Saturday, June 09, 2007

Somebody is Wrong



[Click for larger views]
Both graphs track the 10yr Treasury bond (^TYX) in red and the Philadelphia Housing Index (^HGX) in blue. The top graph seems to make common sense. Over the last wo years 10yr are up 20% and the housing basket is down 10%. But look at the same graph over 5 years. The housing index is up 130% and ten years are flat. Sanity has left the building.

13 comments:

Sac RE Agent said...

first

Anonymous said...

why invest in 10 yr bonds when you can get a great return quickly in real estate?

roxrok said...

murst

Rob Dawg said...

Yeah, and you actually have to -buy- the bonds but you can put no money down plus get cashback to invest in bonds (if you wish) with real estate.

king friday the 13th said...

why invest in 10 yr bonds when you can invest in revalon and proctor and gamble?

or salt lake city real estate?

Swaby the guru told me so.

flailing forward said...

I hear koi futures are up

Benoit™ said...

In regards to SLCRE now being "nationally recgonized", I challenge Nigel to walk around Salt Lake City and ask random people if they've heard of his "nationally recognized" blog.

I would hazard a guess that the number of people who confirm that they're aware of the blog would be equal to the number of comments Nigel gets on an average thread.

Caseypedia's going to have a field day with this one.....

Benoit™ said...

Or a two-line Shakespearean couplet:

Swaby claims he's now recognized nationally.
Even Manson would say he's thinking irrationally.

The Dude said...

Benoit,

Only LOOSERS haven't heard, or appreciate, his nationally recognized blog. He's made it to the "big time"...."above the crowd"...."breathing the rarified air of success".

He's mastered the fine art of linkwhoring and is now authority on all things financial.

The Dude said...

I can't fucking remember to put in prepositions....I_am_a_looser.

Anonymous said...

>> "nationally recognized"

FBI? DOJ? IRS?

piedpiper said...

This week saw a major turning point in interest rates with the 10yr plowing through both the 5.00% resistance which had been in place since the Fed went on hold and the 5.06-5.09% area which marked the declining yield trendline in place since the late '80s. New Zealand's rate raise was a shot across the bow, and watch for similar increases from Australia and the Eurozone.

In short, foreign central banks are now responding to the global liquidity glut and this is going to force the Fed's hand into raising rates even though they'd rather not with the weak housing market here. If the Fed fails to raise rates, the dollar will weaken much further and accelerate the inflationary pressures they've thus far turned a blind eye to just in time for Christmas.

Nice to see fed fund futures finally capitulate and go from pricing in an almost 100% chance of cut from 3-4 weeks ago to a bias towards a hike.

Also seeing preliminary signs of a slowdown on Wall St. and it'll be interesting to see what happens to housing here in Manhattan. I've held off buying for years and this may be the break I've been waiting for. Thinking one weak bonus season may be all it'll take for the thus far resilient NYC market to tip.

Mort said...

There is a huge difference between the two. You don't need money to invest in real estate.