{"id":39401,"date":"2013-06-28T05:52:53","date_gmt":"2013-06-28T09:52:53","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=39401"},"modified":"2013-06-28T05:52:53","modified_gmt":"2013-06-28T09:52:53","slug":"friday-charts-bear-markets-runaway-real-estate-and-the-latest-fed-induced-implosion","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/06\/28\/friday-charts-bear-markets-runaway-real-estate-and-the-latest-fed-induced-implosion\/","title":{"rendered":"Friday Charts: Bear Markets, Runaway Real Estate and the Latest Fed-Induced Implosion"},"content":{"rendered":"

By WallStreetDaily.com<\/u><\/a> <\/p>\n

Our 32nd President, Franklin D. Roosevelt, provided the best public speaking advice on record: “Be brief; be sincere; be seated.”<\/p>\n

And that’s precisely what I aim to do today, as I usher in another set of charts.<\/p>\n

For the newbies in our midst, each Friday I handpick a few graphics to convey the most important economic and investing insights for the week.<\/p>\n

Today, I’m dishing on the specter of a bear market, runaway real estate prices and the most dangerous income investment in the world.<\/a><\/p>\n

So let’s get to it…<\/p>\n

No Bear Sightings Here…<\/strong><\/p>\n

Here’s more proof that we should shrug off the recent market volatility and just keep calm and carry on<\/a>.<\/p>\n

\"\"<\/p>\n

In each of the last four years, we’ve experienced momentary pullbacks. And each time, the market ultimately resumed its upward trajectory.<\/p>\n

I expect this go-round to be the same.<\/p>\n

In other words, it won’t be different this time. (Is it ever?)<\/p>\n

The Roof, <\/strong>t<\/strong>he<\/strong> Roof…<\/strong><\/p>\n

The roof is on fire!<\/p>\n

On Tuesday, the latest reading of the S&P\/Case-Shiller Home Price Indices was released.<\/p>\n

\"\"<\/p>\n

Year-over-year, home prices surged 12%. That’s the fastest growth witnessed in over seven years.<\/p>\n

But we don’t need no stinking water to put out this blaze.<\/p>\n

Like I’ve shared before<\/a>, the rapid run-up in prices is a low-inventory phenomenon. And the market will naturally correct itself.<\/p>\n

As home prices keep increasing, more homeowners will be convinced to put their houses on the market. Couple that with the almost-instantaneous 1% surge in borrowing costs<\/a> we’ve witnessed, and voila!<\/p>\n

More supply and less purchasing power will help keep a lid on prices – and, in turn, the recovery should continue unabated. Bet on it!<\/p>\n

Junk in the Trunk<\/strong><\/p>\n

Back in October 2012<\/a>, and then again in November 2012<\/a>, I warned yield-hungry investors about the dangers lurking in high-yield bond funds.<\/p>\n

In fact, I pegged them as “the most dangerous income investment in the world.”<\/p>\n

I told you to specifically steer clear of the SPDR Barclays Capital High Yield Bond Fund<\/strong> (JNK<\/a>) and the iShares iBoxx $ High Yield Corporate Bond Fund<\/strong> (HYG<\/a>).<\/p>\n

Well, I finally feel vindicated. Because the exodus has begun!<\/p>\n

\u00a0\"\"<\/p>\n

And all it took was the hint of an interest rate increase from the Fed.<\/p>\n

Of course, the Fed’s comments also spooked bond investors of every stripe and color.<\/p>\n

The latest mutual fund flow data reveals that investors yanked a record $61.7 billion out of bond funds this month. That’s almost $20 billion more than the previous record hit in October 2008.<\/p>\n

\"\"<\/p>\n

Talk about a dramatic about-face. Before this month, bond funds posted inflows for 21 consecutive months, according to David Santschi, Chief Executive Officer of TrimTabs.<\/p>\n

Even the world’s best (and biggest) bond fund manager, Pimco’s Bill Gross, suffered withdrawals. Investors withdrew just over $1.3 billion from his flagship Pimco Total Return Fund<\/strong> (PTTRX<\/a>) in May.<\/p>\n

Yet in his latest note to investors (see here<\/a>), he’s urging them to stay the course.<\/p>\n

“And not because we want to keep you on board [as clients],” says Gross.<\/p>\n

Sure it’s not, Mr. Gross.<\/p>\n

Add it all up, and at the very least, you need to get the junk out of your portfolio’s trunk if you haven’t done so already. And be very, very<\/em> careful putting any new money to work in bonds right now. Stick to short-term maturities.<\/p>\n

That’s it for this week. Let us know what you think about this column and all our work at Wall Street Daily. <\/em>All you have to do is drop us an email at feedback@wallstreetdaily.com<\/a> or leave a comment on our website<\/a>.<\/p>\n

Ahead of the tape,<\/p>\n

Louis Basenese<\/p>\n

The post Friday Charts: Bear Markets, Runaway Real Estate and the Latest Fed-Induced Implosion<\/a> appeared first on  | Wall Street Daily<\/a>.<\/p>\n

Article By WallStreetDaily.com<\/u><\/a><\/p>\n

Original Article: Friday Charts: Bear Markets, Runaway Real Estate and the Latest Fed-Induced Implosion<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By WallStreetDaily.com Our 32nd President, Franklin D. Roosevelt, provided the best public speaking advice on record: “Be brief; be sincere; be seated.” And that’s precisely what I aim to do today, as I usher in another set of charts. For the newbies in our midst, each Friday I handpick a few graphics to convey the … <\/p>\n

Continue reading “Friday Charts: Bear Markets, Runaway Real Estate and the Latest Fed-Induced Implosion”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-39401","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/39401","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=39401"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/39401\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=39401"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=39401"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=39401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}