The party’s almost over — but not in the land of the weeping camel

The Dow Jones Industrial Average of leading US stocks passed 13200 for the first time last week, after its strongest run (23 rises in 26 sessions) since 1955. The S&P 500, a broader indicator, stood at just over 1500, a fraction below the record high set in the final spurt of the dotcom boom. London’s FTSE-100 index, at 6600, is not far behind. Both markets are being driven by a fever of takeover activity and rumour in the ‘digital media’ sector, including talks between Microsoft and Yahoo and an approach to Reuters from the Thomson empire of Canada — all ominously reminiscent of the AOL-Time Warner deal, announced in January 2000, that was subsequently judged one of the most value-destroying mergers of all time.

And as if this isn’t enough evidence that the global balance of money and sense is wobbling dangerously again, the Daily Telegraph tells us that ‘savvy investors’ are snapping up real estate in Ulaan Baatar, capital of Outer Mongolia. ‘Our main clients are wealthy bankers purchasing with dollars, which with the current exchange rate is very favourable to British buyers,’ a property consultant explains. OK, I accept that overseas house-hunting has become a new national pastime — and when Merryn Somerset Webb tells us this week that Berlin is the hottest new hot-spot, I’m almost ready to declare, with JFK, ‘Ich bin ein Berliner’. But a luxury condo in the land of the weeping camel, where half the population live in nomadic tents and get their kicks from fermented yak’s milk? Things may have improved a bit since I stared out of a train window at Ulaan Baatar’s crumbling Soviet blocks in the late 1980s, but I still think this is one of the barmiest investment propositions I’ve ever come across.

‘As far as I’m concerned, the party’s only just begun,’ declares the developer of the 14-storey Regency Residence, which will no doubt be the most sought-after address in the entire Gobi desert when it is completed next spring.