| For a select few real estate markets, "location, location, location" is taking on a new meaning. Price is no longer a block by block or neighborhood by neighborhood consideration. There is, says James Surowiecki, an emerging global market for real estate. The case study is Vancouver, which has the median income of Reno but the costly property prices of San Francisco: Sotheby's examined more than twelve hundred luxury-home sales in Vancouver in the first half of 2013 and found that foreign buyers accounted for nearly half of sales. In Miami, a huge influx of money from Latin America has enabled the city's housing market to recover from the bursting of the housing bubble, and has set off a condo-construction spree. Australia has become a prime market for Chinese investors, who Credit Suisse estimates will buy forty-four billion dollars' worth of real estate there in the next seven years. These locations are what Surowiecki, quoting urban planner Andy Yan, calls "hedge cities". Legal, political, and social stability are extremely high. Foreign buyers who can afford to are ready to pay what to locals seem like frothy prices. The calculation is simple: it's better to lose some of your principal on a condo in a Vancouver housing bubble than to lose everything in a coup. Yan's thesis is backed up by research showing that London property prices are directly correlated with overseas political turmoil. The FT's James Pickford and Kate Allen write that the "phenomenon operates independently within small zones of the city and across a range of income levels". Unrest in a country, like Pakistan for instance, boosts house prices in neighborhoods with a high density of Pakistani residents. The effect is most obvious is very expensive sections of central London, but it exists in more moderately priced areas as well. Stability isn't the only thing people will pay for: real estate in Mecca around the Grand Mosque goes for $18,000 a square foot, compared to the Monaco average of $4,400. The WSJ's Jason Chow reports that wealthy Chinese investors aren't sticking solely to residential properties around the world. They're getting into the commercial real estate game, too. Chow, citing a CBRE report, points out that in the first quarter, Chinese investment in international commercial real estate increased 54% year-over-year to $1.4 billion. 39% of that investment came from private individuals. Chinese institutions accounted for 31%. Izabella Kaminska looks at the cranes in the sky and the data being collected to conclude that we are in "a brave new commoditised real estate world in which generic flats have become equal to gold, property developers the equivalent of gold miners, and London the Klondike territory". Residents of Vancouver might relate to that. — Ben Walsh On to today's links: Yikes
Comrade capitalism: How a billion-dollar Russian medical project funded Putin's palace - Reuters Must Read
"Let's, like, demolish laundry" - Jessica Pressler Tax Arcana
Classifying Chuck Taylors as slippers cuts the tariff from 37.5% to 3% - Gazette Cetera Central Banking
The FOMC minutes - Federal Reserve
Kocherlakota says the Fed will keep missing its inflation target until 2018 - WSJ
Bernanke to the Fed balance sheet: you're perfect just the way you are - Reuters Hilarious
Thomas Pikitteh's "Catipal in the 21st Century" - Catipal Wonks
Eduardo Porter interviews Piketty - NYT Crisis Retro
There were flaws in almost every pre-crisis mortgage-backed security - Bloomberg Crime and/or Punishment
Criminal guilt with no material impact. Except names, the US got what it wanted from Credit Suisse - Peter Eavis | 
