Wednesday, September 5, 2007

And oh by the way...the WSJ chimes in....

with two interesting stories. The first is Chicago-specific, and the gist of it that Chicago sale prices could end up in the "doldrums" more than (presumably) NYC, SF and LA because (a) rents are not skyrocketing as much, (b) of credit concerns and (c) vacancies are higher than in the other majors.

If I were worried, (b) would trouble me the most. And a story about Libor "defying gravity" (someone there clearly is a Wicked fan) caught my interest in that regard. Yes, Virginia, the Fed cannot control the global markets alone. Libor and the federal-funds rates are not tracking each other as closely, in part because of a reluctance of European banks to make dollar loans. And with 3-month dollar Libor contracts in the 5.75% range, you are looking at some much higher borrowing costs that have to be factored into , again lowering prices (and mo creating opportunity). Again, as mentioned in my last post, the best alternative for a dirt investor is to stay out of loans that are locked in for lengthy periods. Carry the higher debt for now and move on when the time is ripe.