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- Real Estate Developers Adopt New Approaches – NYTimes.com
… many fledgling projects intended as condominiums switched categories to easier-to-finance rentals, contributing to a severe decline in inventory of marketable Manhattan residences, which this September dipped to its lowest level in 13 years. Now, some residential developers who weathered the recession are bringing new projects to market that could begin to mitigate the inventory shortage.
According to Ms. Mack, today's market "has little or nothing in common with what went on before, and that's probably a good thing." She explained: "It brought an end to gimmicks; credibility is being rewarded, and although we're seeing a new generation of development trading for the highest prices ever, it's rooted in a rationality that didn't exist in the last cycle. People understand that in a market with so much more transparency and such tighter lending restrictions, only the best developers are still able to play the game."
- Study: Quake-triggered landslides a significant hazard in Seattle | UW Today
This is very important for among other reasons, earthquake-insurance coverage.
The next big earthquake on the Seattle fault could trigger destructive landslides in the city, potentially affecting a much larger area than previously thought, and in areas outside those currently considered to be landslide prone, a new University of Washington-led study shows.
"A major quake along the Seattle fault is among the worst-case scenarios for the area, since the fault runs just south of downtown." said Kate Allstadt, a UW doctoral student in Earth and space sciences. "Our study shows the need for dedicated studies on seismically induced landsliding."
The Seattle fault crosses Bainbridge Island and cuts across West Seattle and Beacon Hill, just south of downtown, then crosses Lake Washington to the eastern suburbs and the Cascade foothills. The last major quake on that fault was about 900 A.D., and scientists have documented that it triggered giant landslides that caused large tracts of forest land to slide to the bottom of Lake Washington.
"I was surprised to find that a third of the landslides triggered in our simulation were outside of areas currently defined as being prone to landsliding," Allstadt said.
That is because existing landslide hazard zones are defined primarily by considering only landslides triggered by water, the most important factor when analyzing the potential landslide impact. However, it is also important to look at the details of amplified surface ground motion, since that is the second-most important factor, Allstadt said.
Let's hope a major quake doesn't also happen during extreme rain.
- Tentative JPMorgan Pact Said to Hit Snag Over FDIC Funds – Bloomberg
JPMorgan has been in a legal battle with the FDIC over who should pay certain liabilities from the failed thrift [Washington Mutual], which the agency placed into receivership in 2008, selling JPMorgan the remaining assets.
While today's agreement with the FHFA prohibits JPMorgan from seeking money directly from the FDIC, it doesn't exclude reimbursement from the WaMu receivership set up by the agency.
The Justice Department is seeking to preclude JPMorgan from seeking reimbursement from the WaMu receivership in the other part of the $13 billion agreement, according to the person who spoke on condition of anonymity.
The Deutsche Bank case is Deutsche Bank National Trust Co. v. Federal Deposit Insurance Corp., 09-cv-01656, U.S. District Court, District of Columbia (Washington). The FHFA case is Federal Housing Finance Agency v. SG Americas, 11-cv-6203, Southern District of New York (Manhattan).
"…which the agency placed into receivership in 2008, selling JPMorgan the remaining assets." In that case, the agency sold bad assets to JPMorgan. What a strange situation. Was JPMorgan knowingly buying a pig in a poke, or did the agency misrepresent the assets?
- Fed Proposes a Rule to Help Big Banks Stay Liquid in Times of Crisis – NYTimes.com
For decades, central banks have been willing to provide emergency loans to their banking systems in times of stress, recognizing that bank runs can do terrible damage to the wider economy. But if banks come to expect that their central bank will always act as a lender of last resort, they might be encouraged to take excessive risks.
The support "creates potential moral hazard problems," Jerome H. Powell, a Fed governor, said. The new rule "puts private liquidity in front of the taxpayer," he said.
Brokers provide loans to clients to buy securities. To obtain the money that it lends to a client, a broker takes out its own loan, pledging securities as collateral. To ensure it profits on the arrangement, the broker needs to get more in interest on the client loan than it is paying on its own loan. To achieve this, the broker typically takes out a loan that is of a shorter term than the client's loan.
But the new rule could penalize a bank that uses this approach because it assumes the broker's short-term loan would evaporate in a crisis, and a shortfall would occur that would need to be covered. [emphasis added]
After having read the bankers' complaints about this, we still agree with the Fed's suggested approach here. It is better that the banks do not have to depend so readily upon the central bank or the taxpayers.
- Rick Sharga's take on the future of the US housing market | Inman News
Auction.com Executive Vice President Rick Sharga…about the future of the U.S. housing market.
The shadow inventory was overblown by some, but it is still there and seems larger than the figure Rick cited. We think the banks have been understating the number of problem loans.
Of course, many of the doomsayers were expressing their views before Ben Bernanke began the $85 billion a month in bond purchases. That matters.
That said, we agree much, much more with Rick than we disagree.
Also, the fact that President Obama selected Janet Yellen has added to the optimism that policies will be geared toward recovery, albeit gradual, as Rick said.
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