News Alerts. Nov. 22, 2013. #RealEstate

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  1. The Missing Ingredient of the Economic Recovery (Hint: It's Not Jobs) | BlackRock Blog | Global Market Intelligence

    … if you look over the last 50 or 60 years, household income typically has risen by about 3.5% annually after inflation, fueling a 3.5% or so gain in consumption. However, since the recession ended three years ago, we've seen household income gains roughly half of that. And this year, things are even worse. For 2013, real, or inflation-adjusted, household income growth is averaging only about 1%.

    Well, as our loyal readers know, we mention good wages nearly every time we mention jobs.

    That said, what's also missing is a raft of commercial borrowers of all sizes. Of course, if more people had higher-paying jobs, that would boost demand. Businesses would turn to lenders. Banks would lend because they can create nearly all the debt-money they want right now due to the huge excess reserves at the Fed.

    So, raise wages (politically not doable right now) and start charging interest on excess reserves (negative interest rates).

    If that doesn't create the inflation and growth the Fed wants to see, then the legislature must create jobs via fiscal spending (also politically not doable right now).

    Start educating, Fed.

    Source … http://www.blackrockblog.com/2013/11/20/ missing-ingredient-economic-recovery-hin t-jobs/


  2. Office Trends And Vacancies Q3 2013 | Reis Reports

    We've been covering the ICEE(Intellectual Capital, Energy, and Education) aspect in real estate. Here's a brief video on the subject pertaining to the office sector suggested to us by Patrick D. Murray, Manager of Media Partnerships, ReisReports. Thank you, Patrick.

    Reis VP of Economics & Research, Dr. Victor Calanog, provides an update on the office sector performance for the 3rd quarter of 2013.

    Office vacancy at 16.9%, down 10 basis points from the second quarter.

    Asking and effective rents grew by 0.3%.

    Seven out of the top ten metros ranked by effective rent are either tech or energy oriented.

    Continuing recovery expected over the next five years.

    ReisReports home page … http://www.reisreports.com

    Video source page … http://www.reisreports.com/resources/vid eo/office-trends-q3-2013


  3. Consumer Price Index Summary | 8:30 a.m. (EST) Wednesday, November 20, 2013

    "On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers decreased 0.1 percent in October after increasing 0.2 percent in September. The index for all items less food and energy rose 0.1 percent in October, the same increase as in September." Notables:

    The energy index declined 1.7 percent in October after increasing in September. The gasoline index, which rose 0.8 percent in September, fell 2.9 percent in October. (Before seasonal adjustment, gasoline prices fell 4.9 percent in October.) The fuel oil index also turned down, falling 0.6 percent in October after rising in September. Similarly, the index for natural gas fell 1.0 percent after rising 1.8 percent in September. The electricity index was the only major component to increase, rising 0.1 percent. The energy index has declined 4.8 percent over the last year, with the gasoline index down 10.1 percent. The fuel oil index also fell, declining 4.6 percent. In contrast, the natural gas index rose 4.4 percent over the span, and the electricity index rose 3.0 percent.

    As a result of the partial federal government shutdown, all CPI staff were furloughed from October 1, 2013 through October 16, 2013. Data collection, data review and index computation commenced shortly after the end of the shutdown. In order to minimize the impact of the shutdown on the quality and timeliness of the index, resources normally devoted to maintenance and improvement work were redirected into data collection and index production. The sample of prices used to calculate the October index was about 75 percent of the amount usually used in the CPI.

    Of course, these reinforces the Fed's position of maintaining QE.

    Source … http://www.bls.gov/news.release/cpi.nr0. htm


  4. 2014: The Emerging Purchase Market – YouTube

    It's all good news.

    Freddie Mac's Vice President and Chief Economist, Frank Nothaft, gives a video preview of the November 2013 U.S. Economic and Housing Market Outlook.

    Source … http://www.youtube.com/watch?v=nPMioLppe uA


  5. REAL ESTATE: Are we there yet? | Business | PE.com

    Debra Gruszecki reports and opines:

    Some economists and real estate analysts buoyed by sales dynamics — and spectacular price point ebb and flows — throughout much of 2013 are making claims in recent months that market conditions are moving closer toward a state of normalcy in Inland Southern California.

    Watch for new investment in condo and townhome purchases in 2014. That could take some of the punch out of single-family home sales gains, and the ability of first-time buyers to latch onto affordable condos and townhomes to get into the marketplace.

    Inland economist John Husing, affirming the region's real estate market is far from being on a normal keel, explained that Inland Southern California is only now snapping out of depressed lows because: Housing prices are more than 40 percent below the 2005 to 2006 peak. New home construction is still operating at historic lows.

    An inordinate part of overall sales are going to investors, not families, Husing said. Neighborhoods are still wrangling with the ravages of foreclosure. And, roughly 25 percent of the mortgaged homes in the Inland region are valued at less than the mortgage.

    Husing thinks it could take until 2016 — maybe 2018 — before the economy gets back to normal.

    Source … http://www.pe.com/business/business-head lines/20131120-real-estate-are-we-there- yet.ece


  6. Yen Slides to 4-Month Low as Policy Divergence Widens Yield Gap – Bloomberg

    Kristine Aquino & Candice Zachariahs report:

    The yen slid to a four-month low versus the dollar as a divergence in the path of monetary policy between Japan and the U.S. drove the gap between the nations' benchmark government bond yields to the widest since September.

    The yen led losses among the greenback's major peers after the Bank of Japan left policy unchanged as it maintains efforts to spur 2 percent inflation, while Federal Reserve meeting minutes signaled a reduction in monetary easing "in coming months." The euro declined as investors weigh the possibility of stimulus from the European Central Bank before President Mario Draghi speaks. Australia's dollar fell after a Chinese manufacturing gauge dropped.

    "The market is expecting further action from the BOJ at some point and the general expectation is for the yen to continue to weaken," said Jim Vrondas, the chief currency and payment strategist at OzForex Ltd. in Sydney.

    That's good for Japan and should (we say should but not necessarily that it will) reduce the Fed's temptation to (prematurely) lift QE.

    Source … http://www.bloomberg.com/news/2013-11-20  /euro-holds-biggest-decline-in-3-weeks- before-ecb-s-draghi-speaks.html


  7. The ECB rate cut was driven by the needs of Germany, not the needs of the Eurozone | EUROPP

    Frances Coppola writes:

    No doubt some people will argue that a falling euro would benefit periphery exporters. But I'm afraid they are mistaken. I've already pointed out that this rate cut will reduce borrowing costs for German businesses but not for periphery ones. The fall in the euro will mitigate high borrowing costs for periphery businesses to some extent, but it will also benefit German businesses in addition to the benefit they will get from lower borrowing costs. Overall, therefore, German businesses will benefit more than periphery ones. This rate cut actually worsens the periphery's competitiveness problem. Of course, it can be argued that German and, say, Spanish exporters don't directly compete because they are in different markets. But if Spanish exporters are competing with, say, Chinese, the fall in the euro will make little difference (because the yuan is managed) and the ECB's inability to influence lending rates to Spanish businesses means that Spanish exporters will not benefit at all: meanwhile Germany will do even better in its export markets.

    There are still things the ECB could do….

    … it could cut the deposit rate to negative, thus charging banks for safe assets. The problem with this is, of course, the existence of physical cash. To have much impact, the deposit rate would have to be quite significantly negative, in which case there is a serious risk that banks will simply hoard vaulted cash instead. Alternatively, they could buy up sovereign debt instead of hoarding cash, which creates the same problem as LTROs. And it is worth remembering that German bunds are substitutes for euro reserves: the short-term yield on bunds would therefore also drop into negative territory. Should we really be paying to lend to the German government?

    Now that's an interesting train of thought.

    We'd be interested to see how the same thinking would apply to the US. We'd like to see a step-by-step explanation of how charging interest on excess reserves in the US could be sidestepped and/or could freeze the money function, to which Janet Yellen referred in her confirmation hearing.

    Source … http://blogs.lse.ac.uk/europpblog/2013/1 1/19/the-ecb-rate-cut-was-driven-by-the- needs-of-germany-not-the-needs-of-the-eu rozone/


  8. Sober Look: Key trends in US mortgage markets

    Walter Kurtz reports:

    … MBS bond markets are taking a hit in the form of lower volumes. The sharp decline in refinancing activity has reduced the need to issue new agency mortgage bonds. New issuance is the lowest in years.

    Similarly, trading volumes in MBS have dropped off to new lows.

    Source … http://soberlook.com/2013/11/key-trends- in-us-mortgage-markets.html


  9. Freddie Mac – Freddie Mac Training Brokers to Preserve Communities, Property Values, Boost Sales of HomeSteps(R) Homes

    The new Certified Community Stabilization Expert program is an eight hour on-line course teaching the latest lessons for selling REO homes, stabilizing property values and revitalizing communities hit hard by the foreclosure crisis.

    The Certified Community Stabilization Expert program is approved for six hours of continuing education credit for real estate professionals in eight states including California, Florida, Georgia, Nevada, Ohio, Pennsylvania, Texas and Washington.

    Source … http://freddiemac.mwnewsroom.com/press-r eleases/freddie-mac-training-brokers-to- preserve-communiti-otcqb-fmcc-1069528


  10. Rental Property Depreciation: How a Phantom "Loss" Can Translate Into Real Cash Flow

    There are a lot of great tax benefits that come with owning investment real estate, but one of the best is rental property depreciation. With most rental property expenses, such as mortgage interest, management fees, maintenance, etc., you only get the deduction after you pay the expense.

    With depreciation, you're taking what's called a passive loss, meaning you didn't actually incur an expense from your business checking account to get the deduction on your taxes.

    … depreciation "recapture", which can kick in when you sell.

    Source … http://www.mortgagesbymark.com/blog/for- real-estate-investors/rental-property-de preciation-how-a-phantom-loss-can-transl ate-into-real-cash-flow/


  11. NAR urges delay of flood insurance rate increases | Inman News

    … NAR [National Association of Realtors] now recommends Congress pass the bipartisan "Homeowner Flood Insurance Affordability Act," which would delay further implementation of major rate changes until the Federal Emergency Management Agency (FEMA) completes an affordability study required by Biggert-Waters; creates an office of the advocate to investigate flood insurance rate increases; and reports to Congress with proposed solutions to any identified problems….

    Source … http://www.inman.com/wire/nar-urges-dela y-of-flood-insurance-rate-increases/


  12. IA Magazine – Big 'I' Continues Flood Insurance Reform Efforts

    This impacts upon landlords too.

    Section 205 phases out explicit subsidies for second/vacation homes; commercial properties; severe repetitive loss properties; properties undergoing substantial improvement; and properties experiencing substantial flood damage and rebuild. It immediately eliminates all subsidies, with no phase-out, for properties bought and sold, and stops "grandfathering" of policies located in communities with a new or redrawn map.

    Regarding Section 205, the association noted in its testimony that "the Big 'I' is concerned about the impact that the bought/sold provision of Section 205 will have on individual consumers as well as the broader U.S. housing market."

    Additionally, "the Big 'I' has major concerns regarding the elimination of the 'grandfather' process via Section 207. The fact is that this provision will end up punishing good actors, those responsible homeowners that built or purchased homes in compliance with the known risks at the time, took responsible steps towards mitigation based upon the government maps in existence, and kept active NFIP policies."

    See also: http://www.floodsmart.gov/floodsmart/pag es/commercial_coverage/cc_overview.jsp

    Source … http://www.iamagazine.com/NewsViews/2013  /November_21/big-i-continues-flood-insu rance-reform-efforts.aspx


  13. Japan central bank keeps loose monetary policy, says economy on mend, as critics query results – The Washington Post

    The monetary base is duly rising as expected. But most of the inflationary impact from pumping money into the economy has come from rising costs for imports of fuel and industrial inputs as the yen weakens, said Yukio Noguchi, an adviser to the Institute of Financial Studies at Tokyo's Waseda University.

    The stock of cash in circulation has barely increased, as banks park proceeds from sales of government bonds to the BOJ in accounts at the central bank.

    "Companies have no demand for borrowing," he said.

    There's your problem: pushing on a string. They aren't working hard enough to create projects where such borrowers must begin or the projects can't go forth.

    We aren't advocating bridges to nowhere or people digging holes and refilling them. We're talking about really needed increases in productive work, work that results in further gain, not a series of one-offs.

    Regardless, the whole world is going to need to come to grips with the fact that work as we know it will not be necessary to produce everything humanity needs. There is going to have to be some sort of plan put into place where all human beings have all of the minimums provided via what productive work is done, including that done by robots, which will certainly be the vast majority of it if we continue on our current trajectory.

    Source … http://www.washingtonpost.com/business/j apan-central-bank-keeps-loose-monetary-p olicy-says-economy-on-mend-as-critics-qu ery-results/2013/11/21/2744a500-5271-11e 3-9ee6-2580086d8254_story.html


  14. US rejects Fairholme's proposal to recapitalize Fannie, Freddie | Reuters

    Gene Sperling, Director of the National Economic Council, said in a speech on Wednesday that the administration simply cannot allow Fannie and Freddie to be recapitalized in its current corporate form.

    "The risks are simply too great that this would recreate the problems of the past. The only credible way to end the failed business model of Fannie Mae and Freddie Mac is through comprehensive housing finance reform," Sperling said.

    We think that's not borne out by the current evidence or history of Fannie or Freddie.

    They were not the cause of the crash. Both did better by far than their Wall Street counterparts. Each is paying back the taxpayers via dividends all the money invested in them.

    If they were allowed to continue on as they are now, within the same amount of time they've been in receivership, they'd return all profits to the general revenue of the federal government in a greater amount than was used to bail them out, meaning the taxpayers would more than double their money off themselves (home and other buyers using Fannie and Freddie) rather than losing all to private interests. The longer it would go on, the more money would go to general revenue (otherwise making up for taxes).

    Exactly why there's an echo of anti-Fannie and Freddie commentary that doesn't ever address these obvious facts seems centered on getting the industry into the hands of those who will take those profits for themselves rather than share them back into the general ledger of the US government while our government needs budget-balancing without cuts in services.

    If there's some real reason good for all of us for Fannie and Freddie to be wound down and changed to greatly increase the Wall Street type firms taking over, we'd like to hear it. We haven't heard a thing on it, and we've read plenty of articles complaining against Fannie and Freddie.

    What are your thoughts? Is this just economic ideology from the anti-Fannie/Freddie voices, or do they have any hard evidence to support their claims for why the taxpayers should forgo any further benefit right when Fannie and Freddie will start producing a profit for them, the taxpayers?

    Source … http://in.reuters.com/article/2013/11/21  /fannie-freddie-whitehouse-idINL4N0J60Q G20131121


  15. Most Dangerous Neighborhoods in America – Likes

    Always check the crime rate and types of crimes, etc., concerning any property you might be considering for investment purposes.

    The cap rates will be really high. Don't get suckered.

    #1 North Auburn Gresham Chicago, IL

    Chicago, Illinois has a murder rate that seems to be increasing yearly and a major reason is because of the crime that happens in the North Auburn Gresham neighborhood. This neighborhood which occupies the 60620 zip code has a violent crime rate of 73.5 per 1,000 residents. The chances of becoming a victim in this section are 1 in 14, which is actually on the low side for many of Chicago's rougher areas. The entire south side of Chicago seems to be an evil playground that won't stop its madness until the whole city is engulfed in violence.

    Don't assume that crime is low just because you may be looking at a rural area. Some places have lower reporting rates.

    Source … http://chicagom.likes.com/the-20-most-da ngerous-neighborhoods-in-america


  16. Sam Zell Examines the Multifamily Market – YouTube

    Good points:

    Listen to world renowned entrepreneur and investor Sam Zell answer questions from David Brickman about the past, present and future of the Multifamily market.

    Source … http://www.youtube.com/watch?v=XmJTNM6rz zQ


  17. PBOC Will 'Basically' End Normal Yuan Intervention: Zhou – Bloomberg

    China's central bank will "basically" end normal intervention in the currency market and broaden the yuan's daily trading limit, Governor Zhou Xiaochuan said, without giving a timeframe.

    The daily range will be widened in an "orderly way" as China seeks to enhance the currency's two-way flexibility, Zhou wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. The nation will phase out investment caps for both domestic and foreign investors, he added. A ceiling on deposit rates offered by local banks will be gradually removed as well, PBOC Deputy Governor Yi Gang wrote in the book.

    The party said it plans to achieve these targets by 2020.

    This is a big deal, as for one, it will allow more money to pour out of China into global investments.

    It will also remove US criticisms about China being a currency manipulator harming the US economy.

    Source … http://www.bloomberg.com/news/2013-11-19  /pboc-will-basically-exit-normal-yuan-i ntervention-zhou-says.html


  18. The American Institute of Architects – Architecture Billings Index Slows Down, Pressroom

    Following three months of accelerating demand for design services, the Architecture Billings Index (ABI) reflected a somewhat slower pace of growth in October. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending.

    Source … http://www.aia.org/press/AIAB100739


  19. Watch out! Worrisome housing signs appear in West

    CNBC's Diana Olick reports on the disappointing numbers and how the low rate of first-time buyers is hurting the market.

    They say all real estate is local, but the West has more recently been an indicator of what is to come for the rest of the nation. It was the first region to crash in the mid-2000's and the first to show signs of recovery toward the end of the last decade. Now the tides have turned again.

    Sales of existing home sales nationally fell 3.2 percent in October from the previous month, but in the West they were down 7 percent. The West was also the only region to see a year-over-year decline in home sales.

    Source … http://www.cnbc.com/id/101215003


  20. Thailand's Bubble Economy Is Heading For A 1997-Style Crash – Forbes

    Jesse Colombo is very pessimistic about emerging markets, including China. He writes:

    The emerging markets bubble started in 2009, when China launched a bold stimulus-driven economic growth strategy to counter the deleterious effects of the global financial crisis on its economy. China immediately scrambled to construct scores of new cities (many of which are still empty) and ambitious infrastructure projects for the sake of generating economic growth, which sparked a global raw materials boom that benefited commodities exporters such as emerging market nations and Australia. Global investors soon began to pile into emerging market investments to diversify away from ailing Western nations in wake of the financial crisis.

    Near-zero interest rates in the U.S., Europe and Japan, along with the U.S. Federal Reserve's multi-trillion dollar quantitative easing stimulus programs encouraged $4 trillion worth of speculative capital to flow into emerging market investments since 2009. Global investors entered carry trades in which they borrowed very cheaply from the U.S. and Japan, and invested the funds in high-yielding emerging market assets, while profiting from the interest rate differential or "spread." The sudden influx of "hot money" into emerging market investments helped to inflate a bond bubble, which pushed EM borrowing costs to all-time lows and enabled government-driven infrastructure booms, red-hot credit growth, and property bubbles across the entire emerging world.

    As I've been saying even before this summer's EM panic, I expect the ultimate popping of the emerging markets bubble to cause another crisis that is similar to the 1997 Asian Financial Crisis, and there is a strong chance that it will be even worse this time due to the fact that more countries are involved (Latin America, China, and Africa), and becau se the global economy is in a far weaker state now than it was during the booming late-1990s.

    Source … http://www.forbes.com/sites/jessecolombo  /2013/11/04/thailands-bubble-economy-is -heading-for-a-1997-style-crash/


  21. LA Rents Now Higher Than They Were Before The Recession – State O' the Market – Curbed LA

    Adrian Glick Kudler reports:

    Home prices are soaring in SoCal, but they still haven't quite hit pre-recession levels. Rents, though, have hit those levels and kept on climbing, according to the latest rental report from brokerage Marcus & Millichap.

    [paragraphing added] LA County rents averaged $1,688 a month in the third quarter of 2013, up 2.6 percent from the third quarter of 2012. That means they're now 5.9 percent higher than their pre-recession peak.

    Source … http://la.curbed.com/archives/2013/11/la _rents_now_higher_than_they_were_before_ the_recession.php


  22. Turnaround towns: How Orlando and Phoenix are making a comeback

    By: Robin Micheli, Special to CNBC.com

    For a long time the sunny weather in Phoenix and Orlando was matched by their economic climates, as both enjoyed soaring housing prices and prosperity in the early 2000s.

    Then the Great Recession jolted the cities like a roller coaster at one of Orlando's theme parks, taking them on a hair-raising ride that catapulted them from the tippy-top of the track straight down to the very bottom, with nary a loop or a roll in between. Like some battered American cities, they could have languished there. Instead, they not only climbed back but used the downturn as an opportunity to strengthen the resilience of their economies and promote future growth.

    The two cities' recoveries have much in common, including an emphasis on technology and renewed focus on education, quality of life, environment- and business-friendly policies and incentives, infrastructure and civic involvement. But none of it would have worked without leaders' willingness to make bold investments in the future, craft inventive strategies, and collaborate—with the private sector and other municipalities—in order to find solutions to the complex challenges their communities faced.

    Source … http://www.cnbc.com/id/101184091


  23. Property Taxes Hoped to Curb China's Real Estate Excesses – NYTimes.com

    Adam Century reports:

    …any specific plans to impose a broad property tax have stoked controversy. For one thing, an effective property tax would require individuals, including government officials, to provide a more accurate record of their real estate holdings, a move analysts say would be resisted because of the scale of illicit income and other corruption it would uncover.

    "The moment the government starts collecting taxes, people will be able to see the properties that individuals own," wrote Li Xiaoning, a real estate market analyst, in the Legal Daily newspaper. "This will unleash problems that will truly test the boldness and determination of the government's fight against corruption."

    Source … http://sinosphere.blogs.nytimes.com/2013  /11/20/property-taxes-hoped-to-curb-chi nas-real-estate-excesses/?_r=0


  24. Calculated Risk: Thursday: Unemployment Claims, PPI, Philly Fed Mfg Survey

    The short version: the Fed will start to "taper" soon, but the Fed Funds rate will be low for a long long time.

    If this is true (if they, say, taper this years), it will constitute the Fed shooting itself in both feet (again).

    Tapering before the unemployment rate is below 5.5 (and perhaps inflation is above 2.5) is a mistake in our view. We'd like to see 5% unemployment or below without worrying about inflation until it's over 3%. We should boost help to those on fixed incomes if 3% would harm them.

    Not only that but the quality of the jobs matters greatly. We can't rebuild the US economy on the current minimum-wage rate, where so many new jobs are coming in. We need the super-rich to take less and to rather spread/reinvest profits at the bottom.

    Fortunately, the Fed could always reverse. That though would be very confusing to markets.

    If they do taper soon, they better make it extremely gradual and especially at the beginning.

    Your thoughts?

    Source … http://www.calculatedriskblog.com/2013/1 1/thursday-unemployment-claims-ppi-phill y.html


  25. FOMC minutes show ongoing commitment to MBS purchases | HousingWire

    Lindsey Piegza, managing director and chief economist with Sterne Agee, pointed out that "Federal Reserve officials said they might reduce their monthly bond buying program from $85 billion 'in coming months' as the economy continues to improve."

    Despite the industry witnessing a better-than-expected third-quarter GDP report and October non-farm payroll, Piegza saw signs of economic pessimism when Fed Chairman Ben Bernanke spoke earlier this week. She explained that Fed Chairman Ben Bernanke viewed the latest slew of economic data as 'somewhat disappointing.'

    We think Janet Yellen feels the same and will put even more emphasis upon jobs at living wages, where it belongs, with inflation being a secondary concern during this terribly slow recovery.

    "Fiscal policy is restraining economic growth." That's exactly right. The federal government should spend more on really productive needs. When the economy picks up, the deficit will shrink naturally via rising general revenues (same tax rate, larger tax base).

    Source … http://www.housingwire.com/articles/2806 0-fomc-minutes-show-ongoing-commitment-t o-mbs-purchases


  26. Fed Looks for Other Ways to Aid Economy – NYTimes.com

    Binyamin Appelbaum reports:

    "After the unemployment threshold is crossed, many other indicators become relevant to a comprehensive judgment of the health of the labor market, including such measures as payroll employment, labor force participation and the rates of hiring and separation," he [Ben Bernanke] said.

    The account said that most officials were open to the idea of encouraging bank lending by reducing the interest rate on funds that banks keep on deposit with the central bank. Those reserves have ballooned with the Fed's bond purchases, because the Fed buys bonds from the banks and then credits their reserve accounts. …

    … Keeping the interest rate on reserves above zero, for example, has created an incentive for banks to borrow from money market funds and then deposit the money with the Fed. In the absence of those payments, the money funds might actually be forced to pay the banks to take that same money.

    Officials are reluctant to replace the 6.5 percent threshold because they are concerned that doing so would undermine their credibility with investors.

    We just don't buy those last two concerns, especially the latter.

    Why is no one explaining the first better?

    "…might actually be forced to pay the banks to take that same money…" makes no sense to us. What are we not being told? What do we not know?

    If this is a problem, then channel the interest charged on excess reserves to the money markets in the form of some sort of compensating relief until the economy readjusts or do something else equally or more creative: whatever it takes. Let's get this economy going. It's taking way too long. We don't need a lost generation.

    Does anyone have any ideas? Please share.

    Source … http://www.nytimes.com/2013/11/21/busine ss/economy/fed-officials-considered-new- support-for-economy-minutes-show.html?pa gewanted=all


  27. Mortgage Rates Much Higher After FOMC

    This is what happens when the Fed spooks the market. It works exactly against the direction the Fed still needs the economy to go. We think the Fed's "forward guidance" is way too premature and not explained enough in detail (models, etc.; leanings; thought processes). Matthew Graham writes:

    Mortgage rates shot significantly higher after today's FOMC Minutes reminded markets that the Fed is still intently considering a reduction in asset purchases. Most lenders are a full eighth of a point in rate higher than yesterday's latest rate sheet offerings–many of them fared even worse. The most prevalently quoted conforming 30yr fixed rate for ideal scenarios (best-execution) is now easily back up to 4.375%, and some lenders are closer to 4.5%. Essentially, today's rate sheets are very similar to last Wednesday's–one of the weakest days since mid September.

    Source … http://www.mortgagenewsdaily.com/consume r_rates/332695.aspx


  28. Victus Farms in Silver Bay, MN – YouTube

    Last but not least: We are very favorably impressed. In our view, this is a really good use of real estate.

    Nourishing Community

    The Latin word "victus" means nourishment. And that's exactly what Victus Farm, a partnership between the University of Minnesota and the small town of Silver Bay, Minn., does. It nourishes the Silver Bay community by creating jobs, organic food and clean energy.

    Victus Farm has created a closed-loop production system that provides hundreds of pounds of organically grown lettuce, basil, arugula and organically fed tilapia, to local restaurants and markets.

    Here's how it works. The farm collects rainwater and uses it to raise the fast-growing tilapia in tanks. Nutrient-rich waste water from the fish tanks then feeds the assortment of vegetables grown in the hydroponic greenhouse. Next the water flows to the algae beds, where oxygen is restored to the water before it is returned to the tilapia tanks.

    Staff are testing different types of algae for optimal biofuel production. Meanwhile, biomass boilers provide the necessary heat for the greenhouses. And soon, solar panels will provide the farm's electricity.

    It's a big project for a little town. One that provides everything from food to education, and most of all, a model that businesses can scale up and reproduce.

    Description compliments of the Organic Consumers Association: http://www.organicconsumers.org/

    Source … http://www.youtube.com/watch?v=3BWuziDfr 40


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We do not necessarily fact checked the contents of every linked article or page, etc.

If we were to conclude any part or parts of our industry are in violation of fundamental fairness and the legal standards of a state or states, we'd address the issue through proper, legal channels. We trust you understand.

The laws that tie our tongues, so to speak, are designed to keep the public from losing confidence in the industry and the regulatory system overseeing it. Insurance commissioners around the country work very hard to analyze rates and to not allow the industry to be damaged by bad rate-settings and changes in coverages. The proper way for people in the industry to deal with such matters is by adhering to the laws, rules, and regulations of the applicable states and within industry associations where such matters may be discussed in private without giving the industry unnecessary black eyes. Ethics is very high on the list in the insurance industry, and we don't want to lose the people's trust. That said, the industry is not perfect; but what industry is?

For our part, we believe in strong regulations and strong regulators.

We welcome your comments and ask you to keep in mind that we cannot and will not reply in any way or ways where any insurance commissioner could rightly say we've violated the law of the given state.

We are allowed to share rating-bureau data/reports and industry-consultant opinions but make clear here that those opinions are theirs and do not necessarily reflect our position.

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