PPCC: Pisitófilos Creditófagos. Primavera 2024

[Derby]

https://www.economist.com/finance-and-economics/2024/04/23/why-a-stronger-dollar-is-dangerous

Finance and economics | Battles to come
Why a stronger dollar is dangerous

It sets the stage for a nasty new Trump-China clash, among other things


Photograph: Getty Images

The dollar is looking increasingly formidable. As American growth has stayed strong and investors have scaled back bets that the Federal Reserve will cut interest rates, money has flooded into the country’s markets—and the greenback has shot up. It has risen by 4% this year, measured against a trade-weighted basket of currencies, and the fundamentals point to further appreciation. With a presidential election looming, and both Democrats and Republicans determined to promote American manufacturing, the world is on the verge of a difficult new period of strong-dollar geopolitics.

This situation is made still more difficult by the fact that the currency’s strength reflects weakness elsewhere. By the end of 2023, America’s economy was 8% larger than at the end of 2019. Those of Britain, France, Germany and Japan each grew by less than 2% during the same period. The yen is at a 34-year low against the dollar. The euro has dropped to $1.07 from $1.10 at the start of the year (see chart 1). Some traders are now betting that the pair will reach parity by the beginning of next year.



Should Donald Trump win in November, the scene is therefore set for a fight. A strong dollar tends to raise the price of American exports and lower the price of imports, which would widen the country’s persistent trade deficit—a bugbear of Mr Trump’s for many decades. Robert Lighthizer, the architect of tariffs against China during Mr Trump’s time in the White House, wants to weaken the dollar, according to Politico, a news website. President Joe Biden has made no public pronouncements on the currency, but a strong dollar complicates his manufacturing agenda.

Elsewhere, a mighty greenback is good for exporters that have costs denominated in other currencies. But high American interest rates and a strong dollar generate imported inflation, which is now exacerbated by relatively high oil prices. In addition, companies that have borrowed in dollars face steeper repayments. On April 18th Kristalina Georgieva, head of the IMF, warned about the impact of these developments on global financial stability.

Many countries have ample foreign-exchange reserves that they could sell to bolster their currencies: Japan has $1.3trn, India $643bn and South Korea $419bn. Yet any relief would be temporary. Although sales slowed the strengthening of the dollar in 2022, when the Fed began raising interest rates, they did not stop it. Central banks and finance ministries are loth to waste their holdings on fruitless fights.

Another option is international co-ordination to halt the greenback’s climb. The start of this was on display on April 16th, when the finance ministers of America, Japan and South Korea expressed concern about the slump of the yen and won. This may be the precursor to more intervention—in the form of joint sales of foreign-exchange reserves—to prevent the two Asian currencies from weakening further.

But as much as these countries may want to be on the same page, economics is unavoidably pulling them apart. After all, yen and won weakness is driven by the gap in interest rates between America and other countries. South Korea’s two-year government bonds offer a return of around 3.5%, and Japan’s just 0.3%, while American Treasuries maturing at the same time offer 5% (see chart 2). If interest rates stay markedly higher in America, investors seeking returns face a straightforward choice—and their decisions will buttress the dollar.



Then there are countries with which America is less likely to co-operate. According to Goldman Sachs, a bank, China saw $39bn or so in foreign-exchange outflows in March as investors fled the country’s languishing economy—the fourth most of any month since 2016. The yuan has weakened steadily against the dollar since the beginning of the year, and more rapidly from mid-March, since when the dollar has risen from 7.18 yuan to 7.25. Bank of America expects it to reach 7.45 by September, when America’s election campaign will be in full flow. That would put the yuan at its weakest since 2007, providing a boost to China’s government’s latest export drive. Cheap Chinese electric vehicles may be about to become even cheaper, infuriating American politicians.

Even protectionists in America may be willing to overlook allies’ weak currencies, at least for a time. They are less likely to for China. This raises the risk of further tariffs and sanctions, and maybe even the return of China to America’s list of currency manipulators. So long as America’s economy outperforms, the dollar is likely to remain strong. And so long as American politicians see that as a cause for concern, trade tensions will rise. ■

[sudden and sharp]

https://stevesaretsky.substack.com/p/no-panacea

No Panacea

Happy Monday morning!

Housing affordability, or lack thereof, is all the rage these days. Politicians from every colour of the political rainbow are rallying around restoring some semblance of price stability, or so they say.

They’ve been working hard lately, through mass rezoning, tax breaks on new rental construction, and even housing catalogues. In fact, billions of dollars are being thrown at the problem.

How will we know if any of it worked? For most people they’d tell you housing affordability will have been achieved when prices are lower.

However, in a recent podcast interview with The Globe & Mail, Trudeau said the quiet part out loud.

For affordability to improve, do home prices have to come down?

“No. I think housing prices and houses will always be valuable in this country,” but “anyone who hopes for housing prices to remain on the kind of trajectory they’ve been on over the past decade or two should maybe think about what kind of society or world they want to live in.”

On the other hand, “housing needs to retain its value,” because “it’s a huge part of people’s potential for retirement and future and nest egg.”



In other words, everyone wants affordable housing but nobody wants their house to become affordable.

Trudeau just reiterated what we already knew. Housing is politically backstopped, and we must not jeopardize the 30 year bull market. After all, the tax free primary residence has become the defacto retirement plan for most boomers.

Inflating home prices have also been a boon for government coffers. The tax revenues derived from housing via capital gains taxes, property transfer taxes, development fees and property taxes are what underpin the entire system.

Trudeau’s freudian slip was an admission of what we already knew, maintaining home prices is a matter of national security.

So how else do we achieve housing affordability? We are told we can build our way out, yet housing starts are crashing as we speak, despite billions being thrown at municipalities to unlock zoning.

Over in the orange corner, Jagmeet says we should build affordable housing on all federally owned land. However, an analysis from the Globe & Mail this week highlights the grim reality.

Using the government’s federal registry of properties, The Globe identified federally-owned land that is at least half an acre in size, sitting vacant or occupied by a building not more than two storeys, and located in municipalities with at least 10,000 people.

After a months-long analysis, The Globe found 613 pieces of lazy land in cities and towns across the country – a collection of federal real estate large enough to create about 288,000 new housing units.

In other words, if we took all the under utilized federally owned land and redeveloped it for affordable housing we would create 288,000 new housing units which is the equivalent to just over a years worth of completions in any given year.

So now what?

If we could get incomes to rise faster than house prices, over a long enough period of time, housing could slowly get more affordable. But that is no quick fix, and everyone is looking for quick fixes.

The fact that real GDP per capita has now been declining for seven consecutive quarters isn’t helping that idea either. According to RBC we are now marred in what appears to be a lost decade.



People don’t like to hear this but there really is no panacea for housing in this country. This is just the uncomfortable truth.

Housing affordability will ultimately be achieved through some form of an exogenous shock outside of the governments control, creating a temporary over supply of housing and lower prices. Kind of like what we’re experiencing now with an inflationary shock that ripped interest rates higher and will probably keep them there for the foreseeable future, regardless of what the BoC does this week.

¡Sorpresa!       

[Derby]

https://www.ft.com/content/cbb9b949-1262-4d72-9ee7-6035c3e022d2

Fed official says interest rates should stay on hold for ‘extended’ time

Neel Kashkari warns cutting too early could risk US economic prosperity

A top Federal Reserve official has called for interest rates to stay on hold for an “extended” time, saying lowering borrowing costs before inflation was under control would put the foundations of US prosperity at risk.

Neel Kashkari, Minneapolis Fed president, also told the FT podcast The Economics Show that Americans’ “visceral” hatred of inflation meant that some people would prefer a recession to a jump in prices.

“The economy is, in the US, quite strong, the labour market is strong, inflation is coming down and many, many people are deeply unhappy about the status of the economy,” he said. “I think it’s because of the high inflation that they’ve experienced.”(...)

[Derby]

¡Sorpresa!       

 

[Vipamo]

https://stevesaretsky.substack.com/p/no-panacea

No Panacea

Happy Monday morning!

Housing affordability, or lack thereof, is all the rage these days. Politicians from every colour of the political rainbow are rallying around restoring some semblance of price stability, or so they say.

They’ve been working hard lately, through mass rezoning, tax breaks on new rental construction, and even housing catalogues. In fact, billions of dollars are being thrown at the problem.

How will we know if any of it worked? For most people they’d tell you housing affordability will have been achieved when prices are lower.

However, in a recent podcast interview with The Globe & Mail, Trudeau said the quiet part out loud.

For affordability to improve, do home prices have to come down?

“No. I think housing prices and houses will always be valuable in this country,” but “anyone who hopes for housing prices to remain on the kind of trajectory they’ve been on over the past decade or two should maybe think about what kind of society or world they want to live in.”

On the other hand, “housing needs to retain its value,” because “it’s a huge part of people’s potential for retirement and future and nest egg.”



In other words, everyone wants affordable housing but nobody wants their house to become affordable.

Trudeau just reiterated what we already knew. Housing is politically backstopped, and we must not jeopardize the 30 year bull market. After all, the tax free primary residence has become the defacto retirement plan for most boomers.

Inflating home prices have also been a boon for government coffers. The tax revenues derived from housing via capital gains taxes, property transfer taxes, development fees and property taxes are what underpin the entire system.

Trudeau’s freudian slip was an admission of what we already knew, maintaining home prices is a matter of national security.

So how else do we achieve housing affordability? We are told we can build our way out, yet housing starts are crashing as we speak, despite billions being thrown at municipalities to unlock zoning.

Over in the orange corner, Jagmeet says we should build affordable housing on all federally owned land. However, an analysis from the Globe & Mail this week highlights the grim reality.

Using the government’s federal registry of properties, The Globe identified federally-owned land that is at least half an acre in size, sitting vacant or occupied by a building not more than two storeys, and located in municipalities with at least 10,000 people.

After a months-long analysis, The Globe found 613 pieces of lazy land in cities and towns across the country – a collection of federal real estate large enough to create about 288,000 new housing units.

In other words, if we took all the under utilized federally owned land and redeveloped it for affordable housing we would create 288,000 new housing units which is the equivalent to just over a years worth of completions in any given year.

So now what?

If we could get incomes to rise faster than house prices, over a long enough period of time, housing could slowly get more affordable. But that is no quick fix, and everyone is looking for quick fixes.

The fact that real GDP per capita has now been declining for seven consecutive quarters isn’t helping that idea either. According to RBC we are now marred in what appears to be a lost decade.



People don’t like to hear this but there really is no panacea for housing in this country. This is just the uncomfortable truth.

Housing affordability will ultimately be achieved through some form of an exogenous shock outside of the governments control, creating a temporary over supply of housing and lower prices. Kind of like what we’re experiencing now with an inflationary shock that ripped interest rates higher and will probably keep them there for the foreseeable future, regardless of what the BoC does this week.

¡Sorpresa!       

Gracias por traer este artículo Sudden. Al final ese es el quid de la cuestión.
Una bajada de precios en los hactibos significa una pérdida de patrimonio de gran parte de los actores. ¿Cómo va a interesar jorobar a una mayoría (gente con ladrillo), para mejorar a una minoría (jóvenes sin ladrillo pero que heredarán)?

[Derby]

Se veía venir, verdad? 

https://www.bloomberg.com/news/articles/2024-06-03/blackstone-s-59-billion-property-trust-hit-by-starwood-fallout

Blackstone’s $59 Billion Property Trust Hit by Starwood Fallout


Property trusts have come under heightened pressure as real estate values have plunged.Photographer: Alex Kraus/Bloomberg

A $59 billion Blackstone Inc. property trust is contending with the fallout from a rival’s decision to enforce stricter limits on investors.

Repurchase requests by investors in Blackstone Real Estate Income Trust ticked up in May, according to a shareholder letter Monday, after rival Starwood Real Estate Income Trust tightened limits. Starwood’s decision further chilled investor sentiment about a real estate sector hammered by rising rates.

BREIT’s board agreed to allow the trust to exceed a 2% monthly limit in order to be able to fulfill all of its withdrawal requests in May. In both April and May, BREIT has returned about 4.4% of its net asset value to investors.

The trust has “no plans” to change its share repurchase program, according to the letter.

Property trusts have come under heightened pressure as real estate values have plunged. Last month, the $10 billion Starwood Real Estate Income Trust capped monthly redemptions at 0.33% of net asset value, down from its previous 2% monthly limit, as it faced a liquidity crunch.

Blackstone President Jon Gray said Starwood’s issues led more BREIT investors to ask for their money back.

“There’s been some news based on this SREIT dynamic that creates some increase in redemptions, but nothing like what we experienced back in the beginning of 2023,” Gray said at an investor conference in May.

BREIT’s outflow requests began to rise in late 2022 and the trust had to impose its limits as interest rates climbed and real estate values fell, threatening returns for investors in the trust that had been a major growth engine for Blackstone. In March, BREIT marked what appeared to be a milestone and allowed investors to withdraw as much as they wanted.

The firm said its requests declined until the last two weeks of May 2024, when SREIT set more restrictive limits on redemptions. Blackstone, without mentioning the REIT by name, tried to set itself apart from Starwood’s vehicle. BREIT said in the shareholder letter that its portfolio and liquidity — it can tap into about $7.5 billion — is “materially different” to its rival and cited its bets on data centers and student housing.

Total net returns at the Blackstone trust have fallen sharply since borrowing costs began climbing in early 2022. A popular share class of BREIT gained 2.2% through April of this year after a 0.5% loss in 2023.

The Starwood trust generated a total return of 1.67% this year through April, following a loss of 8.6% in 2023.

[Derby]

https://www.taxresearch.org.uk/Blog/2024/06/03/financial-capital-is-not-scarce-so-why-do-we-pay-so-much-for-it/

Financial capital is not scarce, so why do we pay so much for it?

(...)This is a situation which Keynes has said has outlived its usefulness. It's time that we imagined a world where low interest rates were there in perpetuity and we worked out how to manage capital better.

Not so that money goes into stupid things, like pushing up the price of shares or the price of homes inappropriately, but into the productive well-being of the economy, so that we have the technology we need to meet our needs.

And our needs are really big, because without investment, we can't manage climate change.

And these issues are intimately related.

[sudden and sharp]

¡Sorpresa!       

 

Es un "sinvivir".... 






Desplomes del 99% en Wall Street: decenas de errores técnicos desatan un caos en las cotizaciones de la bolsa de Nueva York
https://www.eleconomista.es/mercados-cotizaciones/noticias/12846501/06/24/berkshire-hathaway-cayendo-un-99-decenas-de-errores-tecnicos-se-apoderan-de-cotizaciones-de-wall-street.html

La firma de Warren Buffett no ha sido la única, de hecho está habiendo problemas en cerca de una docena de empresas. Destaca el caso de la cotización de Chipotle Mexican Grill, de Horace Mann Educators o Franco-Nevada. Los fallos se producen una semana después de que cambiaran las bolsas de valores de EEUU a un acuerdo de un día. El jueves, un error informático impidió que los precios imprimiendo en el mayor índice bursátil de EE. UU. durante más de una hora, pero no afectó a las acciones individuales y resultó sólo en menores interrupciones.

----------


LOS INFORMÁTICOS: Ha probado a apagar y volver a encender??
https://www.youtube.com/watch?app=desktop&v=dVM1-WayX7s

[Derby]

https://www.marketwatch.com/story/u-s-manufacturers-shrink-in-may-as-orders-drop-industrial-side-of-the-economy-is-soft-ed4916a0

‘The manufacturing side of the economy appears to have stalled,’ ISM says

ISM manufacturing index falls to 48.7% in May


American manufacturers are treading water. AFP via Getty Images

The numbers: A key barometer of U.S. factories fell to a three-month low as new orders waned and businesses were reluctant to invest due to high interest rates.

“The manufacturing side of the economy appears to have stalled,” said Timothy Fiore, chairman of the Institute for Supply Management’s manufacturing index.

The index fell to 48.7% in May from 49.2% in the prior month. Numbers below 50% signal that the manufacturing sector is contracting.

The ISM report is viewed as a window into the health of the economy. Economists polled by the Wall Street Journal had forecast the index to rise slightly last month.

Big picture: The industrial side of the economy is unlikely to generate sustained growth until interest rates fall and a lower cost of borrowing entices consumers and business customers to buy more goods or invest.

“Companies are extremely cautious with any form of investment,” Fiore said.

At the same time, higher prices of raw materials such as oil, plastics, copper, aluminum are putting upward pressure on prices. That could keep inflation elevated.

Market reaction: The Dow Jones Industrial Average DJIA, -0.48% fell, but the S&P 500 SPX, -0.18%, rose in Monday trades.

[sargento.algodon]

El artículo del Canadá de Trudeau es esclarecedor. Mucho.

Pero hay una frase que me choca. "billions of dollars are being thrown at the problem."... ¿Cuántos millones de euros se han lanzad desde las arcas públicas españolas para solucionar el problema? La construcción de vivienda pública en España desde 2008 ha bajado a niveles de risa. Ya no hay sorteos de viviendas en polideportivos que paralizan la vida de la ciudad y dan lugar a cotilleos y conversaciones entre marujas (recuerdos de hace 20 años, en la pequeña capital del norte, donde mis amigos todavía viven felices con sus familias). Por otro lado, las rebajas fiscales no han sido muchas (el 60% de los rendimientos netos de alquiler, ahora un porcentaje variable según la edad del inquilino, la alineación de los planetas y la situación del inmueble y los que todavía tengan la hipoteca desde antes de 2013).

Que en Canadá lanzan millones y no solucionan nada y aquí no solucionamos nada pero no lanzamos millones. No sé que es preferible.

[Derby]

https://adamtooze.substack.com/p/germanys-aaa-ethiopian-peasants-meet

[Derby]

Que en Canadá lanzan millones y no solucionan nada y aquí no solucionamos nada pero no lanzamos millones. No sé que es preferible.

Yo creo que también lanzamos millones igual, todo sea por sostener el inmobiliario como vehículo de inversión.

[sargento.algodon]

Sobre los incentivos fiscales, yo, joven opositor, miraba como mis amigos se iban casando en una serie de fases:
- Apertura de cuenta ahorro vivienda para poder deducir un poco de su IRPF como trabajadores que empiezan y no tienen hijos.
- Inscripción en las listas de demandantes de vivienda de protección oficial, porque esas cosas tardan.
- Coche, novia y firma de arras apremiada por el fin de la desgravación y precios en subasta o sorteo en pabellón municipal.
- Entrega de llaves y señalamiento de fecha de boda.
- Invitación al amigo que todavía pasa los días en la biblioteca estudiando.

[Derby]

https://www.economist.com/international/2024/05/29/is-your-rent-ever-going-to-fall

International | Control yourself!
Is your rent ever going to fall?

Too often politicians tout awful solutions for helping tenants


Illustration: Rob en Robin

An entire generation of tenants is tearing its hair out. Across the rich world—from America to New Zealand—millions spend more than a third of their disposable income on rent. The squeeze extends from social democracies that prize strong tenancy rights to Anglophone countries that prefer homeownership—and it is mostly getting worse. The good news for anxious renters is that they are gaining a louder voice as their numbers swell. The bad news is that campaigners and politicians mostly focus on the wrong kinds of solutions to their woes.

The 20th century saw an astonishing rise in homeownership. In 1920 about 20% of Britons owned their own home; by 2000, 70% did. Many Anglophone countries followed a similar path. Even in countries less attached to the idea of owning, private renting became less common after a boom in social housing.

The story in the 21st century has been different. Rod Hick of Cardiff University in Wales calculates that in countries such as Britain, Denmark, Ireland, New Zealand and Spain, homeownership rates fell by ten percentage points in the decade or so to 2018. Data on renting are patchy. But figures from the OECD, a club of rich countries, show that there has been a shift towards renting in most wealthy countries since 2010 (see chart 1). A bigger private-rented sector is probably here to stay, predicts Peter Kemp of Britain’s Oxford University.


Chart: The Economist

One of the most dramatic shifts has been in Britain. A fifth of the population now rent privately, up from a tenth in the early 2000s—an increase of more than 6m renters. It was a British bank, Halifax, that coined the term “generation rent” in 2011. But British millennials, born between 1981 and 1996, were not special. A sagging jobs market, high house prices, rising rents and tighter mortgage rules left many youngsters less able to afford a first property.

Employment and housing pressures have eased somewhat. Generation Z, which includes those born between 1997 and 2012, is now earning much more than millennials did at the same age. Cooling housing markets may be helping some millennials get their first set of keys, albeit often with the help of mum and dad. But others remain stuck. In Britain half of renters are now over 35. What was seen in many places as the sector for the young and footloose is increasingly home to families and the elderly. Politicians are beginning to fret about a coming wave of retired renters.

Rents have risen particularly sharply in the past three years, fuelled by workers returning to cities after the pandemic and by wages rising even as the supply of properties remains constrained. High interest rates have crimped already inadequate levels of building. Housing starts in Sweden were down by 50% in the first quarter of 2023. And lending rules remain tight.

Some tenants complain about insecurity and grotty conditions. But the biggest problem, particularly for those on low incomes, is affordability. The definition of “unaffordable” is open to debate, but the OECD and others commonly focus on housing that accounts for more than 30% of gross income or, alternatively, 40% of disposable income (ie, income after tax and social-security charges). In 2022 almost half of American households in the private-rental sector were being charged more than 30% of gross income, according to the Joint Centre for Housing Studies at Harvard University in America.

That was the highest level on record—and up by 2m in three years. Across the rich world, rents at 40% or more of disposable income are common (see chart 2). And those data miss large black markets—where sublets do not comply with regulations—in countries such as Sweden and Germany.


Chart: The Economist

High rents do not just lighten people’s wallets. A dysfunctional rental market can make it harder for those on low incomes to get good jobs. Stockholm’s metro is part of one of the best public-transport networks in the world. Yet one in five businesses says high costs and a shortage of affordable housing make it difficult to hire young workers. Lucas Persson, a 28-year-old who works at a think-tank, says many of his friends have considered leaving the city. Spotify, a Swedish music-streaming business, has called the broken rental market a barrier to expansion.

Many of those taking up the cause of renters choose to blame landlords—or as some activists call them, “social parasites”. The urge to control prices often follows. In 2022 the Scottish government introduced a rent freeze. Sadiq Khan, London’s mayor, has long wanted to do the same. Cities in France and Germany have tightened rent controls in response to rising unaffordability. The Australian Greens say a rent freeze would rein in “wealthy property moguls”.

In America there have long been rent controls for existing tenants in New York and San Francisco. In recent years Oregon and California have passed state-wide laws; since 2023 Michelle Wu, the mayor of Boston, has been trying to follow suit.

The appeal of all this to politicians is fairly obvious, says Professor Kemp. Landlords are unpopular (Joe Biden has reassured voters he will be “cracking down” on them). So, too, in many places is building houses. By contrast, rent controls often attract broad support: after all, who is against lower rents? Even better, they cost the government nothing upfront and can be set up at the stroke of a pen.

Economists object. Rent controls first became popular in the aftermath of two world wars—a time when tenants were a large voting block. Milton Friedman attacked controls in an essay in 1946, warning that they would result in the “haphazard and arbitrary allocation of space, inefficient use of space, [and] retardation of new construction”. Liberal economists regard controls as a zombie policy.

No city today better demonstrates the distortions Friedman warned of than Stockholm. On paper Sweden’s system of rent controls, the hyresreglering, is the strictest in the world. A powerful tenants’ union negotiates with landlords, holding rents as much as 50% below the market. In practice lots of people lose out. Swedes must join waiting lists for a rent-controlled apartment: in central Stockholm the average wait is 20 years; across the city it is about half that. Many who reach the front of the queue are in their 50s and own a home. Young Swedes often have to put up with expensive sublets agreed to under the table, laments Mr Persson.

Those lucky enough to have a flat refuse to move. Families come up with ingenious ways of passing contracts to distant relatives. If a couple is so bold as to want more space for children, they must engineer a complex chain of swaps. Or resort to bribes. In 2021 a court case revealed that a woman paid SKr2.4m, or $220,000, for a black-market contract for an apartment in Ostermalm, a posh part of Stockholm.

“The queue system allocates scarce apartments to wealthy, upper-middle class Swedes while those who need them live in shitty, uncertain accommodation outside the city,” says Brett Christophers, a geographer at Uppsala University in Sweden. Swedes like to think their approach is fair and progressive. But immigrants fare worst of all because they find the system hardest to navigate, according to Fredrik Kopsch of Lund University, also in Sweden.

Not all forms of rent control are equally harmful—and their impact depends on where and how they are implemented. One reason the idea never dies is that proponents keep adapting it. The most destructive policies see rents artificially capped or frozen at a fixed level. Most governments have long since abandoned these. But every so often one is mad enough to try again, such as the authorities in Berlin in 2020 and Scotland in 2022.

More common now are controls that seek to limit rent increases within tenancies, for instance to a fixed percentage above inflation. The idea behind these is that landlords and tenants do not always have equal bargaining power, so in theory landlords can gouge tenants by taking advantage of high moving costs. Yet if such policies create a wedge between controlled and market rents, they will still encourage landlords not to invest in their properties and tenants not to move.

In Boston Ms Wu proposed an annual cap on increases of CPI plus 6%—a level few landlords would try to exceed. But the problem is that once politicians have control over rental prices, they are tempted to keep bearing down on them, which gums up the market. In Germany recent clampdowns have done exactly that, according to Stefan Kofner of the country’s Görlitz University. In Sweden the cost of rent-controlled apartments fell far below market rents long ago.

Price controls can act like a ratchet: easy to tighten but very hard to relax. Sweden’s parliament has debated reforms for years; in 2021 a modest proposal helped cause a government to fall. If the concern is protecting tenants from gouging, Anglophone countries should improve tenants’ ability to appeal against above-market increases or challenge bad behaviour.

Rent controls are most damaging when supply is constrained and demand is high, squeezing those searching for somewhere to live. The hyresreglering is failing partly because wealthy municipalities around the city have increasingly resisted new building, says Mr Kopsch. American lefties talk dreamily of Vienna, where 80% of the city’s inhabitants live in rent-controlled apartment blocks. Last year the New York Times even dubbed it a “Renters’ Utopia”. But that city’s planning laws have long made it easy to keep adding apartment blocks and, in any case, its population has barely increased since the second world war. Seeing Vienna-style rent controls as the answer to problems in Manhattan misses the point.

The foundations of change

One city provides a good model for helping renters, however. Frustratingly, its lessons are being ignored. In 2016 Auckland in New Zealand, which had some of the least affordable housing in the world, passed a law allowing more dense development on three-quarters of residential land. Lawmakers particularly wanted to encourage more apartments within walking distance of the city centre, public transport or commercial areas.

A housing boom followed—adding 44,000 homes in seven years, equivalent to around 8% of current stock. A new study by Ryan Greenaway-McGrevy of the University of Auckland estimates that the extra homes have held rents almost 30% below where they otherwise would have been. In 2021 Jacinda Ardern, New Zealand’s then prime minister, passed a law nudging other cities to follow Auckland’s lead. But progress has stalled. All around the world, the only way renters will get a better deal is for cities to enable more building. In Stockholm, Mr Persson is not optimistic. In a few years he hopes to get a rent-controlled flat in Rinkeby-Kista, a suburb struggling with crime that is 12km outside of the city. ■

[sudden and sharp]

Rusia declara agente extranjero al mayor movimiento de esposas contra la movilización para la guerra en Ucrania
https://elpais.com/internacional/2024-06-03/rusia-declara-agente-extranjero-al-mayor-movimiento-de-esposas-contra-la-movilizacion-para-la-guerra-en-ucrania.html
El grupo ‘Camino a casa’ entra en la lista negra tras sumarse decenas de miles de seguidores a su causa. El Kremlin rechaza tajantemente desmovilizar a los combatientes hasta que acabe la ofensiva

Las autoridades acusan a estas mujeres de “crear una imagen negativa de Rusia” y llamar a los ciudadanos a participar en protestas no autorizadas. A diferencia de otros actos contra la guerra de Ucrania o por la persecución del disidente Alexéi Navalni, las mujeres de los movilizados no han sido arrestadas cuando se han congregado ante los monumentos militares para exigir con flores que sus esposos regresen a casa. El quid para el Kremlin es que su detención tensaría aún más la cuerda con los militares, que en un lapso de un año ya han visto un intento de rebelión militar y una purga en el alto mando.

No es tan fácil parar a las mujeres... Veremos.