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↑ Orange County Rent Growth Levels Climb Above U.S. Norm – Apartment Market Dynamics – YouTube
After tracking with the national norms for rent growth in recent years, Orange County's apartment sector has climbed above the average in the last two quarters. But with some economic challenges and rising supply levels, can rent growth accelerate further?
↑ Breakingviews: How to run an emerging market health check – YouTube
Too much easy money? Property prices skyrocketing? Reuters Breakingviews' Andy Mukherjee introduces a 'Good Health Guide' to help investors determine just what kind of shape emerging economies are in.
↑ China: towering credit – YouTube
China is reining in capital investments as the authorities show their determination to slow credit growth. Rafael Halpin, a China Confidential analyst, explains to John Authers the scale and the implications of China's slowdown.
↑ Still Report # 200 – Ukraine's Economic Fix – YouTube
We agree that debt-free money is the right path not only for Ukraine but the US and the whole world. Bill Still:
There is a way for Ukraine to not worry about loans from either Russia or the European Union.
↑ [Highly Recommended] How the Fed Let the World Blow Up in 2008 – Matthew O'Brien – The Atlantic
We wonder what if feels like to be the only person in a room full of people charged with preventing economic crashes who was right about how the Great Recession should have been prevented and after that, dealt with. Matthew O'Brien:
Lacker had gotten the "disruptive" event he had wanted, and he was pretty pleased about it. "What we did with Lehman I obviously think was good," he said, because it would "enhance the credibility of any commitment that we make in the future to be willing to let an institution fail." Hoenig concurred that it was the "right thing," because it would suck moral hazard out of the market.
That doesn't mean the Fed wasn't worried. It was worried. About inflation.
The hawks were monomaniacally focused on headline inflation that hadn't yet fallen all the way from its summer peak. Even though commodity prices and inflation expectations were both falling fast, Hoenig wanted the Fed to "look beyond the immediate crisis," and recognize that "we also have an inflation issue." Bullard thought that "an inflation problem is brewing." Plosser was heartened by falling commodity prices, but said, "I remain concerned about the inflation outlook going forward," because "I do not see the ongoing slowdown in economic activity is entirely demand driven." And Fisher half-jokingly complained that the bakery he'd been going to for 30 years—"the best maker of not only bagels, but anything with Crisco in it"—had just increased prices. All of them wanted to leave rates unchanged at 2 percent.
But it wasn't just the hawks who wanted to leave rates unchanged. It was everybody at the Fed, except for Rosengren [Boston Fed president Eric Rosengren]. He was afraid that exactly what did end up happening would happen. That all the financial chaos "would have a significant impact on the real economy," that "individuals and firms will be becom e risk averse, with reluctance to consume or invest," that "credit spreads are rising, and the cost and availability of financing is becoming more difficult," and that "deleveraging is likely to occur with a vengeance." More than that, he thought that the "calculated bet" they took in letting Lehman fail would look particularly bad "if we have a run on the money market funds or if the nongovernment tri-party repo market shuts down." He wanted to cut rates immediately to do what they could to offset the worsening credit crunch. Nobody else did.
↑ Labor Market Slack and Monetary Policy – Boston Fed
In a speech to the Boston Economic Club, Federal Reserve Bank of Boston President Eric Rosengren called for a "patient approach" to removing the Fed's accommodative monetary policy, given the high numbers of U.S. workers who want full-time work but are currently working part time. He also cited the still-high unemployment rate, and the very low inflation rate.
These factors are all consistent with significant "slack" in labor markets. Rosengren argued that the traditional, widely reported measure of unemployment "probably understates the degree of slack remaining in labor markets and the economy more generally."
"While the unemployment rate has recently fallen to 6.6 percent, there remain 7.3 million Americans who want full-time work but are currently working part time," Rosengren said.
We've mentioned economic slack a few times lately and have also often mentioned that the Fed should definitely not be judging things based upon one aggregate number for unemployment and especially not without looking closely at the fallen participation rate.
Boston Fed President Rosengren drives home both points in the video below.
We're in good company.
↑ 5 Tips on Hiring the Best Property Manager
… make sure that you get along on a professional level and that you like their style of communication. It's a mistake to think you will be turning over everything to the property manager and you'll just go on autopilot. Instead, recognize that you'll be working through issues large and small with this person or this company, and you need to feel like you are on the same page to start.
↑ House close to voting on flood insurance bill | Shreveporttimes | shreveporttimes.com
Watchdog groups are unhappy with both proposals, saying taxpayers shouldn't have to finance subsidized insurance rates for people who want to build or buy homes in high-risk areas.
The Senate bill would impose a four-year delay on premium increases for some homeowners with policies through the National Flood Insurance Program (NFIP). During the delay, FEMA would complete a study of how to make the higher rates affordable.
The rate increases were created under the Biggert-Waters Flood Insurance Reform Act of 2012. The reforms, overwhelmingly supported by lawmakers, were intended to help make the government's flood insurance program financially solvent by bringing rates in line with true flooding risks.
There's merit on both sides, but given that individuals can't control global warming by themselves, we have to do things together to see to it that they don't end up homeless. We either do what it takes to reduce the risk of flooding, subsidize people to stay in areas that are becoming more flood prone, help them move to safer ground, or leave them to fend for themselves. Which path do you think best and why?
↑ W.Va. House committee to amend chemical spill bill – Businessweek
As time ticks away, West Virginia lawmakers are suggesting another face-lift for a bill that would tighten aboveground storage tank regulations and safeguard water systems against chemical spills.
t the new version of the bill switches which tanks would be exempt from additional inspections. Some exempt tanks would include those holding fewer than 1,310 gallons, facilities that mix or make chemicals, most tanks on trucks and trains, and liquid traps or gathering lines for oil and gas production.
↑ Gov. Chris Christie gives the OK to knock down unsafe homes damaged in superstorm Sandy | The Asbury Park Press NJ | app.com
The eyesore of homes damaged by superstorm Sandy might not have [to] be tolerated for much longer.
An executive order signed Friday by Gov. Chris Christie gives the state Department of Community Affairs the authority to raze uninhabited buildings damaged by the storm that the agency deems as unsafe.
The Unsafe Structure Demolition Program will use $15 million in federal Community Development Block Grant money to identify and demolish the structures and remove the debris.
15 days seems a bit short to us, but we also think the area should have been cleaned up already.
↑ [For the Sake of Comparison] 1993 Storm of the Century – Wikipedia
The Storm of the Century, also known as the '93 Superstorm, or the (Great) Blizzard of 1993, was a large cyclonic storm that formed over the Gulf of Mexico on March 12, 1993, and dissipated in the North Atlantic Ocean on March 15. It is unique for its intensity, massive size and wide-reaching effect. At its height, the storm stretched from Canada towards Central America, but its main impact was on the Eastern United States and Cuba. The cyclone moved through the Gulf of Mexico, and then through the Eastern United States before moving into Canada. Areas as far south as central Alabama and Georgia received 6 to 8 inches (15 to 20 cm) of snow and areas such as Birmingham, Alabama, received up to 12 inches (30 cm) with isolated reports of 16 inches (41 cm). Even the Florida Panhandle reported up to 4 inches (10 cm), with hurricane-force wind gusts and record low barometric pressures. Between Louisiana and Cuba, hurricane -force winds produced high storm surges across northwestern Florida, which along with scattered tornadoe
s killed dozens of people. Record cold temperatures were seen across portions of the South and East in the wake of this storm. In the United States, the storm was responsible for the loss of electric power to over 10 million customers. It is purported to have been directly experienced by nearly 40 percent of the country's population at that time. A total of 318 people perished during this storm.
↑ Waldo Canyon Report Offers Roadmap on How Communities Can Reduce Wildfire Risks
A report detailing vulnerabilities leading to the destruction of nearly 350 homes in Colorado Springs from the 2012 Waldo Canyon Fire provides today's communities located in wildfire-prone areas guidance on how to reduce their risk of wildfire damage.
"The damage would have been worse in Colorado Springs if not for the mitigation practices used in this area, including programs to reduce flammable vegetation surrounding the community and instituting a program that facilitated installation of Class A roof coverings when wood-shake roof coverings were replaced," said Dr. Steve Quarles, IBHS senior scientist and wildfire expert. "The results from this report show the benefits of following wildfire preparedness practices advocated by the FAC Coalition."
↑ Air pollution in Sharjah as toxic as in Beijing, survey shows | The National
As we mentioned last week about air pollution being a global problem with oil raising land values in some ways and dropping them in others:
Air pollution in Sharjah [United Arab Emirates] on some days reaches the same toxic levels as notoriously smog-ridden cities such as Beijing, Tokyo and Mexico City.
While more data is needed to explain the large variations in the amount of air pollutants, Dr Majeed thinks this is an indication that a significant portion of the pollutants are produced abroad and carried on the wind.
Some pollutants, he said, have a long life and can travel large distances by air. The team is comparing the variations in pollution levels measured in Sharjah against atmospheric models that show the real-time movement of air masses.
Iran, Qatar and Saudi Arabia are all possible sources of the pollutants, he said. "If you look around this area, you will see a lot of petrochemical industry."
↑ Jamming People Into Tight Housing Won't Cut Carbon Dioxide Levels – Investors.com
Lawrence J. Mcquillan:
'Smart growth" projects across the country aim to jam people into high-density housing near mass transit systems.
Proponents think this will make people abandon their automobiles, reducing greenhouse gas emissions. But new research shows "stack-and-pack" housing is an ineffective way to reduce carbon dioxide levels.
The interesting things here are the choice of words and the reversing of the meaning of the research findings.
"Stack-and-pack" maybe accurate, but it has a deliberate negative ring to it. Granted, middle- and lower-income classes aren't going to be living in largish, high-rise, luxury apartments and condos, but those in such apartments and condos don't exactly think of themselves as living in a negative "stack-and-pack" situation but rather in choice properties and choice locales in densely populated cities.
Let's also remember that more and more young people are forgoing cars for mass transit and bikes, etc. They are asking for more and better mass transit, not less, not long commutes.
Also, commuting is certainly dropping with the Internet Age.
Lastly, increasing cities' density by 10-fold is a matter of building up. Buildings certainly are getting taller, and new materials and engineering will only accelerate that trend. Increasing density to obtain a full 25% drop in the greenhouse gas that is CO from oil, gas, and coal burning is no small feat.
Hopefully, more and more of that mass transit will be electric and generated from clean sources.
What's your take? Is urban planning a nasty expression, or is it a good and necessary idea?
↑ Policymakers Have Priorities Crossed on Private Capital for Housing – Bank Think Article – American Banker
Jim Parrott and Mark Zandi:
… investors are not shying away only because they can't compete with the government. They face numerous other barriers that will keep them out even if the government recedes. First among them is a deep suspicion of the parties they depend on when investing in mortgage-backed securities. They depend on credit-rating agencies to assess the creditworthiness of their investments and upon lenders to underwrite and service the loans that stand behind these investments. Both of these players failed to perform their roles competently during the crisis, and investors will remain deeply wary of returning to the space until their confidence is restored.
The second barrier to the return of private capital is the significant uncertainty that policymakers continue to generate in the mortgage securities market. One source of uncertainty is the rule requiring financial institutions that pool and securitize mortgages to retain a portion of the credit risk on those loans after selling the securities to investors. Part of the financial regulatory reform enacted under Dodd-Frank, the measure is intended to reduce risk in the system by forcing securitizers to retain some skin in the game.
Another source of policy uncertainty is the prospect that some local governments may use eminent domain to seize the mortgages of distressed homeowners.
↑ [Future Soon] Technology: Rise of the replicants – FT.com
Rapid advances in artificial intelligence now threaten the jobs of educated white-collar workers
If Daniel Nadler is right, a generation of college graduates with well-paid positions as junior researchers and analysts in the banking industry should be worried about their jobs. Very worried.
Mr Nadler's start-up, staffed with ex-Google engineers and backed partly by money from Google's venture capital arm, is trying to put them out of work.
What will people do to make the rent?
In days gone by when technology replaced human labor, humans simply moved on to what machines couldn't yet do. What will happen once machines can do it all, all the labor?
What will such an economy look like? Who'll be paying if nobody is earning from labor/work?
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