Chris White

China's Inflation Hits American Price Tags

And the 'toxic' financial products the US has sold them? Inflationary or not? What do you think? If inflationary for China, how about for the US too? If not, why the discussion about moving away from the dollar? Oh, and what about the dollar? how would you feel about one of your major assets losing more than 40% in the last few years? That might be inflationary too, wouldn't you think?

There might be others who think there in the same position as China, mightn't there?

Probably be a good thing to look at both sides of the story, or maybe just more than one side. There might be some benefit from that, wouldn't you agree?

Who Is Jerome Kerviel?

How on earth can anyone in their right mind tell the difference between what this one guy was doing from what everyone else who does the same thing every day in this 600 trillion dollar whatever it is does?

Putting a face on the functionary who was playing with 70 billion whatever kind of concretises stuff. But, please, who is going to compare his 'losses' with the 'write downs' at Citi Merrill and who knows where else? What's a write down if not a leveraged bet gone bad?

LIBOR: What's the Big Deal?

I can understand LIBOR and inter bank lending. It was also one of the rates used to calculate those "flow of funds" mortgages which could adjust every month, provide flexible payments and amortize negatively. How does LIBOR function with respect to money markets (currencies) and the other commodities which are traded in London? How do those London markets relate to NY and Chicago?

Or, what might be the relation between the custom built derivatives and the futures, options and indices for currencies, bonds mortgages and commodities which are/were traded in various places?

How do the hedges between these different "sides" of the derivative world work? How do they impact the asset/liability structures of the financial system.

May the LIBOR matter not indicate, perhaps, some major dislocation developing in the interstices between these different markets, tradeable instruments, and the world of hedged on and off balance sheet liabilities?

Housing is No Different in Portland and Seattle

On the moth ball strategy. You'd have to know the details to be definitive. The main one is when they bought the land and at how much per acre. What if they bought 10 years ago? Then the cost of building the houses. They order materials in bulk, for parts of a project, not per unit, so total costs are divided by total acres/units. Labor costs, probably migrant, so on the low end of the scale. Finishing houses is a way of protecting the investment in the land, and other sunk costs. A house without a roof or windows, with holes through the walls for utilities and stuff doesn't weather too well, and is quickly worth a lot less then when it was abandoned. If they've paid local government for water and sewer hook-ups at what they thought was a favorable price, why not use the hook-ups instead of running the risk of losing them?

So their position vis-a-vis the current pricing curve may not be anything like what you'd think at first sight. And their behavior may give some clue about the relative weights of their sunk costs and expected loss in pricing 'power.'