Australian Housing to Bust, Eventually

This post by Terry McFadgen on Australian housing prices is a good summary of the question of if/when prices will tank. One thing overseas readers should keep in mind is that Australian borrowers can’t walk away from their debt – the bank can foreclose on you and then go after you or bankrupt you . . . → Read More: Australian Housing to Bust, Eventually

Bricks, Mortar and Basis Points

One could go back over the whole month and really find a trove of parsable stuff still worth poking at, but best to stick to the present. Recent news is the spate of Downtown buildings that are up for sale or disposal by various means. As always, the real stories go deeper than the . . . → Read More: Bricks, Mortar and Basis Points

Government, government, everywhere you look

Local government wonks should not miss the NY Times magazine’s ominous look at the fiscal crisis going on in governments across the nation: Broke Town, USA.

There is an obligatory mention of pseudo-bankrupt Harrisburg in there, but the more explicit talk over what the continuing Chapter 9 bankruptcy of Vallejo, California means.  The scary . . . → Read More: Government, Government, Everywhere You Look

Good Luck With That: Harrisburg Enters Act 47

Lots of news all around on this.  Try either Bond Buyer:   Harrisburg Enters Pennsylvania’s Act 47 Program

or Bloomberg: Harrisburg, Pennsylvania, Declared ‘Distressed’

Kind of a metaphysical question what defines ‘distress’ for a municipality.  In the census data dump yesterday Braddock, PA is showing a 35% housing vacancy rate. That would be distress and a . . . → Read More: Good Luck With That: Harrisburg Enters Act 47

Governments Riding in to Rescue Firms

What is a government to do when a company faces a near-death situation? In almost all cases, the right answer is to let the company go under: It is not the job of a government to prevent companies from dying. Indeed, creative destruction is central to the proper functioning of capitalism. Capitalism without failure . . . → Read More: Governments Riding in to Rescue Firms

Transactions Between Banks in Bad Assets: An Interesting Legal Drama

The much awaited decision of the Supreme Court in the matter of ICICI v. Official Liquidator of A.P.S. Star Industries is now available. The case had come as an appeal against a decision of the Gujarat High Court which invalidated transfer of Non-Performing Assets between banks. The decisions of the High Court and the . . . → Read More: Transactions Between Banks in Bad Assets: An Interesting Legal Drama

The Great Unravelling (Dubai Edition)

Although I certainly would not rank it alongside Macro Man’s dreaded vacation indicator or the incipient increase in the USD if and when the Economist finally decides to slot its decline on the front page, I still have the nagging feeling that whenever yours truly sit down at either a dull and difficult econometrics . . . → Read More: The Great Unravelling (Dubai Edition)

Dubai’s Great Crash

Sheikh Makhtoum won’t go to debtor’s prison, but short of that, Dubai’s all-but-sovereign default is an epochal event in its story. I wrote a column in Financial Express titled Dubai’s great crash where I draw on this episode to think more clearly about (a) International financial centres and (b) Puffery. On this subject, also . . . → Read More: Dubai’s Great Crash

A Simple Plan to Save California

Congress needs to enact a single national policy to support any state in crises. . . . → Read More: A Simple Plan to Save California

Act Now Before California Forces the Issue

Sometime in the next couple of months The Federal Government is going to give the state of California a lot of money. After lavishing more than a trillion dollars on Banks, Insurers and Auto Companies, there is a 0% probability that the government will sit idly while the largest state collapses. There real question . . . → Read More: Act Now Before California Forces the Issue