News, Commentary, & Analysis. Mar. 1, 2014. #RealEstate #Insurance #Economics

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Table of Contents
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1) January Data Not So Clear on New Home Sales, But Consumers Intend to Buy | Metrostudy Report | Primary and secondary housing market information, research and consulting.

2) Google Fiber: 100 Times Faster Than Your Internet – YouTube

3) Beijing pollution alert maintained as smog lingers – Xinhua | English.news.cn

4) China's toxic air pollution resembles nuclear winter, say scientists | Environment | theguardian.com

5) Costs of natural disasters in China surge to $69 billion | Reuters

6) 'Pony' botnet steals bitcoins, digital currencies: Trustwave | Reuters

7) Dan River exposed to 35 million gallons of coal ash and wastewater: study – NY Daily News

8) Maine resort to install carbon monoxide detectors | Boston Herald

9) Lincecum awarded $100K in landlord-tenant dispute – Giants/A's – The Sacramento Bee

10) Report: Moore tornado debris reveals construction flaws, code violations – Tulsa World: State

11) California Bill Would Prevent Construction On Faults | All about Insurance

12) California almond farmers face tough choices – seattlepi.com

13) Troubled Bitcoin Exchange Mt. Gox Files for Bankruptcy | News & Opinion | PCMag.com

14) [Recommended] Top 10 "Common" Home Inspection Findings

15) FEMA accredits New Orleans' levees | Shreveporttimes | shreveporttimes.com

16) Jury Awards Texas Woman $1.2M for Fall at Iowa Hotel | Marriott International Inc : Iowa briefs | 4-Traders

17) [Futurism] Woes of Megacity Driving Signal Dawn of 'Peak Car' Era – Bloomberg

18) [Insurance-Related & Highly Recommended] Self-Insured Retentions and High Deductibles: Their Impact on Insurers and Policyholders – Johnson and Bell

19) Freddie Mac Multifamiy Housing 2014 Outlook – YouTube

20) Indonesia Losing 1,500 Islands to Rising Sea

21) KVRR Fox Fargo Moorhead – Wrongful Death Suit Filed in Apartment Fire Case

22) Southeast Missouri Town Closer to Federal Buyout | WSILTV | 3 State

23) Buffett's annual letter: Learn from my real estate investments – The Term Sheet: Fortune's deals blogTerm Sheet

24) EconoMonitor : Great Leap Forward – Minsky on Banking: Early Work and Critiques by Krugman and Horizontalists Revisited

25) Estimating Recession Risk With Potential GDP – The Capital Spectator

  1.    January Data Not So Clear on New Home Sales, But Consumers Intend to Buy | Metrostudy Report | Primary and secondary housing market information, research and consulting.

    Jonathan Smoke:

    The first read of January new home sales from the Commerce Department was released this morning. Economists had been expecting a decline of 3-4 percent from December on a seasonally adjusted basis, but instead a 10 percent increase was reported. That decline stood out compared to the existing home sales January report last week. Looking at the new data, Metrostudy's more detailed traffic and sales data, and recent survey data on consumers' plans to buy a home, we continue to expect that we will see a positive bounce once winter ends and the spring selling season begins in earnest.

    The headline increase, especially being a surprise, is immediately drawing some concerns. You don't have to look further than the footnote to see that the January reading relative to the December reading was not statistically significant ….

    "…traffic and sales data, and recent survey data…" is an excellent way to go about micro analysis. Just remember to remain aware of the macro.

    Add your comment.


  2.    Google Fiber: 100 Times Faster Than Your Internet – YouTube

    Google's built a behemoth business by selling ads on its search engine. But now there's hardly a business in technology the company isn't chasing: mobile, maps, even driverless cars. One of its newest businesses is called Google Fiber — high speed home internet access that the company claims leaves competitors in the dust. But all that fiber comes at quite a cost. Bloomberg's Cory Johnson took a deep dive into the business of Google Fiber.

    How many different companies will you allow to connect to your rental units?

    Add your comment.


  3.    Beijing pollution alert maintained as smog lingers – Xinhua | English.news.cn

    This is very costly.

    Beijing on Monday maintained its orange pollution alert, the second-highest alert level, as severe smog is forecast to linger in the Chinese capital for another three days.

    The density of PM2.5, particles smaller than 2.5 microns in diameter, which have been a major contributor to the smog, climbed again Sunday night and remained at high levels, the city's office for severe air pollution emergency response said in a statement.

    The agency advised children and the elderly to stay indoors and to wear masks while going out. It also urged residents to take public transport and reduce driving. The agency urged middle schools, primary schools and kindergartens to reduce outdoor activities.

    City authorities on Friday ordered 36 companies to halt production and another 75 to reduce production as part of a response mechanism when the pollution alert was raised to orange from yellow.

    Pollution can become so bad over there that it reaches the US. It's a global problem.

    Add your comment.


  4.    China's toxic air pollution resembles nuclear winter, say scientists | Environment | theguardian.com

    This one helps drive home the point we made above about costs.

    Chinese scientists have warned that the country's toxic air pollution is now so bad that it resembles a nuclear winter, slowing photosynthesis in plants — and potentially wreaking havoc on the country's food supply.

    Beijing and broad swaths of six northern provinces have spent the past week blanketed in a dense pea-soup smog that is not expected to abate until Thursday. Beijing's concentration of PM 2.5 particles — those small enough to penetrate deep into the lungs and enter the bloodstream — hit 505 micrograms per cubic metre on Tuesday night. The World Health Organisation recommends a safe level of 25.

    The worsening air pollution has already exacted a significant economic toll, grounding flights, closing highways and keeping tourists at home. On Monday 11,200 people visited Beijing's Forbidden City, about a quarter of the site's average daily draw.

    He Dongxian, an associate professor at China Agricultural University's College of Water Resources and Civil Engineering, said new research suggested that if the smog persists, Chinese agriculture will suffer conditions "somewhat similar to a nuclear winter".

    Read the whole article.

    Add your comment.


  5.    Costs of natural disasters in China surge to $69 billion | Reuters

    As if the air pollution isn't bad enough:

    Natural disasters including droughts, floods and earthquakes cost China 421 billion yuan ($69 bln) in 2013, official data showed on Monday, nearly double the total in the previous year.

    China has always been prone to natural disasters but a changing climate is causing more extreme weather, which hits food production, threatens scarce water resources and damages energy security, according to the government.

    Data released by the National Statistics Bureau showed flooding and mudslides cost China 188 billion yuan in 2013, 20 billion more than in the previous year.

    China is the world's biggest emitter of greenhouse gases, which scientists say cause climate change, but has pledged to cut its emissions to 40-45 percent per unit of gross domestic product by 2020 compared with 2005 levels.

    Therein lies their problem. They need to switch to clean growth or else.

    Add your comment.


  6.    'Pony' botnet steals bitcoins, digital currencies: Trustwave | Reuters

    Are you considering taking Bitcoins as rent payments?

    Cyber criminals have infected hundreds of thousands of computers with a virus called "Pony" to steal bitcoins and other digital currencies, in the most ambitious cyber attack on virtual money uncovered so far, according to security firm Trustwave.

    Add your comment.


  7.    Dan River exposed to 35 million gallons of coal ash and wastewater: study – NY Daily News

    Not good for health or property values; drives up insurance premiums too:

    A team of academic researchers equipped with a drone estimates that up to 35 million gallons of coal ash and contaminated wastewater spilled into the Dan River earlier this month.

    Researchers at Wake Forest University's Center for Energy, Environment and Sustainability released results Tuesday from a study using photos collected by the drone that flew over the Duke Energy coal ash dump that ruptured Feb. 2 in Eden. The scientists used images captured by the drone to create a digital three-dimensional model of the pit, allowing them to calculate the volume of toxic ash that flowed out when a pipe collapsed.

    … Coal ash contains numerous chemicals that are toxic to humans and wildlife, including lead, arsenic and mercury.

    Add your comment.


  8.    Maine resort to install carbon monoxide detectors | Boston Herald

    The fire chief in Ogunquit, Maine, says a time-share resort where guests were sickened by carbon monoxide won't be fined, and it plans to install carbon monoxide detectors in all 77 of its rooms.

    Do you have CO detectors in all of your units? Are they battery powered? Who checks the batteries, etc., and how often?

    Add your comment.


  9.    Lincecum awarded $100K in landlord-tenant dispute – Giants/A's – The Sacramento Bee

    Giants pitcher Tim Lincecum and his former San Francisco landlord have agreed to a $100,000 judgment in Lincecum's favor, ending a long legal dispute that began with allegations that he left a townhouse he rented during the 2010 season a wreck.

    The Beverly Hills Sports Council, which represents Lincecum, released a statement Thursday announcing the settlement.

    What's the moral of the story for landlords?

    Add your comment.


  10.    Report: Moore tornado debris reveals construction flaws, code violations – Tulsa World: State

    … the school's steel roof beams were not attached to the walls, many of its cinder-block walls were not properly reinforced with steel rebar and large portions of the walls were not backfilled with concrete. The substandard steel rebar served as a hinge, letting high winds blow walls over, Ramseyer said.

    Add your comment.


  11.    California Bill Would Prevent Construction On Faults | All about Insurance

    Senate Bill 1155 would mandate that developers and city officials treat an unzoned earthquake fault line just like a zoned earthquake fault line, plus add an additional setback of 75 feet.

    California has about 7,000 miles of earthquake faults that have been mapped and identified, and more than 5,000 miles of these faults have also been zoned so that developers cannot build 50 feet near the fault line, unless an exception has been granted.

    Add your comment.


  12.    California almond farmers face tough choices – seattlepi.com

    With California's agricultural heartland entrenched in drought, almond farmers are letting orchards dry up and in some cases making the tough call to have their trees torn out of the ground, leaving behind empty fields.

    In California's Central Valley, Barry Baker is one of many who hired a crew that brought in large rumbling equipment to perform the grim task in a cloud of dust.

    A tractor operator drove heavy steel shanks into the ground to loosen the roots and knock the trees over. Another operator, driving a brush loader equipped with a fork-like implement on the front, scooped up the trees and root balls and pushed them into a pile, where an excavator driver grabbed them up in clusters with a clawing grapple. The trees were fed into a grinder that spit wood chips into piles to be hauled away by the truckload and burned as fuel in a power plant.

    The drought will wipe many people out financially if it lasts much longer and they don't get out in time.

    Multiple Peril Crop Insurance is great, but there are limits. How many years in a row can farmers watch their trees die from lack of water and remain in business, insurance or not?

    Land values will plummet.

    Let's all hope for rain but not floods.

    Add your comment.


  13.    Troubled Bitcoin Exchange Mt. Gox Files for Bankruptcy | News & Opinion | PCMag.com

    Are we ever glad we weren't subjected to this.

    Mt. Gox's lawyer said the company has lost 750,000 of its customers' bitcoins, in addition to its entire stash, estimated at around 100,000 units. With the current bitcoin price at about $565, that translates to around $480 million, or about 7 percent of the estimated global total of bitcoins, Reuters noted.

    FDIC isn't so bad after all, is it.

    Add your comment.


  14.    [Recommended] Top 10 "Common" Home Inspection Findings

    Most real estate transactions are contingent upon an acceptable home inspection to the buyers satisfaction. They can also be contingent on other inspections as well, however, these inspections are not as common as the home inspection. A qualified and experienced home inspector should find something that could be corrected, upgraded, or repaired in every home that they inspect, even newly built homes!

    Read the whole article for solid advice on some common problems to look for.

    Add your comment.


  15.    FEMA accredits New Orleans' levees | Shreveporttimes | shreveporttimes.com

    The Federal Emergency Management Administration has declared the New Orleans area levee system accredited, clearing the way for the improved storm surge protection to be incorporated into National Flood Insurance Program flood maps, which should eventually lead to reduced flood insurance rates.

    Add your comment.


  16.    Jury Awards Texas Woman $1.2M for Fall at Iowa Hotel | Marriott International Inc : Iowa briefs | 4-Traders

    Property owners and managers take note.

    A Texas woman has been awarded more than $1 million for a fall on ice outside a Bettendorf hotel that shattered her right ankle and left her with a limp.

    A Scott County jury awarded 54-year-old Brenda Alcala, of Dallas, $1.2 million.

    Alcala sued after she slipped and fell at the Courtyard by Marriott at Bettendorf on Jan. 21, 2010. Her attorney, Mike Bush, of Davenport, said responding paramedics had to spread their own salt on the hotel's sidewalk to reach and help Alcala.

    Add your comment.


  17.    [Futurism] Woes of Megacity Driving Signal Dawn of 'Peak Car' Era – Bloomberg

    This is a fascinating futuristic article on cars. We were especially interested in the idea of summoning a driverless car when needed: a driverless taxi. We can see driverless cars delivering our groceries too, those groceries that we don't have to physically inspect first. Of course, eventually robots will be better at picking food for us than we are.

    Add your comment.


  18.    [Insurance-Related & Highly Recommended] Self-Insured Retentions and High Deductibles: Their Impact on Insurers and Policyholders – Johnson and Bell

    Do you understand the difference between SIR's and deductibles? If not, here's an excellent article on the subject by Glenn F. Fencl.

    In the current economic climate, first-dollar coverage has become a luxury that many commercial insureds can no longer afford. Although policies with large self-insured retentions and deductibles have always been available, they were frequently overlooked in the past when bottom lines were healthier and insurance premium costs were subject to less scrutiny. As more insureds assume greater responsibility for managing the risk of smaller claims while relying on traditional insurance products for catastrophic protection, more policies are being issued with significant SIRs and deductibles.

    Mr. Fencl gives you a good sense of the scope of things to consider when making a choice between SIR's and deductibles.

    Add your comment.


  19.    Freddie Mac Multifamiy Housing 2014 Outlook – YouTube

    Is multifamily still an attractive investment? Senior Director, Steven Guggenmos covers this topic in Freddie Mac's Multifamily 2014 Outlook.

    Add your comment.


  20.    Indonesia Losing 1,500 Islands to Rising Sea

    Indonesia has already lost 24 small islands off Aceh, North Sumatra, Papua and Riau between 2005 and 2007 to rising sea levels due to climate change, according to a Ministry of Marine Affairs and Fisheries report.

    Do you take the rising sea level into consideration when buying applicable property?

    Add your comment.


  21.    KVRR Fox Fargo Moorhead – Wrongful Death Suit Filed in Apartment Fire Case

    The parents of a Fargo man who died after an apartment fire two years ago say the landlord is to blame for failing to maintain a smoke detector.

    Goldmark says in court documents that it was not the company's duty to maintain smoke detectors in James Peyton's apartment.

    What's your company's policy on maintaining such detectors? What does your state's law say about it? What does your insurance policy require?

    Add your comment.


  22.    Southeast Missouri Town Closer to Federal Buyout | WSILTV | 3 State

    A tiny southeast Missouri town prone to frequent flooding from the Mississippi River is one step closer to a long-awaited federal buyout.

    Add your comment.


  23.    Buffett's annual letter: Learn from my real estate investments – The Term Sheet: Fortune's deals blogTerm Sheet

    This tale begins in Nebraska. From 1973 to 1981, the Midwest experienced an explosion in farm prices, caused by a widespread belief that runaway inflation was coming and fueled by the lending policies of small rural banks. Then the bubble burst, bringing price declines of 50% or more that devastated both leveraged farmers and their lenders. Five times as many Iowa and Nebraska banks failed in that bubble's aftermath as in our recent Great Recession.

    In 1986, I purchased a 400-acre farm, located 50 miles north of Omaha, from the FDIC. It cost me $280,000, considerably less than what a failed bank had lent against the farm a few years earlier. I knew nothing about operating a farm. But I have a son who loves farming, and I learned from him both how many bushels of corn and soybeans the farm would produce and what the operating expenses would be. From these estimates, I calculated the normalized return from the farm to then be about 10%. I also thought it was likely that productivity would improve over time and that crop prices would move higher as well. Both expectations proved out.

    Warren goes on to describe his "value investing" way of thinking, which he definitely applied to the two real-estate deals discussed in his article. Positive cash-flow would be the focus.

    He sticks to the fundamentals and has faith in the US economy over time.

    Add your comment.


  24.    EconoMonitor : Great Leap Forward – Minsky on Banking: Early Work and Critiques by Krugman and Horizontalists Revisited

    L. Randall Wray:

    While Minsky did not directly address Krugman's claim that the central bank still controls deposit creation even in the absence of reserve holdings because it controls the quantity of cash, this is a red herring in any case. Banks hold some cash in vaults and when that runs out, they order more from the Fed. The Fed would be even less likely to refuse to supply cash to meet withdrawals than it would refuse to clear checks among banks. Ensuring par clearing and preventing runs on banks is among the most important functions of a central bank. The Fed's extensive preparations in advance of 2000's Y2K demonstrates the Fed's unquestionable commitment.

    Add your comment.


  25.    Estimating Recession Risk With Potential GDP – The Capital Spectator

    … the healing process is ongoing, and it's fair to say that idle capacity remains an ongoing issue. In turn, the idle capacity implies that the odds are low that a new recession is imminent.

    Add your comment.


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  • Kyle Hiscock

    Thank you for the mention/feature of our recent blog posting, "Top 10 Common Home Inspection Findings!"

    • You are most welcome. Thank you for the solid information. We look forward to reading more of your site's posts.