"At Berkshire we held only one direct currency position during 2007. That was in -- hold your breath -- the Brazilian real. Not long ago, swapping dollars for reals would have been unthinkable. After all, during the past century five versions of Brazilian currency have, in effect, turned into confetti. As has been true in many countries whose currencies have periodically withered and died, wealthy Brazilians sometimes stashed large sums in the U.S. to preserve their wealth.
But any Brazilian who followed this apparently prudent course would have lost half his net worth over the past five years. Here's the year-by-year record (indexed) of the real versus the dollar from the end of 2002 to year-end 2007: 100; 122; 133; 152; 166; 199. Every year the real went up and the dollar fell.
Moreover, during much of this period the Brazilian government was actually holding down the value of the real and supporting our currency by buying dollars in the market."
full article here...
http://online.wsj.com/article/SB120432105199503761.html
His full stickholder's letter can be found here...
http://online.wsj.com/public/resources/documents/berkshire2007.pdf
Slate on: Are foreclosures all badness?...
"After a foreclosure, one family moves out, and another moves in. We see the sad faces of the people moving out, but we don't as often see the happy faces of the new homeowners moving in. Nevertheless, those happy faces are out there, and we should not discount them.
That's important, and it's important in a larger context. Often when it comes to economic policy, some effects—in this case, the genuinely moving stories of good people who can't afford to live where they've been living—are highly visible, while others—the genuinely moving stories of good people who can now achieve their dreams of home ownership—are less well-publicized. That doesn't make them any less real."
full article here...
http://www.slate.com/id/2185303/
Barrons on: Bubble Headed Greenspan...
"DID ALAN GREENSPAN ONCE PROPOSE THAT ADJUSTABLE-RATE mortgages be sold more aggressively to the average homeowner? For this reader, at least, that was the most shocking charge of all in this indictment of the former Federal Reserve chairman, and it momentarily strained credulity.
But it's true. Authors William Fleckenstein and Frederick Sheehan introduce the damning quotes from Greenspan by informing us that "he told homeowners that they had been acting too conservatively." And while the reference to the audience's identity turns out not to be literally accurate, it is close enough."
full article here...
http://online.barrons.com/article/SB120432906225604319.html
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New Yorker on: Homeownership can increase unemployment?...
"Homeownership also impedes the economy’s readjustment by tying people down. From a social point of view, it’s beneficial that homeownership encourages commitment to a given town or city. But, from an economic point of view, it’s good for people to be able to leave places where there’s less work and move to places where there’s more. Homeowners are much less likely to move than renters, especially during a downturn, when they aren’t willing (or can’t afford) to sell at market prices. As a result, they often stay in towns even after the jobs leave. That may be why a study of several major developed economies between 1960 and 1996, by the British economist Andrew Oswald, found a strong relationship between increases in homeownership and increases in the unemployment rate; a ten-per-cent increase in homeownership correlated with a two-per-cent increase in unemployment."
Full article here...
http://www.newyorker.com/talk/financial/2008/03/10/080310ta_talk_surowiecki
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