News, Commentary, & Analysis. Feb. 18, 2014. #RealEstate #Insurance #Economics

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Table of Contents
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1) Backed By $10M, Stealthy Startup Bitglass Reveals Its Enterprise Security Solution For Mobile & Cloud | TechCrunch

2) We Are Approaching The Economic Singularity – Business Insider

3) EPA and Freddie Mac Take On Energy Efficiency in Multifamily Buildings – EcoBuilding Pulse

4) Using a Free CRM to Manage Your Real Estate Business

5) 5 Steps to Successful Multifamily Energy Management Projects | Property Management Insider

6) China Tea Leaf Index: Growth built on shaky foundations – YouTube

7) Concern for Brazil's hot property – YouTube

8) Bitcoin Hit by One of the Largest Ever DDos Attacks

9) Real Estate Surveillance Cameras: Tech trends: "Recording at the edge" | Viewpoint

10) Blogs review: The employment to population ratio | Jérémie Cohen-Setton at Bruegel.org

11) Unemployment in America: Closing the gap | The Economist

12) Calculated Risk: Update: Household Debt Service Ratio at lowest level in 30+ years

13) Political Economist Answers: What's So Dangerous About Austerity?

14) Sober Look: US commercial banks' changing asset mix

15) Why Is China's Economy Still Showing Signs Of Overheating Despite Slower Growth? | Economy Watch

16) Xi's Tinkering Risks China Hard Landing | Asia Confidential

17) Japan confronts a taxing problem – YouTube

18) Will Housing Take Gold? – YouTube

19) Iranian Oil Exports Increase After Nuclear Deal

20) Robert Reich (Why the Lousy Jobs Report Boosted Wall Street)

21) The Social Value of Finance | The Baseline Scenario

22) EconoMonitor : Great Leap Forward – New IMF Paper Shows Yet Again that Reinhart and Rogoff Results Are Erroneous

  1.    Backed By $10M, Stealthy Startup Bitglass Reveals Its Enterprise Security Solution For Mobile & Cloud | TechCrunch

    What do you think?

    If they can make it work as intended, we think it's really ingenious.

    Add your comment.


  2.    We Are Approaching The Economic Singularity – Business Insider

    John Mauldin:

    Deficit spending is a wonderful prescription for Spain, but it begs the question of who will pay off the deficit once Spain has lost the confidence of the bond market.

    John's framework there is not at the frontline ("frontlinethoughts.com" is one of his Internet domains).

    He assumes debt, as if there is no thinking outside the box where such debts don't even get started even while there is never any shortage of currency.

    "I wish it were possible to obtain a single amendment to our constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its constitution; I mean an additional article, taking from the federal government the power of borrowing." — Thomas Jefferson.

    Some people think that means only a balanced budget. Well, that's not correct. The reason is that a balanced budget can incorporate borrowing and simply use taxes in balance to pay the interest without adding to the existing debt. Jefferson meant no borrowing, period: no debt, no interest. He did advocate borrowing on occasion, but that was consistent with the economic framework he had to live with, not the one he wanted.

    How would that be possible? The answer is real greenbacks, which are United States Notes that can be issued by the US government into the general economy while incurring no debt for the taxpayers.

    John Mauldin and the others he quotes never discuss this clear option, which worked for President Lincoln in financing the Civil War and which could be vastly perfected over what Lincoln did. We aren't sure why John, et al., don't discuss it. We're sure they've heard of it.

    We like much of what John writes. He's a bit too laissez-faire for our tastes, but he seems to sincerely mean well; and he can be an entertaining writer and thought provoking.

    How do we get United States Notes through to him? Any suggestion?

    Add your comment.


  3.    EPA and Freddie Mac Take On Energy Efficiency in Multifamily Buildings – EcoBuilding Pulse

    The U.S. Environmental Protection Agency (EPA) and Freddie Mac want to make America's multifamily buildings more energy efficient and affordable, and are teaming up to do so. On Jan. 30, the two entities announced a signed agreement outlining strategies to save water and energy in multifamily properties and to improve financing for energy efficiency investments. Reducing energy costs for apartment residents should improve the affordability of the units, according to a release from the EPA.

    Add your comment.


  4.    Using a Free CRM to Manage Your Real Estate Business

    A CRM is a software program that is typically used to organize and manage customers for a business. It stands for Customer Relationship Management.

    In real estate, many people use a CRM to manage seller leads. Depending on the size of your business, you may or may not think you need a software program to manage this aspect of your business. However, I can tell you from experience that even the smallest real estate company can benefit from using a CRM.

    Add your comment.


  5.    5 Steps to Successful Multifamily Energy Management Projects | Property Management Insider

    … while energy usage stats can be jaw dropping at times, so can the potential for significant energy and cost savings for property management companies. That's good news considering that many multifamily companies hold energy as their third largest annual expense.

    Yet many companies aren't ready to embark on energy conservation measures (ECMs) because they doubt whether these projects can yield verifiable results or they hear about perceived failures across the industry.

    The truth is that well-designed ECMs are a product of math, science, and decades of success in multifamily and commercial real estate. By following these five steps to planning and implementing successful ECMs and energy management projects, property management companies can unlock these energy efficiency opportunities and see highly dependable returns on their investments.

    Add your comment.


  6.    China Tea Leaf Index: Growth built on shaky foundations – YouTube

    A building boom will fuel expansion in many sectors of the Chinese economy, but Reuters Breakingviews' John Foley worries it may be happening in all the wrong places.

    It's worse than that.

    Add your comment.


  7.    Concern for Brazil's hot property – YouTube

    Brazil's house prices have tripled since 2008, rising twice as fast as the cost of rent. Samantha Pearson, the FT's Brazil reporter, looks at what is stoking the increases and why economists are worried.

    Add your comment.


  8.   Bitcoin Hit by One of the Largest Ever DDos Attacks

    Bitcoin has been discussed widely. We've seen where some in real estate have said they accept Bitcoin.

    Why was Bitcoin subjected to the largest "distributed denial of service (DDoS) attacks ever recorded"? What would be the motive for targeting Bitcoin in particular, and what does that mean as to whether you should accept it in real estate or elsewhere?

    We can think of a number of people who might be motivated to stop or slow Bitcoin: Those with an interest in protecting the dominance of sovereign currencies and those who are heavily invested in gold are just two examples.

    What are your thoughts on this?

    If someone takes Bitcoin, which isn't backed by the full faith and credit of any sovereign and Bitcoin suffers attacks that might severely slow it, decrease its value, or even shut it down, would the gamble of taking it in the first place have been worth it? Clearly not if the decrease wipes out profit margins.

    What are the arguments for Bitcoin? Click the comment link to leave your thoughts.

    Background reading:

    Add your comment.


  9.    Real Estate Surveillance Cameras: Tech trends: "Recording at the edge" | Viewpoint

    IP systems, with their advantages over older analog CCTV systems, are slowly becoming industry standard. Although IP technology is not exactly new (the first IP cameras came out in the mid 1990s), their more recent emergence in the industry has lead to other trends. One such trend is the concept of "edge recording."

    Add your comment.


  10.    Blogs review: The employment to population ratio | Jérémie Cohen-Setton at Bruegel.org

    Jérémie Cohen-Setton always does an excellent job pulling together different blogs covering the same story. We've read/covered a number of these, but seeing them aggregated and highlighted is nice.

    What's at stake: The drop and lack of recovery in the employment to population (E/P) ratio has raised questions as to whether the drop in the unemployment rate represents a genuine improvement in the US labor market. A recent study by the NY Fed, which argued that the demographically adjusted E/P ratio was just 0.7 points below trend, has received considerable attention in the blogosphere and among Fed watchers as it corroborates the picture of a recovering labor market.

    We don't think the progress of a recovery should be weighted for long-term-trend retirements without counterbalancing for lost retirement savings and forced/premature retirements.

    We realize that the subject is the employment ratio, but there is too much at stake not to place that in the larger picture.

    Add your comment.


  11.    Unemployment in America: Closing the gap | The Economist

    This article captures a bit of what we were saying above.

    … recent research suggests the unemployment rate is saying something important. It's just that the message is a depressing one: America's labour supply may be permanently stunted. If so that would mean that the economy is operating closer to potential—using all available capital and labour—than generally thought, and that there is less downward pressure on inflation than the Fed has assumed.

    Unpublished research by Alan Krueger of Princeton University finds that in 2010 about 18% of the long-term unemployed quit the workforce each month. That has since risen to 24%. Meanwhile, the rate at which they find work has edged down to 10% per month. The work they find is often transitory or part-time. Thus, with each passing month, more of the unemployed are drifting to the fringes of the labour market than re-entering it. More monetary and fiscal stimulus may have saved them a few years ago, but are of much less help now.

    Policymakers will need to put more effort into making the long-term unemployed once again employable.

    Add your comment.


  12.    Calculated Risk: Update: Household Debt Service Ratio at lowest level in 30+ years

    Bill McBride:

    This data suggests household balance sheets are in much better shape than a few years ago.

    That's if you aren't looking at total net worth of the middle and lower classes.

    Add your comment.


  13.    Political Economist Answers: What's So Dangerous About Austerity?

    This is not what you'll read in the mainstream.

    … the ECB, starting in 2012, flooded the near-insolvent European banking system with nearly 5 trillion euro in "official support." That brought down rates; that allowed Ireland to go back to the markets, and for Greece to now pay 7 percent rather than 30 percent on its 10-year bonds. Central bank policy mattered. Austerity had nothing to do with it.

    Add your comment.


  14.    Sober Look: US commercial banks' changing asset mix

    Walter Kurtz:

    Loan growth rate in the US, while better than in the Eurozone, remains on a downward path. The latest figures suggest that loans are increasing at less than 2%, while deposits continue to grow at 6-7% per year.

    Add your comment.


  15.    Why Is China's Economy Still Showing Signs Of Overheating Despite Slower Growth? | Economy Watch

    C. H. Kwan:

    In the early stage of the current recession, presuming that the economy's actual rate of growth was below the potential, PRC monetary authorities tried to promote recovery by reducing the reserve requirement three times in December 2011, February 2012, and May 2012, and lowering interest rates twice after that, in June 2012 and July 2012. Since then, however, they have come to recognize—from the increasingly apparent overheating of the economy with no pick up in the rate of growth—that the potential growth rate has fallen, and have taken a more cautious monetary policy stance. To curb inflationary pressure, they may have to raise the statutory reserve requirement ratios and interest rates later this year, which may serve as a trigger for an economic downturn.

    Add your comment.


  16.    Xi's Tinkering Risks China Hard Landing | Asia Confidential

    James Gruber doesn't pussyfoot around much when discussing China's economy:

    China's President, Xi Jinping, hasn't done nearly enough to deflate the country's credit bubble. He needs to do three things, and fast: 1) allow defaults of wealth management products so risk can be properly priced 2) accelerate structural reforms laid out late last year 3) lower Beijing's bottom line for GDP growth from 7% to a more realistic 6%. Without these initiatives, Xi risks a much larger economic blow-up in the not-too-distant future.

    Yet, that's still putting it mildly.

    Add your comment.


  17.    Japan confronts a taxing problem – YouTube

    An expected consumer spending boom ahead of Japan's looming sales tax rise doesn't seem to be materializing as hoped – a troubling prognosis for an economy bracing for a post-hike backlash.

    As our readers know, we've been saying all along that the planned sale-tax hike is not a good idea.

    Add your comment.


  18.    Will Housing Take Gold? – YouTube

    Freddie Mac's Vice President and Chief Economist, Frank Nothaft, gives a video preview of the February 2014 U.S. Economic and Housing Market Outlook.

    Frank doesn't state any value judgments about the taper. Is it premature? Do we want interest rates rising this year, or would we be better off having not tapered yet? Is employment really that solid? Can unemployment be sufficiently explained by a lack of potential in the economy (due to retirees, etc.)? Is a lower economy the "new normal" because we have no demographic options?

    Add your comment.


  19.    Iranian Oil Exports Increase After Nuclear Deal

    Any environmental/Anthropogenic Global Warming concerns aside, what do you think about this analysis by Nick Cunningham?

    If the Iranian government — and its people — begin to feel economic relief due to the interim deal, that could also make them more likely to support a long-term one. A permanent deal could lift all sanctions, restore Iran's connection to the global economy, and allow for international companies — including oil companies — to pour money into Iran. That's a huge prize. Iran's leaders know all too well that the West will restore and even step up sanctions if it feels that Iran is not acting in good faith. Having the economic door slam shut on them after it had been partially opened seems to not be something the Iranian people would want. It may actually be more difficult for Iran's hardliners to turn back the clock and go back to confrontation now that they have witnessed some of the benefits of reengaging with the West.

    Add your comment.


  20.    Robert Reich (Why the Lousy Jobs Report Boosted Wall Street)

    This observation by Robert Reich is an important factor to consider.

    Continued low interest rates will also continue to make it profitable for big investors (including corporations) to borrow money to buy back their own shares of stock, thereby pushing up their values.

    That would constitute a phony price increase in a very real sense.

    However, his observation #2 cuts both ways. The taper is driving down emerging-market investments and sending investors into "safe" US bonds, raising demand v. supply, raising prices, lowering yields, adding pressure to lower interest rates. [Update:

    The world’s biggest bond dealers are showing almost no confidence in the best annual start for Treasuries (BUSY) since 2008.

    While Treasuries climbed 1.4 percent this year, Goldman Sachs Group Inc., JPMorgan Chase & Co. and the other 20 primary dealers offered to sell $4.34 of the notes for every dollar the Federal Reserve purchased from the firms in its bond buying program in the past month, the highest since 2011, data compiled by Bloomberg show. Dealers slashed inventories more than 70 percent from a record in October to a two-year low.

    The increased selling shows that bond dealers are becoming decidedly bullish on the world’s largest economy at a time when investors such as Pacific Investment Management Co. are questioning the strength of the U.S. recovery in the wake of reports on jobs growth, manufacturing and retail sales that fell short of analysts’ estimates. Primary dealers surveyed by Bloomberg predict the Treasury gains will turn into losses, pushing up yields (USGG10YR) on 10-year notes to 3.49 percent by year-end. (Source: "Wall Street Bond Dealers Renounce Treasuries That Lure Pimco")]

    The Fed dropping out of the buying market does increase supply for other buyers though. The whole debate really comes down to jobs and retirees: getting that right, getting the data and interpretation right.

    Add your comment.


  21.    The Social Value of Finance | The Baseline Scenario

    Among the Populists and Progressives (think of Louis Brandeis, for example), financial regulation was a political and even moral issue, and questions of the social utility of finance were paramount. In one sense, they finally won in the New Deal reforms of the 1930s. But the regulatory agencies created by those reforms became the new locus of technocratic expertise, and over time their objective became macroeconomic management rather than social progress. This trend only accelerated later in the twentieth century, bolstered by the general rise of economism and the fetishization of free markets, to the point where some (e.g., Greenspan) opposed any regulation and others defended regulation narrowly as a way of correcting for market failures.

    What is missing, Rahman argues, is any actual consideration of the social value of finance in general and financial innovation in particular. In its absence, we are left with the judgment of the expert technocrats, which has predictably led us to where we are today. If we do open up the scope of financial regulation to take questions of social value into account, we might end up in a very different place.

    Thoughts?

    Add your comment.


  22.    EconoMonitor : Great Leap Forward – New IMF Paper Shows Yet Again that Reinhart and Rogoff Results Are Erroneous

    We already covered this topic by linking here, but we like this statement by L. Randall Wray:

    … the sovereign deficit and debt ratios by themselves tell us nothing about sustainability. We can have those ratios rising for "good reasons" (to promote growth and development) or for "bad reasons" (because slow growth has kicked in the automatic stabilizers). For a sovereign currency issuer, what really matters is unemployment and living standard, not debt ratios.

    Add your comment.


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