Well, it certainly appears the time has arrived to up one's stakes in foreign debt instruments. Even if the Chineses, Japanese and Koreans have been investing in US Treasruy bonds, American citizens can invest in the private and government debt instruments designated in euros and yen still.
After all, the whole effort to rob the US blind by Dubya's posses is predicated on the need to get the money out of the US before the crash. While else the insistence on haste with all of the stupid, ill-conceived programs they've pushed?
Posted by PrahaPartizan at November 14, 2005 07:09 AMOK. This is just semantics but, should a pResident whose approval ratings are in the toilet be given the benefit of a 'popularity' rating or (in reality) an 'unpopularity' rating?
"Bu$h'$ popularity is a distraction."
If people start to realise that an 'approval' rating in the mid-high 30's is actually a 'disapproval' rating in the mid-high 50's and low 60's, the CinC (chimp in charge) is going to take a hard fall.
You know, just sayin'.
If we add to this the coming bursting of the real estate bubble then we will be in deep sh**.
Posted by sdkcj at November 14, 2005 08:24 AMBooms and busts are the norm. The bigger the boom, the bigger the bust. This applies to tulips and internet stocks. It'll probably apply to real estate.
We saw a huge boom in the 90's, that ended with wild speculation in 1999. That all ended in 2000.
Real estate is a little different than stocks, though. As long as people can make their mortgage payments, I wouldn't expect panic selling. Real estate isn't as liquid as stocks. With rising inventories, it could take months (or longer) to sell a house.
In order for real estate to fall drastically, you need a catalyst. Rising unemployment would be the big one; where folks are forced to sell their houses. Rising interest rates could impact it, but we're still near historic lows in rates.
The big worry comes for defined benefit pension funds. Many or most of these are underfunded and couldn't withstand another dip in the stock market. Many have diversified into real estate to bolster returns. I fear that if we're in another longer term bear market, like we had from 1929-1940s or 1966-1982, then pension funds are in a world of hurt.
Which means the PBGC is in a world of hurt.
Which means the taxpayer is in a world of hurt, because we have to bail out the PBGC.
Posted by muckdog at November 14, 2005 09:49 AMI should add that currently, I'm bullish on the economy. I think we're still in the economic expansion that started in 2002. At some point I think that this expansion will end, but in my opinion that's down the road.
Posted by muckdog at November 14, 2005 09:51 AM