A quick look at the Fed Res balance sheet shows a $15 billion sell off for the week in mortgage-backed securities. Combined with forthcoming promised Fed Funds Rate rate hikes, the effect will be to crush residential realty.
As well, one should expect the stocks of house builders (wrongly called "home" builders) and building supplies retailers to go down for years to come.
Obscene Stock Prices
Pulte (PHM)
Toll Brothers (TOL)
KB Home (KBH)
House Supplies Retailers
House materials and suppliers likely are no more than $20 to $25 stocks that are overpriced by 1200 per cent!
Home Depot (HD)
Lowes (LOW)
Good Guess of What These Stocks Will Go
Should FRCBs do the right thing and close their positions on mortgage-backed securities as well as US Treasuries, here is where the stock prices of these stocks might head.
The prices come from the lows of 2000 or 2009, normalized in True Dollars and then re-inflated to current dollars, i.e., negotiable bank credits in demand deposits or dollars in circulation.