Friday, July 22, 2005

Red China Realignment

Paul Krugman opines on the Chinese announcement this week to de-link the Yuan from the Dollar. Krugman's analysis provides some interesting perspective on the perverse policy underpinning the nearly decade-old Chinese dollar fixation and its effects. He warns of discomfort ahead in the housing markets if interest rates rise on a falling dollar.

Read for yourself -- but there is significant possibility of dislocation if the Chinese currency is revalued too quickly may send cause a spike in consumer prices in the US. This could destabilize the US economy and thus, the world economy. Bad things could happen.

Monday, July 18, 2005

What Took Them So Long?

I wonder why this iPod clock Radio, soon to be available from iHome Audio

Bubbles, Bubbles, Toil and Troubles

A cousin of mine just got a plum new job and is thinking of buying a house. When he approached a trusted family friend in the mortgage industry, the broker told him to sit back for a year an continue to rent. A mortgage broker. Told somebody with a really good job to continue renting. Why? Because he perceives that housing prices in that area are unsupportably high and will come crashing down.

This industry professional is not alone. According to a column at MarketWatch, 86% of respondents to a poll see a credit-inspired real estate bubble. Further, "Comments by real estate pros stood out because the housing bubble is likely to be the lead domino triggering a global economic meltdown. Real estate respondents expressed virtually unanimous concerns about this bubble."

At least this column is constructive, though. It does provide sample portfolios to help you get through any bubble-popping-induced recession.