US mortgage GSEs: Bank of China is taking cover

The Chinese have been reducing their investment in Freddie and Fannie (htp: Alice).

A snippet from Alice

Just a reminder from Alice's powerful Picasa presentation on house price trends (see also her Youtube version - top of sidebar).

Advisers and analysts who haven't been in the game long enough to yellow their teeth, may be emotionally unprepared for severe and enduring reversals of fortune.

No stagnation, but a house price crash

A carefully-reasoned post by "Alice Cook" on UK Housing Bubble concludes that house prices will drop 25% quickly (by the end of next year).

The alternative (house prices stagnate, allowing inflation to achieve the same result more slowly) has become unsustainable because of fears respecting the stability of the banks.