At Ordos, China, local officials reportedly have built an entire new city for a million people. But no one can move there, because all the apartments have been bought by speculators so housing is too expensive. Al Jazeera seems to be the only real source for this story, tho brief mentions (omitting speculation) are in the Telegraph and National Post , and of course numerous blogs link to the video.
Archive for November, 2009
Dangers of debt
November 20th, 2009 by Administrator
“Black Swan” author Nassim Taleb at the Royal Society:
Debt is a product of overconfidence. The more confident you are, the less it makes sense to use equity. The problem is that we– humans– cannot be trusted with knowledge because we tend to be overconfident …Religions…don’t like debt. It’s not without a reason. You had debt jubilees, cancellation of debt from Babylonian times… Debt was not necessarily a good thing….Debt is something that’s very toxic and can hit you very quickly, which is why I don’t like leveraged buyouts…so you need to protect people from themselves.
You can express overconfidence with equity, without harming yourself too much…The debt bubble we have now is still here.
He gives some annoyingly persuasive arguments for a conservative approach to public policy. I don’t find any transcript, but there is an mp3 from Radio National, and the Royal Society offers both video and audio. It’s worth listening just to hear him say “Silly Con Valley.”
Speculating in cab medallions
November 19th, 2009 by Administrator
Prices below are medians (2009), and “average” for earlier years.
Month Price Source
October ’09 $185,000 City of Chicago
May ‘09 $170,000 Chicago Dispatcher
April ‘09 $164,500 Chicago Dispatcher
March ‘09 $165,000 Chicago Dispatcher
February ‘09 $158,000 Chicago Dispatcher
Feb ‘07 $ 77,000 Chicago Tribune
2004 >$40,000 Chicago Tribune
1991 $28,000 Chicago Sun Times
The October list includes two sales atr $190,000.
As medallion prices rise despite a sagging economy, this seems to me to indicate that fares are already too high and should be reduced, which would allow medallion prices to fall and, in theory, drivers would be unaffected while passengers benefit.
But Chicago Dispatcher publisher George Lutfallah sees it differently. Due to difficult conditions in the taxi industry, individual medallion owners are selling their medallions to big owners– the taxi equivalent of land speculators. Lutfallah sees this as a bad thing, “a taxi driver who owns his or her own cab is more likely to take better care of both the vehicle and the customer.” He therefore recommends a fare increase. (source: print edition of Chicago Dispatcher October ’09)
Ripping off PBGC, too
November 19th, 2009 by Administrator
I guess no one should be surprised at this; I’m just noting for my own information that
GAO found that 40 executives for 10 companies received approximately $350 million in pay and other compensation in the years leading up to the termination of their companies’ underfunded pension plans.
However, it’s all perfectly legal.
GAO did not find any illegal activity with respect to executive compensation on the part of either the 10 companies or the 40 executives under review.
Big Enough to Break Up
November 9th, 2009 by Administrator
This is so sensible that I can’t imagine it will pass.
We urge the immediate enactment of the Too Big to Fail, Too Big to Exist Act, which directs the treasury secretary to compile a list of those financial institutions that are too big to fail in the next 90 days, and to break up these banks and insurance companies a year after the legislation is signed into law
You can sign Sen. Bernie Sanders’ petition for it.
Via Barry Ritholz.
Easier TIF qualification
November 9th, 2009 by Administrator
Now you don’t need to even pretend that your TIF area is dilapidated. Just propose a STAR Line station within a half mile, get the Board to approve, and you can divert tax dollars pretty much for whatever you want. Thanks to ILAPA’s Sharon Caddigan for the alert. Of course, an openly-administered TIF process might be appropriate for development near any transit station, provided that the funds raised are used to actually provide service at the station.
Government land ownership vs. community collection of land rent
November 6th, 2009 by Administrator
Bloomberg’s report on land taken for the new Shanghai Disneyland tells us something about how people may fare under government ownership of land. One retailer, whose land was taken last year for an unspecified project, still hasn’t gotten compensation:
“All I care now is how much compensation we will end up getting after layers and layers of government officials get their share,”
I don’t see why Disney should get government help in assembling land for their project– it’s not infrastructure–, tho such assistance is routinely provided in the US too. Under a geoist system, where the community collects the land rent and uses it to fund governmental services, landowners would have strong incentive to sell and little incentive to hold out. Disney could buy land cheaply but would pay substantial rent (in the form of land tax) to retain it. Those relocating could buy land cheaply elsewhere, and if in a less desirable location would find their land tax reduced. Folks would also, of course, have no other taxes to pay and would receive a share of the rent collected in excess of governmental needs.
