Monthly Archives: June 2013

Incentivizing Amazon. American-style

They don’t beat around the bush in the U.S. If they want a company, they’re pretty open about it and they let money speak.

Hillsborough County commissioners voted unanimously to award Amazon.com $225,000 in incentives, representing 20 percent of the total potential incentive package for the online retailer if it creates 375 jobs paying more than the state average.

County officials say if the company decides to locate in the south county, it could create 1,000 jobs with 375 of them paying an average of $47,581, the Tampa Tribune said.

On July 18, the commission will consider another break for Amazon, lowering its property taxes to $910,000 for seven years. That is a 50 percent reduction, the Tribune said.

Think they get that kind of reception in this part of the world?

Czech politics upended

Zátah policie proti kmotrům a politikům  Kdo, s kým a jak - Grafiky - Domácí - Aktuálně.czIn case you’re wondering what in tarnation is going on in Czech politics and why cops are arresting current politicians, former politicians and the biggest names in lobbying this small nation can produce, here’s a pretty good schematic.

The woman in the center is basically the right-hand of the prime minister, Peter Necas (to her right), whose role in the whole matter (if any) isn’t clear yet. Though it seems impossible that his government will survive. You’ll note that the city of Prague has done its reputation no favors at all in this growing scandal, but this will come as no surprise to Czechs or to long-term veterans of the market.

We’ll wait until things become a bit clearer, as we don’t really have time to follow the blow by blow unraveling of the story (the NYT has a pretty good summary). Suffice it to say that anti-corruption detectives seem to have mapped out how large flows of public money were being siphoned off and divided among Parliamentary deputies, government ministry officials, state-owned companies, city of Prague politicians and lobbyists (i.e. underworld power brokers). It’s nothing short of breathtaking. If there’s an upside to it, it’s that the police are actually free enough to carry out such an investigation in the first place. More cynical commentators (and by that we mean well-informed ones) are saying it simply demonstrates the incompetence of the primary actors, and their inability to control the situation.

Update: Fun “fact” from the country’s least reliable newspaper, Blesk: Police raided 31 homes and recovered CZK 150 million in cashs along with 10 kilograms of gold.

The cheap money era ending?

image-508200-galleryV9-ttntSpiegelOnline asks the big question of the day: Can the World Handle Higher Interest rates? It was always going to happen, of course. Part of the strategy of central bank’s around the world has been to cut interest rates to the bone in an effort to spark growth. It’s debatable what sort of impact this has had, but bond buying programs by the treasuries of the big nations are huge. Spiegel cites the Japanese example, in which 70% of demand for bonds is from the Bank of Japan.

It’s the topic of the moment because the American Federal Reserve has begun to hint that the days of easy money and huge bond buying programs could be numbered. And as you’ll have noticed, when the Fed makes hints, markets go haywire. It’s an interesting read, for starters, but you have to wonder what the long-term impact on real estate financing will be. Especially for existing loans. We’d welcome any thoughts on the issue you might have, anonymously or otherwise.

When the financial crisis escalated in 2008, the Fed, the European Central Bank and other central banks began their cash therapy. Almost in lockstep, they reduced prime rates to close to zero and began buying up bonds on a large scale. To this day, the leading central banks have inflated their balance sheets with such practices to $10 trillion (€7.5 trillion).

But now something is changing. “For the first time, it looks as though one country, namely the United States, is leaving the crisis behind,” says Ulrich Kater, chief economist at DekaBank. “And, also for the first time, a central bank, the Fed, is showing that it is thinking about normalization.” …

 

Crestyl’s DOCK survives flood

The recent flooding in Prague was big on drama, but surprisingly light on damage. People in this part of the world seem to be allergic to admitting that the state has gotten something right, but to a large degree, the flood control measures implemented and built after the horrendous 2002 deluge seem to have done the trick.

That being said, the post-event analysis  will no doubt turn out lots of problems and shortcomings. One of the issues will be that new flood barriers definitely did the business as far as fighting a 2002-style event, but it turns out that each flood is different (shocking, isn’t it?). This time, with the rain advancing quickly from the north, the local creeks accounted for much of the local flood damage that occurred.

By now, most people will have seen the rather depressing aerial pictures of Crestyl’s DOCK project, a view that made things at the ongoing project look grim indeed. These fears seem to have been overblown. Crestyl’s director Omar Koleilat is quite relaxed about sending pictures from the site, and is even inviting us for a visit. Which we’ll of course take him up on. He explains that while there was obviously water in the underground portions of the scheme, the rest of the damage was thankfully quite minimal. We’ll go see for ourselves and report back. For now, you can check out the pictures.

These two shots are from last week, the day after the flood.

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And these shots are from yesterday: