California Dreaming

Ladies – it might be ok to start splurging on that Chanel bag as things are looking a lot better.  Maybe we don't feel it as much in HK which is a bit too finance-tastic or we have too many banker friends laid-off,  but don't get blinded.  Did you know there are more Silicon Valley millionaires than the dotcom hey-day and lots of billionaires this time too. Unfortunately we can’t all work for facebook (be wary of guys who say they do because it’s become quite the pick up line), but seriously good for asset prices (houses and stocks but diamonds too J).  Also, while you may hear bankers complaining about bonuses and lack of cash – don't forget their stock awards are now up 15-20% from where they were awarded just a few short weeks ago.  

Yes European debt crisis is still looming (Greeks are behaving badly) but I don't like armageddon scenarios (I’m a Lehman survivor) and Europe is simply too big to fail.  Bit cliche, I know, but I think that policy response will be a global coordinated effort…I mean seriously can you imagine Europe imploding?  World won’t let it happen.  Although things will be bumpy in the next few weeks with a lot of decisions to be made.  As an aside, I was in Paris and they marked up everything – Pricing adjustments seems to reflect a weak Euro and really nothing was that cheap.  

Recently I made a bet for a business class flight to US with my friend that Obama is going to be re-elected.  I’m so excited for November to see this materialize.  Not because I like Obama but more because I'm confident it will happen.  US is recovering at an amazing pace and housing is coming back in a big way.  Not only because employment is improving but cheap interest rates and (stealing from KRUGMAN here) ‘US is seriously under-housed by historical standards (we’ve built very few houses in the six years since the housing bubble popped) and the sharp fall in household formation — econospeak for lots of young adults living with their parents because they can’t afford to move out.’  THIS IS TOTALLY TRUE, my brother is 25 and all his friends had to move home post college (haha and he too is living with me!).  Anyway will wrap it up here - if you’ve been looking wistfully at California properties (like me), I think it’s time to get serious.