Tuesday, November 20, 2012

Wednesday November 21 Housing and Economic stories


TOP STORIES:

Even Russian 'Black Money' Investors In Cyprus Will Get A Bailout - (www.businessinsider.com) Timing couldn’t have been worse. Or more opportune. A “secret” report by the German version of the CIA, the Bundesnachrichtendienst (BND), bubbled to the surface. It asserted that the pending bailout of Cyprus would use the money of taxpayers in other countries, particularly in Germany, to bail out mostly rich Russians who have over the years deposited their “black money” in Cypriot banks that are now collapsing. Not that the bailout of this tiny speck of land with 840,000 people isn’t in enough trouble.

In Europe, a Repeat of the Loan Crisis - (www.nytimes.com) THE credit crisis, which made it difficult if not impossible for companies and individuals to borrow during the worldwide recession, appears to have returned to Europe. In the euro area as a whole, the amount of credit outstanding has fallen to levels lower than they were a year ago, according to figures released last week by the European Central Bank. In some countries within the euro zone, including Italy and Spain, credit is falling at a faster rate now than it did during the first crisis. The difficulty in obtaining credit seems likely to make it even harder for the countries that have been hurt the most to recover and begin to grow again. The figures show that while the E.C.B. has relieved the immediate financial pressures on both governments and banks by making it easy for them to borrow, it has not managed to extend that easy credit to those who need money the most.

France the next Greece? - (www.telegraph.co.uk) The French are living in Alice and Wonderland. Bild Zeitung asked whether France is becoming the "new Greece". You get the drift. The business lobby Medef warned two weeks ago that the country is heading into a "hurricane". It said Hollande is making a disastrous mistake by slapping on extra business taxes and pushing the top rate of capital gains tax to 62pc. (compared to 21pc in Spain, 26pc in Germany and 28pc in Britain). Medef’s Laurence Parisot had some strong words, as I reported then. "The situation is very serious. Some business leaders are in a state of quasi-panic. The pace of bankruptcies has accelerated over the summer. We are seeing a general loss of confidence by investors. Large foreign investors are shunning France altogether. It’s becoming really dramatic." She said Hollande has yet to understand the "extreme gravity" of the crisis. Or rather, he has misunderstood it. He has embraced austerity but not reform, the worst possible mix.

One safety net that needs to shrink - (www.nytimes.com) ELECTION Day is upon us, and neither President Obama nor Mitt Romney has really addressed one of the nation’s most pressing economic issues: the risk that one day taxpayers might have to bail out swashbuckling financial institutions again. Granted, the economic pain many are feeling now — the snail’s pace recovery, the stubbornly high unemployment — is foremost in voters’ minds. But given all we’ve gone through after the last binge in the financial industry, failing to confront the too-big-to-fail question is a serious oversight. Many Americans probably think the Dodd-Frank financial reform law will protect taxpayers from future bailouts. Wrong. In fact, Dodd-Frank actually widened the federal safety net for big institutions. Under that law, eight more giants were granted the right to tap the Federal Reserve for funding when the next crisis hits. At the same time, those eight may avoid Dodd-Frank measures that govern how we’re supposed to wind down institutions that get into trouble.

realtor to presidential candidates, do no harm... to our commissions - (www.ochousingnews.com) Recently, Dave Liniger, co-founder and chairman of RE/MAX, LLC, had some choice words for the presidential candidates regarding their stances—or lack thereof—on the nation’s housing crisis. In an open letter addressing both President Obama and Governor Romney, Liniger calls out the two candidates for avoiding the issue when it comes to the current state of affairs in American housing. Liniger points out that the two nominees are focusing all their energy and resources on the economy at large and chides them because “as leaders, you ignore housing at our peril,” he says. By “our” he means realtors. The candidates benefit by ignoring this issue because any substantive policy proposals would be unpopular and counter-productive. Liniger writes, “Although the economy is recognized as the single most important issue in the campaign, and housing is commonly blamed for the recession and sluggish recovery, it is unimaginable that relevant solutions to housing issues have not been front and center.”





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