U.S. housing prices fell 0.2% in June from May, the latest data from the Case Shiller index shows. Compared to June last year, prices were up 8.1%, but the pace of the increase is still slowing down. May’s numbers showed a year-over-year change of positive 9.4%.
Cullen Roche noted that the yearly growth in housing prices was nearly 15% earlier in 2014. Calculated Risk’s Bill McBride says he’s “been expecting a slowdown in year-over-year prices as ‘For Sale’ inventory increases, and the slowdown is here!” June’s yearly increase was the smallest since December 2012 and June was the third-straight month of inflation-adjusted declines in housing prices.
It’s expensive to live in a big city. But what if it’s more expensive to live in a small city? The Citizen’s Budget Commission, a non-profit financial watchdog organization in New York, took a look at housing costs in US metro areas recently, then added in transportation costs. By these two metrics, New York City (and most dense metro areas with good public transportation) is one of the cheaper urban options.
This is what housing and transportation costs look like for a typical household in various urban areas around the country (New York is highlighted because that’s the CBC’s focus)*:
Europe is in trouble. “The combination of zombie banks, a rapidly aging population and, most importantly, too-tight money have pushed it into a ‘lowflationary’ trap that makes it hard to grow, and is even harder to escape from,” wrote Matt O’Brien, analyzing some of the most recent eurozone economic data earlier this month. The situation in Europe, he says, is worse than during the Great Depression. At Bruegel, Jérémie Cohen-Settonsays that “Europe appears stuck in a never-ending slump.”
This was the backdrop for Mario Draghi’s Jackson Hole speech on Friday on the state of unemployment in Europe. The ECB president urged a move away from austerity. “This could be done by a greater use of aggregate fiscal policy (having a common eurozone budget), and by looking at opportunities to substitute spending for tax cuts…” says Joe Weisenthal.
You’d be forgiven for thinking that Bank of America settles crisis-era mortgage cases with the U.S. government once a week or so. But the one this week, at $16.65 billion, is the big one. That is, it’s the biggest settlement to date, eclipsing not only previous settlements by the bank (which now come to a total of about $65 billion), but also all of the similar settlements reached by other banks. JP Morgan paid $13 billion and Citigroup $7 billion recently for similar reasons. The bank will pay “$9.65 billion in cash to resolve more than a dozen federal and state investigations, and provide $7 billion in help to struggling homeowners and communities,” according to Reuters.
Here’s our updated chart of the biggest bank settlements in history:
No individuals were charged, but Bank of America has admitted to some of its terrible pre- and post-crisis behavior. There are, as usual, some embarrassing emails involved. Here are some details from the Reuters story:
Things are a little crazy in the dollar store M&A world. Back in June, Dollar General (from here, General) thought about trying to buy its rival, Family Dollar (from here, Family). For various reasons, this didn’t happen. Instead, Dollar General’s other rival, Dollar Tree (from here, Tree), submitted a bid to buy Family for $8.5 billion several days after the meetings with General. Family accepted this, even though General came back with a $9.7 billion cash offer.
“Aside from offering all cash and a bigger, 29 percent premium to Family’s undisturbed share price, General may be a better fit with Family as both companies offer goods at various prices whereas Tree sticks with items that actually sell for $1 or less,” writes Kevin Allison. And yet.
Yesterday, the Islamic State released footage of the beheading of American journalist James Foley, who was captured in Syria two years ago. The group also says it may execute another American journalist depending on the next moves of President Obama.
Reuters reports that the gruesome decapitation video seemed to suggest that the Islamic State was opening a new anti-U.S. front that could result in attacks on U.S. interests or even American soil. “The stronger the war against the States gets, the better this will help hesitant brothers to join us,” said one Islamic militant.
West Africa’s Ebola crisis is not just about the death toll — it’s also an economic disaster in the making. The UN’s World Food Programme declared Guinea, Sierra Leone, and Liberia to be at the highest level of food emergencies last week. The Thomson Reuters Foundation reports that “hunger is spreading fast as farmers die leaving crops rotting in fields. Truckers scared of the highly infectious disease halt deliveries. Shops close and major airlines have shut down routes, isolating large swathes of the countries.” A million people live in the Mano River region, the epicenter of the disease.
The spread of the disease is also, in part, an economic issue. Steven Hoffman and Julia Belluz at Vox write that annual healthcare spending in West Africa comes out to less than $100 per person, compared to $8,000 per person in the U.S. Ebola is spread through body fluid contact, and is thus relatively easy to avoid with the right precautionary measures. However, “aid workers on the ground… report that they don’t have access to the basics to protect themselves and their patients,” say Hoffman and Belluz.
Like a lot of U.S. suburban areas around the country, Ferguson, Missouri is getting poorer. Underlying the weeks-long protests against the police shooting of an unarmed black teenager happening in the small suburban city north of St. Louis this month is a rapid demographic shift. Today, the Brookings Institution takes a look at how the poverty rate has changed in just the last decade:
Just how much poorer has Ferguson gotten? “The city’s unemployment rate rose from less than 5 percent in 2000 to over 13 percent in 2010-12. For those residents who were employed, inflation-adjusted average earnings fell by one-third,” writes Elizabeth Kneebone (who, it should be noted, has literally written the book on this trend). And Ferguson is not alone. In the first decade of the 21st century, poverty rates grew in suburban areas around the country, and already poor areas saw poverty become more concentrated.
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Flexible work hours aren’t always a good thing. Jodi Kantor made a splash with her New York Times story about Jannette Navaro, a Starbucks employee (er, “partner”) who has constant upheaval in her life thanks to her erratic work schedule. Starbucks is one of many companies that uses software to efficiently allocate employees around its stores. “This kind of work is ‘flexible’ only for the company. It means schedules and salaries vary to the point where it’s difficult for workers to make long-term plans,” writes Max Nisen. It can mean things like the “clopen,” when employees are scheduled to close the store late at night and open it again early the next morning.
Starbucks reacted quickly. Just hours after the story went live, the company announced it would be revising its policies. According to the Times, Starbucks executive Cliff Burrows emailed baristas across the country to tell them the company will curb “clopening,” allow employees who live more than an hour from their store to have the option to switch locations, and “scheduling software will be revised to allow more input from managers.” He also reiterated that schedules should be posted at least a week in advance.
Does the local police force reflect the racial makeup of your community? According to an interactive chart created by the Washington Post today — following this week’s protests over the police killing of an unarmed black teenager in the largely black community of Ferguson, Missouri — the answer is probably not.
The Post analyzed Census Bureau data, finding that that the vast majority of cities have a police presence that is a lot whiter than their population.