Saturday, April 08, 2006

Miami Housing Bubble's Bust

This year is shaping up a lot like 1987. Back then, we saw speculation in commodities and stocks in general (though in a much, much milder form than exists now). We also had a new Fed chairman -- Easy Al Greenspan succeeded Paul Volcker as chairman that summer. And, ultimately, we had a stock-market crash.

For such an event to happen, a number of market forces will need to align themselves in a certain way. Given the impossibility of predicting when that alignment will occur, we can only try to position ourselves as it develops -- though, in the very short run, I have almost no shorts, as the path of least resistance seems higher for the moment.

Certainly, there have been plenty of data points suggesting trouble in various formerly hot markets of the U.S., including Miami.


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