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From a skate board maker in Zaragoza to other small businesses laying off employees because banks hit by bad loan losses in the housing bubble are calling in their loans, the situation is rippling across Spain in 2012-2013. It will only worsen an already bad unemployment situation with 25% unemployment. Banks are being consolidated and are expected to take bad loan losses under new rules, and increase their capital reserves to account for bad loans. Many of the cajas savings banks are closed or merged with other banks in other regions resulting in loss of contact with local business. Of 45 regional savings banks only 13 remain. The effects of this are being seen across Spain as small and medium sized businesses are seeing banks call in their loans leading to large layoffs. Here a small business owner in Zaragoza with 1.3 million in skateboard sales to 20 countries, sees its bank call in a 250,000 euro loan, and has to layoff all his employees. A childrens shoe company Colores in Zaragoza shuts down for lack of credit. This is happening quickly as banks in the case of Colores are calling the full amount of the loan immediately and the effects may impact Spain for years. About 60% of the economy and 80% of the jobs are from small and medium sized businesses in Spain, and half a million small businesses have closed in the last few years....

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Is the market in S. Korea reflecting the bursting of the housing bubble in the USA, or is it simply a result of the Roh government's new taxes and rules for real estate such as the capital gains taxes of a shigh as 60% and the restriction on loan size so that monthly payments do not exceed 40% of monthly income. If its the new rules then it must be true that the crisis in the USA must have made the pause from the Roh measures give the market time to reflect. One factor is the oversupply from the building boom especially since the new housing had become increasingly unaffordable to average South Koreans at 100 time average income a 3 bedroom apartment cost $2 million in Seoul. A real estate Professor at Konkuk University estimates that about 1 million units will come onto the market by 2013. 2013 thats because the construction has continued even as sales have come to a near halt. Apartment prices have gone up 3% in 2008 compared to 93% in the last 5 years according to Kookmin Bank. What does this mean for the other Asian markets such as China, India and other Asia. Its not just speculation thats disappearing, but is there a sense that the market for Asian goods in the USA, especially for export powerhouses in Asia such as South Korea, is taking a hit from the credit and housing crisis in the USA. And if thats the case what does this mean for other Asian housing markets in bubble mode, consider this a Early Warning Link. See the link to the South Korean election where even corruption charges against the favored candidate are not affecting his popularity because he is seen as a candidate to who could help S. Korea overcome fears about the economic future. Comments that the current crisis is tougher for real estate and construction than the one during the Korean financial crisis of the 1990's suggest that this is something serious. ...

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Hilsenrath cites Robert Hall, a Stanford University professor whose research shows three fourths of American households do not have two months worth of income put away as cash or other liquid assets. The Federal Reserve researcher Karen Pence says 41% of households can borrow less than $3000 on their credit cards and 23% have been turned down or discouraged from applying for credit. This shows the general financial weakness of overly indebted American households and the overlayed effects of the housing crisis, and higher unemployment. It suggests the margin for consumers to weather difficulties and increase spending is thin.

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Utah is hit hard by decline in construction and housing for young people who come to this part of the country to start families and settle here. It has the youngest population of any state. It also created more jobs than Pennsylvania a much bigger state by 5 times, between November 2006 and November 2007, suggesting that the boom in Utah continued long into 2007. It has also fewer retirees than states like Nevada, Wyoming, Montana and Idaho to help it cushion the impact. Sales of new homes fell 34% in the 4th quarter of 2007 and December housing permits fell 32% over November according to National Association of Realtors. Forecasts by Moddy's Economy.com state that new hopusing starts will fall 60% in 2008 worse than the hits to Nevada and Arizona the other worst hit states. This is also a harbringer of whats happening or likely to happen across the country. As Martin Feldstein put it in a pessimistic note on the ability of the Fed to improve things saying that one could only hope that those like the Fed itself, Treasury, IMF and other economists who show some growth in second half 2008, and who predict nothing worse than a temporary slowdown are correct. Read here a more lasting and deeper slowdown is what Feldstein fears. Feldstein was a Chairman of the Council of Economic Advisors under Reagan and is a professor at Harvard. See his article in WSJ on February 20, 2008 as link to this....

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Copper supplies are expected to be constrained in 2015-2016. Copper demand was up 18% in China in 2014 even with the slowdown in housing. This suggests the future for copper prices may be brighter than it is for other commodities such as crude and iron ore.

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The longest US Open Tennis match? 5 hours and 35 minutes between Dan Evans of the US and Karen Khachanov of Russia just yesterday August 26, 2024. The first three sets were tie breakers. Dan Evans was down 0-4 in the fifth set and came out to win it 6-4. At 4 down he thought he was out and just kept on fighting. Fans gave a rousing ovation. Evans says "it was one hell of a match. I just want to go to bed." 

• Set 1 - 68 minutes
  
  
• Set 2 - 67 minutes
  
  
• Set 3 - 72 minutes
  
  
• Set 4 - 67 minutes
  
  
• Set 5 - 61 minutes
  
  

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New York City and Northern Virgina are selected as the second and third locations for Amazon headquarters. Amazon will evenly split operations for the HQ locations between Long Island City and Arlington County's Crystal City locations. About 25,000 employees will be hired for each location. The location in Northern Virgina is close to Washington Reagan International Airport and metro stops making it appealing. Long Island City was a former industrial neighborhood that is going through a residential housing boom with 16,000 new apartments built since 2006. It is close to airports and subway lines.

Amazon had as criteria for the selection that the locations have flights with easy access for Seattle, job creation impact, and prominence as the main company in the area.

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The part of the tax law that limits state and property tax deductions to $10,000 and limits deduction of mortgage interest is likely to slow the rise of housing values in 2018. Much of the effect is psychological as the impact is felt on the East Coast, California, Midwest and the D.C. area. The median U.S. county will see a decline of 0.8%, and some counties in New York could see declines of 10%, according to Moody's analysis. The impact is greater for higher priced homes, and where incomes are higher with big mortgages and big tax bills.

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30 percent of Hamburg, a key port city in the north of Gemany,  is protected for parks and nature following a plan set by Schumacher, the chief building officer during the early 20th century. Hamburg has 10 percent more green space than other cities in Germany. Hamburg also takes a unique approach to building affordable housing by doing this and yet keeping the nature areas protected. Culturally the city makes an effort to link people to nature.

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Young people are priced out of owning a house in Canada, A house on average costs $C715,000 and average income is $C88,000. A room can cost $1500 monthly to rent near campus. Calgary, Vancouver, Montreal and Toronto housing costs even more. This is still the main issue in the election along with tariffs by the US. Conservatives are better placed to find solutions. Shortages are estimated to require construction of 3.8 million houses over 6 years.

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China's National Bureau of Statistics made an announcement in Beiijing that 51.27% of the Chinese people now live in urban areas. In 1949 the figure was 10.6%, in 1979 it was 19%. In the space of three decades China has urbanized rapidly. This has brought with it economic growth, infrastructure development and increased employment in the manufacturing sector as new workers moved from rural areas to the cities. With it also come major problems for the country and the leaders of the Communist party led government. Of the 691 million urban residents, 253 million are migrant workers- 37% of urban residents and 19% of the population are in this grey zone described as the "hukou" or household registration system. Under "hukou" these migrants from rural areas cannot access public services in the cities, and have rights to access them in their own villages where they are registered. Integrating these migrant workers who are different than their more affluent and better educated neigbors in the cities so that they become truly a part of the urban areas will remain a huge challenge for China. One of the ways China is addressing this is with the plan to build 36 million units of affordable housing for these migrant workers by 2016. Ever so gradually Chinese officials are relaxing the restrictions on migrant workers- such as Shanghai Mayor Han Zheng's announcement for allowing all migrant workers to rent subsidized housing in the outer parts of Shanghai and committing to "increase the migrant population's involvement in the community affairs, cultural life and show genuine care for them." Food security is another issue as more development on prime agricultural land means less land available for agriculture. Appropriation of agricultural land for industrial use is bringing the country down to the limit of 120 million hectares of agricultural land needed for self sufficiency in food, according to the Land Ministry. At the same time China's leaders want to avoid what the World Bank calls "the middle income trap," where a country reaches a level of modernization and urbanization, and then stalls at that level- the level being around $3000 per capital GDP, which is China's GDP per capita today, according to the National Bureau of Statistics in China. Li Keqiang, who takes over from premier Wen Biao, sees the building of affordable housing for migrant workers as a critical way to continue the urbanization process, and shift the country from its export focus by increasing consumption and the development of industries that support this. A slowing economy dominated by state owned companies focussed on a decelerating export model and an aging but still growing population- NBS says China's overall population was up by 4.8% in 2011 over 2010 and has reached 1.35 billion- presents a tougher set of challenges to the new leadership in China than was faced by the current leadership....

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The $6.3 billion settlement of Bank of America for mortgage securities and acquisition of Merrill Lynch under Ken Lewis. This settlement is for a lawsuit for troubled mortgage securities sold to Fannie Mae and Freddie Mac before the 2008 financial crisis. It was filed by the regulator Federal Housing Finance Agency.

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Bernanke's remarks at the Economic Club of New York. "Much work remains and more difficulties lie ahead" says Bernanke, exports will slow, and the labor, housing and credit markets will take time to recover, and consumer spending and investment will remain weak. Inflation is the only bright spot in this picture.

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Jeanne Whalen on the Two Speed Economy in the US September 2025- diverging paths of low and high income Americans. With the new administration in 2025 priorities shift to immigration and what to do about 14 million illegal migrants from Latin America and other places, war on fentanyl and drug trafficking gangs with hundreds of thousands of lives lost to fentanyl and drugs in the US, crime and safety which includes the unprecedented illegal movement of drug trafficking in the Nation, and to a bold posture on using US advantages of its huge market to get European Union, Japan, South Korea, and China to level the playing field on trade bring jobs home.The Biden administration had already conceded to DJT's approach in its one term presidency by shifting on uncontrolled illegal migration but not fast enough, by not removing DJT's tariffs, and failing to take an aggressive posture on fentanyl and drug trafficking. Of the DJT plan US has tariff based revenues of 10--15% for all countries imports into US can that it redirect to groups to soften any effects of tariffs. DJT administration oil transition policy of stretching out the transition to give middle class and lower classes cost of living relief was also accepted by the Biden administration and is now the policy of Democrat run California state government.  The US economy was slowing in 2024 under the Biden administration. What has changed in 2025 is that the US stock markets are responding to steps taken by the DJT Republican administration to lower the cost of doing business by softening regulations, and giving US business the upper hand in different industries, and rebuilding the manufacturing sector with calls for EU and Japan/South Korea to invest more in the US as a quid pro quo for market access. This has led to increase in the value of market portfolios of the income earners above 250,000, or 10% of American households. As this happens the process of trade renegotiation has introduced some uncertainty in 2025 and businesses are looking for more clarity before increasing investment and slowing job hiring which hurts younger people entering the job market and lower income Americans. Were things better under Biden? Government Covid assistance and payouts in the early years 2020-2021 helped lower income workers, as this faded and the cost of living autos, housing increased sharply under Biden in 2022-2024 the situation deteriorated. The situation today is similar to the situation in 2024 with the difference in 2025 that inflation is coming down just as government help is receding. And added factor is the DJT administration plan to tackle head on the increasing cost of Medicaid to about $1 trillion by adding new requirements and reducing subsidies. The federal workforce had a disproportionate share of black workers and the policy changes to reduce the federal workforce have increased black unemployment from 6.1% under Biden in August 2024 to 7.5 % a year later. Hispanics have seen slight improvement in unemployment to 5.3% in 2025, and the middle class incomes also have held up and are holding steady. Meantime Bloomberg points out that one third of people in the top 10% are living paycheck by paycheck because of high cost of housing, university education for children, and inflation.     ...

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To speed up housing development in UK Labour strips environmental groups of the power to stop home building. About 150 road, rail and energy projects will be speeded up by the new rules.

Under old rules in UK regulators would ask developers to mitigate any environmental damage before approval. This is changed to where regulators approve the project and ask the developers to contribute to a "restoration fund" that would go to mitigate any environmental effects, avoiding delays.

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Energy consultant Verleger sees oil prices trending down to $60. He sees prices falling in Jan-March of 2011, as a result of the deteriorating housing market in the USA. He sees half a million barrels a day in demand being taken out as a result of slowdown in construction, adding to inventories.

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The Labor Department report shows U.S. nonfarm payrolls increasing by 165,000 in April 2013, and the unemployment rate declining to 7.5%. The housing and auto sectors showed gains. Private sector jobs increased by 176,000, and government jobs showed losses of 11,000. Professional and business services sectors added 73,000 jobs, including 31,000 temporary workers.

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48% of British voters see immigration as the most important issue, says Ipsos. And 31% say their local area is housing more than its fair share of asylum seekers growing to 61% of Reform UK voters. Reform UK is now leading party with 34% of the vote to Labour's 25% and Liberals 11%. The report in the WSJ on Augu 28 shows how the Labour government did not live up to it's talk on immigration. It also shows how the Conservatives and Boris Johnson failed by opening up non EU immigration from Asia on the grounds that it would bring in the brightest and yet dropped the basic college degree requirement paradoxically or carelessly. Lobbying from health care home care hugely increased migration for this field under Conservatives and is only now being reversed by Labour. Labour has been too slow and the culture of Britain and Labour has not changed enough to grasp the problem. Their are vested interests in Britain such as universities and home care health care that have influenced the conduct of policy so that migration on non-eu has replaced eu migration after Brexit, but not attracted the most qualified immigrants. The 4% of the British population that entered Britain after Brexit as immigrants, millions arrived and now when Labour is trying to bring this down faces a large number of dependent applications. University students are now bringing in their dependents at rates that have skyrocketed. ...

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Much of China's strong GDP growth year after year of 9-12% was generated through large fixed investments in manufacturing. More than 40% of GDP is from factory construction or fixed asset investment in housing and infrastructure. And this spawned suddenly on its own a whole generation of new small business bootstrap entrepreneurs, as if from nowhere, who were good at adapting and seeking out new opportunities as new factories and exports shot upwards. GDP multiplied 14 fold from 1980's. And created 5 million businesses of over 8 employees each, according to the State Administration for Industry and Commerce. In the processs creating 75 million jobs for university graduates, workers from state companies and fro migrants from the rural areas. These private companies and their investment spending make up half of the 2008 GDP of $4.42 trillion. But with the export model heavily dependent on overseas markets especially the USA, the collapsing export markets is shrinking production and investment. Industrial production which went up by 16% annually for 5 years, dropped to 3.8% for Jan-Feb 2009. Mr Yu and his company GenTech, profiled here, was an engineer who studied engineering in Beijing, then at Newcastle University in the UK, worked for Cargill in Iowa, and looked for opportunities away from agricultural engineering. Adapting to China's needs in first semiconductors and then solar equipment assembly lines, he provided the high tech tubing for the gases and chemicals used in manufacturing assembly lines, competing with the likes of Air Products and Chemicals of the USA....

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US House Republicans are pursuing cuts in spending of as much as 50% in many programs that are considered essential, such as a 50% cut in foreign aid at a time of global food insecurity, deep cuts in the FBI's counter intelligence budget, deep cuts in healthcare services and housing to low income Americans following the pandemic and high inflation, and other cuts to services benefiting workers and families. Democrats in Congress and president Biden oppose such cuts and hope to eliminate the deficit with cuts that do not place an unfair burden- taxes on the wealthiest with over $100 million and on stock buybacks would generate about $2 trillion to cover the whole deficit which is in the range of $1.4 trillion in 2023 moving to $2 trillion a year. Much of the Republican plan is being shaped by Mr. Trump's former Budget Director, Russell Vought, says this report in the NYT. Mr. Vought calls it an attack on the bureaucracy and woke spending. Other Republicans see this as an ideological approach that does not address today's problems. Chuck Schumer, Democrats Senate Majority Leader asks Republicans to spell out their plan. ...

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This editorial view in The Guardian says the Tories win in 2019 was a result of homeowners and mortgage holders feeling richer with the soaring house prices in England. It could hurt the Conservatives as interest rates rise and house prices drop. Conservatives could lose support gradually, then suddenly as home prices drop fast. It cites the forthcoming book Shattered Nation by Prof. Danny Dorling of Oxford University on the extractive model of housing in Britain being out of step with its European neighbors. Dorling says that had house prices gone up with inflation in the last 70 years, the average home in Britain would have cost 63,000 pounds, that is twice the median UK salary of 31,000 pounds. Instead government's ONS shows price of average house in Britain is 296,000 pounds in 2022 August, up 36,000 pounds- the price increase of 14% is one year's salary. Dorling says money is siphoned off from the less well off to the already wealthy when paying excessive rents, buying an overpriced house, or keeping up with larger mortgage payments. Lawmakers don't see the problem Dorling says because so many of them are landlords including Mr. Sunak. ...

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GST revenue increase is important because it finances healthcare, education, infrastructure building, jal ghar and cooking gas, Digital India initiatives, housing programs in a way that has never happened before and is needed for modernizing the Indian economy. The same approach is being taken by president Biden in the US to finance his climate and tax bill of $369 billion. It is the biggest climate action bill in history and revenues to finance renewable energy transition are coming from a 15% minimum corporate tax that is being agreed to by all countries in the world including US, Britain, European Union and India. Just today the WSJ the largest biotech company Amgen in the US paid 3.5% effective tax rate on revenues for 2013 when tax rate under federal law was 35%, and the IRS is working on getting $10.7 billion back in payments due over a decade. Much of Amgen's profits of $24 billion had been shifted to a location in Puerto Rico says a report in WSJ. The development work of the free world countries including US, EU, and India cannot happen without this. Without this the US, EU and India cannot even remain competitive with China or tackle national security threats. ...

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This article in The Guardian looks at the role of British authorites in the Empire in the 19th and 20th century that led to famines. Under Lord Lytton in the 1870's and in 1943-44 in Bengal there were famines that were worsened by British policy. Throughout the 19th and the first half of the 20th century India's energies were sapped and its poverty deepened by the British effort to extract wealth from India through commercial policy and taxation. During the Napoleonic Wars Britain used its Empire in India to finance the war in a way Napoleon lacked.  .As can be seen in the British Residency park in Lucknow  British authorites focused their efforts on the Treasury of the collapsing Empires in India whom they replaced. The people seeing tax territories shifted from one foreign authority to another stretching over four hundred years with little difference in development needs being met. After a period of self-rule which struggled with development after Independence in 1947, India's largest state Uttar Pradesh with a population of about 300 million, is finally bringing sanitation, water, roads, housing and medicine to all parts of the state. ...

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China's plan to lift all birth restrictions by 2025. The one child policy was replaced with a two child policy, and now with a three child policy in 2021, as China's birth rate declined below the level needed for a stable population. The plan now is to lift all restrictions as the decline in population is expected to be very steep. Not enough young people to support a growing elderly population is a major problem for the economy. A mindset has developed over 70 years for one or two children that is seen as hard to change. Women now work and pursue careers, their expectations in life have changed. Couples are also finding it hard to get access to schools and afford the costs of education and home space needed for larger families. Housing in most cities is costly, making it harder to raise families. Attitudes are hard to change. Experts see little impact of the new policies. The three northeastern provinces suffered most in the shift to a market economy. This is where the drop in birthrates is very steep. The government will remove all birth restrictions in the northeast before applying it to the whole of China. ...

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China believes Taiwan is part of one country with different systems, yet president Xi's words to former Taiwan president Ma in Beijing on March 9, 2024 suggest China is moderating its stance with Taiwan, reliant more on persuasion after the air and sea blockades during the pandemic. Xi met Ma in 2015 in Singapore when both affirmed the unity of both countries. Taiwan under the Progressives who now have won for a third time sees itself as a separate country and Xi sees Taiwan as a part of China.  Ma's colleague lost the recent election to  Lai Ching-Te of the Democratic Progressive Party. Issues in the election were cost of housing and the economy.  Xi said the 1992 Consensus still holds for Taiwan, a former Japanese colony just across the straits from mainland China under that consensus it was accepted as one country with different systems. Xi said: “Compatriots on both sides of the strait are Chinese... The difference in systems does not alter the objective fact that the two sides of the strait are of one country and one nation.” ...