It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity.

...

We know already that the poisonous side-effect of zero rates and quantitative easing in the US, Europe, and Japan was to flood developing nations with cheap credit, upsetting their internal chemistry and drawing them into a snare. What is less understood is just how destructive this has been.

Much of the money was wasted, skewed towards "highly cyclical and rent-based sectors of limited strategic importance for catching up," it said.

...

The extraordinary result is that some countries are slipping backwards, victims of "premature deindustrialisation". Many of them have fallen further behind the rich world than they were in 1980 despite opening up their economies and following the global policy script diligently.

...

We are left with a world in a state of leaderless policy inertia, unable to escape slow suffocation. Trade is stagnant. Deflation is still knocking at the door a full seven-and-a-half years into the economic cycle, even with the monetary pedal pushed to the floor. The next downturn will test this regime to destruction.

...

Its prescription is radical. The world must jettison neo-liberal ideology, and launch a "global new deal" with a blitz of investment on strategic sectors. It wants a return of the "developmental state", commanding a potent industrial policy, and backed by severe controls on capital flows.

....

Nigel Wilson, chief executive officer of Legal & General, which supported the research, said that the housing crisis had created "an intergenerationally unfair society". 

China's homeowners have come to see near double-digit real-estate returns as a birthright, a bet on par with death and taxes. According to one study, more than 70 percent of Chinese household wealth is in housing. Investors believe there's an implicit guarantee that the government won't let home prices drop, even as many buildings sit empty.

...

In urban China, the average price per square foot of a home has risen to $171, compared to $132 in the U.S. In first-tier cities such as Beijing and Shenzhen, prices have increased by about 25 percent in the past year. A 100-city index compiled by SouFun Holdings Ltd. surged by a worrisome 14 percent in the last year. Developers are buying up land in some prime areas that would need to sell for $15,000 per square meter just to break even.

...

Kaul says that in 2016 there has also been an increase in originations by large lenders of low-downpayment mortgages outside the FHA due to new programs from the GSEs (Fannie Mae and Freddie Mac.) These products allow for down payments as low as 3 percent along with reduced mortgage insurance. While these loans were introduced nearly 20 months ago there was no big move toward them because FHA still had a price advantage. The April restructuring of PMI premiums changed this, giving lenders an alternative. This, he says, was especially appealing to those "already wary of the FHA's heavy enforcement."

...

"The changes happening at the top end of the market are real, and although they do not affect large numbers of people directly, the ripple effects they generate do resonate across London," Glucksberg said.

...

"The old elite would have bought their curtains and food locally. Now the hairdresser comes to you, the food is delivered. Even going to restaurants -- chefs come and cook [for the super rich] in their house."

There are so many new apartments in the neighborhood -- roughly one-fifth of all rental units expected to become available in the city in 2016 and 2017, according to Nancy Packes Data Services, a research firm -- that the Brooklyn rental market seems poised to zoom right past boom, to glut.

"The market is saturated," said Sofia Estevez, executive vice president at the developer TF Cornerstone, which will begin offering apartments in a 25-story, 714-unit rental building at 33 Bond Street next spring. "I think it'll take a couple years to stabilize."

And just as overbuilding along Billionaires' Row around 57th Street in Manhattan has caused prices to soften in the highest-end market, the construction boom in this stretch of Brooklyn has prompted landlords to strike deals to fill their buildings, which dwarf the surrounding brownstones, rowhouses and tenements.

At 7 DeKalb, a new 23-story tower atop the City Point mall complex, the landlord is offering two months of free rent with a 14-month lease, and use of the building's fitness center and other amenities for a year without charge. That means a one-bedroom, one-bathroom place can be had for $3,428 a month; a two-bedroom, two-bath apartment goes for $5,057.

...

"People are worried about all kinds of stuff these days," says longtime Aspen broker Bob Ritchie. "I've never seen anything like this before."

The speed of the collapse has been stunning... This year ... "a slowdown in January turned into a free fall." Sales volume in Pitkin County is down 42%, according to data compiled by Land Title Guarantee Co.

...

As noted here over the years, In the case of Miami, like in other most other coastal markets such as New York and Los Angeles, the housing boom was heavily boosted by foreign buyers, who used US luxury real estate as their new form of anonymous "offshore bank accounts" courtesy of the NAR's exemption from Anti-Money Laundering Provisions. However, after the recent drops in commodity prices and the spike in the USD, they have scaled back their purchases.

...

Rents, even in the suburbs, are rising and many of the best rental homes in suburban Atlanta are owned by private equity firms. Many of these firms swooped into the market during the recession, buying up foreclosed homes and fixing them up for renters. These houses are typically well-maintained, but come with higher monthly rents and higher credit requirements.

These are standards many in the region are struggling to meet. It's forced some to take up long-term residence in local motels that don't check credit and others to move several generations of a family into one home.

...

Wavering prospective home-buyers are enticed by ultra-cheap mortgages, bolstered by the Bank of England cutting rates after the Brexit vote. So buying is still often cheaper than renting. And while falling interest rates raise big questions about company pension promises, buying a home at least gives you somewhere to live in retirement.

...

Brits aren't mad, they're just trapped: prisoners of a system that conspires to keep prices high and houses in short supply. They know their government will do almost anything to prevent house prices collapsing. Buyers can already obtain loans from the government to help get on the housing ladder, a policy that will further inflate prices for those lucky enough to own property already. There are reports that Theresa May's government is preparing a fresh multi-billion pound housing stimulus -- albeit one that should support more development.

...

Of course, it would be wrong not to look at the longer term. The pound's depreciation, the U.K.'s gaping current account deficit and relentlessly awful productivity say nothing good about the prospects for the economy. If Brexit leads to investment cuts, then jobs will go too. For now, though, British buyers will be compelled to continue their dance with the property market devil.

The pretend-wealth of highly-leveraged housing is all fun and games until prices crash (whether because of intrinsic exhaustion or the economy sputtering), and you're upside-down...

...

America's mortgage-finance system, with $11 trillion of debt, is probably the biggest concentration of financial risk to be found anywhere. It is still closely linked to the global financial system, with $1 trillion of mortgage debt owned abroad. It has not gone unreformed in the ten years since it set off the most severe recession of modern times. But it remains fundamentally flawed.

...

The supply of mortgages in America has an air of distinctly socialist command-and-control about it. Some 65-80% of all new home loans are repackaged by organs of the state. The structure of these loans, their volume and the risks they entail are controlled not by markets but by administrative fiat.

No one is keen to make transparent the subsidies and dangers involved, the risks of which are in effect borne by taxpayers. But an analysis by The Economist suggests that the subsidy for housing debt is running at about $150 billion a year, or roughly 1% of GDP. A crisis as bad as last time would cost taxpayers 2-4% of GDP, not far off the bail-out of the banks in 2008-12.