Subject: housing stocks
Comments: It looks like the housing stocks are turning around with the market also. They made a huge reversal yesterday on big volume. You might have to live with those high prices in Florida because the economy and Joe Average needs it. Californians say it's too big to fail.

We will see if the R/E rally was for real, or just short covering. 2006 will reveal a clearer picture.

It seems whenever the "average joe" thinks he's got the world by the balls (ie- NASDAQ 2000, Interest Only Loans, Real Estate Expert), something usually comes up that proves him wrong. The logic conclusion would be higher interest rates. But what will cause LT rates to go higher?

The "average joe" got suckered in to interest only/adjustable rate mortgages at a time they should have been locking in 20 or 30 year fixed mortgages. The Banks/Mortgage Lenders (Legalized Thievery Business), pretending to be on the side of the client, did what was in the best interest for themselves and sold adjustables/interest only loans ( As a side note, the credit card business is nothing more than legalized loan sharking. If you and I charged consumer those rates, we would be put in jail). Now, the "average joe's" are getting hammered every time short rates rise. These are the same people who have speculated on real estate that they have no intentions of closing on.

The only problem with the higher (longer term) interest rate argument is what will be the catalyst to cause the real rulers of our nation (China/Japan) to begin dumping their US Bonds. Venezuelan President, Hugo Chavez, recently ordered the sale of $14 billion dollars of US Bonds, and moved the money to Europe. Could this unwinding of US assets be pushing up LT rates? We won't know the real answer until its too late.

The problem I have with the real estate situation is the massive speculation by the " Republicrats" (see Oct 12th post). Would you hang your entire financial future out on a limb that is being controlled by foreign governments? Not me. Smart investors make the big bucks by shorting what the Republicrats are buying, then buy when they panic and sell.