UK Leasehold

Another story about how developers are inserting unfair clauses in leasehold contracts. There are a lot of these. The government is consulting on the issue. The current situation is unacceptable, in my opinion. The relationship between Persimmon and the average first time buyer is very asymmetrical. At the very least, sales offices should be prohibited from offering an incentive for buyers to use a conveyancing solicitor chosen by the developer.

Morning Call

It looks pretty quiet. European and Asian equity markets down a bit, but not crashing. Currencies about flat, bonds not much changed, nor commods. In the US this is a half-day public holiday and a lot of the dealers will have taken the day off as part of a long weekend. Tuesday, when the US markets open properly, will be interesting.

Wrap

I had to finish early. When I last looked, most markets were spookily quiet: the dealing rooms must be deserted.

Worth Reading: Lacy Hunt

This transcript is of Lacy Hunt explaining his deflation thesis. It seems to rest on the argument that over the next few years the economy is going to massively undershoot its trend growth, meaning that there is a lot of slack in the economy, meaning that there will be deflation. He also explains, in a bit more detail, why productivity is killed when there is too much debt. It’s interesting, but somehow I am still not completely convinced. He’s obviously been right when everyone else has been wrong: central banks have serially tried to raise inflation without success. But somehow, at some point, spending (not lending) by the CB must result in some sort of excess of money over goods. I get it that velocity is slowing, but can it fully compensate for the money creation? We shall see!