From a VoxEU column today, by me and Joshua Aizenman:
Might more inflation be good for the US and Europe? This column looks at the housing market in the US and argues that, with houses dropping in price, buyers are playing a waiting game. And as buyers keep delaying, the price drops further. Given the importance of property in many economies, the knock-on effects are severe.
Right now voters are leaning toward reelecting President Obama. An average of the latest public opinion polls gives Obama a lead of 48 percent to 44 percent over former Massachusetts Gov. Mitt Romney. Polls also show that Obama is favorably viewed by 50 percent of voters compared with 35 percent for Romney. In the United Kingdom, a $100 bet on Romney will net you a $175 profit if Romney wins. A winning bet on Obama yields only $40.
But there are a lot of reasons for Democrats to worry. New voter registration rules will restrict turnout by Democratic voters. Citizens United means rich Republican donors can contribute unlimited funds for attack ads in critical television markets. And the turnout by youth and minority groups that was so high in 2008 may recede in 2012 because of waning enthusiasm.
Moreover, the media’s obsession with reporting poll results tends to make us forget that the Electoral College picks the president, and national opinion polls do not necessarily predict outcomes there.
NASHVILLE, TN – There are market forces keeping the healthcare mergers and acquisitions market active but not frenetic, according to analysts at a panel called “Financing The Deal” at the Nashville Health Care Council on May 15.
In the past year, Nashville has been at the center of some of healthcare’s biggest deals. There was the private equity-backed HCA public offering, a $3.8 billion purchase of HealthSpring by Cigna and Blackstone Capital Partners’ $3 billion acquisition of Emdeon to take it private.
The analysts concurred that deal making in 2012 isn’t likely to slow because of uncertainty surrounding the future of healthcare reform. If anything, there’s greater pressure to make deals this year in advance of possible post-election efforts at tax reform.
“There’s still a stable financing environment despite the upcoming election and the events in Europe,” said Jon Santemma, global co-head of healthcare investment banking at Jefferies & Company. “Valuations are dow
BANKS in China appear to be in rude health. The seven biggest mainland banks have just posted a 16% year-on-year increase in pre-tax profits between them for the first quarter. The level of non-performing loans (NPLs) remains low, at just about 1%. But trouble is being stored up for the future.
There are two big worries: bad local-government debt and souring property loans. The infrastructure binge of the past few years saw a boom in local-government financing vehicles (LGFVs), off-balance-sheet entities used to get around prohibitions on borrowing. Regulators say these entities’ bank debts were worth $1.4 trillion at the end of September. Private estimates range much higher, and suggest that 20-30% may be non-performing.
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The government is trying to defuse the bomb. One experiment is the issuance of local bonds to replace these loans. O