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Posts tagged with ‘Recession’

Could the Housing Bubble Reinflate?.

Karl Smith, Assistant Professor of Public Economics at UNC, has voiced the possibility of a resurgence of the housing bubble. Fannie and Freddie are considering cutting bulked foreclosure sales, deficit cutting seems to be the Fed’s next move and lack of rental provisions is a constant worry as it may force families to borrow, forcing banks to expand credit. 

However, the flipside of this dilemma, is that expanding credit will lead to soaking up the excess housing inventory, which will lead to a surge in prices. This will ramp up new housing development, causing a boost in household demand, immigration and property appreciation. So while there is the potential to repeat history, it can be remedied with regulated lending requirements, collateralized default plans, scrutinized ratings requirements and regulated interest rates. We can control the boom before it turns into a bubble. 

Europe Crisis 2012: A Thought About Southern European Migration

I recently met a Spanish gentleman in Doha at a conference, who mentioned that he had moved to Qatar very recently. Unemployment is as high as it has ever been (approximately 23%) with fears escalating that Spain would require a bailout, similar to Greece, Portugal and Italy. Spanish bond yields have skyrocketed and there seems to be no immediate solution to fix the economic woes that plague the country. 

On further inspection, the overall unemployment rate maybe 23%, but the disjuncture is even greater for the fresh, out of school and 20 something “yuppies”. Unemployment for them is at 50%. With Southern Europe experiencing probably their roughest era in recent history with negative growths post recession, a massive migration maybe underway where Southern Europe may flock to countries like Germany and France, where the unemployment rates are only at 6%. These effects may find themselves trickling into the Middle East and Asia Pacific regions, which may see a surge in Southern European expats in the upcoming years.

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Bank.

Can we have a banking system that provides good services to people at reasonable rates? A banking system that doesn’t bring down the global economy every few decades?

Anat Admati thinks we can. She’s a finance professor at Stanford, but she never paid much attention to banks until the financial crisis. (This is not unusual in the superspecialized world of academia.)

After the crisis hit, Admati started reading up on banks. And, in a basic banking textbook, she came upon a single line that changed her career.

"I sat in my office and I thought, ‘Something is really wrong in banking.’ "

In this podcast (Source: NPR), Admati tells us what she thinks is wrong in banking — and how she thinks we can fix it.

Simon Johnson explores the liquidity versus capital debate issue in further detail on Bloomberg. 

Study links skyscrapers to financial crashes

An “unhealthy correlation” exists between the construction of skyscrapers and financial crashes, according to a new report from investment bank Barclays Capital.

(Source: emergentfutures)

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How Much House Can You Buy With $250,000; $500,000; $1 million?

Courtesy of creditsesame.com, here’s an interesting infographic that provides the median price per square foot across the country, along with the amount of square feet you would or could purchase if you did spend 250K, 500K or 1M. With nearly 63 metro cities covered, it really paints quite a picture about the current national housing market, with median price per square foot prices in the range of $50 - $400. 

How Much House Can You Buy With $250,000; $500,000; $1 million?

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A quick satirical digital short that looks at the probabilities of the 2008 recession and the influence of bankers on the crisis, explained in terms of sigmas. 

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