Articles About Economics

Over the last 30 years, China has become the world’s factory floor, offering a massive and highly mobile workforce, fast turnarounds and low production costs.  The “Made in China” label can be found on virtually any product sold across the globe, from shoes and clothing to power plant components and process control systems.  Even products […]

One European nation has escaped the worldwide financial meltdown and recession.  It’s Norway, which saved its money – rather than spent – through the boom years. As a result of frugal financial management, Norwegian housing prices and consumption are on the upswing and interest rates are affordable.  Norway’s fiscal responsibility of its income from enormous […]

To purge their balance sheets of debt and avoid future writedowns, more and more U.K. banks are considering plans to transfer commercial property loans into REITs. Such strategies entail using REITs as publicly traded “exit vehicles” to limit the losses they and their borrowers face. The British Property Federation is currently pushing the idea to […]

A new Wall Street Journal analysis shows that U.S. banks are charging off bad commercial mortgages at the fastest pace in almost two decades.  At the current clip, losses on loans that financed apartments, retail centers, offices, and other commercial real estate could total nearly $30 billion by the end of the year. Thousands of […]

In his semi-annual testimony before the House Financial Services Committee, Federal Reserve Chairman Ben Bernanke said that although the economy is exhibiting “tentative signs of stabilization,” he plans to maintain a “highly accommodative” monetary policy for the time being.  According to Bernanke, “The pace of decline appears to have slowed significantly.  In light of the […]

Economic development organizations are stepping in to help plug the credit hole.  We all know what the economy is like today, and it is unlikely that the industrial and commercial real estate markets will soon turn around. As an economic developer, I see another side of the economy where both communities and businesses are seeking opportunities […]

Ernst & Young recently conducted a distressed debt survey to determine who will be the most active direct sellers of non-performing loan portfolios.  The results are interesting. 36 percent responded it will be regional banks and thrifts 32 percent responded it will be money center banks 13 percent responded it will be the United States […]

While the commercial real estate market waits to bottom out, dozens of smaller buyers who pooled their dollars to buy office buildings during the boom may be in worse shape than large institutional investors.  These tenants-in-common (TIC) funds, which allow smaller investors to own multiple office buildings together, are facing the same issues as giant […]

In another sign that recessions are good for low-cost leaders, Sears posted a $26 million profit – or 21 cents per share — in the first quarter of 2009.  Based on that news, shares rose $5.21, or 10.38 percent, to close at $55.40 on the Friday before Memorial Day.  These numbers represent a significant improvement […]

The tragic death of the “King of Pop” provides an interesting insight into how hedge funds and private equity groups buy loans  in anticipation of future earnings. Michael Jackson made real money during his 40 years as an entertainer; unfortunately, he also lost a lot of money, especially over the last 10 years. Reports are […]