On “Seven More Years of Hard Times?”

September 20, 2010 Leave a comment

Cogent conclusion of an interesting (somewhat technical)  review of some important recent research on periods of economic recession and financial crises.  In short, we are in this for the long haul.

It is not true that if you break a mirror, you will have seven years’ bad luck. That is a superstition. But if you allow a financial market to spin wildly until it breaks down, it really does seem that you run the risk of years of economic malaise. That is a historical pattern.

via Seven More Years of Hard Times? – Project Syndicate.

Filed under Economy, International

Pending Economic Stimulus

September 18, 2010 Leave a comment

We are at a turning point for monetary policy.  Interest rates will stay low and the Federal Reserve may expand the money supply if the economic indicators look bad.  This suggests no early hope for a significant economic recovery that would benefit Coral Gables and the region.

The Federal Reserve next week is likely to affirm its pledge to keep interest rates low for an “extended period” and maintain the floor on its holdings of securities, say economists surveyed by Bloomberg News.

via Fed Likely to Keep Rates Low, Affirm Asset Floor, Survey Shows – Bloomberg.com.

Filed under Economy, Florida

Commissioner Kerdyk is Right

September 15, 2010 Leave a comment

There is plenty to worry about in the prices of houses in Miami-Dade and Coral Gables.  Even if we live in Coral Gables, there is little chance that our house prices will coming bounding back or that the city will get in inflow of tax revenues from higher property values.  Forget that notion for several years.  I think that in these times higher millage rates discourage real estate sales for most buyers.

The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market.

Shadow inventory — the supply of homes in default or foreclosure that may be offered for sale — is preventing prices from bottoming after a 28 percent plunge from 2006, according to analysts from Moody’s Analytics Inc., Fannie Mae, Morgan Stanley and Barclays Plc. Those properties are in addition to houses that are vacant or that may soon be put on the market by owners.

via U.S. Home Prices Face Three-Year Drop as Supply Gains (Update1) – Bloomberg.com.

Filed under Economy, Housing, Property Values

International Economic Risks for Coral Gables

September 15, 2010 Leave a comment

This is one more of the big risks for the US and world economy.

European bond markets are again delivering a chilling message to global policymakers. With bonds of “peripheral” eurozone nations continuing to fall in value, the risk of Irish, Greek, and Portuguese sovereign defaults is higher than ever.

via Brady Bonds For the Eurozone – Project Syndicate.

Filed under Economy, International

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