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Monday, July 09, 2007

How far to fall? iTulip on the Dow and house prices

iTulip shows charts that follow the Dow and house prices, comparing them with inflation over a long period. The implication of the way this information is presented, is that stocks are about 100% over trend, or to put it another way, have a 50% fall to get to the trend line, and house prices would have maybe a third to lose.

I would guess that in terms of crystallising loss, this is more significant for equities than for real property, because you have to live somewhere.

3 comments:

Anonymous said...

I am the author of the charts referenced above. For the latest, see here:
http://homepage.mac.com/ttsmyf/RD_RJShomes_PSav.html
http://homepage.mac.com/ttsmyf/recDJIAtoRD.html
http://homepage.mac.com/ttsmyf/newestHousData.gif
FYI, thru today 7/12 for the Real Dow, and thru 2007 Q1 (= mid-Feb 2007) for Real Homes:
Real Dow is 2.24x the +1.64 %/yr curve, which is a 55% drop thereto, and
Real Homes national (green points) is 1.78x the ca. 54 level, which is a 44% drop thereto.

Sackerson said...

Many thanks. I shall also paste your comment into a new post.

Ed said...

sackerson,
OK, and feel free to use any of my charts at your site.
Ed