Don't Get Talked Out of This Good Market

Still with the up openings. Still with the pick-offs. Still with the bad taste in people's mouths. Still with the fades.

Now, unless we hold up off this bounce, we have to spend the rest of the day putting a bad spin on the data to justify the turnaround.

To me it is all nonsense. We have a good market that's up a ton, and people want to do some lock-ins.

The worry I have if you sell is, what happens on mutual fund Monday, when people realize how much money they made in the month of May? Does anyone think that people will pull out of stocks? Does anyone think that mortgage rates hitting a six-month high is really all that horrible except the pundits and headline writers?

I can tell you from boots-on-the-ground surveys I do that this rush in rates is bringing out buyers who truly are afraid of missing things. Plus we got a terrific amount of refi business, which is also good. There's nothing I like more than that moment when people feel there is an urgency, which hasn't been the case at all with real estate.

The people who write these stories then shift immediately to saying that the defaults on the big homes, the jumbos, are getting bad. What the average investor doesn't understand is that these homes have equity in them. Go talk to Ron Hermance at Hudson City Bancorp (HCBK - commentary - Trade Now). He wants to repossess these homes. They have huge equity in them and are worth a ton to him. I am attempting to buy homes from banks -- they have a lot -- and there are without a doubt great deals, and that in itself will help things along.

Then they switch to worries about commercial real estate. But every day these commercial real estate REITS, including the ones that bought real estate at the high, are refinancing -- as we saw from Boston Properties (BXP - commentary - Trade Now) this very morning.

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