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« Weighing the Week Ahead: Hope for a Budget Compromise? | Main | Investors: How to Profit by Understanding the Fed »

February 17, 2013



Renton -- Apparently you did not read the last paragraph of this post. That would be the one where I suggested that housing stocks were overvalued, so we should look for effects on the economy instead.


Renton Auto Body Shop

So catch the housing rebound but sequestration is going to kill the economy? Sounds to me like pump and dump is alive and well. Housing stocks have already rebounded.


Jose -- If it takes effect without modification, it would be a significant drag. As I note in this week's article, this is not something with a hard deadline, despite the "launch date." We have already been feeling the effects via anticipation.

It might take a week or so past the deadline for Congress to act. At this point, few seem to expect a solution or a major effect.

A more rational plan would be market-friendly.



Jeff, I'm wondering if you think the Sequester is a non-issue much the same as the fiscal cliff? It would seem that significant cuts at this point could cause a real drag on the economy, especially in view of the anemic growth last quarter?


Funny you mention housing, as my wife and I sit in our hotel room at an East coast resort town, spending the week looking for a vacation home. It took six years for prices to drop to what we think is cheap. The market here is weak but stable. Having kept up with a number of towns from Maine to Florida, this area seems typical. A bottom? Maybe; we think it's good enough.

I can't agree with Prof. Shiller on housing not being an investment. It depends on many things. Between my wife and I, we have gone through six or eight houses and had pretty good returns. Plus you get to live in them, a nice bonus you don't get with other assets.


This wonderful stock market advance will be good to the last drop!

Meanwhile, Doug Short, often mentioned in this weekly column, seems to believe the market is getting overvalued, though he is aware that "extremely poor return on fixed income investments" renders equities appealing, "despite overvaluation risk". The following article from Mr. Short is already more than a week old, but remains relevant:

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