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- Triad apartment vacancy rate lowest in a decade – Greensboro – The Business Journal
Catherine Carlock reports on the Triad of North Carolina:
The Triad's white-hot apartment market is continuing its streak.
The region's average apartment vacancy rate is the lowest in a decade, with total occupancy reaching nearly 93 percent in September, according to the most recent report from Charlotte research firm Real Data.
- BOJ policy working, still has room to boost stimulus: IMF | Reuters
Leika Kihara reports:
Some analysts believe the central bank may have to expand its stimulus next year if wages do not rise much or a rise in the consumption tax in April triggers a downturn in the economy.
"There's a danger of appearing too reactive and changing your policy too quickly," Schiff [Jerry Schiff, International Monetary Fund's mission chief to Japan] said, adding the tax rise did not automatically serve as a reason to expand monetary stimulus.
From our previous reports, it will be obvious to you that we disagree with Jerry Schiff's analysis.
- Four Intriguing Ideas for How to Fix the Banks – Businessweek
Peter Coy reports:
Writes Konczal [Mike Konczal, a fellow at the Roosevelt Institute]: "It may be that the Federal Reserve, instead of just announcing a single interest rate, also announces several other metrics that it uses to ensure full employment and price stability—something like the ratio on bank capitalization."
We have always advocated strong ratios (10:1). Weak ratios (40+:1), among other causes, made the recession "Great."
- Bubbles in the Broth by Nouriel Roubini – Project Syndicate
Nouriel Roubini writes:
… some critics, like Fed Governor Jeremy Stein, argue that macro-pru policies to control credit and leverage — such as limits on loan-to-value ratios for mortgages, bigger capital buffers for banks that extend risky loans, and tighter underwriting standards — may not work. Not only are they untested, but restricting leverage in some parts of the banking system would merely cause the liquidity from zero rates to flow to other parts of it, while trying to restrict leverage entirely would simply drive the liquidity into the less-regulated shadow banking system. According to Stein, only monetary policy (higher policy interest rates) "gets in all of the cracks" of the financial system and prevents asset bubbles.
The trouble is that if macro-pru does not work, the interest rate would have to serve two opposing goals: economic recovery and financial stability. If policymakers go slow on raising rates to encourage faster economic recovery, they risk causing the mother of all asset bubbles, eventually leading to a bust, another massive financial crisis, and a rapid slide into recession. But if they try to prick bubbles early on with higher interest rates, they will crash bond markets and kill the recovery, causing much economic and financial damage. So, unless macro-pru works as planned, policymakers are damned if they do and damned if they don't.
We concur with Nouriel Roubini. How about you?
- JP Morgan sees 'most extreme excess' of global liquidity ever — Telegraph Blogs
Ambrose Evans-Pritchard reports and writes:
If you think there is far too much money sloshing through the global financial system and causing unstable asset booms, you are not alone.
A new report by JP Morgan says the bank's measure of excess global money supply has reached an all-time high.
The wash of money has set off another asset boom, yet the world economy has failed to achieve "escape velocity", and is arguably still in a contained depression. Global trade volumes contracted by 0.8pc in August. (It would have been a lot worse without QE of course, though we can never prove it).
If we ever need more QE it should go straight into the veins of the economy by direct deficit financing of big investment projects (fiscal dominance) and damn the torpedoes, and the taboos. Just print money to build houses for the poor, and solve two problems at once. Remember, I said "if", before you Austro-liquidationists and coupon rentiers all scream abuse at once.
Too much loose/aimless cash being used to speculate on assets rather than solid places to put where the results would be Main Street productivity increases, higher wages, more full-time and permanent jobs, etc., …
- Starwood Property Trust Announces Spin-Off Of Single-Family Residential Business — GREENWICH, Conn. /PRNewswire/ —
GREENWICH, Conn. /PRNewswire/ — Starwood Property Trust (NYSE: STWD) today announced that its Board of Directors has unanimously approved a spin-off of its single-family residential business to its stockholders. The newly formed real estate investment trust (REIT), to be called Starwood Waypoint Residential Trust, will apply to list on the New York Stock Exchange and trade under the ticker symbol "SWAY." Upon completion of the spin-off, SWAY will be one of the largest publicly traded investors, owners and operators of U.S. single-family rental homes and non-performing residential mortgage loans ("NPLs") in the United States.
SWAY Management, an affiliate of Starwood Capital Group, will serve as the manager of SWAY. In connection with the spin-off, Waypoint Real Estate Group ("Waypoint"), a leading vertically integrated single-family rental operating platform, will merge with SWAY Management. Terms of the transaction were not disclosed.
As of September 30, 2013, Starwood Property Trust's single-family residential portfolio, which will be owned and operated by SWAY following the completion of the spin-off, consisted of approximately 5,817 units in single-family homes and NPLs, totaling approximately $750 million of invested capital.
- South Bay's Apartment and Condo Tsunami | The Registry
Rob Goszkowski reports:
There is a bulge in the pipeline of South Bay multifamily unit inventory, particularly San Jose [California], and it has only begun to arrive. Those companies that were flush or fortunate enough to find financing when little was available are completing their projects in the midst of immense demand. And yet those developers that are in the earliest stages of multifamily projects today are confident that their efforts will be rewarded even as the crush of new inventory hits the market.
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