There are some not so good economy headlines today.
Home sales plunge in March reports CNN:
The National Association of Realtors’ Pending Home Sales Index fell 4.9 percent in March, following a 1.1 percent increase in February. The index was down 10.5 percent from the March 2006 reading.
The above is the mortgage bubble bursting and the Boston Globe says there is a Private equity debt bubble that will also pop some time ahead. Additionally there is a huge bubble in the Chinese stock market and Andy Xie warns of China crash.
Until recently Xie was the Asia/China expert with Stephen S. Roach’s team at Morgan Stanley. I’ve always found his writing very solid, though a bit on the pessimistic side of things. But I have never heard him being this bearish:
Xie […] also warned that the global boom in equities would be over by 2008 and that this would coincide with a worldwide recession.
The recession would start from the United States and spiral down into Asia where exporters would be hit, Xie, 46, told Reuters in a telephone interview.
"I think it’s going to be bust very soon," Xie said, adding that a combination of excess liquidity, rising inflation and rich valuations would result in a global crash soon.
"People will be surprised. When the end comes, it’s going to be pretty bad," Xie added.
Yuck!