Fed laughter and Housing pricesUSA: Why Las Vegas Got Bubbly

“One of the mysteries of the housing boom and bust is how speculation in Las Vegas and Phoenix, with their wide open spaces, got so heated.  With so much land on supply, you’d think it would be hard for a bubble to get started.”  The answer is both 1) Price elasticity in Las Vegas is actually relatively high compared to other regions/metro areas, and 2) Land constraints were nicely balanced (as opposed to, say, San Francisco) which made speculative development possible.

CHI: Chicago Has Problems, But It’s No Detroit

“The city’s economy is in far better shape because of its size and diversity.  [Standard & Poor’s] projects per capita income, for example, in Chicago at 93% of the national average, while putting it at 57% in Detroit.  And while Chicago has seen population declines, they haven’t been nearly as sharp as Detroit, and the city continues to attract people in their 20s and 30s…Going forward, S&P says one major difference between Chicago and Detroit is the Windy City can raise basically any tax without voter approval — an option Detroit didn’t have.”  Meanwhile, here’s all the pretty things Chicago would like to have by 2034.

USA: The New Defense Budget May Change Less Than You Think

A new study on post-conflict military budget changes found that “countries that had recently suffered counterinsurgency losses or draws had lower rates of mechanization, on average, than countries that had not…we found this relationship only for countries that fought counterinsurgencies on their own soil, where the conflict represented a clear internal threat.  By contrast, outside interveners or occupiers that recently experienced counterinsurgency failures abroad had slightly higher mechanization rates, on average, than countries that had no recent counterinsurgency losses or draws at all.  The Pentagon’s decision to invest less in manpower and presumably increase the military’s mechanization fits this pattern precisely.”

Global: Trans-Pacific Partnership Is No Big Deal

Krugman: “The first thing you need to know about trade deals in general is that they aren’t what they used to be.  The glory days of trade negotiations — the days of deals like the Kennedy Round of the 1960s, which sharply reduced tariffs around the world — are long behind us.”  The Trans-Pacific Partnership is mostly about increasing “the ability of certain corporations (often American) to assert control over intellectual property.”  The current situation feels like “officials caught in a 1990s time warp, still living in the days when New Democrats tried to prove that they weren’t old-style liberals by going all in for globalization.”

USA: Fed Laughter And Housing Prices

HappyFriday: Everything Is Awesome! and More Weather-Related Nonsense

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