Before you say anything I know that I am a little of my rocker but hear me out. Over the last two weeks I have started to hear the first couple of cracks in the media around this suckers rally we have had in the market (Real Estate and Stock Market). For about 4 or 5 months now I have been hearing nothing but good news and not really understanding where it was all coming from.
But over the last 2 weeks I am starting to see more and more people realize we are not out of the woods yet and we will have a lot more pain. Don’t get me wrong I don’t see the Armageddon option on the table again. We survived that near miss but just because we survived it doesn’t make everything better.
So I suspect over the next 6 months we will finally put in a bottom and then it will take 2-3 years to get out of this mess as we have a lot of idle capacity we have to chew through.
Signs that a bottom is in place will be some of the following:
Another Stimulus is approved by Congress (After all TARP will be mostly paid back so they will sell the public on the idea that they are just reusing capital, (Our Capital)).
People will stop talking about the Fed raising rates in 2010. It is not going to happen people. In fact I think it is 50/50 that they raise rates in 2011 (If they do raise them it won’t be over 1%)
Government will pass a $5,000 stimulus for anyone to buy a foreclosure, that should chew up excess capacity quickly
FHA or other Government entity will increase investor loans from 10 properties to 30 or 50 properties
Bank of America will be majority owned by the government with the next bailout, they have to regret buying Countrywide
Public Builders will start to buy each other out for their cash positions and to reduce future building capacity
Taxes will go up (If we keep spending we will have to raise taxes)
Keep in mind I made my best deals of 2009 in Jan-March just as the financial panic was hitting TILT. So we should all have a chance to ring the register again.
Buy Cash Flow properties and hold for the long term
Good Investing
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