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Monday, October 09, 2006

Heard On The Street Talks About A Housing Bottom

By Yaser Anwar, CSC of Equity Investment Ideas

On August 23rd I told readers that Toll Brothers that the way TOL behaved after earnings would have been a bottom signal. Today's Heard On The Street Column asks the same question but with regards to the Housing sector. Readers who would have bought into my argument then would have made a 10+% return.

I'd also like to remind readers & tell new ones that I had thought the Fed would raise rates two more times, however I was totally wrong on that. The Fed had halted & seems to remain that way. Moreover, the market expects a 30% probability of a rate cut in Jan 07.


"The housing contracts suggest price drops by next summer for average single-family homes will range from 5.9% in the Chicago area to 8.5% in San Diego and Miami areas. A contract based on 10 regions suggests a 7.2% decline.

Because they represent the best guesses of informed people with skin in the game, futures markets are often pretty good at predicting, well, the future. Washington types have closely followed the political futures market run by the University of Iowa ever since it called the 1992 presidential tally more accurately than major polls." Excerpted from 'Futures Shock'

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