very good post, i was really searching for this topic as i wanted this topic to understand completely and it is also very rare in internet that is why it was very difficult to understand thank you for sharing this. Regard Stock Market

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Hmmmm i have borrowed $180,000 at 9% interest. should i pay it back or does anyone have any good investment ideas regarding the current investment climate? there are shortly going to be bargain share prices as well as bargain house prices. i am presuming that $1800,000 isn't enough to buy an investment property. however, how am i going to be able to tell a good share from a bad one? perhaps i should just wait for an index to show a significant movement up. that could be a safe way, and allow me flexibility regarding liquidating if things start reversing. any ideas? my email is guydebyl@yahoo.com.au if the question expires and you have some ideas that could help me.

I would look for an investment property at the moment - people are always going to need bricks and mortar. I have thought the worst was over 2 or 3 times already and yet today the UK stock market has had its biggest % fall in over 20 years so still more unceretainty to come.

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... or both?

Stock markets are driven by two things: 1) The stored wealth of American investors, some say the discretionary wealth of American investors (I don't) 2) The investments made by foriegners (other countries investing in our markets) When America's economy goes into its next recession, people will begin pulling money out of their investments to use as savings and to live on. There should be a general trend in transferring some money into less risky investments. When America's economy (as compared to economies elsewhere in the world) has the appearance of being riskier, foriegners will stop investing here and put their money somewhere else. That will cause our markets to drop by a certain degree. Falling oil prices create more wealth for investors, so that would tend to drive our markets up, not down. The "real estate bubble" has been bursting now for 2 years, and yet home prices are still rising, just not at the rate they were 2 years ago. Don't count on American real estate to plunge. It's not a market that you can just pull out of. People live in houses, they don't move when things get bad. The worst that could happen is a very slow drop in real estate prices. The thing that could pull the rug out from under our economy would be something that disrupts our trade. 9-11 came the closest by downing two important buildings and grounding the commercial air fleet for 3 days. We recovered with nothing more than a series of tax cuts. I predict that it will take nukes in 5 American cities to put a dent in our economy.

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With the stock market crashing because of housing issues, what does this mean for home prices? will prices fall? i know that now is a good time to buy foreclosed properties, but what about regular home prices? will lenders be more apprehensive before giving mortgages, or will they scrutinize your credit history more than usual. i am trying to make sense of the stock market crash and how i can capitalize on it.

all the things you mention are already in place and happening. property values are dropping foreclosures are up - people cannot refi their ARMs - forcing them into foreclosures now or anytime in the future is a good time to buy - if you go with a traditional loan and stay away from ARMs or creative financing. lenders are vurrently more apprehensive about lending...they want you to put 20% down and sometimes to even prove that you have 6 months of payments in escrow (just in case) the stock market has not crashed, but it certainly took a hit --especially after it was climbing good recently. you will continue to see a definite connection between the stock market and the real estate market and foreclosures... and this will most probably not right itself for quite a while....the media is speculating another 24+ months good luck---stay informed

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This is part of what happened in 1929 "march 25: a mini-crash begins as investors start to sell, revealing the market's shaky foundations. for the many people playing the market with borrowed money, the day is a disaster, as margin calls wipe out their holdings. while the investors seek to borrow more money, interest rates soar to 20 percent. the new york daily news calls it a "selling avalanche." march 27: banker charles mitchell announces that the national city bank will provide $25 million in credit to stop the market's slide. his move stops the panic, and call money declines from 20 to eight percent. senator and former treasury secretary carter glass calls for mitchell to resign from his post on the federal reserve board because of his intervention in the market." and later "october 24: "black thursday." the economic bubble finally bursts. stock prices fall sharply on a day of heavy liquidation. ticker tape runs four hours later than normal at a volume of 12.9 million shares. headlines will report the market's paper loss at $5 billion. a pool of bankers act to stem the drop by putting more money into the market, and president hoover reassures americans that u.s. business is sound. within a few days, a headline will read, "brokers believe worst is over and recommend buying of real bargains." october 28: "black monday." the stock market falls 22.6%, the highest one-day decline in u.s. history. the crash triggers similar declines in markets around the world. october 29: "black tuesday." panic sets in as investors all try to sell their stocks at once. over 16 million shares of stock are sold, setting a record -- and the market records over $14 billion in paper losses. stock tickers cannot keep up with the heavy trading volume. at the end of the day, the market is down 33 points, more than 12.8%. some of the nation's financial elite, including general motors' william c. durant and the rockefeller family, show confidence by buying stocks, but their efforts fail to stem the tide." i am wondering how the first excerpt compares to the current bailout. it only kept the crash at bay for seven months. all the same factors were in place. an inflated market funded with borrowed money; declining home and property values; declining available credit; rampant, widespread personal debt, declines in domestic manufactering, lack of govt regulation, etc. when will people remember to stop forgetting history? for a full timeline of this event go to http://www.pbs.org/wgbh/amex/crash/ timeline/timeline2.html

$302,600,700.53 using the Consumer Price Index $250,160,971.62 using the GDP deflator $615,835,777.13 using the value of consumer bundle * $948,375,870.07 using the unskilled wage * $1,344,323,529.41 using the nominal GDP per capita $3,331,925,675.68 using the relative share of GDP

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In early 2007 my mother passed and left my parents home in sw wa state to five of us...so we each have a 20% stake in the sale of the house. one of the five was designated as executor to handle the estate details. the house has not sold, even with several small reductions in price and some rehab work done to make the property more appealing. my problem is....i'm a stock options guy, not a real estate guy, and would prefer to sell off my 20% in favor of cash in hand. the stock market will undoubtedly recover many, many months before the real estate market. the falling market values versus fair market price versus the executor wanting to get the most for the sale has me stuck owning 20% of a house i would prefer to liquidate at a discount in favor of having cash in my online trading account before the stock market rebounds sometime in 2009. can anyone provide me search terms or links to investors who buy this type of inherited real estate equity at a reasonable rate?

No one will buy just the 20% The five of you need to sit down and plan a better strategy. Maybe one of the others will buy you out. Problem is setting the price, it has already been lowered and still no takers.

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This is just crazy to me. our president has not been in office 60 days and has already come under scrutiny for what he was elected to attempt to rectify. the bush administration ran amuck for 8 yrs, without much questioning or doing any justifying at all, and brought the us to where we are today, hence the ensuing investigation. so why is our new president being scrutinized for trying to right the wrongs of the bush administration? why is it news that rush limbaugh has challenged him to a debate? he is a commentator, not a politician. his opinion is just that, his opinion. at the end of the day, he doesn't have the power or probably any real desire to change everyday ordinary americans lives...this is a great marketing ploy to boost ratings as well as an attempt to weaken the confidence of our presidents supporters. i know that everyone is aware of the global financial mess that we are in. it happened because of unethical and irresponsible behavior by all parties directly involved. however, we are in this mess together and have to endure this as a counrty, this is not the time to point fingers. some feel it isn't their problem their neighbor bought a home they can no longer afford but it will become their problem if the neigbor gets foreclosed and the value of their property falls. there is a trickle down effect in society that people seem to have forgotten. when someone suffers some misfortune, though it may not affect you directly at the time, others are affected that you might not know or see. when are we all going to get over this selfish attitude that we or our situation is more important or of more value than the next person? that is why we are where we are, everyones only concern is themselves and how they can benefit, irregardless of the consequences to others. this is the united states of america, but a unified resolution to the problem doesn't seem likely. the financial situation of the us is a problem our president inherited. of course with any major issue, things get worse before they get better. yet it is being insinuated that his actions, in the less than 60 days he has been in office, are the reason for the recent stock market plunge. that is laughable; not because the market fluctuates with the economical cycles and globally all markets are in a funk, or that it was uncertain beforehand but that people actually feel that one man can cause an entire global market to fall. if it's that easy, then wall st. has alot bigger issues to be concerned about if u ask me. in my personal opinion if you want to see something effectively changed, sometimes you have to modify those old ideas and ways of thinking and try something new. the american people want change, not a continuation of the same but we must also realize this is but one man, who is trying and with opposition that effort can be just that trying. we must have patience and faith in what it is we believe he can do and just give our president the chance to show and prove, not try to block him. there is uncertainty in everything so we never know the results of anything until we give it a try. i don't think there are any political figures that have not broken some promise to the citizens that elected them into office, not even bho, but i personally feel he is a man of integrity and has americas best interest in mind. for the last 8 yrs the republicans ran the show. since they have, we have gone to war, gone into trillion dollar debt, had our housing market go belly up, our stock markets at record lows, gas prices at record highs, the highest unemployment % in decades, all under republican leadership. this is the worst many americans and the world have seen the us fall in a very long time. rich stay rich while the poor continue to struggle. bho wants to clean it all up. so why is he not being given a chance? right is right and wrong is wrong...and the republicans did america wrong. if he has to get us into a lil more debt to see america back on top again, so be it. it cant be any worse than what the republicans have already done. i

Your"question"reads more like an editorial!

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1: international overseas buyers will sell their australian houses and can not afford to buy till the marker recovers.because of the market slowdown forced to sell like some australians. 2:australian unemployment to rise forcing many to sell. mortgage stress already hits 800,000 people. 3:when shares start to recover their will be a surge from investment housing to stock market. 4: australian housing market bubbled higher than anywhere else in the the world making it the worlds most unaffordable. do other agree with this? does this sound right? i suspect that they could fall by another 10-20% what are your thoughts? http://www.superreview.com.au/artic le/property-values-to-fall-further/ 433798.aspx http://www.dailyreckoning.com.au/au stralian-housing-market-4/2008/01/2 1/

Yes. I think people will be shocked at how much further it will fall. More than another 20%..

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The press are full of stories about the fall in property prices, and people defaulting on their mortgages, causing the banks to re-posses their homes and sell the properties on. as a want-to-be first-time buyer, i am keeping my eyes peeled on the property market in anticipation of being able to finally get my foot on the first rung. and yet, according to right move, primelocation and nestoria, i don't seem to be seeing any of these "cheaper" properties. i am still seeing overpriced studio flats in old council flats being sold in excess of £300,000. i find it hard to believe that these properties are selling, especially at this time of the credit crunch. the evening standard and the bbc both listed west hampstead in nw london as the worst area for people trying to sell, and yet there is no decent stock listed on the market. so, where can i find out about these cheaper sales? the estate agents are useless (as always). are these properties being auctioned, and if so where do i hear about them?

You've hit the nail on the head with this sentence: I find it hard to believe that these properties are selling, especially at this time of the credit crunch. These properties are NOT selling. I am looking in the Rotherhithe / Canada Water area. What is listed in the local estate agents' is exactly the same as what was listed six months ago. These properties aren't selling, and this brings me to my next point ... ... no new properties are being listed. Why not? Well, if you knew that you'd have to take a lot lower price than what you paid for it, you simply wouldn't sell, right? Only those who are extremely desperate are selling now, and let's face it, most people aren't extremely desperate, because you could hang on for a while, and even if you really needed to relocate you could simply rent that house out or something. Yes, average selling prices are getting cheaper, BUT what the papers aren't pointing out is that this is based on a much, much smaller number of sales than say, this time one year ago. So obviously, if there is only a very small number then the average is skewed for one thing, and for another thing the small number of sales is due to the fact that only the very desperate are selling so everyone else would simply reject a low offer. Basically, there are no cheaper properties in London. However, as a first-time buyer, if you're really struggling, you might want to consider Shared Ownership. Don't bother with auctions. First of all, because everyone now thinks that it's a way of finding a cheap property, the increased interest means that this is pushing prices up. Second, it's a false economy in that you end up spending a lot on fees which might go to waste, which you wouldn't do in a normal sale.

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I'm a little concerned that the poor are going to rally and take over the country and then all our money and investors and intelligent people are going to deposit their money into overseas accounts. i sold all my stocks over a year ago (thank god) and now the money is in a foreign bank. i know that the stock market is going to fall and continue to fall because usa has so much competition from other countries that want us rich guys to invest in their economy. why doesn't obama understand that? even if he does and decides not to raise capital gains i think the damge is done. wealthy people like myself just don't like him. employees are going to suffer and businesses are going to suffer for a while. i guess i'll find more bargains in real estate. i own 40 properties and my rents have increased by 14% this year because people aren't buying anymore. maybe i should start liking obama because he helps that part of ny business. the more poor people the more rent i make.

I recommend that you don’t sell your property. The Real Estate market is more of a secure investment and has a long history of being stable.

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I know it is speculative but is there a chance the australian property market could rise now that stock market investors look for new opportunities. with interest rates looking to fall this would be a bonus. i add that the cash rate mightn't reflect domestic bank interest rates, but there will come a time when they will be forced to be competitive and meet the cash rate in the future. thus with these issues in mind. what is the likely outcome for housing prices? sure immediately not much, but there could be another bull run when the dust settles.

I don't know about the Australian market, but property is still not a terrible investment. People need to remember that it is a "long haul" investment, not something meant for a quick turnaround (as popular as house-flipping may be). Over the long run, both property and the stock market historically have an excellent rate of return. Sure it's hard to be patient, but over 20 years your stock portfolio and/or property holdings will fare you much better than simply a savings account (whose APY's hardly keep up with inflation rates). Slow and steady is always the way to go with investing!