  |
New Money Matters Update January 9, 2014 Read!
Marc's' Notes:
Which way will real estate go?
Will it continue to rise, stall out or is there another crash in our future?
Most people seem to think real estate is out of the woods and the farthest thing from their mind is another crash.
How fast people forget. Wasn’t it just a few short years ago when the nightmare that was the housing bust made headline news almost nightly?
The resulting crash brought banks to the brink of failure and the financial system of the world to its knees.
The lines of for sale and foreclosure signs and the stories of woe from people who bought too much house or couldn’t understand what the word adjustable meant in their adjustable rate mortgage are a distant memory.
To prevent a global economic blow up, the central banks of the world created trillions of dollars through a myriad of programs and showered just about everyone with free cash, federal guarantees and dirt cheap loans. Half of decade later, many of the loans and much of the free cash continue. Quantitative Easing (also called asset purchases) floods another 75 billion dollars a month into the debt sectors with no end in sight. The central banks assure us all is now right with the world of toxic mortgages and yet they barely ease up on the money spigot.
Considering all the above, one has to pause to consider just how fast the public forgets such things as the bloodbath that was the housing crash.
But memories are indeed short and I can find few people that will even consider that housing could ever go down again.
Washington’s policies have indeed rescued the real estate market and low interest rates are keeping it afloat for now but at some point interest rates must rise from the zero ground they currently occupy.
When rates eventually do rise, real estate is probably going to suffer once again and suffer by a lot more then people think.
As you can see from the chart below, the real estate market is still struggling and is no where near where it was during the peak and all this despite the lowest interest rates on record.
No one can say for sure just where the real estate market will go in the months or years to come but few will argue that rising interest rates will make it more difficult to buy a home and that will show up once again in declining home sales.
Markets:
Meandering but slowly climbing. We had a few down days near the New Year but I don’t put much stock in a big threat just yet. The budget ceiling debate is suspiciously quiet with a small deal reached on sequester cuts which to say was they will renege on some of those cuts, and so what else is new?
Other than that we haven’t heard much from Washington lately have we?
Makes you wonder what they are doing! In any case, the market is stretched a bit with complacency everywhere, margin debt very high, and insiders selling stocks but that does not mean this market won’t go higher. There is still a lot of cash sitting on the sidelines so I believe after some “digestion” of these new highs, we go on to higher highs.
It does not mean we won’t have a correction but I doubt it will be a large one. Stay the course we have advised. Diversify in many assets, buy only the strongest dividend payers like the Exxon’s of the world, and stay away from small stocks and funds that don’t pay good dividends. Hold some foreign currencies and gold/ silver assets. Hold lots of cash in bank savings and laddered Cds’ (Contact me if you need details on this). Buy an I-Bond at treasurydirect.com.
I will follow Washington news for you and advise. Right now the theme is print, print, print from central banks worldwide. They still however do not acknowledge inflation although prices are rising.
Did you also notice the smaller portions of what you are buying? Shrinking size on the newspapers? It’s another form of inflation the FEDS do not recognize. Also note all the new “fees” and taxes like the LUMBER TAX on wood you buy. Gas surcharges on trucking. All sorts of payments they hit you with.
It is crazy out there.
Note that only a few million people have signed onto Obamacare. You can bet it is only the “sicker” population that is signing on. This are the higher cost segment. Remember insurance counts on many people signing up, and when it comes to health care, the more healthy people pay for the sicker folks. With only the sicker people signing on, the costs will be much higher than projected. This whole thing is going to be ugly. As for me, we tried to sign up but are getting different information from different sources. I am hesitant to drop my old insurance to sign up then find the new program is terrible and then not being able to get my old insurance back.
My advice is if you are low income and don’t have insurance yet, try and sign up. If you are like me and have insurance and don’t know what to do, I suggest you wait and see how this whole thing washes out. I for now will keep paying my high rates and wait a few months until I can get some consistent answers on what I will get and how much I will pay.
On the lighter side:
Someone told me Obama has played something like 162 rounds of golf while president.
That works out to about 2 rounds a week. Hummm…….
Like I mentioned on the show when he was elected. “I hope we don’t look back on Obama and say, what a crock of **** he was”. We will see.
I personally do not favor his “change” which we found out was little change. He hired the same hacks that were there before, kept up the war effort and Cuba’s little secret, increased surveillance on US Americans, authorized “hits” on foreign soil, authorized massive continuing bailouts of banks and big corpa, keeps the Federal Reserve’s horrible policies and encourages class division by inciting one income group against the other. My taxes are higher and I keep hearing about this company and that country getting our money. This is not the type of “change” that is good for America. Not to mention that the healthcare thing is a mess and I see a country spending trillions more than it has each and every year.
Bah!
My report on “How to buy stocks on sale or get paid to not buy them at all” is in the works. I am thinking of offering a class with it so you can learn how to do it. Email me your thoughts on this.
Next weeks Money Matters show is Thursday the 16th where I will interview the producer of movie “Money for nothing”. It is a riveting piece on the Federal Reserve and the bailouts. I recommend you SEE THIS FILM. On the February pledge drive I will be offering a copy of this DVD for the pledge! Stay tuned and tune in!
All the shows are on my website for download as well as the “Dream Portfolio” (consult in a box) and the popular “Super Dividend Payers List”. Sign up now and get one year free with a 2 year membership.
Follow me on Twitter (Marc Cuniberti) for daily trades and comments.
Marc
How long will this continue?
