Lately, its been all about 4H

No, not the 4H program people joined in high school. Instead i’m talking about the 4 H’s that have recently been plastered all over the business publications – hedge funds, healthcare, housing and lastly Hindustan (another word for the entire Indian subcontinent).

Hedge fund have been getting an insane amount of press for several reasons, the amount of capital that is coming into the funds, lack of SEC oversight and the GM/Ford debt downgrade scare that many people thought would slam many hedge funds. The reality is that very few funds were on the wrong side of the trade in regards to the debt downgrade.

Healthcare is a systematic problem that no one wants to touch with a 10 foot pole, it’s like a hot potato. When GM announced disappointing earnings it talked about its rising healthcare costs. Every big company is under pressure to cut benefits, but no company seems to want to take the health care providers to task and hammer out a solution. Till then the costs will continue to rise.

Housing is out of control in several markets including where i live in Los Angeles. I have seen houses near where i live double and even triple in price and there seems to be no end in sight. The main driving force behind this pricing boom is with the use of “interest only ARM’s.” In Southern California in 2001, under 2.0% of the mortgages were “interest only ARM’s”, however today the number is just north of 50%. I’ve been calling for a crash for 3 years and have given up on calling it.

Hindustan (aka India) – This is the place to be for business. Every private equity house is setting up shop in India, hedge funds are rushing in and most surprising is the number of new airline carriers coming online. At the 2005 Paris Air Show, many of the largest deals signed by Boeing or Airbus were from Indian carriers such as Jet Airways, IndiGo and Kingfisher Airlines.

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