Americans should invest abroad - Wasik

Writing in Bloomberg yesterday, John Wasik considers how Americans should invest, since homes, equities and bonds all seem poor value. He recommends high-yielding foreign (i.e. non-US) equities, something Peter Schiff (Crash Proof) has been tipping for quite a while. This, he thinks, will provide yield but also hedge against further falls in the dollar's exchange rate.

Energy crunch = higher food costs

Continuing the theme of energy demands, the Contrarian Investors' Journal comments that the search for alternatives to oil is causing inflation in food prices.

Energy crunch?

Frederick Sheehan's article Reaping the Whirlwind, originally posted in Whiskey & Gunpowder, is reproduced today in Prudent Bear. The prose is rather poetic, but the issue is how an overheated world economy is straining the world's capacity to grow energy supplies to cope. Worse still, new housing designs in the US and upgraded housing in the developing world, are building-in permanent excessive energy demand.

Safe Haven suggests Dow 9,000 "in the intermediate term"

Chartist Robert McHugh at Safe Haven reads the runes and predicts a significant correction for the Dow - in real terms (i.e. as measured against gold), if not nominal terms.

How far to fall? iTulip on the Dow and house prices

iTulip shows charts that follow the Dow and house prices, comparing them with inflation over a long period. The implication of the way this information is presented, is that stocks are about 100% over trend, or to put it another way, have a 50% fall to get to the trend line, and house prices would have maybe a third to lose.

I would guess that in terms of crystallising loss, this is more significant for equities than for real property, because you have to live somewhere.

News hub for sub-prime mortgage issue

A contributor has kindly alerted me to a blog that explains the issues and collates news items - please click here. Sub-Prime Mess is now also on the link list (see sidebar).

Subprime mortgages: bad news and more to come

Following the collapse of Braddock Financial's $300 million Galena Street, Reuters (6 July) looks ahead to what other hedge funds will have to report.

The Mogambo Guru includes subprime loans in his latest Daily Reckoning rave. I do hope someone posts his Agora Financial conference speech onto YouTube.