The problem in the U.S. is along the east and west coast where zero-down financing was promoted. Wherever there is a bubble, the right conditions had to exist.

The combo of zero-down financing and a fair level of real demand will be enough to start an epidemic of price speculation. But you can take zero-down financing into an area where demand is flat to falling, and the same speculation will not start. Or you could have traditional financing in areas of average demand levels (like Florida last September after the four hurricanes) and there is no excess speculation.

But increase the demand a little, and drop the equity requirements, and it's a new ball game.

Another aspect of the real-estate bubble I believe has to do with the National Association of Realtors (NAR). CNBC offered an interesting "town hall meeting" on the current real estate situation in the U.S. and the NAR chief economist steadfastly advanced the notion that there is no bubble, and that all is well. I think the man lacks credibility.

Moreover, I sense that NAR members themselves are part of the problem. How many realtors today own multiple condo units for "investment"?

If you happen to be a realtor owning four or more units, acquired for no money down, I think you have a problem " but I KNOW you have a conflict. Let's think about how objective is the advice of a person who is on the verge of either making a financial killing or possibly having to declare bankruptcy should the market turn.

Think about the quality of "advice" of a stockbroker if say the NASD decided today to drop margin requirements on equity purchases to zero, and the Dow zoomed to 13,000, say, where your "advisor" was long a ton. If, in that case, you really believed you were still getting objective advice, then I'd suggest there is no hope for you.

I think the same situation exists today with real estate brokers. So, again, ask your real-estate broker how many units he/she/they own.

And, if you are a member of the NAR, believing in the steadfast advice of your chief economist, what are you going to do if later you were to find he is in the same position personally (i.e., up to his neck in ARMs, which may or may not be true)? Would you try to sue NAR for bad advice based on conflict of interest? Or, would you just have to accept the notion that conflicts of interest are systemic problems in your business too?

You see, as long as there are owners of capital who pay for advice, there is a need for that advice to be independent and objective. There is no place in society for people to be seeking "advice" from the sell-side.

As I watched the interesting CNBC Town Hall Meeting on Real Estate, listening to some of those speakers, all I could say to myself is "What a sham!"

As to the question from a reader concerning the effect of demographics (such as aging population) on the condo market, I have to say I'm no expert.

If my recent experience amounts to much, I'd have to say buying into well-managed private nursing homes would be wise. I've seen a lot of old people lately who need personal care and support.

As to the capital markets this week, I suspect the G-7 meeting will play a role. Tomorrow's U.S. trade deficit number also should impact on forex markets. Early this morning, the USD is weak, and gold bullion is up $2.00 to $430.80. Oil is down a fair bit, 58 cents, now at $52.74.