold etfs, and that's not necessary, since they all key off The Major Gold regional etfs: GLD, GBS.L, and HK:2840

New GoldStock-beta website ! I have just finished a Beta version mock-up of the new GS website Please have a look :: http://goldstock.co.uk/gsnew.htm I have included loads of charts that should be interesting to many GEI posters. COMMENTS are most welcome please

"A stabilisation of house prices at current levels would benefit homeowners, limiting the reduction in their net wealth and capping the scale of negative equity, and would provide support to the balance sheet position of banks." I agree. About the only effective mechanism is this: They start buying a share in Houses, or they finance someone who does that (buys houses.) Very dangerous, since it helps some (those who sell), while costing the taxpayer. However, it does serve to prop up prices, while getting money into people's hands - a dangerous combination, that really can lead to inflation, and maybe much higher inflation. Other QE/Money printing techniques may help property somewhat, while leaving it near the bottom of the list of those items that benefit from inflation. Look at the big lag in house prices in Weimar times !

I agree. About the only effective mechanism is this: They start buying a share in Houses, or they finance someone who does that (buys houses.) Very dangerous, since it helps some (those who sell), while costing the taxpayer. However, it does serve to prop up prices, while getting money into people's hands - a dangerous combination, that really can lead to inflation, and maybe much higher inflation. Other QE/Money printing techniques may help property somewhat, while leaving it near the bottom of the list of those items that benefit from inflation. Look at the big lag in house prices in Weimar times !

EVENT Tonight - any interest? (too far for me) Housing Markets and the Global Financial Crisis Date Mon, Jul 13, 2009, 18:30 - 20:00 Venue Hong Kong Theatre, Clement House, LSE, London, England Admission Free Inquiries 44.20.7955.6043

UPDATED - from the GS thread Some weeks to go to the next important low in Gold ? Static components: long term (ong) : short term (btb) /see Charts :: OilnGold : http://www.buythebottom.com/cot_charts/gold.html Target levels : targets: GCnp: -800, LSnp: +10,000 / see: chart

Some way to go to the next low ? /see Charts :: http://www.buythebottom.com/cot_charts/gold.html

This is a good chart This first chart plots GLD’s holdings since its birth on November 18th, 2004. I like to compare GLD’s gold bullion held in trust with the performance of the price of gold, slaved to the right axis. Not only is multiplying its initial holdings by 94.3x as of mid-October utterly remarkable, but the way these gold holdings have grown is fascinating. They have been far more stable than even GLD’s most optimistic proponents, including me, originally expected at launch. While GLD’s holdings have indeed contracted modestly from time to time, its strategic growth trajectory has been tremendously impressive. GLD’s gold has climbed in a somewhat stair-stepped fashion. Of course when gold is surging in a powerful upleg, interest in gold investment is high and GLD grows rapidly. But provocatively, even when gold is not surging, GLD still tends to grow moderately on balance. When gold powered from around $750 in October 2007 to just over $1000 in mid-March, it is no surprise GLD’s holdings were growing. Everyone, especially non-contrarian mainstreamers, loves a hot investment. GLD’s holdings grew to an all-time high of 664 metric tons. But gold cracked on a Fed rate cut surprise (75bp instead of the 100bp expected) in mid-March and plunged 15.3% by early May. Did this spook GLD owners? Darned right it did! Check out the sharp drop in GLD’s holdings over this period. /see: http://seekingalpha.com/article/106213-hap...-four-years-out I am looking for an up-to-date chart that allows me to compare the "gold Bullion held" by GLD with the Gold price

Wow - that Nationwide story - make me boil too ! This part: " Nationwide seemed keen to dampen excitement about the move. It described the new mortgage as a "very niche" offering which it was not actively promoting. The offer is only being made to existing Nationwide mortgage customers who are in negative equity but want to move home and borrow more. . . . Nationwide's deal could be particularly useful for people who needed to move because of a new job or a baby on the way." So here may think me a right wing fanatic. But should they be having a new baby AND MOVING TO A BIGGER HOME, if they cannot afford it? Some people are more responsible than that. It greatly p---es me off that the responsible one will wind up picking up the pieces for the irresponsible Bring back debtor prisons and orphanages !! (ok, time to crawl back into my cave.)

SingingPig.co.uk is full of them... and they think themselves as "oh-so-clever" contrarians to be buying now. Enthused bag-holders, more like !!

?? It's a "bi-polar market" IMHO. We have seen the swing to inflation fears, and are now in the midst of a swing back towards deflation fears. You can see it clearly in the Gold-to-TLT ratio: Maybe Larry P is right and the deflation swing will finish around July 22nd.

"When you've got the likes of Celente, Faber, Schiff, Rogers and Chapman etc all calling Gold/Silver the place to be, how the hell haven't we seen a big physical call or big money hit the market yet?" It's not only that they are all saying the same thing. The problem is the mainstream media are carrying their forecasts, and not laughing them off! When they start ridiculing Gold bugs (again!) then I will know it is time to buy Gold Larry Pesavento and Tom Obrien would love to see Gold fall to $875 around July 22nd: Larry Pesavento interviews : http://www.tfnn.com/interview_archives.php

A project for today's research: How to measure FEAR in the gold market ? Here's a post from the Gold etf research thread Why buy Gold when you can buy a March 2010 call at zero intrinsic value?? At $19.30, a 1,000 oz. hedge* would cost me a mere $19.30 x 100 x 100 x ($90.90/89.27) :: $196,524 I will certainly hold some of my Gold position thru GLD calls. *( Would THAT do it for you, GF? )

Why? I said "nibbling" ! My plan is to buy on the way down, as it falls. So I will increase my position as it goes lower. I bought maybe 2-3% of my target spending so far. As open buy orders got hit. I plan to spend about 1/3 in July, 1/3 in August, 1/3 when the charts look right. It might take me to about 1,000 ounces or more If I knew exactly where it would fall to, and turn, then I would simply wait. But I'm not that smart. Having said that, a further fall looks "highly likely" If I had a 100% position on now, I would downsize to 50-75% on the break of that trend, since a drop to $870, or lower now looks "highly likely." I always said that I would wait until July (at least), and target GLD-$85. If we hit the target this month, i want to have at least 50% invested by month-end, more if "everything looks right." Is that clear enough? (A genuine question) I do find it worrying, that so many are complacent here, and see this is a mere temporary dip, a chance to buy. Is the whole gold bug market (Sinclair et al) thinking like that? I would prefer to hear more worries, if I am going to put big money into the metal. HOW DO I ASSESS FEAR-OF-FALLS in Gold??

Gold is on its way to $870 now. You should be asking what will happen if that breaks. $800, and even $700 are possible. I think some folks here may be in serious denial about what is going on now !

Nice break underway GLD is at $89.10 -1.61 / Pct: -1.77%