All Forum Posts by: Dave Kennedy

Hey Mike,

Just revisiting this thread. We broked 7200 as of late. Next stop 5,500....?

That is downright scary.

The fundamentals are starting to impact now. GDP down 6% today, consumer spending Q4 lowest since 1982....etc. Jobs release next week.

S&P just broke the key support level of 740 today. Well see if it pops or drops after that one.

What type of rates are obtainable for a mortgage? It might cash flow for you with your current principal and rates but for the buyer with your ask and current market rates it might not look so good. They might be well under your ask.

Mike I agree it can be a great investment in that sense.

I guess my original post was referring to primary residence. As Jon pointed it out, its really just a liability over time. even if your for sale price doubled your purchase price after 30 years.

I can't argue with your numbers above, I've always liked RE as an investment vehicle over the market anyhow. Which is why I am here.

When you think about it quickly you see that you purchased a house for 250k and solid it for 550k. In your mind you are happy because you made 300k appreciation over 30 years. But it really isn't the case.

The reason I thought of this is because I was looking at what I owed on my car and how much I have already paid....My car loan was for 23k, but in the end I will be paying 35k plus my down payment. I damn near had a heart attack when I looked at it this way. I am about half way though my 66 month loan. I am thinking about paying it off which would relieve me of any debt I have. I pay $433 a month for the car. That equates to 72k of purchasing power toward a loan on a house/rental/investment.

People talk about the advantages and disadvantages of real estate investing as oppose to stock market investing.

Everyone tries to compare risk, long term appreciation rates, leverage...etc between the two.


But I wanted to bring up a specific scenario and see how it plays out. For simplistic reasons lets assume 100% financing at 6% for a 250k house.

If you take out a 30 yr, fixed rate for 250k the total amount you have paid during that time is 540k.So even if you sold your house for 550k and had your loan paid off it essentially nets our with everything you paid. There wasn't really anything gain during those 30 yrs was there? Am I way off?

Don't you really need to outpace the rate of interest + inflation rate during your hold just to make any profit?

While I agree Bernanke said some of the right things yesterday he was hardly the reason for the rally imo. I think it had more to do with a 10% drop over the last 6 days. We were bound to have a bear rally.

Just look at it today, already on the sell side by 85 pts. I don't think investors already forgot what Ben said.

It was just a head fake.

Matty is that a fact? How did you get that number of 67% and what is "real value"? I'm not challenging your statement I'd like to learn what it means and see how you can derive those numbers.

So AIG burned through the $150B in 5 months and now they are going to be reporting $60B in loss Q2, expected.

So not even a quarter of a Trillion! Would have had them break even over the last 2 quarters.

They should have let them fail back in Oct. Sure the market would have been crushed but it is basically going to happen. The amount of cash burn going on over there is unbelievable and it is only going to get worse. The commercial exposure is really bad and 09 is going to be a bad commercial year, worse then 08 imo.

Charlie Gasparino (sp) from CNBC said that from a Citibank source a deal with the government will be done later today or tomorrow to take a 40% stake in the company.

It may not be complete nationalization but its a major step toward it. If this is true by Wednesday the government will be the majority control of the U.S.'s biggest bank.

Dow below 7,000 if this happens?

But how is he a hypocrite if he was against bailout out the market in September and he is now against bailout out the homeowners?

Also he talked about not capping bankers salary....that still falls inline with his thinking. He is saying let the market work. How can you possibly cap a salary in capitalism?