Alex Sinclair

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    • Tokyo Silent on Yen's Surge, Nikkei Plunge [view article]
      Japan is competitive. The yen may be higher against the $ but the change against Europe, China, the rest of Asia and most emerging economies is minimal or the yen is actually lower than a year ago. On a trade weighted basis the yen really has not moved much. The real story on yen/$ is a US story and as the weakened US consumer and the rapidly declining housing market will be the story for the next few years. The United States will underperform for some time to come. The yen will rise against the $ as the world comes to realize how serious the decline is in US housing prices and how much of US consumer spending has been equity extraction from housing. Japan's exports to the other parts of the world are growing strongly and Europe is much more dependent upon the US consumer than Japan.
      The Case/Shiller index is a lagging indicator. Pricing is being determined more and more by foreclosures and short sales which do not show up in MLS or median pricing. The median price has also been a lagging indicator until recently as the decline in the # of transactions at the bottom end fell faster than those above and it is starting to catch up with the actual declines in both low end and upper end pricing. This is much more than a subprime problem in the big housing markets; it is a prime problem because pricing is off more than 20% (as much as 40% in the weakest areas) in the Southwest and the Southeast. Most of the other larger states are off 10 to 20% and foreclosures are accelerating nationally. Foreclosures exceeded home sales last month in Las Vegas and San Diego County had more notices of default in January than single family home sales. We are a long way from the end of this problem.       Feb 24 05:24 PM
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