Tuesday, April 10, 2007

Hedge funds running out of places to profit

"People are actually selling stocks to raise capital to buy cheap real estate. The liquidity from the stock market is getting drained into the real estate market bottoms."
"The trend is actually much more significant than perceived because of the hedge funds. Hedge funds are actually moving out of the stock market to real estate. This can cause massive outflow of funds from stocks to real estate."
I made mention in an earlier post that I saw unexplained decreases in housing inventory in March in many markets around the U.S. I have some theories about the reasons for this but that’s all they are, theories.

I came upon this story today in Indiadaily.com .
It is clear to many stock market investors that even the raging emerging Asian markets have run out of room to grow as we’ve seen over the past three years. The U.S. markets are fundamentally out of whack and hedge fund managers are taking bigger risks trying to match profits of days gone by. I see this new trend of jumping into housing as very risky, and if it works it will only prolong an inevitable reckoning the housing market will have to face.
Vern

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