RON AND JUDY NAYDUK
Broker
  Re/Max Realty Specialists Inc., Brokerage
Independently Owned and Operated
   
 
ron@nayduk.com; judy@nayduk.com
905-828-3434
 
 
 
 
 
 
Market Conditions
 
Bubble Bursting?

Real estate bubble burst: Deflation

- "The deflation of the US housing market is sure to wreak far more havoc than its dot-com predecessor," Pomboy predicts, "shaking the very foundation upon which the US consumer and financial system (with its record real-estate exposure) now rest."

- If, therefore, the free-spending – but overly indebted – American consumer begins to spend a little less freely, which industries would feel the pinch? And which would benefit?

- Your editor would not quarrel with Pomboy's suggestion to short Starbucks, the purveyor of pricey coffee drinks, while simultaneously buying Hormel, the purveyor of inexpensive forms of "meat and meat by-products."

- But neither would he rush to implement this trade. As a hard-core Starbucks consumer, he could not easily imagine a financial condition so dire that he would abandon his daily cappuccino. (His children would go without shoes first). Nor could he imagine a household budget so stretched that he would purchase a can of Spam...and actually eat it.

- That said, he suspects Pomboy is on the right track, which is why he finds her second suggestion far more compelling: Sell financials; buy gold shares.

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  © RON AND JUDY NAYDUK of Re/Max Realty Specialists Inc., Brokerage
Independently Owned and Operated
 
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