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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (126891)	7/22/2005 2:12:52 PM
From: Henry Niman	Respond to of 793883

The rumors have been heating up for a few days now. The discussion by the students first appeared 2 days ago, but I think the news started to spread last night.

To: carranza2 who wrote (126891)	7/27/2005 9:10:35 AM
From: michael97123	Respond to of 793883

I love this guy. I think you should consider what he says about China. Politically speaking, we dont need any more enemies. Whats happening in NK (a sort of accomodation attempt) and Iran (letting the euros lead) sort of proves this. We have our hands full with sunni terrorists and need at least to neutralize other potential threats. We dont need to be in a trade war with china. China is a comppartnerer of ours in the world. It will never be a smooth relationship but it is one that is key to the success of both nations at least in the short term. Mike Dr. John Rutledge Blog on Technology, Policy, Economics, Investing, and Business. - rutledgeblog.com June prices of existing homes rose 6.3% from May, and are up 14.7% over a year ago. This was triggered by the June drop in long-term rates below 4% that drove the 30 year fixed mortgage down with it. The housing market is not a bubble; this is an interest rate story. The drop in interest rates has caused a massive one-time repricing of the housing stock. The housing market will not collapse because U.S. inflation and interest rates will stay low. U.S. inflation is anchored by prices in India and China. This housing game is in the ninth inning, though. The recent revaluation of the Yuan triggered a sharp rise in Treasury bond rates. Mortgages will follow. Expect a final patooie of activity as people race to buy and refinance fearing the end of low rates. I expect the run-up of prices to stop. Don’t leverage yourself into real estate, but don’t sell your house either. (By the way, stocks are a better long term investment than houses anyway; they have out performed housing 3 to 1 over the last 25 years.) JR (7/26/2005 12:28:21 PM) George Melloan is a Brilliant Man You need to read George Melloan's GLOBAL VIEW column on the op-ed page of today's Wall Street Journal. There are two reasons why I think George Melloan is a brilliant man. First, George mentioned the Rutledge Blog today. Second because, well, he really is. I have known George for about 25 years, since I wrote my first op-ed for him and Robert Bartley on why US rates would fall in spite of budget deficits. He is vastly experienced on both the ideas and the practice of global economics and investing. And he is dead right today to tell the US government to knock off our raging China-phobia before we make a real mess. As George points out, China's government has a difficult policy problem. They have to deliver rising living standards fast enough to keep the Chinese people off the streets. There are currently some 200 million migrant workers in Chinese cities who have left their farm and state company jobs in the countryside to do construction labor and other day jobs. Last week's political disturbances in the Shanghai suburbs should be a reminder that a major stumble in their growth rate could cause problems we don't want to see. China's fixed exchange rate against the dollar was a valuable source of stability for both countries. By pegging against the dollar, the Chinese authorities had essentially outsourced the Chinese inflation rate to Alan Greenspan & Co. And it took both currency and inflation risk off the table for foreign direct investors. I have made it no secret that I believe forcing China to revalue the RMB was a major policy blunder. But the damage could still be contained. The big question is whether currency speculators will get their jaws around the RMB. Normally, the answer would be "of course they will." But the RMB is still not freely convertible, which makes speculation slower and more costly. Ironically, last week's move will increase hot money flows into China and could actually put off the day when China will be able to have a convertible currency with a market determined price. JR Still own EPP (pacific ex-Japan) and EWY (Korea) to collect gains in Asian markets from the repricing. (7/26/2005 10:39:16 AM)