Interest Rate Roundup

Saturday, September 02, 2006

Vacation's over ... time to get down to business!

I love vacations, that's for sure. Nothing like some R&R to recharge the batteries. But after the holiday weekend, it'll be time to get back to business.

In the meantime, a couple quick observations ...

1) My weeklong trip was a cruise out of Miami, Florida. Everything you've heard about how insane the condo building boom is in Miami is true. I literally counted 15 cranes throwing up buildings off the north side of the ship before we sailed out of port. There were probably another 20 or more visible to the west and southwest. And these aren't little tiny buildings going up either. Some looked to be 40 to 50 story behemoths.

The last time my wife and I were down there was in February 2004 when we took a quick trip to South Beach. The city was already getting overbuilt with empty specu-palaces back then (meaning there were several "dark towers" with only 20% or so of the units having lights on at night -- indicating flipper/investor buyers rather than owner-occupants). It is getting much, much worse now.

2) This housing bubble isn't just confined to the United States, either. There were cranes all over San Juan in Puerto Rico, too. And the bus driver on our shore excursion there couldn't stop talking about how much house prices were going up/had gone up. I'm not sure if he was just in awe/shock or looking to get a piece of the action himself. But it's telling that he brought this topic up unprompted by any of us on the tour ... and continued to talk about it for an extended period of time.

3) It looks like things got a bit more ugly in the states while I was away, too -- There was a big crash in pending home sales for July ... a big decline in construction spending ... and more trouble/downgrades in subprime lending land. I won't rehash old news, but suffice it to say, it comes as no surprise to me.

Anyway, good to be back in the saddle. Enjoy your Labor Day weekend!


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