Tuesday, August 4, 2009

Coming to you live from sunny Santa Monica

Well, Inoculated Investor headquarters has officially moved to the west coast. I don't anticipate the quality of the content to suffer or my dedication to the site to dissipate. I actually hope the warm weather inspires me to provide even more valuable material. So, here's to the start of my new life in California. I am still in the process of getting an internet connection for my new apartment so forgive me if the posts are sporadic over the next few days.

Best and worst commercial real estate deals: Anyone who follows my blog knows that I am very concerned about the state of the commercial real estate market. I fear that the regional banks still have significant exposure to CRE loans that may turn disturbingly toxic. Having said that, not all CRE-related deals go bad. The Real Deal put together a list of the 15 best and worst deals. Here are a few I thought were interesting:

1. Bruce Ratner's pending purchase of the Vanderbilt Yards site in Brooklyn from the MTA for $100 million
2. Developer Avi Shriki’s 10-year contract to rent out his failed luxury project in Crown Heights as a shelter for the homeless

1. Boston Properties' purchase of the GM Building for $2.8 billion, or $1,473 per square foot
2. Tishman Speyer's purchase of Peter Cooper Village and Stuyvesant Town from MetLife for $5.4 billion


Double dip recession on the horizon? This is a post from Naked Capitalism I got from Seeking Alpha. In this piece Edward Harrison does a nice job of explaining why we could see a technical recovery and discussing the most recent previous double dip recession in the early 1980's. He argues that at a certain point the economy could just stop falling and even if the consumer numbers continue to be weak, government spending (as it did in Q2) could add a lot to GDP. The problem is that if the consumer is under constant pressure to rebuild his or her balance sheet and then government spending tails off, the excess capacity in the economy could lead us back into a recession.


Martin Hutchinson takes on China again: Here is this week's missive from The Prudent Bear in which he continues his crusade to warn us about what is going on in China. Here is a little teaser that should entice you to read the entire thing:

"Shares are trading at 35 times earnings. Banks in the last six months have lent more than the entire Gross Domestic Product for the period. Interest rates are below the inflation rate, while monetary growth is far above it. The seven largest bond transactions in the world in 2009 were domestic deals in this country.

Looks like a bubble to me, and bound to end in tears. In a Western economy, one would be sure of it. So why should we think China's different, and what would be the effects of a Chinese economic meltdown?"

I am going to keep posting material that questions the sanity of pumping billions of dollars into the Chinese stock and real estate markets so that no matter what wonderful GDP numbers the Chinese come up with you keep in mind the potential for a nasty bubble popping.


Curious to learn more about the writers at Zero Hedge? Check out this link in which Tyler Durden gives some background on himself and his colleagues as well as the reasons for starting the blog. No matter what you think of the crude language, anonimity, and bearish take on the world economy, it is hard to argue that Zero Hedge has not created a very positive outlet for free speech in the blogosphere. These are troubling times and all investors need access to information that they agree with and disagree with. It is the only way to stimulate valuable debate that could help us get out of the current crisis.


(Picture courtesy of www.legendsofamerica.com)