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- The Banking Sector: Better, with Room for Improvement | BlackRock Blog | Global Market Intelligence
Geared toward stock buyers, this article is also helpful in attempting to gauge real estate financing in the US.
Five years after the 2008 financial crisis, the US financial system — the proximate cause of the crisis — is in much better shape. Leverage levels are considerably lower and a regulatory overhaul has left US financial institutions better capitalized and less risky. In addition, a rising-rate environment like the one we’re in today has historically helped boost banking sector profitability.
- Treasury Bill Rates Surge to Highest Since 2008 at 1-Month Sale – SFGate
“If we do not lift the debt ceiling and if we default, the world goes into recession,” Mohamed El-Erian, chief executive and co-chief investment officer at Pacific Investment Management Co., the world’s biggest bond-fund manager, said in a television interview on “Bloomberg Surveillance” with Tom Keene. “This is not about an ability to pay, this is about a willingness to pay. We are playing Russian roulette.”
Also, mortgage rates in particular may spike, depending upon the Fed’s inaction, and the real estate sector in the US will be slammed the longer the default drags out.
The legislators know this. At least they should. They will hear about it regardless. They risk the real ire of most voters if they don’t come to some agreement and soon.
- Alaska builds differently to adapt to climate change | The Chillicothe Gazette | chillicothegazette.com
Something for investors in Alaskan real estate to watch out for:
FAIRBANKS, Alaska – Alaskans are learning to build differently to minimize the damage of global warming.
“We take a very practical approach to adaptation,” says Jack Hebert,president of the non-profit Cold Climate Housing Research Center in Fairbanks. He and colleagues try to avoid building on permafrost, land that is frozen underground but can thaw when temperatures are too high. Since Alaska’s temperatures have risen twice as fast as those in the lower 48, more permafrost is thawing, ruining roads and houses.
- Why US commercial real estate is booming
Hessam Nadji, senior director at Marcus & Millichap, highlights how U.S. demand for commercial real estate has been building up over the past few years as investor confidence hit record highs.
- Tim Harford — Article — Capital — some good news on banking
Five years after the Lehman Brothers collapse, a study shows that the regulators’ medicine is working
The banking crisis had many causes, some of which are complex enough to make a quantum physicist’s head spin. But a central cause is simple: banks relied far too much on debt to fund their activities — they used too much leverage. That’s why a new study, quietly released by the Bank for International Settlements almost exactly five years after Lehman Brothers collapsed, makes for encouraging reading. It suggests that attempts to reduce leverage are paying off. The regulators’ medicine is working — and with fewer side-effects than feared.
A highly leveraged bank gets most of its money from debtholders, which is risky because those debts must be repaid on schedule or the bank is bust. A less leveraged bank gets more of its money from shareholders and it is not obliged to pay them anything in particular at any given time. In troubled times, the less leveraged bank is far more resilient.
- Video: Investors in rental homes: ‘It’s a business not a trade’
Diana Olick of CNBC gives a quick overview of what “institutional” investors are doing vis-a-vis the single-family buy-to-rent market in the US.
Institutional investors have poured a collective $20 billion into as many as 200,000 properties, or up to 12 percent of distressed home sales over the past 18 months, according to a report from KBW.
It is a tiny slice of the housing stock, to be sure, but investors who remain in the game say it will get larger and the potential for long-term profit is big.
… It appears the divide is between the short- and the long-term view.
“What we’ve sought to do is to say, ‘Could we convert this business into something that looks, acts and smells like multifamily,” said Hawkes [Laurie Hawkes, president and COO of Arizona-based American Residential Properties].
Source … https://www.cnbc.com/id/101081621