Since the bears didn't like the 666 bottom on the S&P 500, I'll give them some more math that they'll have a hard time swallowing.
As it quite evident now, the stock market, even to those who missed the lows, has bottomed. The stock market, is a forward looking indicator, and even though the news has been bad, this news is already discounted in prices.
It's the same with housing.
And house prices, will now be going up, and these price increases, along with the rising stock market will get those who haven't bought, or who are contemplating buying a home, off of the sidelines, and it will help engender confidence in banks who love algorithms and models, but hate common sense!
Let's do the math. The numbers on the average home sale price came out today at $165,400. That my friends is the absolute low reading that you will see in this housing cycle, so get on board, or get run over by the train.
Now we also know, that the higher end homes are being foreclosed on also. Let's take a $1,200,000 home that goes into foreclosure and sells for $600,000.
Now the average home sold for $165,400, last month, didn't it? So lets throw in a $600,000 high end foreclosure into the mix in a sample of 20 homes.
So we have:
19 homes at $165,4000=$3,142,600.
1 home at $600,000= $600,000.
So now we have 20 homes that now sell for $3,742,600. Divide that by 20 homes and you get
$187,130 versus this month's figure of $165,400.
An increase of 13.13%!
More bad numbers for the non-believers!
The housing numbers will indicate better times, even if housing hasn't changed.
It's the same with the stock market. Higher prices attract buyers!
How about it bears--how's your "conviction" level now?
Are we still heading into Depression II?
Being bearish will turn your intellectual argument into just common cents, and then you'll just contemplate what Thomas Paine said:
A long habit of not thinking a thing wrong gives it a superficial appearance of being right.
Because common sense is still in short supply on Wall Street!