Heard on the Street: Watch for Steeper Yield Curves - WSJ.com

World interest rates are rising at the long end of the yield curve. Since we are funding so much of our economy with foreign debt, this means our own yield curve will steepen as well, meaning higher long-term interest rates on the way. - David

An early warning system for asset bubbles - McKinsey & Company

McKinsey & Co. is working on something really valuable: a predictive model for overheated asset markets (bubbles) like the one we're recovering from now. Key quote from the article, which first appeared in the Financial Times:

"The answer lies not in the level of debt alone, but in the sustainability of debt."

McKinsey & Company - An early warning system for asset bubbles

The right predictive models could be enormously helpful. We probably wouldn't have believed them during the recent real estate run-up, but I'll bet we pay attention going forward. - David

2010 Quality of Life Index

Just for fun, a fanciful view of the best places in the world to live. Note: The publisher is a travel newsletter, not an economic authority by any means! - David

2010 Quality of Life Index

The Housing Bubble: A Worldwide Phenomenon

The major adjustment we've experienced in real estate values isn't at all limited to the United States. The attached, from McKinsey & Co., shows this how home prices have fared in major international economies:

McKinsey Chart Focus

Why? International economies are irreversibly linked by trade, investment, and expectations. Our actions have worldwide implications! - David