What We Read Today 24 October 2014

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary “reading list” which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for “reading list” items are gratefully reviewed, although sometimes space limits the number included.

• Housing is waking up to a new hangover (Diana Olick, CNBC) After three years of double digit price increases for U.S. houses the increases have slipped back to single digits nationally and some markets are not increasing at all. Zillow is quoted in this article as saying house prices should continue to be steady and rising slowly. But not all agree. See next two articles.

• Home prices headed for a triple dip (Diana Olick, CNBC) The western U.S. will lead the national average prices lower as soon as the end of this year or early 2015, according to some analysts.

• See recent GEI Analysis articles on U.S. housing, especially 2014 articles by Keith Jurow who has been ahead of the curve for more than three years.

• The jingle that sounds the road to economic recovery (Gillian Tett, Financial Times) One reason that the U.S. banking system seems to be healthier that that in Europe is the use of non-recourse mortgage loans where repossession (foreclosure) is the process that removes the debt from the ledger. There is no recourse to any other borrower assets. Tett says: “It sometimes pays to wipe the debt slate clean rather than sweep problems under the rug.” Some Irish lenders have started to issue non-recourse mortgages and Tett says the rest of Europe should follow that lead. Unencumbered balance sheets are needed for growth, in her opinion, and she presents some macro observations to support. The quickest way to clean balance sheets is to keep the dirt from under the carpet and close out (by writing down) bad debts.

• Articles about conflicts and disease around the world

Ebola

Waiting on hold: Ebola and Big Data (The Economist)

Ebola’s impact on the West African economy (The Conversation)

Ebola in New York: Five Things to Watch (Bloomberg Businessweek)

U.S. stock futures tumble on reports of Ebola case in NY (Reuters)

Yen rallies on safe-haven bids after New York Ebola case reports (Reuters)

Want to feel better about Ebola? This (massive) chart should do the trick. (The Washington Post)

Turkey

Turkey’s U.S. relations show strain as Washington’s patience wears thin (Reuters)

Syria

Syria’s Kobani less at risk but could still fall: U.S. officials (Reuters)

Iraq

In Iraq, Relief After News of Blackwater Convictions (The New York Times)

Islamic State militants seize Iraq village, press assault on Yazidis (Reuters, Yahoo! News)

ISIS

With their feet and a tweet, Europe’s Muslims stand up to IS (The Frontier Post) Hat tip to Sig Silber.

Iran

Iran will be seen as responsible if nuclear talks fail: U.S. (Reuters)

Ukraine

Exclusive: Charred tanks in Ukraine point to Russian involvement (Reuters)

Russia

LEAKED: What Happens to Germany if Russia Turns off the Gas (Wolf Street)

Oil slump leaves Russia even weaker than decaying Soviet Union (The Telegraph)

Hong Kong

China’s Hong Kong Follies (Project Syndicate)

Mexico

Mexican mayor accused of masterminding disappearance of 43 students (The Washington Post)

There are 12 articles discussed today ‘behind the wall’.

Today’s discussions start with an assessment of how falling oil prices will affect the global economy. That extends naturally into discussions of inflation, deflation and the quantity theory of money. Along the way some neoclassical modeling “habits” are hoisted on their own petards.

Do not miss “Other Economics and Business Items of Note”, the final section every day.

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