The Decline of Great Cities

Bill Bonner reports on Detroit:

The 65-story David Stott building, for example, is on the market for $3.5 million. For less than a million you can buy a 12,000 square foot Italian renaissance-style mansion, complete with an intricate, hand-carved walnut main staircase and imported wood paneling throughout.

"That may seem like a bargain," says a CNBC reporter, "considering the 1915 limestone house sits on over 2 acres and is just 3 miles from the city center. But then again, this is Detroit, Michigan."

Speculators hope that Murder City might once again become Motor City. But they should ask instead why it is that last year, as rental rates across the United States rose an average of more than 6%, in Detroit, rents couldn't even climb 1%.

Investors might do better to look at Liuzhou, China, where GM is producing its new Wuling Sunshine mini-van. In 2002, China made a million cars and trucks. By 2020, it's expected to produce 15 million units, more than the United States. How can Detroit stage a comeback with that kind of competition?

Something to think about.