April 28, 2008
– Comments (3)
Vacant Homes Hit Record High- AP
Yet builder stocks go up again. Who said you have to be smart to work on Wall Street?
Strange day at the market. Oil nears $120, yet the stocks are flat or down. Vacancies of existing homes are at record highs, yet the homebuilders are up 5% or more? Pretty confident that there is no place for them to go but down, but at the moment I am scratching my head.
Are homebuilders up because of an anticpated rate cut? Your graphs have already illustrated that monetary policy is decoupled from long term rates. Do they think that a six hudred dollar rebate is going to put people over the top and make them want to rush out and buy a home? Not seeing the logic here.
I smell government intervention. Plunge Protection Team? I cannot believe with all the bad news this market is holding up. Where is the new money coming from?
"Where is the new money coming from?"
Well, the Chinese and many of the Middle Eastern countries have boatloads of dollars they need to invest. How much was our daily trade deficit again? $2B, I believe. That money needs to go somewhere.
And then there is the money from the commodities. Many of them are now 10-20% below their highs. That is due to money flowing back from commodities into stocks.