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The Zillow index from Zillow Inc., the real estate web site, shows home values increasing by 5.8% in June 2013 over a year ago, and up 2.7% in the first six months of 2013. The Case-Shiller index shows home prices up 12.2% in May from one year ago. Economists say the Case-Shiller index overstates the price increases compares to the Zillow index because it includes foreclosed homes. During a period when foreclosures are slowing as in the past year, this tends to show a faster increase in prices in the Shiller index, with the reverse happening when foreclosures are high. This is because foreclosed homes sell at a large discount. The Zillow index excludes foreclosed homes removing this volatility in the index. Increase in mortgage rates by one percentage point, and future expectations of increases, are likely to keep price gains down in pricier markets of Boston, New York and San Francisco. Inventories are tight in some cities. Dallas, Los Angeles, San Diego, Washington D.C. and Orlando, have less than 3 months supply, according to John Burns Real Estate Consulting. Phoenix, Seattle, Denver less than 2.5 months supply, according to a WSJ quarterly survey of 28 metro areas....

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David Brooks of the NYT describes the approach taken by British prime minister David Cameron and his Conservative Party government to help the working class poor in Britain, and tackle the social roots of poverty. He says an American adaptation similar to this is badly needed in the Republican Party, with the candidates in the election providing solutions from an old rulebook. Only after Trump's popularity with appeals to less educated older Americans has the Republican leadership responded, with Speaker Ryan helping organize a forum on poverty under the Jack Kemp Foundation- emphasis was placed on education, work, opportunity and accountability for anti-poverty programs in the discussion moderated by Ryan and Senator Tim Scott. Less attention was paid to the other social aspects mentioned here by Brooks, and cited by Cameron when he described the inadequacy of traditional solutions from the right and left of the political spectrum. Cameron outlined the principles of his anti-poverty plans called "Life Chances Strategy," in a speech on Jan. 11, 2016, in north London, with the entrie transcript on the gov.uk website. Cameron acknowledged in the speech that social issues including single parent families, and other social problems such as long term unemployment, can make it harder for some people to use self-reliance and personal responsibility in a growing economy as a way to grasp opportunities. Cameron proposes a combination of economic, social and job growth strategies. His second term plans include 30 hours a week of free childcare for 3 and 4 year olds so both parents can work, parental maternity leave, expansion of Troubled Families Program, in addition to the introduction of National Living Wage, tax cuts, universal credit. In tackling social aspects of the problem Cameron cited the need for development in the early years of childhood, the huge importance of family, social connections and experiences, informal mentors, cultural experiences, broadenend horizons, that enable young people to acquire language skills, character and resilience. Second term projects include expanding reach of high performing schools to deprived areas, emphasis on core English, math, science, history, geography Ebacc skills, a 1 billion pound investment in the National Citizens Service by 2021, a plan to transform housing estates including rebuilding from scratch, additional 1 billion pounds to provide mental health treatment including treatment within 2 weeks in homes and communities. Throughout Cameron's "Life Chances strategy" is aimed at tackling not just the material dimensions of poverty, but also what he describes is broken in Britain- "the paucity of opportunity."...

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Zweig gives the example of Palm Pilot IPO shares in March 2000, which the parent company 3Com priced at more than 1,350 times net earnings for the Palm shares. He cites George Akerlof, who writes about identity economics, and points to the fact that users of a product can be so fanatically devoted to it so as to drive up the price for an extended period of time. In the case of Palm Pilot its users were fanatically devoted to the product. This appears to be true for Facebook with users who see their identity enhanced as they put up pictures of themselves and share with friends. Over time users may realize that it is their private information that Facebook is using to generate revenue. It also sets up the shares for a sharper reversal over time.

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After the financial crisis of 2008-2009, commercial real estate defaults posed a serious threat to the US economy. Now this threat is receding with low interest rates making it easier to get cheap financing, which raises the returns. For banks the rising earnings give a cushion to absorb losses, letting them sell distressed properties and not have to hold onto them. From office towers in Manhattan to Florida apartment buildings and retail properties in Washington, commercial real estate values are going up. Prices of commercial real estate properties sold by institutional investors went up by 19% in 2010, according to an index developed by the MIT Center for Real Estate. Investors have boosted the prices of bonds backed by commerical real estate to the highest level in two years. The managing director at Real Capital Analytics says, that with values going up, both the owners and lenders have more room to work out difficult situations. Real Capital Analytics January 2011 report shows that of the $52 billion in retail properties to fall into default, a little over half have completed workouts. In Feb 2010, the Congressional Oversight Panel of the Troubled Asset Relief Program said that the commercial real estate market had the potential to pose a serious threat to the US economy. The panel estimated that about half of the $1.4 trillion in commercial property real estate loans set to be paid off by 2014 were under water, where the borrower owes more than the property is worth. Market segments for hotel, apartment buildings and retail are going up. Hotel occupancy rates in the top 25 markets went up from 60% to 64%, according to Smith Travel Research. Sales of apartment buildings in the US went up as home ownership hit new lows, and lease rates went up to the highest levels in 4 years, according to Axiometrics....

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Difficulties facing Britain which depends on continental Europe for exports and would be affected by whatever happens in Europe, and yet is reduced to being on the sidelines. This comes at a difficult time for the Cameron government, which is a coalition of Conservative party members who are euroskeptics, and the Liberal party members who are the most europhile of the the three major British parties. Sarkozy and Merkel have made clear that they would move ahead with a closer fiscal union within the eurozone, no matter what Britain's views are. This leaves David Cameron's government to what Labor leader, Ed Miliband, called "handwringing," as Britain can do little about the future direction of the EU. Cameron is able to please backbenchers in parliament from his party with talk about protecting British interests, but has no neotiating leverage, according to Steven Fielding, director of the Center for British Politics at the University of Nottingham. Britain may also have antagonized European leaders. Sarkozy said about Cameron and British government views: "You say you hate the euro and now you want to interfere with our meetings." This also happens as Britain faces rising unemployment, and deficits larger than anticipated after austerity measures taken by the Cameron government....

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Defense spending under the new Obama 2012-2013 budget for the fiscal year starting Oct. 1, 2012, is $525 billion, and an additional $88 billion for Afghanistan. This is $6 billon below the $531 billion budget for the 2011-2012 budget of $531 billion approved by Congress, $22 billion less than the Obama administration's proposed budget. An additional $115.1 billion was for Afghanistan. In a move to bring financial discipline to additional appropriations for foreign conflicts, the Obama administration is proposing in the 2012-2013 budget proposal a limit to "overseas contingency operations" appropriations. The total proposed is $450 billion for fiscal 2013 to 2021.

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The People's Bank of China's decision to reduce the reserve requirement for deposits at banks by 0.5% is not likely to have much impact, as banks already have enough money to lend. The problem is more a lack of demand for loans as the economy slows. Inflation fears restrict the use of growth tools such as lowering interest rates and the housing bubble limits the use of construction spending to increase growth. Political uncertainty with a leadership transition, and economc uncertainty in Europe also limit options.

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In August 2008 Russia invaded Georgia and established the independence of the 2 breakaway countries of South Ossetia and Abkhazia. Georgia tried to enter NATO that year but the French and the Germans objected, and the U.S. did not want to commit deep in the Caucasus region. In the 2012 election the anti-Moscow government of Mr. Saakashvili was replaced by a government that sought friendly relations with the West and with Russia. There are still no embassies between Russia and Georgia. A special representative to Russia was appointed in the new government of Mr. Bidzina Ivanishvili, a billionaire who made his money in metals and banking in Russia. Saakashvili is now a Ukrainian citizen and is a governor of Odessa province, on the Black Sea, with separatist influence. Russia's trade ties with Georgia, a destination for Georgia's exports including wine, are gradually being restored after a trade embargo imposed in 2006. The trade embargo was lifted in 2013. The representative to Russia says its no use keeping the illusion of NATO membership even though it is an objective, as Georgia has to defend itself, the consequence of being in a difficult region. The strident anti-Russian rhetoric is now muted, as Georgia rethinks its relationship with Russia and the West to live in a difficult neighborhood. Ukraine went through some wild swings with the Orange Revolution, and the change in government to a pro-Russian government that jailed the earlier leader for corruption, leading to the protest movement calling for close relations to the West, the collapse of the elected pro-Russian government followed by the election of Mr. Poroshenko, and the Russian intervention in Ukraine in 2014-2015, leading to western sanctions on Russia. The sanctions end in Jan 31, 2016. The situation in Ukraine may stabilize where the NATO readiness force and German chancellor Merkel's call for "a persistent NATO presence in the Baltic states," lead to a situation where Russia determines the best course is cooperation with its neighbors, and trade, economic relations....

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A former Wall Street trader says banning bonuses for investment bankers would take out much of the risk in the financial system. The current system is different from the one he joined as an intern in the 1980's, he says. At that time banking was a bland business, where the head of a financial firm made about the same as a junior trader makes nowadays. Large bonuses of today were rare at the time. What large incentives to take risk in the form of bonuses do is to encourage extreme risk taking, especially when the downside or pain as a consequence of these decisions is passed on to other individuals or institutions, or the government.

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The unemployment rate drops to 7.8% from 8.1% in September according to the Labor Dept. The decline partly comes from people taking part time jobs because they are unable to find full time work. The establishment survey shows 104,000 jobs added in the private sector in September, and revises the figures for July and August to show 86,000 additional jobs created. Of the 104,000 jobs added, jobs increased in health care and transportation. Government added 10,000 jobs. Manufacturing jobs declined by 16,000, a cause for concern. A more accurate measure of unemployment is the underutilization of labor called U-6 by experts, this includes part time workers who would prefer to work full time- this has remained at 14.7% for Sept. 2012. The overall picture is that the job market remains sluggish. Because Labor Department numbers are prone to revision this could change in coming months. The slowing economy in China with the new stimulus in China coming in at one eighth the size of the old stimulus (1 trillion yuan over 4 years compared to 4 trillion yuan over 2 years 2009-2010) because of inflation concerns and risks of aggravating a property bubble, and the declining growth in the eurozone- France with zero growth in 2013 and Germany at 0.9%, Italy and Spain declining growth- means the prospects for U.S. economic growth will be lower in 2013. U.S. GDP growth was 1.3% in the second quarter according to the Commerce Department, and Macroeconomic Advisors predicts GDP growth of 1.5% in the third quarter in downward revisions. ...

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George Will lists the shortcomings of Romney and Gingrich, as U.S. Republican presidential candidates in 2012. Gingrich is the worse candidate, says Will. Gingrich was paid $1.6 million by Freddie Mac, for services as "a historian." His response was to say "If you put people in jail," look at "the politicians who profited from" Washington's environment. He criticized government housing agency Freddie Mac for its role in the housing crisis, and at the same time profited as a lobbyist for Freddie. This shows his personal record and lack of conviction about the need for integrity in government officials. Conservatism, says Will, is about understanding that man does not fully understand the complexities of the world around him. It stands in opposition to man saying that he has grasped these complexities and assuming a hubrisitic attitude. Gingrich with his fervor for the latest idea, is the opposite of what conservatism stands for, says Will. Will sees Rick Perry and Jon Huntsman as better candidates than Romney or Gingrich. Presidential debates don't test what is needed to perform presidential duties and have become ridiculously important. Rick Perry's Texas record as two term governor, and his skepticism and distaste for Washington and Wall Street, give him assets that could prove to be vital for the job of president. Huntsman's positions on issues are closer to the conservative approach to government than Romney's. Will says it is important that Republicans don't give an Obama running as a Harry Truman did in 1948, against Congress, the one thing needed to win - someone who voters have a distaste for....

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The first signs of a change in Germany's position to promoting growth in Greece came when German chancellor Angela Merkel told CNBC on May 15, 2012: "I have the will, the determination to keep Greece in the euro zone." She added that if Greece's leaders are looking for "stimulus to be pursued for growth in the euro zone, which we could pursue in the interest of Greece, we're open for this. Germany is open for this." The Social Democrats, SPD opposition leaders have long said that Merkel is able to change positions as the situation changes. Looking back she even disassociated herself from her mentor German chancellor Kohl when he was not willing to disclose the names of donors for illegal donations. This has given her the flexibility that another Christian Democratic party leader Schauble lacked in leading Germany. She has also seen poll numbers favoring the CDU dissipate quickly before the 2005 elections and is aware how quickly situations can change, as is happening now with the public in France, Netherlands, Spain, Portugal, Ireland, Greece, and eastern european EU countries growing weary of strict austerity policies pushed by the CDU. A faction of the CDU pushed for strict austerity policies at the recent CDU convention in Leipzig, Germany. Merkel told the CDU about charges that she had shifted on a number of core issues such as nuclear energy, social issues, minimum wage, and euro zone bailouts- "Our political compass has not changed. The context is changing. This is a time of epic change."...

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Debate in Germany over whether there should be exception to the minimum wage agreement of 8.50 euros per hour. The head of the federal employment agency, Heinrich Alt, says a universal minimum wage would reduce incentives for young people to join vocational training. The new labor minister, Social Democrat Andrea Nahles, says "there will be no exceptions, notwithstanding all the escape fantasies." The Social Democrats insisted on the minimum wage to win support from rank and file working class members after losing support in its own base with the increase in the low wage sector in Germany. Unemployment in Germany is less than 5%, but this comes with an increase in lower wage workers as part of the reforms under the Social Democrat Schroeder administration when unemployment was close to 10%. Economists say the increase in wages would increase weak consumer spending in Germany and increase imports from other eurozone countries. In 2011 the share of the German population making less than the new minimum wage of 8.50 euros an hour, according to the German Institute for Economic Research, is- for former East Germany 27%, for former West Germany 15%, for ages under 24 years 44%, for ages 25 to 60 years 15%. This does not affect the manufacturing sector in East Germany as wages in the sector are above 8.50 euros. The other problem is that wages appear to be declining in Germany, with wages decreasing by 0.3% in October 2013, according to the Federal Statistical Office. ...

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How information generated by Tesco's Clubcards can be used through rigorous information collection, analysis of mounds of data by computers based on a clear structure for the information and what they are looking for. And how the information insights can be used to quickly take action in what to stock and who to target with what is stocked through direct mail and coupons. Tesco uses information about what interests customers, who they are, for example: child care providing fathers who might want the beer as well as the baby stuff, South Asians in immigrant heavy communities in the U.K. tracking what they buy, and don't buy and where. 1. This information driven strategy of Tesco has been copied by other retailers. P&G, Coca Cola, Kimberly Clark and other consumer product companies buy analyses based on Tesco data. 2. This strategy has helped Tesco battle Walmart overseas. Walmart failed in the S. Korean market after 8 years selling its 16 outlets to a local competitor, while Tesco has 39 stores in S. Korea that are doing well. Tesco is also doing well in Central Europe where Walmart intends to open stores. In the UK which accounts for 45% of Walmart's international sales and 10% of its overall sales, Walmart's share of the British market is 16% for groceries compared to 31% for Tesco. Walmart entered the British market in 1999 through the acquisition of the Asda chain of stores. Tesco is growing and doing much better than Walmart in the UK. 3. Tesco's Clubcard based information driven strategy- 3-1. Uses a outside provider that is excellent in its field, can pioneer techniques that will work with Tesco strategy, and has the energy and dedication. Tesco uses Dunnhumby, a husband-wife consultancy that also works with Kroger in the US running its loyalty card program and analyzing customer data. The research firm is now majority owned by Tesco. 3-2 How it works. Each week Dunnhumby receives data on 15 million shopping baskets. Each product is scored on 50 dimensions such as price and the size of the package. The computer looks for customers whose shopping baskets have similiar combinations of scores. Dunnhumby has made 6 segments for Tesco. Finer Foods segment is made up of affluent time strapped customers who go upscale and Traditional segment comprises homemakers who buy ingredients to cook meals from scratch. 3-3 The clubcard works as follows. Introduced in 1995 by Mr Leahy, now CEO, the application asks for information about dietary preferences, size of household, ages of children . The plastic a card in the mail gives customers a point for every pound they spend after they reach $280. Each point is a penny off future purchases and it also can be converted into miles in frequentflier programs In addition large spenders get discount coupons every 3 months on particular products keyed to their buying profile in the database. Quarterly coupon package from Tesco would include 3 coupons for stuff they regularly buy and 3 for stuff Tesco would like them to try. While only 1-2% of coupons ever get redeemed about 15-20% of Tesco coupons get redeemed. The package also includes vouchers through which members can redeem points. $300 of purchases would generate a voucher for $3.00 off any purchase. Karen Masek, an actor and mother of two in London, says Tesco's mailings reflect her preference for fresh produce, environment-friendly cleaning products and organic meat. She says Tesco knows her buying habits and never sends anything that is way off the mark. 3-4 The way Tesco battled successfully with Walmart: Tesco searched its database and identified shoppers who buy the cheapest items available. About 300 items were identified for price conscious customers. Tesco lowered prices on these items such as Tesco Value Brand margarine so that these buyers would not defect to Walmart. 3-5 Examples of how the computer data is used. 1n 2001 Kimberly Clark introduced a premium version of its Andrex toilet paper in the UK infused with aloe vera. Through the Clubcard research data one could track who was buying this toilet paper and how consistently, and later tracked what other products these buyers were buying so that they could be targeted with incentives. It was found that they bought skincare products so Kimberly Clark sent direct mail to 500,000 customers offering free beauty treatments for purchasing the toilet paper twice....