The decks are stacked, planet hijacked

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Decks are Stacked, the Planet Hijacked: with climbingpoetree.com on the global property bubble by Karl Fitzgerald on Mixcloud

Renegade Economists show 349

As broadcast on 3CR radio, Wednesday July 23rd, 2014

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Show Notes
this is cut n paste from my notes, its not all referenced (but most is). Pity I couldnt get to the last item.

Cities Where Millionaires Roan in Clusters
1. Monaco: 29.21% Population: 37,579
A millionaire you might bump into: Tennis champ Novak Djokovic

2. Zurich: 27.34% Population: 366,765
A millionaire you might bump into: Singer Tina Turner

3. Geneva: 17.92% Population: 184,538
A billionaire you might bump into: Biotech heir Ernesto Bertarelli

4. New York: 4.63% Population: 8.41 million
A billionaire you might bump into: Real estate mogul/”celebrity” Donald Trump

Hedge Fund dodged over $6bn in taxes
WASHINGTON (MarketWatch) — Hedge fund Renaissance Technologies used structured financial products purchased from Barclays and Deutsche Bank to avoid more than $6 billion in taxes, a pair of senators said Monday.

The report said the banks and hedge funds used the basket option structure to open trading accounts in the banks’ names, creating the “fiction” that banks owned the account assets. But in fact the hedge funds exercised total control over the assets and executed all the trades. The funds often exercised the options shortly after the one-year mark and claimed profits were eligible for the lower income tax rate.

In Renaissance Technologies’ case, the subcommittee said using basket options to treat short-term gains as long-term gains allowed the hedge fund to avoid more than $6 billion in taxes between 2000 and 2013.

Why are the BRICS starting a bank? And 9 more FAQs
BEIJING (MarketWatch) — There are no surprises, but lots of questions, about Beijing’s espousal of the BRICS bank, launched last week by China as well as Brazil, Russia, India and South Africa.

The freshly named New Development Bank (NDB) is designed to provide both development finance and balance of payments funding on a grand global scale — a clear potential rival to the International Monetary Fund and the World Bank.

More by Hudson on the BRIC bank

Euro-zone construction declines in May
The European Union’s statistics agency also confirmed Thursday that the annual rate of inflation remained at 0.5% in June.

The figures suggest that the euro zone is mired in a period of very low growth and inflation, increasing the risk that it could be pushed into a period of falling prices by some unexpected setback. Consumer prices fell on the year in Greece, Portugal and Slovakia, and were unchanged in Spain and Cyprus.
….
June marked the ninth straight month in which the inflation rate was below 1%. The ECB targets an inflation rate of just below 2%.

Data firm Markit said the headline reading from its monthly survey of 3,000 manufacturers across the euro zone fell to 51.8 in June from 52.2 in May.
activity slowed across the euro zone’s core, including Germany, Austria, and the Netherlands. In France, activity contracted, as it did in Greece.

Greek Property prices
In Athens, the capital and the country’s largest city, the average price of apartments plunged by 10.87% (-8.89% inflation-adjusted) in 2013 from a year earlier, according to the Bank of Greece.

In real terms 44.4% fall since 08 Athens residential

Italy’s house price index fell by 6.54% during the year to Q3 2013, according to Eurostat. When adjusted for inflation, the index actually declined by 7.58%.

The Italian economy was still in recession in 2013, with a real GDP contraction of 1.8% due to the decline in domestic demand.

Australia

AFG
QLD – lending for investment property rising from 33.5 – 38.7% Jan – June
NSW – inv loans as a % of mortgages fell from 53.4 – 45.9%

AFR – Sales Flood set to bury 2006 record

Industrial real estate transactions fur June quarter are up 124%
set to beat previous 2006 record

A strong commitment to infra projects helping
$11.5bn WEstConnext project Syd
$1.5bn East-West link Melb
$870m Perth Freight link

THE LAND QUESTION
Whose planet is this and for whose benefit?

Gu Nets $60m in Footscray
(paywalled)

Richard Gu AXF Group
Bought 17m 2011
Sold $60m 2014
352% return over 3 years.
Who Pays?
Housing hurts.

How does this filter thru to you?
Now $40,000 per unit , if land still at $17m = $11,333

Rental vacancy rates up, but not including Speculative Vacancies (those properties held off the market purely for capital gains).

Berrick Wilson – Call him the Chinese millionaire hunter.

Australia’s Significant Investor Visas, which are similar to U.S. EB-5 visas that come with a $500,000 investment minimum and a requirement to create jobs, are designed to attract overseas capital and eventually allow permanent residency in the country.

Immigrants are required to put the A$5 million into government bonds or complying funds that invest in assets such as infrastructure, real estate and agribusiness, for four years, according to the Department of Immigration website. The initial visa requires residency of at least 40 days a year over the period, after which permanent residency can be granted.

Prior commentary on Significant Investment Visas.

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