Property prices in China fell again last month in most of the 70 cities the National Bureau of Statistics measures. Forty-six cities had declines, a trend which has gone on for months. It is too early to tell whether this is a U.S. or Spanish style collapse of housing that will wipe out billions of dollars in property values or an adjustment in which the real estate market can catch its breath after years of upward movement. China has loosened bank reserve rules, so a supply of capital may revive the market. Or China may be seeing a bubble burst. There are two causes, if this happens. The first is a wild run in speculation as a means to make quick money. The other is purchases of real estate as people move to China’s cities to find manufacturing jobs. As the economy slows, so might this migration and the pay levels of many of the middle class. China could have millions of dollars of underwater mortgages if that occurs. And its consumers might lose much of their ability to spend money on less expensive goods and services as they struggle to keep their homes.

Gas and Oil Prices

Gas and oil prices continued to sell down on worry that the problems of Europe could spread across the world and tip many nations back into recession. Concerns about Europe also have put a cap on oil use there. Oil was off another eight cents and dropped to $92.27, near a multimonth low. The average price of a gallon of regular gasoline dropped again yesterday, according to the AAA Fuel Gauge. It fell to $3.713, down from $3.899 a month ago and $3.926 a year ago. The dip may cause an uptick in travel among Americans this summer. That would tend to simulate the economy as people spend money on vacations, even if they are modest ones.

Galaxy III Launch

Samsung’s launch of its new Galaxy III smartphone has begun to look like an Apple (NASDAQ: AAPL) iPhone event. Nine million of the model have been preordered worldwide. The number is even more impressive since the smartphone will not be available in the United States for months. Samsung is considered the only viable competitor to Apple. And the Galaxy III will be released before the iPhone 5, which probably will not launch until fall. Samsung has developed an important edge over Apple that the American company cannot easily overcome. The Galaxy III runs on superfast 4G networks. These networks have become the core of most wireless subscriber marketing campaigns. With the Galaxy III, Samsung will extend its advantage.

Yahoo! Changes

The trend of never-ending executive changes at Yahoo! (NASDAQ: YHOO) continues. New interim CEO Ross Levinsohn fired some of the people predecessor Scott Thompson hired. The most notable of these worked with Thompson at the eBay (NASDAQ: EBAY) PayPal division. This executive — Sam Shrauger — is gone. Levinsohn also promoted executives to take over Yahoo!’s large global media operations, which was Levinsohn’s job until recently. Levinsohn giving up his previous position is a sign that he plans to stay as CEO. Levinsohn also folded e-commerce operations, the core of Thompson’s turnaround plans, back into the company’s traditional structure.

Douglas A. McIntyre

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