World Out Of Whack: What’s Next For Global Real Estate?

Market dislocations occur when financial markets, operating under stressful conditions, experience large widespread asset mispricing.

Welcome to this week’s edition of “World Out Of Whack” where every Wednesday we take time out of our day to laugh, poke fun at and present to you absurdity in global financial markets in all its glorious insanity.

While we enjoy a good laugh, the truth is that the first step to protecting ourselves from losses is to protect ourselves from ignorance. Think of the “World Out Of Whack” as your double thick armour plated side impact protection system in a financial world littered with drunk drivers.

Selfishly we also know that the biggest (and often the fastest) returns come from asymmetric market moves. But, in order to identify these moves we must first identify where they live.

Occasionally we find opportunities where we can buy (or sell) assets for mere cents on the dollar – because, after all, we are capitalists.

 

In this week’s edition of the WOW: global real estate

Ever since anyone can remember, global real estate prices have been going up. Pretty much doesn’t matter which country you’re from (unless, of course, it’s Syria, or Iraq… or Fuhggedistan): if you bought something in the last 2 to 3 decades, it’s like the ceilings were insulated with helium. Even when the 2008 crisis hit and we had Captain Clever ensuring the world that things were just peachy:

“At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.” – Ben Bernanke, March 28, 2007

Even with that setback real estate has marched upward. The US, of course, took a decent breather and is only today back to where it was pre the GFC.

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Disclosure: None.

Disclaimer: This site is not intended to render investment advice.None of the principles of Capex Administrative Ltd or Chris MacIntosh are licensed as financial professionals, brokers, bankers or even candlestick makers in any jurisdiction, anywhere on this big ball of dirt.We do NOT know your individual situation, and you should always consult with your attorneys, accountants, financial planners, and those that are sanctioned to provide you with advice. DO YOUR OWN DUE DILIGENCE.

But seriously, all investments carry risk. Some of what I discuss arguably carries great risk. Investments which can lead to you losing 100% of your capital and maybe more if you are stupid and use margin.If you invest more than you can afford to lose, or borrow money from Joey down at the tavern, Master Card or Visa to make your investments, then you need to go and read a different website.

But really seriously…

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