Nearly six months ago, from Costa Rica, I posted "Bush and Congress Agree on Bailout Blunder?" The more things change, the more they stay the same.
If you read the footnotes to banks´balance sheets, banks are getting decimated by write downs of assets caused by mark-to-market accounting. They then go to TARP to replace some of the "lost" equity, go to Congress to get publicly whipped by folks who should know better, but don´t, and go to the market to raise new capital, when they can, at extraordinary cost to their existing shareholders. And we wonder why banks don´t lend. Or why times are tough. Or why frauds are uncovered when the financial tide goes out.
Meanwhile, down here in Costa Rica, a funny thing is not happening. By and large, real estate prices are not going down. (Big exception: raw land.) Sales activity has slowed dramatically, but the slowdown is not reflected in prices, at least not yet. And life goes on, sunny and hot here at the beaches.
What is happening is that vacation rentals have fallen dramatically. What would have cost you $1,000 a week a year ago, for a one week stay in a quality condominium, now can be had for $600. Plus, air fares are dirt cheap. One charter from Edmonton, Canada could be had last week for $312 (CAN $400), about the same as a flight from Miami.
Costa Rica has always had a reputation as a good place to hide out. Time for you? Try it for a week, stay forever.
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