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big benThis month’s decisive, if unexpected, victory for the Tories has given a boost to the UK’s real estate markets. Following an already strong 2014 and now with even higher expectations for continued growth in 2015, the UK is an interesting play.  In light of this amiable confluence of factors and the increasing difficulty of finding yield here in the States, it’s perhaps time for a rousing rendition of George M. Cohan’s “Over There.”

And hey, legally speaking, it’s a terrific place to invest.  It’s a hot bed of red in a tooth and claw capitalism (at least compared to our other European friends).  The UK has a robust and broadly understandable legal system and a respect for property rights soundly rooted in the common law; all in all, a genial environment for investment.
Continue Reading A Guide to UK Real Estate and Real Estate Finance: Why Don’t You Speak Proper English?

You know, as an economist, I am a pretty good piano player. I struggle every morning, marinating in the news cycle, to try to understand what’s happened to the US economy and what its impact will be or might be upon the business of commercial real estate finance. We apparently are inching up on the point where the Fed may or may not do something, but as we discussed in this column a while back, the Fed’s idiosyncratic love affair with transparency is creating a cacophony of voices both in and outside of government that make even that threshold question hard to answer. It would seem we ought to pay attention, but, as the fed-heads and the commentariat continuously randomly blather and bloviate it’s just all noise, so what’s the point? I have been and remain fundamentally confused and in all the chatter I don’t see much wisdom or insight.
Continue Reading Commercial Real Estate and the Broader US Economy: What Me, Worry?

In Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 575 U. S. ____ (2015), the Supreme Court clarified issuer liability under §11 of the Securities Act. Section 11 provides that issuers are liable for registration statements that contain “an untrue statement of a material fact or omit to state a material fact required . . . to make the statements therein not misleading.” While the Court’s opinion applies in the context of publicly registered offerings, there are some important take-home messages for private placements too. Click through for three top considerations for issuers in light of Omnicare.
Continue Reading Three Top Considerations After Omnicare

Is the Federal Reserve overreaching by broadening the scope of its policies?

If extremism in the defense of liberty is (reportedly) no vice, unremitting, continuous undisciplined chatter for the sake of transparency is no virtue.  God knows transparency has become the sine qua non of public ethics these days.  To be accused of not being transparent is pretty much the same thing as being accused of being an anti-Semite (with notable exceptions for certain parts of the world).  When it was reported recently that Mrs. Clinton had used a private email address as opposed to an official State Department email, someone suggested that this evidenced a lack of transparency.  The democratic establishment shuddered, only matched by the glee over at Fox News.Continue Reading Mrs. Yellen, What in the World Are You Doing?

I’ve written about Europe a lot over the past couple of years and not out of just a Schadenfreude enjoyment of watching a slow motion disaster far from our shores but because it seems to me that really matters, both in terms of its impact on the global financial marketplace and the probable knock-on effect on domestic U.S. finance markets. It also deserves our attention because it contains lessons for all and sundry policymakers and opinion purveyors about policy choices that simply don’t work.

Of course, the first and most portentous mistake in Europe is don’t ever get into a land war in Southeast Asia, er, I mean never sever control of fiscal and monetary policy; in other words, their big mistake, the Euro-zone currency itself.

Until now, I have shied away from the conclusion that the center could not hold, and held firmly to the notion that somehow Europe would muddle through.
Continue Reading Europe and Its Common Currency: It’s Really Over… But Not Today

Here’s one from left field that I only began to focus on recently.  In mid-December, the gnomes of Basel published several “Consultative Documents” on bank capital and credit risk issues.  First of all, I’m somewhat suspicious by the open palmed amiability of something called a “Consultative Document.”  That suggests a dialogue with regulators but this is Euro-speak for “Proposed Rule.”  My experience is that once something gets to the Proposed Rule stage, the relationship between the regulatory and the regulated is short on consultation and long on prescription.  But hey… maybe this is different. 
Continue Reading Regulators: It’s in Their Nature

I saw the movie Imitation Game last weekend, which is the story of Alan Turing and his role in breaking the Enigma Code which shortened World War II and saved millions of lives.  (Spoiler Alert:  He did it, we won.)  Turing, played by Benedict Cumberbatch, was terrific, even if you’re not a certified “Cumberbitch.”  It got me thinking that to actually navigate this economy, you have to be pretty good at code breaking.  There’s always a lot of code speak.  First, there’s the code of each of the hermetically sealed subcultures of business and markets (recent example on my desk is a note entitled:  Response to BCBS/IOSCO Consultation Document by GFMA, AFIRE, ASIFMA and SIFMA).  We will come back to this in a later commentary, but today let’s focus on officialdom when the often intentionally obscure or misleading Orwellian doublespeak of politics and policy achieve its higher expression.  Is it getting worse?  Well, it’s certainly not getting better.
Continue Reading Breaking The Code

We here at CrunchedCredit are getting ready, as we do each year at this time, to polish up the palantir and make our predictions and business projections about the coming year.  While it can be a fun exercise, it’s actually serious business.  To start with, you need a macro view of the geopolitical situation, the markets and the economy.  To not start with a macro view is to make a choice, and a bad choice at that. 
Continue Reading Schrodinger’s Cat

This is our fifth annual Golden Turkey Awards at CrunchedCredit.  It just gets easier and easier. There are simply so many worthy contenders for an award this year.  You know, we don’t stop and take a moment often enough to just say thank you to our government and its enormous regulatory apparatus for being such a reliable source of material for us.  We read in awe at the breathtaking nonsense often emanating from our elected panjandrums and their regulatory cohorts and enabling self-appointed policy elites.  I’m so appreciative of the studied, surely serious, perhaps well meaning, ham handed and ultimately self-defeating efforts of our government to micromanage economic outcomes.  We here at CrunchedCredit spend a fair amount of time talking to the aforesaid.  The poverty of understanding about how financial markets work is really stunning.  You have to admire the willingness of our government, marinated in hubris, to weigh in, chest out and chin high on so many issues above their intellectual fighting weight.  So let me take this moment to just say thanks.

But, of course, what makes our life as card-carrying members of the commentariat good, makes the life of those trying to actually conduct business in this regulatory free fire zone excruciatingly difficult.  Our job is calling B.S., sussing out the inanity, stripping away the syntactic chaff behind or within which much regulatory product is hidden and trying to provide some helpful guidance about how to deal with this increasingly complex world along the way.  Not to diminish that getting our fiscal and monetary policy right is a deadly serious business, but we can’t help but find some humor in all this.

So, here it is – our Golden Turkey Awards for 2014.Continue Reading CrunchedCredit.com’s 5th Annual Golden Turkey Awards

Never a dull moment.  We at Crunched Credit are probably guilty of excess and perhaps myopic focus on our federal government and its regulatory apparatus; it is such a consistently reliable source of commentary and outrage.  So here’s one out of left field, but no less important for that. 
Continue Reading “First” Deeds of Trust now Second in Line?