Sunday Morning Reading

Here are a couple pieces you might want to check out …

Story #1: THE HOUSING BUBBLE.

The New York Times reports that the median home price is going to fall this year for the first time since the end of World War II:

Economists say the decline, which could be foreshadowed in a widely followed government price index to be released this week, will probably be modest — from 1 percent to 2 percent — but could continue in 2008 and 2009.

....Unless the real estate downturn is much worse than economists are expecting, the declines will not come close to erasing the increases of the last decade.

Maybe it's living in South Florida (ground zero of the housing bubble) that makes me myopic, but I think the coming implosion is going to be worse than the New York Times believes. Still, a story worth reading.

Story #2: Biofuel boom in India

Jatropha Plant Gains Steam In Global Race for Biofuels

By some estimates, the per-barrel cost to produce biofuel using jatropha -- about $43 -- is about half that of corn and roughly one-third that of rapeseed, two other leading materials for alternative energy. At those prices, jatropha biodiesel would be competitive with fuel made from crude oil without significant government subsidies.

Again, I think this story is being too optimistic. The cost predictions may not hold up outside of the laboratory and the story flatly states:

But unlike other biodiesel crops, jatropha can be grown almost anywhere -- including deserts, trash dumps, and rock piles. It doesn't need much water or fertilizer, and it isn't edible. That means environmentalists and policy makers don't have to worry about whether jatropha diverts resources away from crops that could be used to feed people.

Sorry, but anytime you're "growing" your fuel, you make the choice between feeding your car or feeding people. Farmers who grow jatropha will be using land that could probably grow food. Still, it's an interesting plant. If the Energy Return on Energy Invested (EROEI) is actually as good or better than sugar cane, and you can grow it in all kinds of climates and environments, we could have a winner here.

Check out my new gold and energy blog at MoneyAndMarkets.com