What Is On The Horizon?

Is the housing correction over? Far from it. Why? New York, New York. If you look at the housing correction history, not until New York vicinty corrects big time, the housing correction will not be over.

Last year, people were claiming that, cities like San Francisco, New York, San Diego are different from rest of the US, housing in those places would not correct. One by one, San Diego, and even historical stronghold San Francisco were rolling over. Now, NYC vicinity seems to be the last stronghold with people saying New York is unique. Being a New Yorker myself before, I knew all too well that\'s not the case. NYC vicinity\'s housing price will correct and it will be very soon. My bet is about 20% at least. Go ask New Yorker now to see how many of them can afford to buy a house or condo in NYC vicinity. Even the once cash rich Chinese community now starts to feel the strain. The new credit rules make them hard to get loan approval because a lot of Chinese take cash as their income so they do not have a strong income statement to show the banks in order to get the loan. Even if you have cash to put a 30% down payment for a 1 million house, so what, you can\'t prove that you can afford the mortgage without a strong income statement.

What does this imply? Further housing drops in big Apple will only mean more shit will hit the banks. That could be the last drop of toxic that finally push some larger banks down to the cliff.

In terms of unemployment, looking back in any Recession(by the way, based on the Fed, we are still not in a Recession yet), the worst job reports will come in year 2 and 3. So we are probably only half way through this period. Looking at the GDP growth this quarter, it cracks me up. Probably the Fed forgot to put a - sign in front of the GDP result due to the poor math training in U.S.

For those who thinks we are close to the bottom of the Bear, keep betting. Unless you do not believe this is a Bear market, otherwise, by any traditional measurements, we are not even see half of the Bad of the Bear yet.

One final word, whoever preserves their capitcal will prevail at the end of a Bear market and therefore, there is no need to be aggressive either building long or short positions. Greed is good in a Bull market. But Greed will leave you with only your underwear in a Bear market.

As always, those who with cash when this Bear finally walks its course will recoup the most benefit of the Bear market. We should treat this Bear as another once in a life time chance to build another fortune that could leave to our next generation for good.