Tomorrow is already summer solstice - mid-summer, in celestial terms.

How did it get here so fast? Where's the summer?

This morning we walked along the Thames. ITV frequently has its reporters and cameramen along the Southwark quay, interviewing people - for the day's chatty news coverage, we suppose. Today, there was a young woman in a bikini, her back to the river, her face to the camera...talking to a newsman.

The poor thing; it was freezing cold, with strong winds blowing across Waterloo Bridge as though a tempest was coming.

Yesterday, too, the rain pelted down on London, and the wind whipped it against road-signs and windows.

But our beat is not the physical weather. No, instead, our métier is gloomier. It involves trying to take the temperature of the financial markets...and to figure out its seasons. But like any good meteorologist, we begin by looking out the window!

And what a view it is.

Last night, we had dinner with a friend at the Savile Club. There, we met one of London's most successful hedge fund managers.

"Well, there is no doubt that we have a worldwide liquidity boom," he offered. "And there is no doubt that it will come to an end sometime. But a lot of money has been lost guessing when it will be. I don't mind guessing, of course. It's part of the job. And my guess is that this boom/bubble will run for another five or six years. There are just so many more players in the financial markets...and so much more money coming in. None of the restraints of the past are in force now. Remember, many of them were just customary - people felt awkward taking too many risks...or raising too much money...or paying too high a price. Now, the new players don't seem to have those kind of hesitations."

The City of London, which is the equivalent of New York's Wall Street, used to be run by stuffy old men in stuffy old suits in stuffy old offices. A friend of ours worked there in the '60s. He recalled.

"Oh, it was so quaint and so civilized. The partners all wore Derby hats. And a butler would bring around tea twice a day. At 11 and at 4. He wore a morning coat and served the tea, with white gloves, on a silver platter. After tea-time, everyone went home."

Then, how it all changed! The old boys were out. And the new boys were very different. They wore open collared shirts and had degrees in mathematics. And now they work around the clock.

But what are they working at? Ah...that is a good question. You can stand in front of one of their office buildings all day, dear reader. You will see no products coming out of it. Not even smoke rising from its chimneys. For all their sweat, the ultra-smart professionals seem to produce nothing
- at least nothing you can see. Nothing you can eat. Nothing you can sit on. Nothing you can use to brush your teeth...or read for amusement...or kill a varmint with. Neither animal, vegetable nor mineral. The output of the City is intangible.

But people must like it. They pay heavily for it.

Looking out our window, we see what it is. London is covered in molasses. Credit is flowing everywhere, pouring in from every corner of the globe. Rich, sticky...a source of decay. Russians drive around in Lamborghinis. Arabs fill up restaurants. Japanese and Chinese shoppers raid the boutiques.

London is not the most expensive city in the world (that dubious honor falls to Moscow). But London is not far behind, as number two. On the list of the world's most expensive cities, no American burg even makes the top ten. Does that mean the dollar is undervalued? Or does it mean that Americans just don't have very much money...that they can't afford to have a really expensive city?

We don't know. But we have a feeling that the winds of financial climate change are blowing ill to the United States of America. After the storm in subprime lending blew through the United States in the spring, it looked as though the bad weather was over. But there's more where that came from, reports USA Today. Foreclosures in Minneapolis rose 100% in 2006. And they're expected to rise another 100% in 2007. More than a million houses may be foreclosed this year - of which, 60% are the victims of subprime mortgage lending. Nor is the damage expected to stop when the New Year is rung in on January 1st, 2008. There will be even more foreclosures next year, says the Mortgage Bankers Association. Bears Stearns (NYSE:BSC) has got a fever in the subprime chill. Even Goldman Sachs (NYSE:GS) has a few sniffles.

But so far, the pain is being felt only down in the lower depths of American society. The poor, minorities, the disfavored, the underprivileged lads in bad neighborhoods - those are the one who are losing their homes. Naturally, the bleeding hearts are coming forward with the dopiest solutions. The NAACP proposes a moratorium on foreclosures - an act of desperate foolishness, which would almost surely cut off mortgage credit to poor people for decades. And the clowns are rushing in, too - proving once again that there is no situation so bad that earnest politicians can't make worse. The Buckeye State has come up with a cockeyed plan to bail out troubled borrowers. Ah yes...hacks rush in where the seasoned pros of the subprime industry now fear to tread.

But enough of the troubles of the unwashed...let's turn our heads in a different direction. In New York City, another trophy building has changed hands - the old New York Magazine headquarters. It is being sold for $313 million - which works out to $660 per square foot. How much can you rent a place like that for? Well, current rents are about $64 a square foot, not even 10% of the purchase price. Let's see. If the cost of money were only 6%...that would leave the buyer with less than 4% to pay all the expenses...depreciation...maintenance...taxes...management. We're not experts at commercial property investing, but we don't see how these numbers are going to work out.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.