Housing Doom Housing Bubble Blog

I’ve been invited to appear on the Charles Goyette show on KFNX 1100 AM here in Phoenix, 7:30 a.m. MST on Friday morning.  If you are out of the Phoenix area, or prefer to listen live on your computer, you can catch the show by clicking the "On Air" button here.

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I swore I wouldn’t post a Jim Cramer video again, but when Cramer starts raving on that  "Cuomo says, ‘I’m going to shut down the mortgage market,’" because of the New York Attorney General’s probe into Washington Mutual, Fannie Mae and Freddie Mac, well, you’ve just got to see it.

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Ambrose Pritchard of the Telegraph is reporting this morning:

The French president, Nicolas Sarkozy, has warned the United States Congress that the US risks triggering "economic war" if it attempts to devalue its way out of trouble by allowing a relentless slide in the dollar.

The stunning remarks came as the greenback plunged to a record low of $1.4731 against the euro, causing a chorus of angry protests from industrial leaders in France and Italy. The dollar breached $2.10 against sterling for the first time since the early Thatcher years in 1981. On Wall Street the Dow tumbled 246.40 to 13,414.50.

Mr Sarkozy spared no sensitivities as he launched into a full-blown attack on the Bush Administration. "The dollar cannot remain solely the problem of others. If we are not careful, monetary disarray could morph into economic war. We would all be its victims," he said.

"Those who admire the nation that has built the world’s greatest economy and has never ceased trying to persuade the world of the advantages of free trade expect her to be the first to promote fair exchange rates." Stephen Jen, an analyst at Morgan Stanley, said the dollar fall had become alarming. "This has been driven so far by Middle Eastern and Asian central banks, but there is a risk that hedge funds will start to join in, and they can be very powerful," he said.

"The most dangerous threat is that the yen will snap back and destroy the ‘carry trade’ before anybody has a chance to unwind positions."

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