SPY $300 end of 2022 - 2023.

[DarthTrader]

I argue that the housing market is in terrible shape. I closed my source but for instance, UBS in arguing the housing market is doing good, claimed that the median mortgage monthly payments are 23% versus a 2007 record of 30.3%. 25% is considered "financial distress".

Today, per the MBA, that mortgage to median income ratio is now 37.9% and climbing. This is not sustainable growth in the housing market.

Lumber to Gold ratio, a leading indicator in the US is plummeting.
Brick to Gold ratio, a leading indicator in the UK is also plummeting.

We all know about yield curve inversions.

But here's an interesting one, I call it the "Buffett Tell". Go ahead and dig through old news articles. Warren Buffett has an uncany knack of starting to deploy his capital 3 to 6 months before the market loses 40% from its ATH and entering a 3-5 year bear market.

2000, 2007, 2018, (which was a recession interrupted by reversal of fed policy and then covid which resulted in $4.8Trillion dollars dumped on our heads)....Buffett waited patiently for years, criticized by all, that he was not spending his cash war chest.

Then - he began to buy.

Most notably, Burlington Northern, which he began to buy in mid-2007, 6 months before Dec 2007 which was the last time the S&P ever saw anything close to the ATH until 2013.

So I call it the Buffett Tell....

Recently he began buying again, Occidental Petolleum and that Allegheny(?) if I recall correctly.

I think the fact that Gold is so resilient against the dollar right now is another tell. Food prices are going parabolic, fertilizer is through the roof, oil is near ATHs. It's time to recognize a mother of all recessions is coming.

But most importantly, after 9 years of price increases, unsustainable housing prices will now come down on the heads of retail. I am not arguing there is a credit crises, though there could be for other reasons, I'm arguing that the housing market itself will simply waste away people's equity and bring a halt to a large sector of the economy. No one can afford a house anymore. Not at these rates. 37.9% highest ratio of all time. Keep an eye on MBA.

I get the SPY $300 from Darius a fund advisor who states that when these various factors align, particularly the late-stage rate hikes, the draw downs are historically 41%.

 

[JustAGuy1]

Sellers are averaging 15-20 grand more than asking price here, not too bad.

 

[DarthTrader]

Sellers are averaging 15-20 grand more than asking price here, not too bad.

Maybe you should catch-up. Since I am pretty embedded in one of the hottest housing markets in the US, just in the last 2 weeks buyers dried up.

I already know people like you operate on 6 month, sometimes a year old data.

I know UBS does, and you're definitely not smarter than UBS analysts.

 

[JustAGuy1]

Maybe you should catch-up. Since I am pretty embedded in one of the hottest housing markets in the US, just in the last 2 weeks buyers dried up.

I already know people like you operate on 6 month, sometimes a year old data.

I know UBS does, and you're definitely not smarter than UBS analysts.

LOL, you're wrong son. It's happening all over Omaha, Sioux Falls etc.

 

[DarthTrader]

LOL, you're wrong son. It's happening all over Omaha, Sioux Falls etc.

Sorry, not wrong, also you quoted the cheapest housing market in the country. $20,000 wouldn't even buy a point off the rate in my area lol.

But - go ahead, hang your hat on 1) one of my broader points, 2) on something you clearly know nothing about.

Lumber demand just cratered when Russia is 20% of the world's lumber supply....meanwhile every other commodity Russia touches is going through the roof.

 

[JustAGuy1]

Sorry, not wrong, also you quoted the cheapest housing market in the country. $20,000 wouldn't even buy a point off the rate in my area lol.

But - go ahead, hang your hat on 1) one of my broader points, 2) on something you clearly know nothing about.

Lumber demand just cratered when Russia is 20% of the world's lumber supply....meanwhile every other commodity Russia touches is going through the roof.

Yes, you're wrong. But puff out your chest and pretend to be the smartest little boy in the room.

 

[DarthTrader]

Yes, you're wrong. But puff out your chest and pretend to be the smartest little boy in the room.

You're welcome to make a bull argument, but right now bear case rules. LOL.

 

[DarthTrader]

Yes, you're wrong. But puff out your chest and pretend to be the smartest little boy in the room.

Housing sales down 7.2% in March, biggest drop ever. In 2007 the biggest drop in housing sales was a 2% monthly drop. 2007 saw an 18% drop for the entire year.

In ONE MONTH we have had half that drop just about.

 

[JustAGuy1]

You're welcome to make a bull argument, but right now bear case rules. LOL.

Nothing you type has any effect at all on the reality here. You simply don't know what you're talking about. There is no shortage of buyers here there is an inventory shortage.

 

[JustAGuy1]

Housing sales down 7.2% in March, biggest drop ever. In 2007 the biggest drop in housing sales was a 2% monthly drop. 2007 saw an 18% drop for the entire year.

In ONE MONTH we have had half that drop just about.

Nothing you type has any effect at all on the reality here. You simply don't know what you're talking about. There is no shortage of buyers here there is an inventory shortage.

 

[DarthTrader]

Nothing you type has any effect at all on the reality here. You simply don't know what you're talking about. There is no shortage of buyers here there is an inventory shortage.

About inventory. We are sitting at a national inventory around 1.3mo or 1.9mo. Lowest ever. Which is a double edged sword.

It means that housing prices are incredibly ELASTIC.

As soon as there's any uptick in inventory - let's say a 7.2% drop in housing sales per month - then housing prices drop dramatically and since most real estate is currently bought by investors, not first time home buyers, who are rolling their equity into new money-down purchases, that means they will abruptly halt their purchases.

A 1mo increase in housing inventory would have a dramatic drop in housing prices, which will be a first since 2008-2009 housing drops.

But no no...please ... continue to think markets only go up. LOLOLOLOL

 

[DarthTrader]

Nothing you type has any effect at all on the reality here. You simply don't know what you're talking about. There is no shortage of buyers here there is an inventory shortage.

I also notice you gloss over the collapse in lumber prices. As if you don't even pay attention to the biggest leading indicators of recession and home building.