Category: housing

Amazing Sunset Tonight

(click to order a print from SmugMug.com)

View from our balcony (Kallebäck neighborhood of Gothenburg, Sweden).
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Two Excellent Michael Lewis and David Einhorn Articles

I’ve posted a bunch of stuff from these guys over the years:

Here’s the latest:

Titles:

  1. The End of the Financial World as We Know It
  2. How to Repair a Broken Financial World

By Michael Lewis and David Einhorn
2009-1-4
New York Times

In the past year there have been at least seven different government bailouts, and six different strategies. And none of them seem to have pleased anyone except a handful of financiers.

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U.S. Homeownership and Stock Market Participation Rates

Just a quick post of some interesting date from the U.S. Census Bureau. As shown on the chart above (click for larger image), the percentage of Americans who own their own homes is declining. No surprise there, but it does beg a few questions, such as:

What (and when) was the peak and how far (and how long) will the rate fall?

To consider these questions, I hopped over to this page at U.S. Census Bureau website,  downloaded this spreadsheet and quickly crunched a few numbers in this spreadsheet.

What I found was that…

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The Investment Cycle – Where Are We Now?

Seems like a good time to take a look at the investment cycle and consider where we might be, which IMHO is somewhere between fear and capitulation.

Regarding stocks, right now we’re on day five of a rally attempt.  Today is also election day in the U.S.  Anything could happen.  By the end of the week I expect the market will either: (a) follow through to the upside with a huge gain, or (b) fail. It could, of course, also just mark time, but that seems least likely, IMHO.

Regarding real estate, I am 100% out, after selling my last piece of USA real estate the day before the worst week in modern stock market history a few weeks ago.  I am looking to buy back in 2009 or 2010, depending on where we are living and the relevant investment factors.

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Article: Europe on Brink of Currency Crisis Meltdown

Ok, this answers my question from a few weeks ago about “what about the ROW (‘rest of world’) subprime mess? Where is it?? It’s not mortgages, it’s this (see article). And it’s [probably] going to make USA subprime look like a walk in the park:

Europe on the brink of currency crisis meltdown
The crisis in Hungary recalls the heady days of the UK’s expulsion from the ERM.

By Ambrose Evans-Pritchard
2008-10-26
telegraph.co.uk

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.

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Web 2.0 Expo Next Week, First Doing Market Update

Susanne and I just got back from a great 4-day trip to Berlin for the Web 2.0 Expo. Met a lot of interesting people and startups there and will report on it next week. First, however, a quick market update.

The reprieve rally I blogged about here is over, with new lows being set Thursday. See the 18 comments I added to that blog post for a number of interesting articles. Also see Nouriel Roubini’s video from yesterday in London: “It’s going to be a financial and economic wreak.”

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