HousingPANIC has a Special Message for our new landlord and owner, Communist China

China, sitting $414 billion in US treasuries (that won't get paid back) and over $100 billion in US mortgage backed securities (that won't get paid back), and over $1 trillion total in US dollars (that are becoming toilet paper), plus a recent big investor in Blackstone's hilariously failed IPO (man, that's gotta hurt), has gotta be getting PISSED OFF lately. Welcome to American capitalism comrades, where you can get suckered by con-men and lose it all!

Seriously, could the royal screwing of these corrupt communist jackasses, who helped ruin America with their evil cozy partner Wal-Mart, be any more perfect?

A Special HousingPANIC message to the corrupt leaders of Communist China:

Thank you for selling us all that cheap crap these past few years and enabling our housing bubble by artificially surpressing our interest rates.

Thank you for ruining our manufacturing base by manipulating your currency and dumping your goods on unpatriotic and clueless Americans. And thank you for destroying the character of our towns and cites by enabling your evil partner Wal-Mart to destroy its competition with an endless supply of cheap dangerous crap from your sweat shops.

And by the way, you really didn't think we'd ever pay you back, did you?

Sincerely, HousingPANIC (and the Deadbeats of America)

China shying from shaky US mortgage market

While China is eager to invest a portion of its US$1.33 trillion foreign-exchange reserve overseas, it is unlikely to take a chance on buying additional US mortgage-backed securities (MBS) as they are now considered too risky, Chinese economists said.

"The Chinese economy is benefiting from high-yielding, safe investments in US mortgage-backed securities. Here at home, American homeowners are benefiting from lower interest rates on mortgage loans resulting from greater Chinese demand for these securities," Jackson said.

It's easy to feel richer when things you own have "soared" in price. But are you? Welcome to the world of inflation and dollar depreciation

It's a classic trait during the early stages of inflation that people feel rich as the perceived value of their assets denominated in their currency shoots up (stocks, houses, art, etc)

But then they slowly come to realize that they're indeed not rich, as the buying power of their currency ain't what it used to be. But this takes some time to sink in, especially since they're feeling so rich and flush with cash - who cares if it costs more to go out - my house doubled in value! And ESPECIALLY if the government who reports the inflation data has completely cooked the books.

So here's a standard night in London. $16 for two pints, and $22 for a burger and chips. Then to a movie, which is $20 for the ticket, $10 for the popcorn and $8 for a coke. Times two that's $152 for a cheap night out.

Remember when $152 for beer, burgers and a flick would have seemed insane? $152 used to be a four-course at Ruth's Chris folks. Like just a few years ago.

The dollar is quickly becoming worthless. And 99% of Americans don't think it effects them, and hey great news the Dow was up 1% last week!

Oh, won't they be in for a surprise...

The government is reporting 2.7% inflation. Anyone think that prices are only up 2.7% vs. last year? Sure, the price of homes and rents are crashing, but what about everything else? Want another hint? Just check out the price of corn, or any other commodity.

2.7% ain't even close folks. Ain't even close.

Why is the Dow up even after the CDO blowup? Here's some ideas, add yours

First and foremost, stocks prices do not equal house prices. Why trolls don't get this I'll never understand - the two are mutually exclusive. iPhone prices don't equal home prices either, FYI.

Here's a few reasons I see for stocks going up recently:

1) Investors frantically getting out of depreciating dollars and into stocks. One share of IBM going up while dollar is tanking means it takes more dollars to buy that one share of IBM, so IBM shareholders may feel "richer" when indeed they may be poorer. And meanwhile I paid $18.00 for 12 chicken wings here in London the other day... Get it?

2) Bond investors, especially mortgage-backed CDOs and US treasuries, selling their bonds and moving funds into stocks

3) Overleveraged hedge funds, on the verge of blowing up and shutting down, rushing into stocks short term, trying to get the sheeple excited before they get the F out of Dodge

4) Venture cap money is sloshing around in a big way buying up public companies. Buy-outs and rumors of buy-outs driving stocks higher and higher

5) Dead real estate money still looking for a place to go and stocks are a natural

6) Classic flight to safety after the CDO S&P Bear Stearns news with the multinational mega-caps leading the way

7) Hank Paulson and the PPT working overtime

Yes, this will all end and end badly. But enjoy the ride until it does. One BIG fallacy is the view of most that they can ride the wave and get out at the first sign of trouble. What happens when everyone wants to get out at the exact same time? Anyone remember September 12th? Anyone remember Black Friday? Anyone alive in 1929?

My COP, EWJ, EWZ, EWG and my miners are doing fine, I covered my homebuilders last week (pigs get fat hogs get slaughtered, gotta love 100% - 200% gains), I enjoy 5.5% to 6% CD's and savings, and I'm short IndyMac, Countrywide and Retail Holders today. And I wish I had picked up gold at $640, was waiting for my $630 target that never came.

With oil coming up on $80 again, CDOs and hedge funds blowing up, consumer confidence plummeting, housing prices in freefall, and wars and rumors of war all over the place, it feels dangerous out there.

How 'bout you? Where's your money? Are you on offense or defense? And do you understand how the dollar collapse affects you?