Gro-Bels's Freeze Recommends Japanese Real Estate:

Gro-Bels's Freeze Recommends Japanese Real Estate:
Curtis Freeze, chief executive officer of Gro-Bels Co., a Tokyo-based property developer, and chairman of Honolulu-based Prospect Asset Management Inc., talks about Japan's economy and his investment strategy. Japan’s economy grew more than forecast in the third quarter as consumer spending increased, shielding the expansion from a stronger yen and export slowdown likely to have a greater impact this quarter.


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Top Asset Managers Rebound Strongly

Assets managed by the world’s largest 500 fund managers rose by 16% in 2009 to US$62 trillion at the end of the year. This is in contrast to a 23% loss the year before, according to the Pensions & Investments / Towers Watson World 500 ranking. The research also shows that although the percentage rise in total assets in 2009 is the second largest since the research began in 1996, asset levels are still below 2006 levels. In addition, during the past five years only half of the fastest growing firms have done so in a primarily organic way, with the other half doing so by merger or acquisition.

Top 10 Global Asset Managers

Barclays Global Investors
1. Barclay's is a leading global wealth management firm, and has offices in 20 countries. The company also provides retail, corporate banking and investment banking.


State Street Global Advisors--SSGA
2. SSGA has 28 locations worldwide, with assets under management worth $1.8 trillion. The company is the world's second largest asset manager.


Fidelity Investments
3. Fidelity Investments was founded in 1969, and provides asset management services to clients around the world. The company manages over $200 billion in assets for private investors and institutions.


The Vanguard Group
4. The Vanguard Group is based in Malvern, Pennsylvania, and manages assets worth $1.4 trillion. The company provides over 200 stock bonds as well as variable annuity portfolios.

JP Morgan Asset Management
5. JP Morgan is a leading provider of asset management services to individuals, institutions and financial intermediaries. The company offers full spectrum asset classes.


Capital Research and Management Company
6. Founded in 1931, the Capital Group provides asset management services in North America, Europe and Asia. The company has 22 offices worldwide.


Deutsche Asset Management
7. Deutsche Bank is a leading provider of financial services, and is headquartered in Frankfurt, Germany. The company specializes in private wealth management, and also provides retail banking services around the world.

Northern Trust Global Investments
8. Founded in 1889 by Byron Laflin Smith, Northern Trust Global Investments has $603 billion in assets under management and is based in Chicago. Through its subsidiaries the investment firm provides a wide array of products and services to United States and international clients.


UBS Global Asset Management
9. Headquartered in Zurich, Switzerland, UBS provides investment services to private, corporate and institutional clients and has offices in 50 countries. UBS Wealth Management is the largest private bank in the world and has over $540 billion in assets under management.


Alliance Capital Management
10. Alliance Capital Management is based in New York and provides diversified investment products to private clients and institutions. The company has approximately $458 billion in assets under management.

Commercial Real Estate USA Ready to Move On Up?

The commercial sector in the US is ready to move on up, according to James McCaughan, of Principal Global Advisors. He shares his view with the Strategy Session crew.

Akiko - I Miss You

I recently saw Akiko live she played this song.
Akiko is a phenomenal songwriter and musician.
Her voice is best suited for down tempo songs sung slow motion like this track
"I Miss You".
Mesmerizing, romantic and exquisite voice perfect for live jazz club venues.

Japan does not expand its bailout

Japan does not expand its bailout in response to US



The Bank of Japan has decided not to increase its measures to inflate the Japanese economy in response to the US decision to pump a further $600 billion into its economy this week.

However, the central bank is proceeding with unusual plans to buy shares in exchange traded funds and real estate investment trusts as part of a 5 trillion yen asset buying scheme starting next week.

Maintaining interest rates at an ultra-low level of between 0% and 0.1% the central bank painted a downbeat picture of Japan’s economy.

‘Japan's economy still shows signs of a moderate recovery, but the recovery seems to be pausing. Exports and production have recently been more or less flat,’ it said.

‘Business fixed investment is showing signs of picking up. The employment and income situation has remained severe, but the degree of severity has eased somewhat,’ it added.

Worldwide Corruption Rankings index 178 countries

Since 1995, Transparency International has published an annual Corruption Perceptions Index  ordering the countries of the world according to "the degree to which corruption is perceived to exist among public officials and politicians". The organization defines corruption as "the abuse of entrusted power for private gain".

Governments committing huge sums to tackle the world's most pressing problems, from the instability of financial markets to climate change and poverty, corruption remains an obstacle to achieving much needed progress. The 2010 Corruption Perceptions Index shows that nearly three quarters of the 178 countries in the index score below five, on a scale from 10 (highly clean) to 0 (highly corrupt). These results indicate a serious corruption problem.

To address these challenges, governments need to integrate anti-corruption measures in all spheres, from their responses to the financial crisis and climate change to commitments by the international community to eradicate poverty. Transparency International advocates stricter implementation of the UN Convention against Corruption, the only global initiative that provides a framework for putting an end to corruption. Denmark, New Zealand and Singapore are tied at the top of the list with a score of 9.3, followed closely by Finland and Sweden at 9.2. Bringing up the rear is Somalia with a score of 1.1, slightly trailing Myanmar and Afghanistan at 1.4 and Iraq at 1.5.

Notable among decliners over the past year are some of the countries most affected by a financial crisis precipitated by transparency and integrity deficits. Among those improving in the past year, the general absence of OECD states underlines the fact that all nations need to bolster their good governance mechanisms. The message is clear: across the globe, transparency and accountability are critical to restoring trust and turning back the tide of corruption. Without them, global policy solutions to many global crises are at risk.

Toranomon-Roppongi Building

Toranomon-Roppongi Area

Vertical Garden City

Construction is currently underway for the Vertical Garden City redevelopment of a large slice of central Tokyo close to ARK Hills. Working in concert with local residents, Mori Building will transform these areas into safer, more comfortable and greener places to live.























About the Project
Concept.

This redevelopment project covers approximately 2.0 hectares of land located extremely close to Kamiyacho Station on the Tokyo Subway Hibiya Line and Roppongi 1-chome Station on the Namboku Line.

Many embassies and hotels are located nearby, making it an area with a strong international flavor, and it is being developed through category 1 urban redevelopment projects such as ARK Hills, Izumi Garden, etc. Moreover the "Loop Road No. 2, vicinity of Shimbashi, Akasaka, and Roppongi" area, which includes the site of this development, has been designated an urgent urban renewal area.

Based on the concept of "a life surrounded by nature in the heart of the city," we are aiming to build an appealing urban area that is very cosmopolitan and has abundant culture. It will combine residential, retail, and business functions to a high standard. The development will be in harmony with other developments in the vicinity, ensure reasonable and sound land use, improve disaster prevention capability, and advance the development of the city infrastructure.

Development of public facilities is to include widening of the ward road on the western side of the site by 12 meters from the opposite bank, and the building of two new ward roads, 9 meters and 6 meters wide, around the perimeter of the site. We will also develop public spaces inside the site itself, an approximately 3,000m2 space on the west side and an approximately 1,000m2 space on the south side, and develop new pedestrian walkways and green areas. There is a height difference of approximately 10 meters between the existing residential areas on the west side and east side of the development site, but this project will help to improve the convenience of the area by installing escalators and elevators in the walkways.

Overview of Plan

Location Roppongi 1-chome and Toranomon 5-chome, Minato-ku, Tokyo
Size of site (C-1 Area) Approximately 15,370m2
(C-2 Area) Approximately 510m2
Total floor area Approximately 143,720m2
Floors Mixed-use tower: Above ground: 47 / Basement levels: 4
Residential building: Above ground: 6 / Basement levels: 2
Major uses Offices, shops, residences
Construction to be started Autumn 2009
Construction to be completed 2012

Janek Gwizdala Project Live

All the players on this recording are monster.  Oli rockberger rips it on Ivories, Janek shreds it on Bass - they're all awesome. The composition is constantly fresh. It's like a more jazz-oriented Maceo Parker, but still with a lot of funk influences.The Bass lines have fantastic harmonies, and the band is very tight. One of my favorite contemporary Jazz Trios!
Janek Gwizdala Bass, Oli rockberger Keyboard, Tobias Ralph - Drums.



Janek is one of the highest level bass players alive today but mostly a great composer, a true musician and arranger.

Latitudes not Attitudes: How Geography Explains History

Many reasons have been given for the West’s dominance over the last 500 years. But, Ian Morris argues, its rise to global hegemony was largely due to geographical good fortune.

I am wearing your clothes, I speak your language, I watch your films and today is whatever date it is because you say so.

This is what Shad Faruki, a Malaysian lawyer, told the British journalist Martin Jacques in a 1994 interview. And he was right: for 200 years, a few nations clustered around the shores of the North Atlantic – ‘the West’, as we normally call them – have dominated the world in ways without parallel in history.
Most people, at some point or another, have wondered why the West rules. There are theories beyond number. Perhaps, say some, westerners are just biologically superior to everyone else. Or maybe western culture is uniquely dynamic; or possibly the West has had better leaders; or the West’s democratic politics and its Christianity might give it an edge. Some think western domination has been locked in since time immemorial: others that it is merely a recent accident. And, with many westerners now looking to China’s double-digit economic growth to pull the world out of recession, some historians even suggest that western rule has been an aberration, a brief interruption of an older, Sinocentric, world order.
When experts disagree so deeply, it usually means that we need fresh perspectives on a problem. Most of those who pronounce on Western rule – economists, political pundits, sociologists – tend to focus on recent times and then make sweeping claims about the past. Asking why the West rules, though, really requires us to work the other way round, posing questions about history, then seeing where they lead. As the masthead of this magazine puts it: ‘What happened then matters now.’

The shape of history

Explaining why the West rules calls for a different kind of history than usual, one stepping back from the details to see broader patterns, playing out over millennia on a global scale. When we do this the first thing we see is the biological unity of humanity, which flatly disproves racist theories of western rule.
Our kind, Homo sapiens, evolved in Africa between 200,000 and 70,000 years ago and has spread across the world in the last 60,000 years. By around 30,000 years ago, older versions of humanity, such as the Neanderthals, were extinct and by 10,000 years ago a single kind of human – us – had colonised virtually every niche on the planet. This dispersal allowed humanity’s genes to diverge again, but most of the consequences (such as the colour of skin, eyes, or hair) are, literally, only skin deep and those mutations that do go deeper (such as head shape or lactose tolerance) have little obvious connection to why the West rules. A proper answer to this question must start from the fact that wherever we go – East, West, North, or South – people are all much the same.
So why have their histories turned out so differently? Many historians suggest that there is something unique about western culture. Just look, they say, at the philosophy of Socrates, the wisdom of the Bible, or the glories of Leonardo da Vinci; since antiquity, the West has simply outshone the rest. Such cultural comparisons, however, are notoriously subjective. Socrates, for instance, was certainly a great thinker; but the years in which he was active, during the fifth century bc, were also the age of the Hebrew prophets in Israel, of the Buddha and the founders of Jainism in India, of Confucius and the first Daoists in China. All these sages wrestled with much the same questions as Socrates (Can I know reality? What is the good life? How do we perfect society?) and the thoughts of each became ‘the classics’, timeless masterpieces that have defined the meanings of life for millions of people ever since.
So strong are the similarities between the Greco-Roman, Jewish, Indian and Chinese classics, in fact, that scholars often call the first millennium bc the ‘Axial Age’, in the sense of it being an axis around which the whole history of Eurasian thought turned. From the Mediterranean to the Yellow Sea, larger, more complex societies were facing similar challenges in the first millennium bc and finding similar answers. Socrates was part of a huge pattern, not a unique giant who sent the West down a superior path.
From a global perspective, Christianity, too, makes more sense as a local version of a broader trend than as something setting the West apart from the rest. As the Roman Empire disintegrated in the middle of the first millennium ad and new questions (Is there something beyond this life? How can I be saved?) gained urgency, the new faith won perhaps 40 million converts; but in those same years, in the wake of the Han dynasty’s collapse in China, Mahayana and Theravada Buddhism offered their own answers to the same questions and won their own 40 million devotees. Soon enough Islam repeated the feat in Africa, the Middle East and South Asia.
Even such astonishing Renaissance men as Leonardo and Michelangelo, who refined the wisdom of the ancient West to revolutionise everything from aeronautics to art, are best seen as Europe’s versions of a new kind of intellectual which societies needed as they emerged from the Middle Ages. China had produced its own Renaissance men some 400 years earlier, who also refined ancient wisdom (in their case, of course, the East’s) to revolutionise everything. Shen Kua (1031-95 ad), for instance, published groundbreaking work on agriculture, archaeology, cartography, climate change, the classics, ethnography, geology, maths, medicine, metallurgy, meteorology, music, painting and zoology. Even Leonardo would have been impressed.
Over and over again, the triumphs of western culture turn out to have been local versions of broader trends, not lonely beacons in a general darkness and, if we think about culture in a broader, more anthropological sense, the West’s history again seems to be one example of a larger pattern rather than a unique story. For most of their existence, humans lived in small, egalitarian hunter-gatherer bands. After the Ice Age some hunter-gatherers settled down in villages, where they domesticated plants and animals; some villages grew into cities, with ruling elites; some cities became states and then empires and, finally, industrialised nations. No society has ever leaped from hunting and gathering to high technology (except under the influence of outsiders). Humans are all much the same, wherever we find them; and, because of this, human societies have all followed much the same sequence of cultural development. There is nothing special about the West.

Location, location, location

You may have noticed that all the historical examples I have mentioned – Italy, Greece, Israel, India, China – lie in a narrow band of latitudes, roughly 20-35° north, stretching across the Old World. This is no accident: in fact, it is a crucial clue as to why the West rules. Humans may all be much the same, wherever we find them, but the places we find them in are not. Geography is unfair and can make all the difference in the world.
When temperatures rose at the end of the last Ice Age, nearly 12,000 years ago, global warming had massive consequences everywhere, but, as in our own times, it impacted on some places more than on others. In the latitudes between 20° and 35° north in the Old World and a similar band between 15° south and 20° north in the Americas, large-grained wild grasses like wheat, rice and teosinte (the ancestor of maize) and large, relatively tame mammals like wild goats, pigs and llamas went forth and multiplied in the warmer weather. This was a boon for humans, who ate them, but in the process of managing these other species – cultivating and tending the plants, herding and culling the animals – humans unintentionally domesticated them. We unwittingly altered their genomes so much that they became new species, providing us with far more food. Genetically modified organisms had been born. Potentially domesticable plants and animals existed outside the lucky latitudes, but they were less common. Indeed many places, such as large parts of Western Europe, sub-Saharan Africa and Australia, had no domesticable native species at all. The consequence, given that humans were all much the same, was predictable: the domestication of plants and animals – farming – began in the lucky latitudes long before it began outside them. This was not because people in the lucky latitudes were cleverer or harder-working; nature had just given them more to work with than people in other places and so the task advanced more quickly.
Nor was nature even-handed within the lucky latitudes. Some places, above all the so-called ‘Hilly Flanks’, which curve from what is now Israel through Syria, southern Turkey, northern Iraq and western Iran, were extraordinarily well endowed; China between the Yellow and Yangzi rivers and the Indus Valley in Pakistan were somewhat less so; Oaxaca in Mexico and the Andes in Peru somewhat less still. Consequently, the Hilly Flanks were the first to see farming firmly established (by 7500 bc); then came China and Pakistan (around 5500 bc); then Oaxaca and Peru (by 5000 bc); and then, over the next 7,000 years, most of the rest of humanity.
Farming spread from its original cores because it could support more people than hunting and gathering. The lives farmers led were often harder and their diets poorer than hunters’, but that was beside the point. The farmers’ weight of numbers, nastier germs (bred by crowding and proximity to domestic animals), more efficient organisation (required to keep order in larger villages) and superior weapons (necessary to settle constant quarrels) steadily dispossessed the hunters, who either took up farming in their own right or ran away.
The agricultural cores developed increasingly complex institutions as they expanded. Within 3-4,000 years of the start of farming (that is, by 3500 bc in Southwest Asia, 2500 bc in the Indus Valley, 1900 bc in China, 1500 bc in Mesoamerica and 1000 bc in the Andes) the first cities and states were taking shape. Within another few centuries, most had bureaucrats keeping written records and by 2,000 years ago a continuous band of empires, with populations in the tens of millions, stretched from the Mediterranean to China. By then imperialists and traders had exported agriculture, cities and writing beyond the lucky latitudes as far afield as cold, rainy Britain in the northwest and hot, humid Cambodia in the southeast. These great empires – the Han in the East, the Mauryan in India, the Parthian in Iran and Iraq and the Roman further west – had many similarities; but the biggest, richest and grandest by far was Rome, the descendant of Eurasia’s original, westernmost agricultural core in the Hilly Flanks.
Geography explains why farming first appeared towards the western end of the Old World’s lucky latitudes; and, if the West had simply held on to the early lead that nature’s unfairness had given it, geography would be the obvious explanation for why the West now dominates the world.
But that is not what actually happened. The West has not always been the richest, most powerful and most sophisticated part of the world during the last ten millennia. For more than 1,000 years, from at least 600 to 1700 ad, these superlatives applied to China, not the West.
After the fall of the Roman and Han empires in the early-to-mid first millennium ad, China was reunited into a single empire while the West remained divided between smaller states and invading Arabs. By 700, China’s capital at Chang’an had probably a million residents and Chinese literature was enjoying a golden age. Woodblock printing presses churned out millions of books, paid for with the world’s first paper money (invented in the 10th century). By 1000 an economic revolution had joined the cultural explosion: 11th-century China produced almost as much iron each year as the whole of Europe would be doing in 1700, on the eve of its Industrial Revolution. Chinese ironmasters produced so much, in fact, that they clear-cut entire forests to feed their forges, and – six centuries ahead of the West – learned to smelt their ores with coke.
For centuries, Chinese wealth and power dwarfed the West’s. Between 1405 and 1433, while little Portuguese caravels tentatively nosed down Africa’s west coast, Chinese emperors dispatched gigantic fleets across the Indian Ocean under the leadership of the eunuch admiral Zheng He (who, according to legend, was nearly three metres tall and 230 cm around the belly). Zheng’s flagship was on the same scale as its skipper. At 80 metres long, it was the largest wooden ship ever built. When Columbus set sail in 1492, his own flagship was shorter than Zheng’s mainmast and barely twice as long as the big man’s rudder. Columbus led three ships and 90 sailors; Zheng led 300 ships and 27,870 sailors. His fleet extracted tribute from the cities of India, visited Mecca and even reached Kenya, where today Chinese archaeologists are diving to locate wrecks of Zheng’s ships.

The power of place

The glories of medieval China seem, on the face of it, to disprove any geographical explanation for why the West now rules. After all, geography has not changed very much in the last 500 years.
Or maybe it has. Geography shapes history, but not in straightforward ways. Geography does determine why societies in some parts of the world develop so much faster than others; but, at the same time, the level to which societies have developed determines what geography means.
Take, once again, the example of Britain, sticking out from Eurasia into the cold Atlantic Ocean. Four thousand years ago, Britain was far from the centres of action in the Nile, Indus and Yellow River valleys, where farming had been established for millennia, great cities had grown up and labourers by the thousand broke their backs to immortalise divine kings with pyramids and palaces. Distant Britain had few of these things, which spread only slowly from the Mediterranean core to the Atlantic periphery. Geography made Britain backward.
But, if we fast-forward to 400 years ago, the same geography that had once made Britain backward now gave the island nation wealth and power. Britain had been drawn into a vastly expanded and more developed core, which now had ships that could reliably cross oceans and guns that could shoot the people on the other side. Sticking out into the Atlantic, such a huge disadvantage 4,000 years ago, became a huge plus from the 17th century.
The first sailors to the Americas were Italians (Christopher Columbus was from Genoa; the famous ‘British’ explorer John Cabot, who reached Newfoundland in 1497, actually grew up as Giovanni Caboto, in Florence). They were soon shoved aside by the Portuguese, Spanish, British, French and Dutch – not because the Atlantic littoral produced bolder or smarter adventurers than the Mediterranean, but simply because Western Europe was closer to America.
Given time, the 15th century’s greatest sailors – the Chinese – would surely have discovered and colonised America too (in 2009 the Princess Taiping, a replica of a 15th-century junk, came within 20 miles of completing a Taiwan–San Francisco round trip, only to collide with a freight ship within sight of home). But in much the same way that geography had made it easier for people in the Hilly Flanks to domesticate plants and animals than for people in other parts of the world, it now again stacked the odds in the West’s favour. The trip from England to New England was only half as far as that from China to California. For thousands of years this geographical fact had been unimportant, since there were no ocean-going ships. But by 1600 it had become the decisive fact. The meaning of geography had changed.
This was just the beginning of the changes. In the 17th century a new kind of economy took shape, centred around the North Atlantic, generating massive profits and driving up wages in north-west Europe by exploiting the geographical differences round its shores. In the process, it enormously increased the rewards for anyone who could explain how the winds and tides worked, or measure and count in better ways, or make sense of the secrets of physics, chemistry and biology. Not surprisingly, Europeans began thinking about the world in new ways, setting off a scientific revolution; they then applied its insights to the societies they lived in, in what we now call the Enlightenment. Newton and Descartes were geniuses, but so too were Chinese scholars like Gu Yanwu (1613-82) and Dai Zhen (1724-77), who also spent lifetimes studying nature. It was just that geography thrust new questions on Newton and Descartes.
Westerners answered their new questions, only to find that the answers led to still newer questions. By 1800 the combination of science and the Atlantic economy created incentives and opportunities for entrepreneurs to mechanise production and tap into the power of fossil fuels. This began in Britain, where geography conspired to make these things easier than anywhere else; and the energy windfall provided by fossil fuel quickly translated into a population explosion, rising living standards and massive military power. All barriers crumbled. British warships forced China to open to western trade in 1842; Americans did the same in Japan 11 years later. The age of western rule had arrived.

The lessons of history

So what do we learn from all this history? Two main things, I think. First, since people are all much the same, it is our shared biology which explains humanity’s great upward leaps in wealth, productivity and power across the last 10,000 years; and, second, that it is geography which explains why one part of world – the nations we conventionally call ‘the West’ – now dominates the rest.
Geography determined that when the world warmed up at the end of the Ice Age a band of lucky latitudes stretching across Eurasia from the Mediterranean to China developed agriculture earlier than other parts of the world and then went on to be the first to invent cities, states and empires. But as social development increased, it changed what geography meant and the centres of power and wealth shifted around within these lucky latitudes. Until about ad 500 the Western end of Eurasia hung on to its early lead, but after the fall of the Roman Empire and Han dynasty the centre of gravity moved eastward to China, where it stayed for more than a millennium. Only around 1700 did it shift westward again, largely due to inventions – guns, compasses, ocean-going ships – which were originally pioneered in the East but which, thanks to geography, proved more useful in the West. Westerners then created an Atlantic economy which raised profound new questions about how the world worked, pushing westerners into a Scientific Revolution, an Enlightenment and the Industrial Revolution. By the mid-19th century, the West dominated the globe.
But history did not end there. The same laws of geography continued operating. By 1900 the British-dominated global economy had drawn in the vast resources of North America, converting the USA from a rather backward periphery into a new global core. The process continued in the 20th century, as the American-dominated global economy drew in the resources of Asia, turning first Japan, then the ‘Asian Tigers’ and eventually China and India into major players.
Extrapolating from these historical patterns, we can make some predictions. If the processes of change continue across the 21st century at the same rate as in the 20th century, the economies of the East will overtake those of the West by 2100. But if the rate of change keeps accelerating – as it has done constantly since the 15th century – we can expect eastern global dominance as soon as 2050.

An age of rapid change

It all seems very clear – except for one niggling detail. The past shows that, while geography shapes the development of societies, development also shapes what geography means; and all the signs are that in the 21st century the meanings of geography are changing faster than ever. Geography is, we might even say, losing meaning. The world is shrinking and the greatest challenges we face – nuclear weapons, climate change, mass migration, epidemics, food and water supply – are all global problems. Perhaps the real lesson of history is that by the time the East overtakes the West, the question of why the West rules may have ceased to matter very much.

Easy does it

Symbolic moves by the Bank of Japan 

 

JAPAN’S economy has long been sickly. It now also has to contend with a stronger yen, thanks in part to loose monetary policy elsewhere in the rich world. That alone gave the Bank of Japan (BoJ) reason to act on October 5th. So too did criticism that it has not done enough to spur the economy, which has inspired Japanese politicians to suggest legislation to weaken the central bank’s independence.
Whatever its motivation, the BoJ this week took three modest but symbolic steps. First, it lowered its policy rate from 0.1% to a range between zero and 0.1%. That signals to the market, and to disenchanted politicians, that the BoJ cares. Second, the BoJ stated that it would maintain its virtual zero-rate policy until there was “medium- to long-term price stability”. Until deflationary Japan sees consumer prices rise by between 0% and 2% a year (with an unofficial aim of 1%), the long-standing near-zero policy rate will remain.
Third, the central bank said that it would consider establishing a programme to buy public- and private-sector assets from banks—including commercial paper, corporate bonds and perhaps even exchange-traded funds and Japan real-estate investment trusts. Since the financial crisis Japan has continued to accept financial instruments as collateral in order to pump money into the system, but has not bought the assets. The effect would be to restart the policy of quantitative easing that Japan used to claw out of its banking crisis between 2001 and 2006. The initial amount under consideration is about ¥5 trillion ($60 billion), ¥3.5 trillion of which is for public-sector debt. That is on top of a sum of ¥30 trillion already budgeted for BoJ loans to banks.
The market had expected some form of easing but had not imagined a whittling of interest rates, however symbolic. The Nikkei 225 Stock Average hit a two-month high on October 6th and bonds rose sharply. From a political standpoint, too, the moves were a success. The finance minister, Yoshihiko Noda, said he expected the actions to weaken the yen and improve the economy. “Very timely,” gushed Banri Kaieda, the economics minister.
Whether the BoJ’s actions will have any lasting impact on the economy is another matter. The change in the policy rate does not mean much in practice: it merely reinforces the message that low rates are here to stay for a while. The asset-purchase programme is as yet too small to matter. An expected round of fresh quantitative easing by America’s Federal Reserve later this year will put more upward pressure on the yen, which on October 7th reached a 15-year high against the dollar, about where it was before last month’s currency intervention. Still, the BoJ seems willing to respond to a worsening economic climate and to political heat. The psychological boost that represents should not be discounted.

Global Real Estate prices

Floor to ceiling

Our latest round-up shows that prices are on the rise in most markets

THIS time last year global real estate prices were a sea of negative numbers. That was then. Of the 20 markets tracked in the last year, only four still posted year-on-year declines and only Ireland’s property catastrophe has worsened. (America’s FHFA index, which excludes real estate that was financed with large mortgages, was also down, but the country’s Case-Shiller national and ten-city indices rose modestly.)
Asia’s price rises lead the way, as they did when the data were last published in July. Singapore, Hong Kong and Australia boast the gaudiest year-on-year price increases, even if the rate of appreciation is down a bit from the summer. Real Estate prices in China rose by 9.1% in the year to September, compared with a 12.4% rise in May. That is still too fast for the government, which unexpectedly raised interest rates on October 19th and has outlined more measures to cool the market in recent weeks, including higher down-payment requirements and the introduction of a property tax in some cities.
My analysis of “fair value” in real estate, which is based on comparing the current ratio of real estate prices to rents with its long-run average, suggests that China has less to worry about than the likes of Australia, which is again the most overvalued of the markets we track. That makes it all the more surprising that Australia’s central bank opted not to increase its benchmark interest rate this month.

Related items

Europe shows a familiar split between core countries and peripheral ones. Ireland, Spain and Italy continue to suffer year-on-year price declines; German and French homes have shown big gains in value over the past year, a particular turnaround for France since our previous round-up. The British housing sector’s talent for defying gravity may be on the wane. The pace of annual appreciation in the country’s property market has slowed over the summer. British housing is still overvalued—outright falls may loom.

check out this interactive Real Estate-price tool that compares global real estate data, now including price-to-rent ratios

America’s real estate market, almost alone among those which experienced a big bubble, is more or less fairly valued at this point, at least according to price-to-rent ratios. But price rises may not last for long. Earlier gains were driven by substantial reward programmes and government subsidies, many of which have now lapsed. America’s overhang of housing inventory may get worse if concerns over lenders’ foreclosure processes jam up sales. The temptation for the country’s 11m underwater borrowers to walk away is another threat (see Economics Focus). And being at or below fair value is no guarantee of a bounce in prices: Japanese housing fell by 4% in the year to the end of the first quarter, despite being stuck far below its long-run price-to-rents ratio.