Linking ≠ endorsement.
⇧ Paul Mason: what they’re not telling you about housing – YouTube
Economics Editor Paul Mason looks at the real story behind the housing crisis at the general election as the Conservatives make an extension of the right-to-buy policy a central part of their manifesto.
When the private sector doesn’t create enough decent housing for the poor and working class, governments have to step in or leave the people needlessly suffering.
⇧ Report: Nashville’s housing market third-hottest in the U.S. – Nashville Business Journal
“Despite increased permitting activity, Nashville’s strong economic landscape will propel demand, and ultimately home prices, over the next few years.”
The hottest U.S. housing market, according to Auction.com, is Denver, followed by San Antonio.
⇧ Here’s how housing market corrections drag on GDP | HousingWire
For every 10% decline in house prices (in real terms), GDP falls by around 4% from its pre-peak path, according to the study of 50 global episodes of housing market corrections since 1973.
Property price downturns since 2006 have been linked to a larger fall in GDP. The GDP gap between pre-peak trends has increased from around 4% before 2000 to around 7% since then.
⇧ Why your rent might rise again this year – Columbia Missourian
Renting has gotten increasingly expensive over the last five years. The average U.S. rent has climbed 14 percent to $1,124 since 2010, according to commercial property tracker Reis Inc. That’s four percentage points faster than inflation and more than double the rise in U.S. home prices over the same period.
In addition, most of the new apartments coming on the market are aimed at affluent tenants and carry higher-than-average rents. That’s especially true in cities where new buildings are going up in urban core areas, which means builders need to recoup higher land and development costs.
“The share of young adults with jobs has climbed in the past year, and that will help many of them move out of their parents’ homes,” says Jed Kolko, chief economist at online real estate firm Trulia. “Most of them will be renters first.”
More people vying for apartments helps drive rents higher. And metropolitan areas with faster job growth are generally seeing higher-than-average rent hikes as well.
In theory, more apartment construction should help bring down rents because landlords would compete for tenants. But 80 percent of new complexes, Nadji estimates, are high-end projects aimed at renters willing to pay a premium for amenities such as gourmet kitchens and concierge service.
⇧ Oil Pares Weekly Gain as Supply Growth Tempers U.S. Output Drop – Bloomberg Business
Saudi Arabia pumped the most in three decades in March, the Organization of Petroleum Exporting Countries said in its monthly report.
Saudi Arabia boosted crude production by 658,800 barrels a day in March to 10.294 million a day, according to data it communicated to OPEC’s secretariat in Vienna. The kingdom led a November decision by the 12-member group to defend market share and ignore calls to cut output. OPEC has pumped above its collective quota of 30 million a day every month since June, estimates compiled by Bloomberg show.
They figure they can produce the US and Canada under the table.
We’re still waiting to see whether lower gas prices will be a net gain for the US (putting the environmental damage from fracking aside).
⇧ OPEC oil output surge boosts surplus, despite higher demand | Reuters
“The strategy of OPEC to put pressure on the high-cost producers is working, but the individual members seem to have moved off of that focus and are instead producing as much as they can,” said Jamie Webster, analyst at IHS in Washington and an OPEC expert.
They’re competing with each others so they can pay the bills but also so they can collectively try to hold off alternative energy in the form of electric cars and such. They can’t keep it up indefinitely.
⇧ Democrats are oceans apart on Trans-Pacific trade deal – Strange Bedfellows — Politics News
“The Trade Promotion Authority bill just introduced in Congress also raises the bar on workers’ rights around the world by making rigorous enforceable labor requirements a mandatory negotiating objective, putting them at the very core of the Trans-Pacific Partnership and other future agreements.”
If it’s so great, why can’t we see it?
⇧ Monetary policy in the future | Brookings Institution
…a principal motivation that proponents offer for changing the monetary policy target is to deal more effectively with the zero lower bound on interest rates. But economically, it would be preferable to have more proactive fiscal policies and a more balanced monetary-fiscal mix when interest rates are close to zero. Greater reliance on fiscal policy would probably give better results, and would certainly be easier to explain, than changing the target for monetary policy. I think though that the probability of getting Congress to accept larger automatic stabilizers and the probability of their endorsing an alternative intermediate target for monetary policy are equally low.
Well, we’d like to see Congress educated rather than economists give up teaching them how fiscal policy is the best approach.
“Some of most stubborn foreclosure cases are finally being flushed out of the foreclosure pipeline, and we would expect to see more noise in the numbers over the next few months as national foreclosure activity makes its way back to more stable patterns by the end of this year,”….
⇧ US housing starts total 926,000 in Mar vs. 1.04 million estimate
There are expectations that growth will rebound in the second quarter, but the tepid housing starts report and a struggling manufacturing sector suggest the momentum will probably not be strong enough for the Federal Reserve to start raising interest rates before September.
September would be early.
⇧ Agriculture poses immense threat to environment, German study says | EurActiv
The use of pesticides and fertilisers as well as intensive animal husbandry, have a negative impact on humans and nature, the 40-page document indicates.
“Over the last 30 years, innovation and technical progress in most sectors has led to great successes in reducing the amount of substance that reaches the environment. But agriculture emissions show only marginal improvements,” the study’s authors write.
⇧ What Structural Reforms? | Sparse Thoughts of a Gloomy European Economist
…while long term growth is negatively affected by product market regulation, excessive labour market regulation does not hamper long term performance.
It is not the first time that the IMF surprises us with interesting analysis that goes against its own previous conventional wisdom.
The guy who should be happy is Alexis Tsipras; he has been resisting since January pressure from his peers (and the Troika, that includes IMF staff!) to further curb labour market regulations, and recently presented a list of reforms that mostly pledges to reduce crony capitalism, tax evasion and product market rigidities. Exactly what the IMF shows to be effective in boosting growth.
⇧ Stephen Williamson: New Monetarist Economics: Sticky Prices, Financial Frictions, and the Ben Bernanke Puzzle
…as Noah says, NK models are “used” in central banks, and here’s an example of what that can mean. There is nothing inherently offensive about work on sticky prices, just as there’s nothing inherently offensive about cats. In fact, there is some very interesting work on sticky prices. Last week, I saw a paper by Fernando Alvarez and Francesco Lippi. They do very sophisticated work, with careful attention to the available data on product pricing, and I think a lot can be learned from what they’re up to. But if we want to think about the effects of monetary policy, and how monetary policy should be conducted, we better be thinking about the details of central bank liabilities, central bank assets, the role of the central bank as a financial intermediary, private banks, collateral, government debt, credit, etc. A basic NK model throws all of that out and focuses exclusively on sticky price frictions. Why is that a problem? Well, suppose a financial crisis comes along. What then do you know about malfunctioning credit markets, the role of central bank lending vs. open market operations, the effects of unconventional monetary policies such as quantitative easing? Not much, right? And it’s pretty clear that you’re not going to learn much about these things by tweaking a reduced form NK model.
Sounds like Steve Keen.
“Keen overstates his case but many neoclassical models *do* ignore debt in general, as ‘one person’s asset is another’s liability’. The papers that incorporate debt generally do it on an ad-hoc basis.
“All in all, Keen’s empirical evidence is just too ample for me to disagree with him on debt.” https://newmonetarism.blogspot.com/2012/02/amplification-and-indeterminacy.html?showComment=1330641934086#c6278868562218191960
⇧ Consumer Price Index Summary [and our environmental commentary]
On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers rose 0.2 percent in March, the same increase as in February. The index for all items less food and energy rose 0.2 percent in March, also the same increase as in February.
What impact will the drought in California have on food prices going forward? California seems to have been more than dragging its feet on obtaining new sources of freshwater. Is the government waiting so that the situation will be so severe that it can finally tackle it without “conservative” opposition?
There’s plenty of water deep underground, but bringing it up will likely cause problems with the Earth’s crust. Think fracking-earthquakes.
We can desalinate, but there are environmental issues that should limit that as well.
We need a comprehensive environmental/ecological approach to all human activity. How long will it take for humanity to wake up to that fact? How bad do things have to get before things will get better? Will humanity have waited too long?
⇧ Redistribution Can Involve Less Government Rather than More | Beat the Press
Capitalism for the poor and socialism for the rich: Excellent post by Dean Baker:
Thomas Edsall presents some interesting polling results in his NYT column indicating less public support for government policies to redistribute income even as the distribution of income is becoming increasingly unequal. He argues that this presents a paradox for Democrats who are concerned about inequality.
Actually the situation is less paradoxical when we consider the possibility that government policies are largely responsible for growing inequality.
⇧ IMF 2015 Fiscal Monitor – YouTube
At the Spring Meetings, Vitor Gaspar, Director of the Fiscal Affairs Department explains the main message of the 2015 Fiscal Monitor.
⇧ Program Management | Ready.gov
Typical goals of the preparedness program include:
Protect the safety of employees, visitors, contractors and others at risk from hazards at the facility. Plan for persons with disabilities and functional needs.
Maintain customer service by minimizing interruptions or disruptions of business operations
Protect facilities, physical assets and electronic information
Prevent environmental contamination
Protect the organization’s brand, image and reputation
⇧ The Multifamily Machine | CRE Show
Join Michael and his guests as they share an update and forecast on the multifamily industry including tips for asset managers, investors and developers. Will cap rates remain steady? Will rate growth and occupancy gains continue? How will new supply impact the sector?
⇧ Is fashion a high priority in real estate sales? – OC Housing News [cached]
If you were selecting a real estate agent to represent you, would the agent’s style matter more than their competence?
A very high percentage of people who use a real estate agent to buy or sell a home use the first agent they contact and don’t shop around. This fact is largely what keeps bad agents in business.
Due to the way most people select agents, being found is more important than being good; style is more important than substance. A new firm in New York fully embraces the current system.
⇧ World Bank breaks its own rules as 3.4 million forced from land and livelihoods | Global development | The Guardian
The International Consortium of Investigative Journalists (ICIJ) and other outlets, including the Guardian, reviewed more than 6,000 World Bank documents as well as interviewing current and former bank employees and government officials involved in bank-funded projects.
In many cases, the organisation did not follow internal policies and safeguards requiring it to monitor evictions caused by its projects and provide resettled people with new housing options and job prospects, the investigation showed.
We can do better, much, much better.
⇧ Bretton Woods system
This is the system that the new China and Asia banks and banking system will destroy because the US wasn’t people-oriented enough but for the sake of those at the top of the economic and financial pyramid, too profit-oriented.
⇧ China growth lowest since 2009 – YouTube
China’s economy expanded at its slowest pace in six years in the first quarter, highlighting the challenge of finding growth drivers amid a slowdown in the key pillars of construction and manufacturing. The FT’s Gabriel Wildau reports from Shanghai.
⇧ Grexit or default within the eurozone and Rick Rule on oil – YouTube
The odds increase for a Greek default within the Eurozone.
⇧ Tell the next Prime Minister: Money Creation Should Serve Society – YouTube
We have our differences with Positive Money, but we do start from the same position that money should be created in the public interest.
The same banks that caused the financial crisis currently have the power to create 97% of the UK’s money. They’ve used this power recklessly, putting most of the money they create into property bubbles and financial markets. And now they’re back to their old ways.
We need a change. The power to create money should only be used in the public interest, in a democratic, transparent and accountable way. The 1844 law that makes it illegal for anyone other than the Bank of England to create paper money should be updated to apply to the electronic money currently created by banks.
When new money is created, it should be used to fund vital public services or provide finance to businesses, creating jobs where they’re needed, instead of being used to push up house prices or speculate on the financial markets.
⇧ Recent Grads: How to Find an Affordable Apartment – YouTube
This could be useful for landlords and managers too.
If you’re a recent grad trying to find an affordable apartment, watch my new Real Estate Minute video. I highlight a new tool from the apartment listing site HotPads that breaks down affordability based on neighborhood and profession for recent college graduates in 11 major cities.