CLICK Francisco Goya 1799 from Los Caprichos

The world’s largest private-equity firm, which has spent $7.5 billion buying 40,000 homes in the U.S., agreed in July to purchase 18 apartment blocks from the city of Madrid for 125.5 million euros ($173 million). The firm is bidding against investors including Goldman Sachs Group Inc. for another 1,458 housing units being sold by Madrid’s regional government, according to three people with knowledge of the auction, who asked not to be identified because the information is private.

While Spain traditionally has a lower percentage of renters than the U.S., the (Spanish) government last year introduced measures to increase demand in the rental market by abolishing tax breaks for individual home buyers, passing legislation to protect landlords by speeding up evictions of tenants who don’t pay, allowing owners to raise rents above the annual inflation rate and reducing the duration of leases.

Three years of austerity, unemployment at 26 percent and a drought in mortgage lending are forcing more Spaniards to rent (rather than own) and (banks) to attract foreign funds to invest in the country’s unsold homes, which may total 1.5 million units according to some estimates.

Blackstone (in the U.S.) is now attempting to sell debt backed by the rental payments, the first securitization of its type, with Deutsche Bank AG (DBK) holding a meeting today in New York to market $479.1 million of the securities backed by mortgages on 3,207 properties. Blackstone’s long-term wager is that the homes’ values will rise, positioning the firm to exit at a profit.

CLICK CHART TO ENLARGE

We have the illusion that the world functions thanks to programmed design, university research, and bureaucratic funding, but there is compelling—very compelling—evidence to show that this is an illusion, the illusion I call lecturing birds how to fly.  Nassim Taleb "Antifragile: Things That Gain from Disorder"

CLICK TO ENLARGE MAP

​Vancouver at High Tide This map of Vancouver is from Robert A. Rohde's Global Warming Art and it shows regions that are most vulnerable to sea level rise. Leaky condos result from bad construction; flooding basements from bad site selection.  Snippets from Global Warming Art: ​

• During the twentieth century, sea level rose 20 cm.
• Many model predictions still foresee a sea level rise of less than 1 additional meter by 2100.
• The likely scenarios for twenty-first century sea level rise due to unrestrained global warming remain less than 2 m.
• Regardless of the time scale involved, an analogy to the previous interglacial suggests that a few degrees Celsius of sustained warming can cause enough melting to raise sea level 4-6 m before the ice sheets reach equilibrium. This level of warming is likely to be achieved or even exceeded by 2100 in the absence of intervention to combat climate change, though as above, it would take far longer to realize the full sea level change.
• Since coastal regions tend to flat and the ocean's surface provides a calibration target for the radar system, one can usually expect that near shore elevations will be somewhat more accurate than the average.
• These maps don't include any information regarding tides, storm surges, or other coastal effects, they provide only a partial picture of how vulnerable a given terrain may be to sea level rise.
• One should view these maps as rough estimations of how sea level rise may affect coastal areas and not rely on them too heavily.
• The ultimate amount of flooding is highly uncertain.