Will Globalization be a Victim of the Recession?
Migrant workers are returning home in droves. Even those who are not going home are reducing the remittances they send. Economic immigration is slowing to a trickle. Workers in almost every country blame job losses on “cheap foreign labor”. That includes the providers of “cheap foreign labor”. Luxury 2nd home sales and international tourism have dropped substantially.
Trends are evident in the real estate market. The “bottom fishers” are finally coming out. In most countries the bottom fishers are foreign investors. The middle-eastern investors especially are in a buying mode. In some markets, local investors are buying assets that foreigners cannot afford to keep. Corporate mergers and acquisitions are way up. The economist says they have increased 25% over last year. These are stronger companies taking over weaker companies for the most part. Also they are weaker companies trying to get together to stay afloat.
As the world economy contracts forces will pull in two directions. There will be reduced incentive to export jobs and import goods. There will be an increase in searches for investment opportunities in other markets. Good luck world.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Showing posts with label World Economy. Show all posts
Showing posts with label World Economy. Show all posts
Thursday, February 26, 2009
Sunday, October 12, 2008
The Global Financial Crisis and Real Estate (part 1)
The Global Financial Crisis and Real Estate (part 1)
Disclaimer: I do not know what will happen. I am just making this up like the real pundits do.
I guess the real question is, “Who will be affected, how and why?” That question leads back to the question “What is the crisis?” and “Is this a financial crisis or a confidence crisis?” The answer to the last question comes first. This is a financial crisis that stems from a confidence crisis that comes from a financial mess. The foreclosures themselves should not cause a crisis of the magnitude we face. Nor should the “real estate bubble”. Even together these two crisis should not cause a problem this big. There are not enough losses from foreclosures to do this. The “real estate bubble” was caused by speculators and most of them took the hit on their balance sheets and went on with their lives.
These two situations should have actually caused a bonanza for real estate professionals. They did not. There should have been some really great buying opportunities. There are not. That goes back to the definition of the crisis. That will come in part 2.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Disclaimer: I do not know what will happen. I am just making this up like the real pundits do.
I guess the real question is, “Who will be affected, how and why?” That question leads back to the question “What is the crisis?” and “Is this a financial crisis or a confidence crisis?” The answer to the last question comes first. This is a financial crisis that stems from a confidence crisis that comes from a financial mess. The foreclosures themselves should not cause a crisis of the magnitude we face. Nor should the “real estate bubble”. Even together these two crisis should not cause a problem this big. There are not enough losses from foreclosures to do this. The “real estate bubble” was caused by speculators and most of them took the hit on their balance sheets and went on with their lives.
These two situations should have actually caused a bonanza for real estate professionals. They did not. There should have been some really great buying opportunities. There are not. That goes back to the definition of the crisis. That will come in part 2.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, July 3, 2008
Which Engine Runs the Plane Now?
Which Engine Runs the Plane Now?
A few years ago I attended a lecture at which the speaker compared the world economy to a 747 airplane. He mentioned 4 engines. 1 was the USA, 1 was Europe, 1 was Japan and 1 was the developing world. This was right after the Asian Crisis. He said the only engine keeping the plane up was the USA. So what keeps us in the air today? Are we still flying or are we getting ready to crash?
The USA is being crushed by high commodity prices and war spending and bad government economic policies. Europe is sputtering. Japan is beginning to start back up. China and India is the engine that is keeping us in the air. They were not even considered in the speech the economist delivered. They were just lumped in as the developing world. The countries in the developing world are doing ok because of high commodity prices and because the growth of the internal economies in these countries is like a runaway diesel.
Will this 1 engine on the 747 keep us in the air long enough to get the other engines re-started? This is the big question. What if it doesn’t? Is a worldwide recession even possible, or will the symptom of the recession be the cure? A tremendous economic slowdown like a world recession would have to push down the price of commodities. Would this restart the other engines or just blow out the one that still runs?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
A few years ago I attended a lecture at which the speaker compared the world economy to a 747 airplane. He mentioned 4 engines. 1 was the USA, 1 was Europe, 1 was Japan and 1 was the developing world. This was right after the Asian Crisis. He said the only engine keeping the plane up was the USA. So what keeps us in the air today? Are we still flying or are we getting ready to crash?
The USA is being crushed by high commodity prices and war spending and bad government economic policies. Europe is sputtering. Japan is beginning to start back up. China and India is the engine that is keeping us in the air. They were not even considered in the speech the economist delivered. They were just lumped in as the developing world. The countries in the developing world are doing ok because of high commodity prices and because the growth of the internal economies in these countries is like a runaway diesel.
Will this 1 engine on the 747 keep us in the air long enough to get the other engines re-started? This is the big question. What if it doesn’t? Is a worldwide recession even possible, or will the symptom of the recession be the cure? A tremendous economic slowdown like a world recession would have to push down the price of commodities. Would this restart the other engines or just blow out the one that still runs?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
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