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So it's the talk of the markets here today's Case Shiller Index showing the first increase.
In nearly three years this is a home price index.
Does this really mean the housing market has finally hit bottom.
-- -- -- experts for Fox Business exclusive Robert Shiller who helped create a case Shiller home price index.
And is currently chief economist for macro markets along with Sam affinity CEO of macro markets great to have you both here thanks for coming on Fox Business.
Doctor -- I've got to get to this index because.
People look at the Case Shiller Index now as really.
A Cassandra of sorts because the index was the one that presage the fall of the housing market several years ago.
They look good now to see what this month over month slowing in the house price fall really means what can we infer from this latest number.
Actually it was more than a slowing if you look from.
April -- -- it was an increase.
-- four tenths of 1% on the intensity and not much but yeah that that we'll take it and I think it is significant because.
The real estate market is fundamentally different from other -- -- markets it has tremendous momentum.
And we've been saying this continual decline for three years now.
That is downward momentum we'll be seeing the first upswing we start to wonder that maybe that it could.
Possibly be about a more of these close to about I'm not -- that is but I am saying.
It it's it's definitely more positive information and.
Most investors realize is the supply of unsold homes of shrinking in a meaningful way to your -- Well inventory of unsold homes is going down and new construction is hit.
Fallen off a cliff and as the population continues to grow the demand for housing will eventually catch up.
And that's something that should.
Out of Afghanistan another boom -- this -- that we've over the last.
Eight years or so has done bubbles really and it was pathological.
Focus everything it turn around that quickly and just a year or two since the crash.
Well anything is possible and in a speculative market.
All sorts of things happen but the more likely scenario.
I think it's not as bad as for example of the stress tests that they had in their baseline scenario.
But you know the most plausible thing is that don't get too optimistic -- -- the difference of opinions that.
Sure exactly that's what that's what a lot of people -- 11 but that's not a trend make but Sam.
Over -- macro markets eventually come up with two.
Exchange traded trusts now that help people hedge against these wild swings in housing prices tell us about the east sure we launched.
On June 30.
Major metro -- simply you -- them down major metro stock symbol DMM.
UMM offers investors a an opportunity to benefit from housing recovery.
DMM goes up in value if home prices declined further.
Which can be used -- -- -- to their existing home price.
Exposure so quite unique the only way to directly trade US home prices and are based on that the ten city index by S&P case Shiller.
We'll see you've been at the forefront I remember when you watch the Case Shiller Index and and the Brady and the futures though.
Has that been at a brisk enough pace that encouraged you to come out with these macro markets -- trust.
The futures while they received a lot of attention have really not traded a tremendous amount might not.
Well they they really apply to a very unique segment of the market where macro shares apply to all retail investors as well as institutions so.
Retail pension funds endowments typically can't trade in the futures market.
But can buy -- macro shares which are back but nothing more than cash in US treasuries professor.
We're looking as they always say at at local regions because all real estate is local.
Do you think say for example the New York market has hit it slows or do we see any further -- like down in home prices here.
But New York was late very -- this right.
I think of course any prediction who people are concerned about a longer run production.
Most people you -- can buy houses within two to month those longer run predictions beauty.
The then they depend on the success of the Obama policies they depend on the world economy there's so many things.
That's where we need some kind of market that -- price discovery tell me what you think of the Obama policies do you think they've been successful at this point.
Well I think Obama has -- You know -- -- I think that kind of amazingly successful given that they were underwhelming to start -- he should have.
Done the stimulus fast I can say that now after.
And there should have been better bailout for the for the mission is or available -- what it is better effort to deal with the foreclosure of individual homeowners.
But you know he did some of that and.
The confidence that would not in the latest numbers but the confidence since -- -- came into office has gone way up and we're getting.
-- like our real estate -- positive side so it seems to be plausible that.
The plan was surprisingly successful.
In boosting our animal spirits.
Just your book half hour after you gotta get added -- -- well.
It's I like it because it's -- -- confidence it's a whole view of the world news.
That that I think.
Has to come up for us to get out of this -- senator -- guy.
Use your putting out new products no matter what the economy's doing what's your sense of where the economy is right now.
Well nice -- estimates predict where the economy has I think we have we have -- ways to go yet.
I think the importance of risk management products like the housing -- shares like other types of products allow people that -- Economic.
Indicators are very very important people just need to think about for the long term I think.
The boom economy is cause people think short term and really they should be thinking long term in the portfolio.
Buying houses right now is it really very much the buyer's market.
Professor -- that you look now.
I talked to people who say -- striking the hardest -- now.
What -- I say people to have have sellers relief finally realized its power market anymore.
Well existing home sales.
Someone there's still low though.
And so that's a sign -- that they are particularly that part of what happens in a downward market is that people they hold out for too long.
And I would I would imagine that there are some real bargains at this point for someone -- is.
They're trying to press the done.
Yesterday that we had -- of the Philadelphia fed saying we're going to see rate hikes it's not going to be comfortable thing but sooner rather than later.
That's in direct disagreement with what Bernanke was saying which of course was.
It'll be not for the foreseeable future that would make if we saw -- rate hike earlier rather than later.
That would make cheap money -- -- cheap anymore but isn't that what got us into trouble in the first place Alan Greenspan leaving rates so low for so long.
That was part of it.
History is complicated I think the bubble had a life of its own as well.
But the problem was that Greenspan didn't see it he didn't understand that there was a bubble.
Now we have.
Monetary policy that's learned from this recent experience I expect that.
They will be once we see recovery.
They're worried because they put -- so much reserves and money.
And they're worried about people a little edgy about inflation so I think.
That processor has a point where we're gonna expect aggressive return of higher interest rates as soon as these recovery looks a reasonably sure.
I'm with you professor Robert Shiller and San Suu Kyi of macro markets great to have you both right here explicitly of Fox Business thank you so much -- could look at the new products -- yeah.
All right we will be right back -- much.
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