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- Greece's Weak Exports Mean More Deflation Is In The Cards - Real Time Brussels - WSJ
... at some point, Greek exporters will need to ramp up production to help offset the blow to domestic demand caused by public-sector austerity and falling wages. That hasn't really happened yet.
Mr. May ["Ben May, an economist at Capital Economics in London."] also points out that while Greek exporters are enjoying the fruits of lower wages, they are faced with sharply higher financing costs. Interest rates for the Greek private sector have soared over the last three years, pushing many businesses out of existence. Lower wages may largely be helping Greek exporters cling to life.
While lower financing costs would help, it's likely that lower wages and, most importantly, prices will be needed for Greece to generate the export volumes that will lead to recovery, Mr. May said.
Read the source article ... https://blogs.wsj.com/brussels/2013/09/11/greeces-weak-exports-mean-more-deflation-is-in-the-cards/
- A Housing Slump in India - NYTimes com
One longstanding complaint about business practices in India is that the country's banks lend heavily to a wealthy elite who often put very little of their own money into deals. These developers rely on minority investors and bank loans for most of the financing. India's debt tribunals, for companies unable to repay what they have borrowed, have tended to move slowly. They are reluctant to force founders of companies to incur large losses even in corporate reorganizations in which creditors and minority investors lose heavily.
Raghuram Rajan, the new governor of the Reserve Bank of India, said at his inaugural news conference last Wednesday that he would try to change this. "Promoters do not have a divine right to stay in charge regardless of how badly they mismanage an enterprise, nor do they have the right to use the banking system to recapitalize their failed ventures," he said.
Will he be able to walk that talk?
Read the source article ... https://www.nytimes.com/2013/09/11/business/global/a-housing-slump-in-india.html?pagewanted=all&_r=0
- Top tips for real estate investment success | GulfNews com
Property investment can be one of the most rewarding forms of financial investment, offering a tangible asset with a functional purpose, whilst simultaneously offering opportunity for strong growth. With the correct advice, property is a strong inflation hedge and will complement other asset classes.
However, problems can arise when people get emotionally attached to their properties, or get caught out by foreign legal and financial systems and the potential to lose money can be just as great. To help avoid likely pitfalls, I have put together a 'Top Ten' guide on top tips to remember when embarking on a property purchase:...
What would you add to James Thomas' list?
Read the source article ... https://m.gulfnews.com/business/top-tips-for-real-estate-investment-success-1.1213814
- Yep, it's another housing bubble
A recent paper by three economists from Robert Morris University in Pennsylvania...suggests that the index can be used to detect housing bubbles. Adora Holstein, Brian O'Roark, and Min Lu track the index against its long-term trend line. When the index falls below trend, it marks a possible start of a housing bubble. They suggest that when the monthly affordability index value falls below trend for at least three months, a housing bubble probably exists.
Using the monthly composite home affordability index from FRED, the database maintained by the St. Louis Federal Reserve bank, we can chart out every single monthly index report and construct a long-term trend line.
As the Robert Morris economists found, affordability fell below its long-term trend in the beginning of 2004—marking the beginning of the housing bubble. Homes remained below the long-term trend for affordability until December 2008.
This year affordability fell below the long-term trend in April. We remained below trend in the May, June and July reports.
If the Robert Morris economists are right about below trend affordability indicating a housing bubble, we're definitely there right now.
This does not mean that home prices are poised crash immediately. Keep in mind that home prices continued to climb for over two years after affordability fell below trend, peaking in April 2006.
We shall see what the Fed's decisions do.
Read the source article ... https://www.cnbc.com/id/101019905
"Copyright (c) 2013 by REFM, LLC. Reuse is permitted with proper attribution."
Read the source article ... https://www.getrefm.com/blog/2013/09/comparison-grid-of-long-term-commercial-real-estate-lenders/