.... 1 Introduction The real estate market, like other markets, is subject to the pressure of supply and demand. When speculation runs wild, prices can inflate rapidly. This is a "housing bubble." The danger in this situation is that the market will not be capable of sustaining the inflated prices, so the value of properties begins to come down, sometimes rapidly. Definition of a Housing Bubble * A "housing bubble" is a cyclical economic event where high trade volumes inflate prices, which ultimately become unsustainable, causing a lowering, or "crash" in values. Economic bubbles may be called by a variety of terms, including a speculative bubble, a market bubble or a balloon. Economic cycles of this nature are not exclusive to real estate. They have occurred throughout history in a variety of markets, including stocks, tulips and pottery. Contributing Factors to Unstable Housing Conditions * It could be argued that a housing bubble is really an example of a credit bubble. Although real estate is the underlying commodity, most house buyers use credit -- in the form of a mortgage -- to secure the property. Lax lending guidelines, rapidly inflating values, speculative buyers and the use of adjustable rate mortgages (ARMs), which can adjust to higher rates, are all factors in accelerating the likelihood of borrowers defaulting...
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...ANALYSIS OF REAL ESTATE SECTOR IN INDIA REPORT SUBMITTED TO Dr. Dennis Raj Kumar Submitted by (GROUP-9) Lavanya Sriharshini Vinod Varun Ashok P Manju harsha Pramit CONTENTS CHAPTER NO. | CHAPTER NAME | PAGE NO. | | ABSTRACT | 3 | 1 | INTRODUCTION | 4 | 2 | MARKET STRUCTURE | 6 | 3 | ANALYSIS OF INDIAN REAL ESTATE IN HOUSING SECTOR | 11 | 4 | PRICING STRATEGIES | 16 | 5 | ADVERTISING STRATEGIES | 19 | 6 | FINANCIAL ANALYSIS OF INDIAN REAL ESTATE COMPANIES | 21 | 7 | FUTURE OUTLOOK OF REAL ESTATE | 32 | | CONCLUSION | 35 | | REFERENCES | 36 | ABSTRACT EXECUTIVE SUMMARY: Real estate sector in India is assumed greater heights with the labor migration, liberalization of economy which led to raise for commercial and housing space.2012 was very sluggish year in terms of growth where GDP contribution of real estate declined from 10.6% to 6.5% due to raise in input cost, high lending rates which impacted sales as a result of inflation. Real estate sector is described as cyclic moments in terms of price over a period of time which caused fluctuations in commercial and residential markets. This resulted in change in economic policies of Indian market environment. The change in macro-economic factors such as GDP, employment rate, population growth, House hold disposal income, stock market values, Price to income ratio, Net rental yield, Household debt service ratio, interest rate / mortgage rate, demand supply...
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...boost lackluster domestic demand, which the U.S. and others argue is partly to blame for the anemic economic growth in the euro zone as a whole. Do Tax Cheats Solve the U.K.’s Productivity Puzzle? URL:http://blogs.wsj.com/economics/2013/10/22/do-tax-cheats-solve-the-u-k-s-productivity-puzzle/?KEYWORDS=productivity abstract: Economists in Britain have long been scratching their heads over the nation’s troubling “productivity puzzle.” Now Markit, the financial information provider that publishes the purchasing managers’ indexes used to gauge activity in the global economy, has tentatively suggested that former tax cheats might be muddying the waters. Britain has a bigger workforce than it did before it tipped into recession in 2008 yet is producing far fewer goods and services. This mismatch between output and jobs has led to a collapse in productivity, a measure of how effectively an economy uses its resources that’s an important driver of future growth prospects. Bank of Mexico’s Carstens: Inflation to Move Above 4% URL:http://blogs.wsj.com/economics/2014/01/10/bank-of-mexicos-carstens-inflation-to-move-above-4/?KEYWORDS=inflation abstract:Mexico’s inflation is bound to move above 4% in coming months as a result of new taxes on some consumer goods, but the effect should be temporary, Bank of MexicoGovernor Agustin Carstens said Friday. Inflation measured by the consumer price index rose sharply in December to end last year at...
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...WHARTON on... Global Finance ............... http://executiveeducation.wharton.upenn.edu http://knowledge.wharton.upenn.edu Global Finance: Looking Back, and Ahead The world is undergoing the worst financial crisis in decades. Although the global credit crunch was sparked by the bursting U.S. housing bubble, one of the most important causes was more basic: For too long, spending in the United States has outpaced incomes. This fundamental mismatch was supported temporarily by an extremely lax U.S. monetary policy that led to easy credit, and by foreign producers who supplied cheap goods to America in part by managing their currencies. The resulting, unsustainable imbalance led to financial collapse and a worldwide economic downturn, even in rapidly developing countries such as Brazil, Russia, India and China—the BRIC countries. The following articles from Knowledge@Wharton look at these and other developments in global finance. They also examine how similar crises have been managed successfully—or not—on a national basis in the past, and what lessons they may offer. 3 Contents Huge Reserves, Emerging Market ‘Challengers’ and Other Forces Are Changing Global Finance Rapidly developing economies (RDEs) have increasingly become drivers of change—and sometimes disruption—in global financial markets. That has important implications for companies in the United States and Europe as new players emerge, including sovereign wealth funds, state-controlled entities, and acquisition-minded...
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...The Size and Distribution of Hidden Household Income in China Xiaolu Wang National Economic Research Institute China Reform Foundation C510 Guo Hong Building, No. A-11 Muxidi Beili Xicheng District, Beijing, 100038, China wangxiaolu@neri.org.cn Wing Thye Woo Economics Department University of California Davis, California 95616, USA wtwoo@ucdavis.edu and School of Finance Central University of Finance and Economics Beijing, China December 25, 2010 revision This article is part of a research project of the Chinese Research Society for Economic System Reform. We thank the many individuals and organizations who made this project possible. We also thank the readers of the earlier Wang (2007) study and of earlier drafts of this report for their valuable comments. We are solely responsible for the remaining mistakes in this article. 1 The Size and Distribution of Hidden Household Income in China Xiaolu Wang and Wing Thye Woo Abstract Official Chinese data on urban household income are seriously flawed because of significant underreporting of income by respondents and non-participation by the high income groups in official household surveys. We collected urban household income and expenditure data in a way that increased their reliability and the coverage of the rich. We utilized the well-known relationship between Engel’s coefficient and income level through two different approaches to deduce the true level of household income for each of the seven Chinese...
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...FocusOn China Hotel Market Outlook Issue 2 - 2011 Produced in Conjunction with the China National Tourism Hotel Association Contributors Lily Ng Executive Vice President Jones Lang LaSalle Hotels, China lily.ng@ap.jll.com +86 21 6133 5550 Hans Galland Senior Vice President Jones Lang LaSalle Hotels, China hans.galland@ap.jll.com +86 10 5922 1352 Shuo Qi Analyst Jones Lang LaSalle Hotels, China shuo.qi@ap.jll.com +86 10 5922 1353 Glossary: City abbreviations BJ - Beijing DG - Dongguan CC - Changchun GZ - Guangzhou CS - Changsha GL - Guilin CD - Chengdu HZ - Hangzhou CQ - Chongqing HB - Harbin DL - Dalian HF - Hefei ADR OCC RevPAR GDP FDI CBD REITS FEIMCs UNWTO CIRC CSRC CBRC Jones Lang LaSalle Hotels Jones Lang LaSalle Hotels, the first and leading global hotel investment services firm, is uniquely positioned to provide the depth and breadth of advice required by hotel investor and operator clients, through a robust and integrated local network. In 2010, Jones Lang LaSalle Hotels provided sale, purchase and financing advice on $4.1 billion worth of transactions globally. In addition, advisory and valuation services were provided on over 1,000 assignments. The global team comprises over 225 hotel specialists, operating from 39 offices in 20 countries. The firm's advice is supported by a dedicated global research team, which produced 70 publications in 2010 in addition to client research. Jones Lang LaSalle Hotels' services span the hospitality spectrum; from luxury single...
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...urgently need to transform the pattern of economic development,” pronounced Premier Wen Jiabao in March 2010. “We will work hard to put economic development on the track of endogenous growth, driven by innovation. — Premier Wen Jiabao, March 20101 Since the early 2000s, the success of China’s export-led growth strategy had been alienating major trade partners—especially Europe and the United States. By 2005, China’s trade surplus had reached $134 billion, of which $114 billion was with the United States alone. Foreign-invested firms accounted for more than half of this amount. 2 In the U.S., organized labor and various pundits and politicians increasingly blamed China for the loss of as many as 3.5 million manufacturing jobs.3 U.S. Senator Chuck Schumer (D-NY) became a leading voice calling for punitive tariffs if China did not allow its currency, the yuan, to appreciate.4 When China did allow the yuan to appreciate beginning in May 2005, the yuan grew by almost 21% over the next three years, from 8.3 to 6.8 yuan per dollar. However, in October 2008, China once again froze the exchange rate. By then, China's trade surplus with the United States had grown to $258 billion, while its overall current account surplus reached $426 billion. Although political complaints about China’s export-led growth model achieved limited traction, the global financial crisis brought the problem to light. In the fourth quarter of 2008, China’s exports shrank for the first time since...
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...anTien Nguyen Amna Qureshi Rina Marie Abantao “Jotun - All the Colours in the World” Date: 04.06.2009 Program: Bachelor in International Marketing Fudan University & Norwegian School of Management “This paper is written as a part of the undergraduate program at BI Norwegian School of Management. This does not entail that BI Norwegian School of Management has cleared the methods applied, the results presented, nor the conclusions drawn” Jotun China – All the Colours in the World Executive summary Jotun Kemisk Fabrik A/S was founded in March 1926, operating only in Norway until 1962 when it began to expand internationally. Today Jotun operates in more than 70 countries, and is one of the world’s leading manufacturers of paints and coatings. Jotun has been in the Chinese market since 1983, initially focusing only on marine coatings and protective coatings where the brand became very successful. Encouraged by this, Jotun China decided to enter the Chinese decorative paint market in 2001 with the long term goal of becoming the market’s leading brand. However, after 8 years in the Chinese decorative paint market, Jotun China has not been able to replicate its previous successes. Therefore, we the authors of this thesis, working in collaboration with Jotun China staff, set out first to determine the viability of Jotun’s latest strategy for the Chinese decorative paint market, and second to suggest concrete steps to follow if and when executing this strategy. Our findings...
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...T A R Y F U N D INTERNATIONAL MONETARY FUND Research Department Global Imbalances: In Midstream? Prepared by Olivier Blanchard and Gian Maria Milesi-Ferretti1 Authorized for Distribution by Olivier Blanchard December 22, 2009 Disclaimer: The views expressed herein are those of the author(s) and should not be attributed to the IMF, its Executive Board, or its management. Before the crisis, there were strong arguments for reducing global imbalances. As a result of the crisis, there have been significant changes in saving and investment patterns across the world and imbalances have narrowed considerably. Does this mean that imbalances are a problem of the past? Hardly. The paper argues that there is an urgent need to implement policy changes to address the remaining domestic and international distortions that are a key cause of imbalances. Failure to do so could result in the world economy being stuck in “midstream,” threatening the sustainability of the recovery. JEL Classification Numbers: E21, E22, F32, F33, F36, F41 Keywords: Current account deficits, saving, investment, portfolio choice. Authors’ E-mail Addresses: oblanchard@imf.org ; gmilesiferretti@imf.org 1 One of the series of “Seoul papers” on current macro and financial issues. We are grateful to Caroline Atkinson, Nicoletta Batini, Tam Bayoumi, Christian Broda, Matthieu Bussière, Paul Cashin, Nigel Chalk, Menzie Chinn, Stijn Claessens, Charles Collyns, Carlo Cottarelli, Irineu de Carvalho Filho, Uri...
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...UNDERSTANDING THE SUBPRIME LENDING The term "subprime" refers to the credit status of the borrower, which is being less than ideal. Subprime lending is a general term that refers to the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history. According to the U.S. Department of Treasury guidelines issued in 2001, "Subprime borrowers typically have weakened credit histories that include payment delinquencies i.e. non-payment of the mortgage, and possibly more severe problems such as charge-offs, judgments, and bankruptcies. They may also display reduced repayment capacity as measured by credit scores, debt-to-income ratios, or other criteria that may encompass borrowers with incomplete credit histories." This is when the borrowers have a poor credit history that is they are bad borrowers. Subprime lending is also called B-Paper, near-prime, or second chance lending, as the borrowing is done to customers with a poor credit history or no credit history without any security in return of the money lending. Subprime lending encompasses a variety of credit instruments, including subprime mortgages, subprime car loans, and subprime credit cards, among others. A subprime loan is offered at a rate higher than A-paper loans due to the increased risk. Subprime lenders To access this increasing market, lenders often take on risks associated...
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...Plumlee and R. David Plumlee Negative Goodwill: Issues of Financial Reporting and Analysis Under Current and Proposed Guidelines Eugene E. Comiskey and Charles W. Mulford Electronic copy available at: http://ssrn.com/abstract=1263280 JARAF The Journal of applied research in accounTing and finance Publication Information JARAF - The Journal of Applied Research in Accounting and Finance is a scholarly peerreviewed journal jointly published by The Centre for Managerial Finance at Macquarie Graduate School of Management and the Faculty of Economics and Business at The University of Sydney. All journal articles published in JARAF are subjected to double-blind peer-reviews by qualified international experts. Months of Distribution: July – December Current Edition: Volume 3, Issue 1 (2008) ISSN 1834-2582 (Print) ISSN 1834-2590 (Online) Editors Tyrone M. Carlin Professor of Financial Reporting & Regulation Faculty of Economics and Business The University of Sydney NSW 2006 Australia Nigel Finch Director, Centre for Managerial Finance Macquarie Graduate School of Management Macquarie University NSW 2109 Australia Editorial Advisory Board Edward I. Altman Max L. Heine Professor of Finance Stern School of Business, New York University (USA) Author Enquiries For information relating to the submission of articles, visit the JARAF website at: www.mgsm.edu.au/journals/jaraf Please address all enquires to: Nigel Finch Editor JARAF Macquarie Graduate School of Management...
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...A REPORT ON THE BRICS COUNTRIES ECONOMIC POLICIES Submitted to Submitted by Prof. Padmakali Banerjee BA ECONOMICS HONS (4th sem) Contents 1. Introduction to BRICs 2. Brazil 3. Russia 4. India 5. China BRICS • In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China which are all deemed to be at a similar stage of newly advanced economic development. • The acronym was coined by Jim O'Neill in a 2001 paper entitled "Building Better Global Economic BRICs" • It is typically rendered as "the BRICs" or "the BRIC countries" or "the BRIC economies" or alternatively as the "Big Four". • It has been replaced by BRICS since the 2010 inclusion of South Africa in the bloc. • In 2010, however, while the four BRIC countries accounted for over a quarter of the world's land area and more than 40% of the world's population. • Projections on the future power of the BRIC economies vary widely. Some sources suggest that they might overtake the G7 economies by 2027. • According to a paper published in 2005, Mexico and South Korea were the only other countries comparable to the BRICs, but their economies were excluded initially because they were considered already more developed, as they were already members of the OECD. Current leader Brazil - Dilma Rousseff, President China - Xi Jinping, President India...
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...had broken and six others had cracked. Taipower recently applied to resume operations of the No. 1 reactor after replacing some parts and carrying out other safety checks. But the environmental groups said the cracks in the bolts indicated deterioration of the nuclear power plant's structure, operating systems, parts and components. Allowing continued operation of the aging plant would jeopardize public safety. At a recent public hearing on the matter, Tsuei Su-hsin, secretary-general of Green Citizen Action's Alliance, said the decision to resume operations was not transparent. Forecasts for slow growth in China, worries over Greece bailout take toll on markets HONG KONG--World stock markets sank Tuesday over worries about slower economic growth in China and a possible snag in the deal for Greece to get its bailout money. In early European trading, Germany's DAX was down 0.4 percent at 6,835 and the CAC-40 in France fell 0.4 percent to 3,473.81. The FTSE 100 index of leading British shares lost 0.3 percent to 5,857.35. U.S. stocks were poised to fall. Dow futures were down 0.3 percent at 12,915. Broader S&P 500 futures were down 0.4 percent at 1,358.70. Asian stock markets also slid, as mainland Chinese shares saw their biggest loss in almost a month a day after Premier Wen...
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...drawn from China's spectacular and sustained economic growth? As Hu Jintau remarked at the 17th Congress of the Chinese Communist Party, the period since the previous Congress five years ago has been extraordinary. China's economic achievements have been arousing not only astonishment and admiration but also some anxiety. In the past twelve months alone, The People's Republic of China (PRC) has overtaken Canada as the biggest source of imports to the USA, and overtaken the USA as the biggest source of imports to the European Union. Concern about the low level of investment in Africa has been displaced by concern about the effects of the high level of Chinese investment in Africa; there is now even anxiety about the effects of investment by Chinese state-owned firms into the Western economies. The Chinese Communist Party is also expressing concerns. The themes of its 2007 Congress included protection of the environment and the achievement of social harmony. According to some estimates, China has displaced the USA as the world's biggest source of greenhouse gases. Inequality is rising as fast as pollution: China now has over 800 individuals with a personal wealth of more than a hundred million US dollars each, up from 500 in 2006; while the average income in rural areas of China is 480 dollars per year. Made in China. Hu Jintau's remark on the extraordinary nature of the most recent years can be faulted in only one sense: China has been making phenomenal economic strides...
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...THE FUTURE OF ECONOMIC CONVERGENCE* Dani Rodrik Harvard University August 2011 * This is a paper prepared for the 2011 Jackson Hole Symposium of the Federal Reserve Bank of Kansas City, August 25-27, 2011. I am grateful to Arvind Subramanian for helpful conversations and to UNIDO for making their INDSTAT4 data base available. I also thank Cynthia Balloch for research assistance and the Weatherhead Center for International Affairs at Harvard for financial assistance. I. Introduction Novelists have a better track record than economists at foretelling the future. Consider then Gary Shteyngart‘s timely comic novel ―Super Sad True Love Story‖ (Random House, 2010), which provides a rather graphic vision of what lies in store for the world economy. The novel takes place in the near future and is set against the backdrop of a United States that lies in economic and political ruin. The country‘s bankrupt economy is ruled with a firm hand by the IMF from its new Parthenon-shaped headquarters in Singapore. China and sovereign wealth funds have parceled America‘s most desirable real estate among themselves. Poor people are designated as LNWI (―low net worth individuals‖) and are being pushed into ghettoes. Even skilled Americans are desperate to acquire residency status in foreign lands. (A degree in econometrics helps a lot, as it turns out). Ivy League colleges have adopted the names of their Asian partners and yuan-backed dollars are the only safe currency. This is sheer fantasy...
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