During a recent trip to the US, I spoke with several players in the domestic property and tourism industry. The reality of the current US market is a stark reminder of how quickly tides can turn.
According to analysts, as much as 60% of investment in second homes and vacation properties bought from 2006 is now in negative equity.
The market value of that new holiday house you bought is now lower than when you invested in it.
While these remain paper losses until such time as a property is sold, it's a strong indicator of a recession. Retail brokers are reporting that transactions involving such properties are now flat with no expectation of uplift in the near future.
Turning to world financial markets, petrol futures trading for 2016 is now in excess of US$160 a barrel, with today's prices now over US$130.
The significance of this is that long-term futures are now higher than the current price of the commodity. Petrol prices are affecting airlines, with direct flights to Los Angeles and New York by Thai Airways and Singapore Airlines now rescheduled due to higher fuel consumption for the long-range Airbus A340.
On the supply side, levels of fuel production have been underestimated by the production giants and growth in emerging economic tigers - Russia, Brazil, India, China - is not forecast. Everything points to oil prices approaching US$200 a barrel in the not too distant future.
As we move through the second quarter of 2008, the fate of the US dollar remains uncertain. While the upcoming presidential election will create a change in US international policy, effects from the disastrous "Bushonomics" era will take several years to reverse.
Historically, there are some benchmarks, with parallels between the current sub-prime debacle and previous savings-andloans crises during the Reagan era. It's going to be a long and arduous journey for the world's leading economy; uncertainy continues to grip most investors' minds.
In Thailand, the knock-on effect for fuel and commodities, such as rice and seafood, is seeing prices rise at hyperinflationary levels.
Labor costs continue to skyrocket as a
