Monthly Archives: July 2014

Silicon Valley rents soar as tech gobbles space

Posted on by

“There’s a lot of talk about the red hot residential real estate market in Silicon Valley, but commercial prices are also soaring.  Asking rents in Palo Alto now average $83 a square foot annually. That’s nearly triple the national average.  In the last four years, commercial real estate prices are up 75 percent in Palo Alto and in nearby Sunnyvale and Mountain View, prices are up 68 percent and 115 percent, respectively.  If companies are looking for a bargain on rents, they shouldn’t look to San Francisco. In the last four years, office rents there have soared 70 percent.  The real winners in this red hot market are the real estate developers, who are rushing to build more office buildings to satisfy demand.”

http://www.cnbc.com/id/101727095

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

Bursting Switzerland’s bubble

Posted on by

“Last year, SNP chief Thomas Jordan requested a [buffer] to be introduced for Swiss banks, forcing them to hold an additional one percent of risk-weighted assets to stave off the potential dangers of the housing boom. Earlier this year, as worries about a bubble increased, the SNB instigated a number of policies to prevent any more dramatic rises. This included doubling the capital buffer requirement to two percent. However, despite a partial slowdown since January, Jordan told reporters in March that the work was not yet done. ‘The pace has slowed, but we are far away from the soft landing we want. We don’t yet see the slowdown that we would like to see.'”

http://www.worldfinance.com/wealth-management/bursting-switzerlands-bubble

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

Sweden’s deflated economy: Sub-zero conditions

Posted on by

“Sweden’s economy, which it oversees, grew three times faster than the euro zone’s in 2010 and dodged Europe’s double-dip recession in 2012-13. The Riksbank felt confident enough in recovery to start raising interest rates in 2010. The Riksbank worried that rising household borrowing and soaring house prices could lead to trouble down the road. It therefore opted to ‘lean against the wind’, in central bankers’ parlance, and deflate the credit boom before it burst catastrophically.  It seems instead to have taken the air out of everything but exuberant markets. Unemployment in Sweden has held steady, while Swedish private-sector debt as a share of GDP is higher now than it was in 2010.”

http://www.economist.com/news/finance-and-economics/21606895-interest-rates-are-back-crisis-lows-sub-zero-conditions

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

When Zero’s Too High: Time preference versus central bankers

Posted on by

“Central banking has taken interest rate reduction to its absurd conclusion. If observers thought the ECB had run out of room by holding its deposit rate at zero, Mario Draghi proved he is creative, cutting the ECB’s deposit rate to minus 0.10 percent, making it the first major central bank to institute a negative rate.  Can a central-bank edict force present goods to no longer have a premium over future goods?  Armed with high-powered math and models dancing in their heads, modern central bankers believe they are only limited by their imaginations.  More than half a decade of zero interest rates has not lifted anyone from poverty or created any jobs—it has simply caused more malinvestment.”

http://www.fee.org/the_freeman/detail/when-zeros-too-high

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

The Fed’s Dreaded Dilemma: A Weak Economy Plus Inflation

Posted on by

“The fact that the Fed’s PCE index is showing inflationary pressure is significant, since it is essentially designed to lowball price increases. The CPI gives a 31 percent weighting to shelter costs and a 17 percent weighting to transportation (read as rent and gasoline), which the PCE basically cuts in half. By reducing the volatility of its preferred inflation gauge, the Fed essentially gives itself the leeway to maintain a looser policy longer.  But the fact that the PCE is on the rise leaves the Fed in a conundrum, having said for years now that it would act when inflation reaches an annualized 2 percent, a level that is fast approaching.”

http://www.investingdaily.com/20619/the-feds-dreaded-dilemma-a-weak-economy-plus-inflation-2/

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

Fed Still on Red Alert

Posted on by

“It’s bad enough that central bankers create money out of nowhere to buy bonds. Now it turns out that’s not all they’re buying.  A study by global research firm Official Monetary and Financial Institutions Forum (OMFIF) states global public investors ‘as a whole appear to have built up their investments in publicly quoted equities by at least $1 [trillion] in recent years.’  The percentage of financial advisors who are bullish on the stock market jumped to 62.2%, the fifth straight week this indicator has been above the key 55% level.  Other noteworthy tops came in August 1987 (60.8%), October 2007 (62%), and December 2004 (62.9%).”

http://www.caseyresearch.com/cdd/fed-still-on-red-alert

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

Bill Bonner: The Greatest Fraud Ever

Posted on by

Bill-Bonner2

“Banks – with the happy connivance of the Fed – create new money. Corporations use it to buy their own shares. Central banks buy shares too.  Besides, buying stocks seems to please everyone who matters. Investors are happy. Speculators are happy. Economists are happy. Politicians are happy, too.  After all, a rising stock market means the economy is getting better, doesn’t it?  But there is a heavy price to pay, dear reader. The financiers end up owning more of the real businesses… the real enterprises… the real houses… the real output of the real economy.  Wall Street firms own more houses. And more stocks. All are bought with money that they – or their cronies – created.”

http://www.bonnerandpartners.com/the-greatest-fraud-ever/

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

U.S. Economy Shrank in First Quarter by Most in Five Years

Posted on by

“The U.S. economy contracted in the first quarter by the most since the depths of the last recession as consumer spending cooled.  Gross domestic product fell at a 2.9 percent annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previously reported 1 percent drop. It marked the biggest downward revision from the agency’s second GDP estimate since records began in 1976. Business investment fell at a 1.2 percent annualized rate, compared with a previously reported 1.6 percent annualized drop. Companies reduced their spending on structures at a 7.7 percent pace, and spending for equipment fell 2.8 percent, today’s report showed.”

http://www.bloomberg.com/news/2014-06-25/economy-in-u-s-shrank-in-first-quarter-by-most-in-five-years.html

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

On The Fed’s (Tentative) End to Bond Purchases in October

Posted on by

“The current plan is that–so long as the economy doesn’t crash–the Fed will taper to $25 billion in August, then $15 billion in September, and then wipe out the remaining $15 billion in October.  Here’s a chart showing the behavior of the S&P500 versus the monetary base.  It used to be the case that the stock market bounced around with little relation to the Fed’s asset purchases. But since early 2009 and the introduction of QE programs, the stock market and the Fed’s bond buying have moved in virtual lockstep.  Let me ask you this: Do you think the S&P should be hitting all-time highs because of how great the underlying economic fundamentals have been the last few years?”

http://consultingbyrpm.com/blog/2014/07/fed-announces-tentative-end-to-bond-purchases-in-october.html

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet

U.S. Budget Deficit Narrows as Economy, Jobs Boost Tax Revenue

Posted on by

“The U.S. posted a $130 billion budget deficit in May and the smallest shortfall for the first eight months of a fiscal year since 2008, as a stronger economy and rising employment bolster revenue.  The deficit last month was about $9 billion less than the $139 billion shortfall in May 2013, the Treasury Department said today in Washington. The median estimate in a Bloomberg survey of 20 economists called for a $130.5 billion gap.  During the first eight months of the fiscal year, individual tax receipts, the single largest revenue item, were up 3.3 percent from the same period in fiscal 2013. Corporate income-tax receipts increased 15.6 percent.”

http://www.bloomberg.com/news/2014-06-11/budget-deficit-in-u-s-narrows-as-economy-jobs-bolster-revenue.html

Scan to Donate Bitcoin to Freedomwat.ch Staff
Did you like this?
Tip Freedomwat.ch Staff with Bitcoin
Donate via Installed Wallet