News: Real Estate, Risk, Economics. Jun. 17-18, 2014

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Table of Contents
(Click to sections below.)

1) IMF Survey : New Global Housing Watch Throws Spotlight on Booms and Busts

2) Don't Rule Out Multifamily Investments | Realtor Magazine

3) [Recommended] The Glienicker Gruppe Manifesto for The European Union

4) [Recommended] Thomas Piketty and 14 others: Our manifesto for Europe | Comment is free | The Guardian

5) Yu Yongding predicts that China may soon have little choice but to float the renminbi. – Project Syndicate

6) Las Vegas, Back From the Bust, Revives Dead Projects – Bloomberg

7) Commercial Real Estate | NYC Office Leasing

8) Will China Avoid a Severe Housing Market Correction? | PRAGMATIC CAPITALISM

9) KBW: Plan to wind down GSEs will fail | HousingWire

10) Commercial/Multifamily Mortgage Debt Outstanding Rises to Another High – CoStar Group

11) Would You Bank With Google Or Amazon?

12) U.S. Producer Prices Unexpectedly Fall – NYTimes dot com

13) No Hesitations: Another 180 on Piketty's Measurement

14) (Updated) Gas line explosion burns plumber at Casper assisted living center

15) Trio arrested in Citra mobile home arsons | Marion County

16) "Severe thunderstorms have pummeled western and central Europe…" ALERT™ :: Event Summary

17) Abilene Hail Storm 214 – YouTube

18) SmartWater

19) Why The Fed's New Vice Chairman Will Be A Disaster For the U.S. Economy – Forbes

20) Free exchange: Wasted potential | The Economist

21) Inflation: the Short and Long-Run Scenarios

22) Advanced 1031 Exchange Strategies – YouTube

23) Expect further cooling in China home prices: S&P

24) Will Boomers Leave Their Single-Family Nests? | Realtor Magazine

25) Iraq, oil markets, and the U.S. economy | Econbrowser

26) Podmajersky family sues one another over Chicago real estate empire – In Other News – Crain's Chicago Business

27) Bidding wars and big prices: Buffalo real estate is red hot – City & Region – The Buffalo News

28) Portland To Be Next Google Fiber City | CivSource

29) Connecticut hoarder found dead under debris after first floor collapses from clutter | cleveland dot com

30) Why Mortgage Downpayment Requirement Is So Hard to Relax | National Mortgage News

31) How to Fix and Flip Houses; Case Study #1 Sold With a $50,000 Profit | Invest Four More

32) Suburbia fading as buyers yearn for city life

33) [Insurance related] Florida Gov. Rick Scott signs nearly 100 bills

34) Jackson, Wyoming asks state's help covering cost of creeping landslide

35) Oak Creek Canyon fire leaves risky flood zone | azfamily dot com Phoenix

36) Confirmed tornado damages homes in Central Texas | Latest State headlines from AP | News

37) FRESNO, Calif.: Records show inspection lapse in oil and gas wells | National Business News | The State

38) Freedom Industries trench overflows for second day | The Herald-Dispatch

39) Lawsuits in question in West Virginia tank law – seattlepi dot com

40) Hazardous sites mapped in new initiative – WCAX COM Local Vermont News

41) Hospital: 1 dead and 16 critical after tornadoes – NBC-2 dot com WBBH News for Fort Myers, Cape Coral & Naples, Florida

42) Man pleads guilty to arson, insurance fraud – Maryville Daily Forum: State News

43) The myth of a new housing bubble in Germany | Olga Tschekassin at Bruegel dot org

44) Three-Year Change in Employment vs. Housing Starts

45) T-LTRO: variation on a (ECB's) theme | Silvia Merler at Bruegel dot org

46) Mortgage Rate Preview: Will The Federal Reserve Move Rates Lower?

47) The ill-advised rigidity of the 2% inflation target

48) Could politics trump economics as reason for growing income inequality?

49) Jill Lepore: What the Theory of "Disruptive Innovation" Gets Wrong : The New Yorker

50) More investment, for Germany's sake! – CER Insights – Medium

51) Investment Properties: The Great American Farce – Forbes

52) Commercial real estate market sees more steady improvement – Atlanta Business Chronicle

53) Dukeville concerns over coal ash: 5 things to know – Businessweek

54) Miami sues JPMorgan alleging mortgage discrimination | Al Jazeera America

55) Nest's Smoke Alarm Returns, With Price Cut – NYTimes dot com

  1.    IMF Survey : New Global Housing Watch Throws Spotlight on Booms and Busts

    IMF Survey: When you pulled all of the charts and data together, were there any surprises you didn't expect?

    Loungani: Yes, two things. First, during the recent financial crisis, the house prices in many countries did not fall. It's important that the IMF keep an eye on this, because we don't know if that means that good things were going on in those countries or that there is something going on that we should worry about.

    We're surprise they were surprised. We agree though that just because real estate in a given nation hasn't crashed that it won't yet do so.

    Add your comment.


  2.    Don't Rule Out Multifamily Investments | Realtor Magazine

    Over the past few years, institutional investors have gobbled up the available stock of desirable single-family rentals in many markets. Rather than compete with these large investment companies, why not try multifamily investment?

    Brenton Hayden is including even duplexes in with "multifamily," but the real-estate and insurance industries treat anything under 5 units as not multifamily (commercial residential) but as plain residential. Confused? We don't blame you, but we thought we'd make you aware if you weren't already.

    Anyway, there's a slowdown in multifamily investing right now. It might be a good time to start careful shopping for a bargain or two or…. You should be able to expect more cooperation with your due-diligence efforts.

    Why is there a slowdown? There's been quite a bit of construction in the sector, so rent rates may not rise much in the near term.

    Crunch the numbers.

    Add your comment.


  3.    [Recommended] The Glienicker Gruppe Manifesto for The European Union

    We — eleven German economists, lawyers and political scientists — cannot accept the prospect of further playing for time and betting — with ever-larger wagers — that the crisis will eventually pass. Europe has structural problems that require structural solutions. Even though this is not a popular view at the moment, we are convinced that the monetary union needs deeper integration. More particularly, it needs a sufficiently powerful European economic government.

    The original version was published in German by Die ZEIT on October 17, 2013.

    Why is a "United States of Europe" so terrifying? When Europe was a bunch of little fiefdoms, things were certainly not better for the common people. The issue should never be about how large a government is but rather how good it is. Small is definitely not necessarily better. Some of the worst governments in history have been rather small.

    Add your comment.


  4.    [Recommended] Thomas Piketty and 14 others: Our manifesto for Europe | Comment is free | The Guardian

    Very interesting, pro-democracy:

    Through this manifesto, we would like to contribute to the debate on the democratic future of Europe and take the proposals of the Glienicke group still further.

    …unlike our German friends, we feel it is essential that the budget of the eurozone comes from a European tax, not from contributions by the states. In these times of starving budgets, the eurozone needs to demonstrate its ability to raise taxes more fairly and more efficiently than the states; otherwise people will not grant it the right to spend. Beyond that, it is necessary to very quickly generalise the automatic exchange of banking information within the eurozone and establish a concerted policy to make the taxation of income and wealth more progressive, while at the same time jointly waging an active fight against tax havens outside the zone. Europe must help to bring tax justice and political will into the globalisation process: such is the content of our first proposal.

    Our second proposal is the most important and flows from the first. To approve the tax base for the CIT, and more generally to discuss and adopt the fiscal, financial and political decisions on what is to be shared in the future in a democratic and sovereign fashion, we must establish a parliamentary chamber for the eurozone.

    Our third proposal directly concerns the debt crisis. We are convinced that the only way to put this definitively behind us is to pool the debts of the eurozone countries. …

    Debate over Europe's political institutions has all too often been pushed aside as technical or secondary. But refusing to discuss the organisation of democracy ultimately means accepting the omnipotence of market forces and competition and abandoning all hope that democracy can regain control of 21st century capitalism.

    Add your comment.


  5.    Yu Yongding predicts that China may soon have little choice but to float the renminbi. – Project Syndicate

    Yu Yongding:

    The Nobel laureate economist Robert Mundell showed that an economy can maintain two — but only two — of three key features: monetary-policy independence, a fixed exchange rate, and free cross-border capital flows. But China is currently juggling all three — an act that is becoming increasingly difficult to sustain.

    … How has China managed to defy the Mundell trilemma by maintaining all three policy objectives simultaneously? The answer lies in China's sterilization policy.

    … the costs of sterilization are very high. For starters, by maintaining an undervalued real exchange rate, China has fallen into the so-called "dollar trap," boosting the US dollar's international importance at China's own expense. As time passes, the senselessness of this policy will become increasingly apparent.

    http://www.investopedia.com/terms/s/ster ilizedintervention.asp

    Add your comment.


  6.    Las Vegas, Back From the Bust, Revives Dead Projects – Bloomberg

    For almost five years, the desert plot at the western edge of the Las Vegas valley was home to hulking steel skeletons — ghostly ruins of a construction project halted by the recession.

    Now the 106-acre (43-hectare) site bustles with hundreds of workers building the first phase of Downtown Summerlin, an office, entertainment and retail complex that's scheduled to open in October. Howard Hughes Corp. (HHC) revived the development last year after the previous owner, General Growth Properties Inc., shut it down in 2008.

    The commercial real estate market in Las Vegas, littered with vacant buildings and abandoned construction sites by overreaching developers during the U.S. property crash, is coming back to life as the local economy improves and tourists return to the nation's gambling capital. Blackstone Group LP's deal to buy the Cosmopolitan resort and Genting Bhd. (GENT)'s proposed resurrection of an abandoned project on Las Vegas Boulevard are further signs of investor confidence in the nascent recovery.

    Las Vegas remains far from bust proof though: First to go down and last to rise again. Have that in mind if you invest there. Selling high is a great idea.

    Add your comment.


  7.    Commercial Real Estate | NYC Office Leasing

    New York City:

    About a third of the execs felt that low interest rates were to blame for the over-the-top pricing, which they said is creating an asset bubble within the commercial market comparable to the housing bubble of 2005 to 2007.

    Add your comment.


  8.    Will China Avoid a Severe Housing Market Correction? | PRAGMATIC CAPITALISM

    … our perspective on the property market sees the current difficulties as primarily cyclical — tightening credit, slowing growth and over-exuberance on the part of some developers — rather than structural.

    We see it as finally structural. There are too many things that have altered China since earlier corrections. They can't maintain the value-add-export economy and are so far grossly mishandling the transition to a consumer-based one.

    We'd love to be pleasantly surprised by huge, radical reforms. We haven't seen even the slightest hint of such reforms yet.

    Add your comment.


  9.    KBW: Plan to wind down GSEs will fail | HousingWire

    Despite Miller's affirmation that the administration wants to wind down Fannie and Freddie, analysts from Keefe, Bruyette and Woods said that the GSEs aren't going anywhere.

    KBW's analysts also say that Miller's call to wind down the GSEs won't be the last of its kind. "We expect to continue to see headlines like Miller's comments but we think legislation to unwind Fannie and Freddie will fail to pass Congress," KBW's analysts said.

    As for the future of Fannie and Freddie, KBW's analysts said the GSEs' odds of survival keep going up with each passing day. "Inertia is Fannie and Freddie's best friend," they said.

    We agree but see no good reason to privatize.

    Add your comment.


  10.    Commercial/Multifamily Mortgage Debt Outstanding Rises to Another High – CoStar Group

    The level of commercial/multifamily mortgage debt outstanding increased by $11.1 billion in the first quarter of 2014, as three of the four major investor groups increased their holdings. That is a 0.4% increase over the fourth quarter of 2013, according to the Mortgage Bankers Association.

    Total commercial/multifamily debt outstanding stood at $2.56 trillion in the first quarter.

    Multifamily mortgage debt outstanding rose to $913 billion, an increase of $8.7 billion, or 1%, from the fourth quarter of 2013.

    Simply put and relatively speaking, they see it as a better risk than alternative investments.

    Add your comment.


  11.    Would You Bank With Google Or Amazon?

    We usually think of banks as our leading source of financial services, but what if they faced new competitors. Would you be willing to get a mortgage from Google or Amazon, Apple or Facebook?

    How do you spell FDIC?

    Add your comment.


  12.    U.S. Producer Prices Unexpectedly Fall – NYTimes.com

    The overall inflation backdrop remains generally tame, with the main gauge watched by the Federal Reserve continuing to run below the U.S. central bank's 2 percent target.

    Still, key consumer inflation measures pushed up in April and are expected to continue edging higher as the labor market tightens and the economy regains momentum. That should position the Fed to raise interest rates in the second half of 2015.

    The labor market will be truly tightened when most everyone who's given up looking comes back to look. We're a long way from that.

    If handled correctly, Iraq could be a blip. The oil is in Kurdistan and in Southern Iraq where the Shia dominate.

    In addition, the Shia are mounting a counter-offensive and the Iranians have made clear that they aren't going to sit by while Wahhabists overtake Iraq.

    The US and Russia and China don't want to see a Wahhabi government of Iraq either.

    If the US and Iran can cut through the fog and come to a final agreement on Iran's nuclear-energy program, sanctions would be lifted and Iran would be pumping out the oil again, which while not inflationary and not "good" for the US and Russian oil industries, would still be good for the global economy.

    Add your comment.


  13.    No Hesitations: Another 180 on Piketty's Measurement

    Now, with the benefit of more time to read, re-read, and reflect, yes, I'm doing another 180. It seems clear that the bulk of the evidence suggests that the FT, not Piketty, is guilty of sloppiness. Piketty's response is convincing, and all-told, his book appears to remain a model of careful social-science measurement (thoughtful discussion, meticulous footnotes, detailed online technical appendix, freely-available datasets, etc. — see his website).

    We don't think Chris Giles' questions were disingenuous or exactly sloppy, but we do agree with Thomas Piketty's responses and his overall theory. Continual consolidation of wealth can't help but take more and more of the national-income pie (until collapse).

    Add your comment.


  14.    (Updated) Gas line explosion burns plumber at Casper assisted living center

    June 06, 2014:

    A plumber suffered burn injuries when a natural gas line exploded at Meadow Wind Assisted Living center in Casper on Friday, police said.

    The plumber, who was working on the line when it exploded, was taken to Wyoming Medical Center for treatment, said Casper police Sgt. Lyle Berg. Details about the plumber's injuries weren't immediately available.

    The 4:30 p.m. explosion prompted residents to evacuate the center.

    Add your comment.


  15.    Trio arrested in Citra mobile home arsons | Marion County

    OCALA —

    A trio of accused arsonists are under arrest in Marion County.

    Deputies said 42-year-old Kenneth Beare, 28-year-old Ketrina Cron, and a 17-year-old boy set fire to four vacant mobile homes between 2 a.m. and 4 a.m. Sunday, June 8.

    Add your comment.


  16.    "Severe thunderstorms have pummeled western and central Europe…" ALERT™ :: Event Summary

    June 12, 2014:

    Severe thunderstorms have pummeled western and central Europe, bringing extremely strong and damaging winds, large hail, rampant lightning strikes, and heavy downpours. The storms have affected a large area as far south as northern Italy and east into Poland, although the worst hit are Germany, France, and Belgium. Severe thunderstorms and high temperatures are affecting other areas as well, including several Central Europe countries, where forest fires sparked by lightning strikes have spread as a result of the intense heat. According to officials, the storms that hit Germany's North Rhine Westphalia region are the worst in 20 years.

    Add your comment.


  17.    Abilene Hail Storm 214 – YouTube

    This is a hail storm that hit Abilene unexpectedly today the 12th of June at around 6:15 P.M. Damage across the neighborhood was pretty extensive. It was like bombs going off!

    Add your comment.


  18.    SmartWater

    SmartWater is a proprietary forensic asset marking system that is applied to personal, commercial, and industrial items of value to deter theft and to identify culprits for prosecution. The non-hazardous liquid leaves a long-lasting and unique identifier that is invisible to the naked eye except under an ultraviolet black light. The SmartWater anti-criminal system is marketed globally by SmartWater Technology Ltd.

    Add your comment.


  19.    Why The Fed's New Vice Chairman Will Be A Disaster For the U.S. Economy – Forbes

    Jesse Colombo's Austerian take on Stanly Fischer:

    As the governor of the Bank of Israel from 2005 to 2013, Stanley Fischer earned praises for his management of Israel's economy during and after the Global Financial Crisis. In 2009, 2010, 2011 and 2012, Global Finance magazine's Central Banker Report Card gave Fischer an "A" rating. Bank of Israel was ranked the world's most efficiently functioning central bank under Fischer's leadership in 2010.

    Contrary to popular belief, Israel's so-called economic strength is the byproduct of a temporary economic bubble that Fischer helped to inflate rather than the result of sound and sustainable monetary policies.

    We agree that low interest rates can be a disaster (Greenspan was a disaster on many fronts, including deregulation), but the ZLB phenomenon ought not be ignored.

    Is the US really close to anything approximating hyper-inflation? Hardly.

    We do think stocks are in a bubble though.

    Add your comment.


  20.    Free exchange: Wasted potential | The Economist

    … low rates of labour-force participation contributed just under 10% to the shortfall in actual GDP through 2010, but have become a more serious drag since then. About a third of the decline in participation is due to ageing, Mr Hall reckons. Although part of the rest could be reversed with stronger demand for labour, some forms of hysteresis, such as people leaving the workforce to claim disability benefits, will be permanent in the absence of vigorous reform.

    Add your comment.


  21.    Inflation: the Short and Long-Run Scenarios

    Lawrence Yun:

    Broad inflation still looks tame, up less than 2 percent from one year ago, but could easily rise faster. The annualized inflation in April was already speeding at a higher 2.4 percent rate (that is if price gain in April was to persist similarly for the next 12 months) and then accelerated even faster to 3.2 percent in May.

    A higher inflation rate will mean higher mortgage rates.

    If inflation rises without falling back again, then of course he's right.

    We have yet to be convinced inflation is rising much on an annualized basis.

    It's not yet time for the Fed to raise interest rates. The economy is still too weak. Employment is still far too low.

    Add your comment.


  22.    Advanced 1031 Exchange Strategies – YouTube

    There's a great deal of information in this video:

    Join Michael Bull and Ricky Novak as they explore best practices and proven strategies for successful 1031 exchanges.

    * Construction exchanges
    * Reverse exchanges
    * Drop and swap procedures
    * Safety for your funds alternatives
    * International exchanges

    Add your comment.


  23.    Expect further cooling in China home prices: S&P

    Optimistic about China's housing market:

    Bei Fu, Senior Director of Corporate Ratings at Standard & Poor's, describes why property prices in China are set for a further decline this year.

    Add your comment.


  24.    Will Boomers Leave Their Single-Family Nests? | Realtor Magazine

    "Declining home values and the recession-scarred economy have suppressed boomers' residential mobility, thus slowing the rate at which they can adjust their housing consumption," notes Patrick Simmons, Fannie Mae's director of strategic planning economic and strategic research group. Between 2006 and 2012, the percent of boomer households who moved during the preceding year fell from 10.2 percent to 7.9 percent, according to Fannie Mae data.

    But Fannie forecasters do expect that the stability of single-family detached occupancy among baby boomers will eventually come to an end, either eventually by choice or the inability of boomers to maintain a single-family home as they age.

    Will they then buy a smaller place, a condo, or rent? Will they wait and move into assisted-living?

    Add your comment.


  25.    Iraq, oil markets, and the U.S. economy | Econbrowser

    This is a pretty good overview of the oil situation concerning Iraq by James Hamilton; however, we don't think ISIS has lasting ability.

    The group is calling itself the Islamic State of Iraq and al Sham, translated as the Islamic State of Iraq and Greater Syria, or ISIS. And so it may come to be.

    Add your comment.


  26.    Podmajersky family sues one another over Chicago real estate empire – In Other News – Crain's Chicago Business

    Very interesting:

    After John III declined to disclose his pay, his parents fired him as manager and sued him for breaching his fiduciary duty.

    Add your comment.


  27.    Bidding wars and big prices: Buffalo real estate is red hot – City & Region – The Buffalo News

    The Western New York real estate market is red hot.

    Not everyone is seeing speedy sales, multiple bids and big sale prices. The key seems to be that old real estate truism: location, location, location.

    The popularity of these areas is driven by a combination of older buyers wanting to migrate back to the city from the suburbs and a new generation of younger buyers who want to live near their place of work, in walkable neighborhoods. These areas are also convenient to the new hustle and bustle of downtown and the Medical Campus, and that proximity is pushing up prices whenever a property hits the market.

    "There's a huge movement of people from the suburbs back into the city," said Michael Culeton of Hunt. "We're seeing neighborhoods that were less desirable in the past becoming more so. Those neighborhoods are becoming renovated."

    And there are a lot of cash offers, with no conditions or contingencies attached, such as the need to sell a prior home first.

    Add your comment.


  28.    Portland To Be Next Google Fiber City | CivSource

    Residents of Portland, Oregon — you're getting Google Fiber. Google has spent hundreds of millions of dollars to build out its Google Fiber cities. Now, Portland, Oregon is the next to join the ranks of gigabit cities nationwide. The City Council officially approved a franchise agreement with Google to provide the service.

    Google plans to invest $300 million in the Oregon project. Past Google cities have included Kansas City, Kansas; Provo, Utah; and Austin, Texas. Other expansion plans are on the way. The project will offer free internet services to users who pay a one-time $300 fee. Free Wifi networks will also be available in parts of the city, and non-profits may also be able to access free internet services.

    Add your comment.


  29.    Connecticut hoarder found dead under debris after first floor collapses from clutter | cleveland.com

    A 66-year-old woman described by police as an apparent hoarder was found dead under a pile of debris after the first floor of her Connecticut home collapsed into the basement under the weight of all the clutter, authorities said.

    Police had been to Mitchell's house many times over the years responding to requests for welfare checks by neighbors and other people, O'Donnell said. Officers had offered her help from local social service experts, but she refused each time, he said.

    Add your comment.


  30.    Why Mortgage Downpayment Requirement Is So Hard to Relax | National Mortgage News

    A downpayment remains a high hurdle for consumers seeking mortgages. Lowering that hurdle increasingly seems in line with shared industry and regulatory goals—assuming borrowers don't default.

    Lower downpayment risks may be a concern but they have less bearing on default than some other underwriting factors. "I don't think downpayment amount has been as big a factor as income and credit profile in the performance of a mortgage," Madiedo says.

    Micki Pressman, a vice president at Philadelphia-based mortgage insurer Radian, one of the companies that helps protect lenders from default risk on home financing involving loan-to-value ratios above 80%, agrees that these other variables have a bigger impact.

    "If someone has a very poor credit history, that's pretty indicative of how they are going to pay but all things being equal, the property value is one component" of overall loan risk, she says.

    One of the traditional problems with low equity has been with the HELCO's (Home Equity Lines of Credit). People who have traditionally depended upon continual home-value appreciation have often found themselves unable to make payments. They had thought they'd simply be able to sell at a substantial profit and even move up to ever-larger houses regardless of their credit worthiness. Terrible loan underwriting standards and practices by terribly under-regulated Wall Street commercial and investment banks made all of that possible. We need to be vigilant about this to not let lax standards slip back into the market.

    Add your comment.


  31.    How to Fix and Flip Houses; Case Study #1 Sold With a $50,000 Profit | Invest Four More

    This is an excellent warning by Mark Ferguson to novice investors and those who think they have enough cash to fix a new purchase.

    In October of 2013, I did a case study about a fix and flip I had just purchased. The article how to fix and flip a houses; case study #1, discussed the costs, repairs and potential profit on the fix and flip. I sold the property on May 23, 2014 for a nice profit, but things did not go exactly as I planned. The repairs were much more than I planned for, but I also sold the property for more than I thought. I had some major problems with my contractor on this property and it took way to long to repair and sell. I also learned a lot about how to improve my fix and flipping business with this property.

    Add your comment.


  32.    Suburbia fading as buyers yearn for city life

    Good info for landlords too:

    After 60 years of migrating to car-dominated suburbs, a larger share of Americans want out of long commutes in favor of neighborhoods where jobs and stores are nearby. (June 11) AP

    Add your comment.


  33.    [Insurance related] Florida Gov. Rick Scott signs nearly 100 bills

    Some of the other bills signed by Scott include one (SB 542) that is designed to make it easier for private companies to sell flood insurance in the state. Florida is home to 37 percent of the federal flood insurance policies. The push for the bill came in the wake of skyrocketing premiums in the federal program although Congress did roll back some of those amid an outcry from coastal homeowners.

    Scott also signed a bill (SB 708) that would prohibit insurers from using credit information to deny a claim or cancel a policy. The new law would also create a "homeowner claims bill of rights" that requires insurers to spell out to homeowners what they can expect when they file a claim.

    Add your comment.


  34.    Jackson, Wyoming asks state's help covering cost of creeping landslide

    JACKSON — The town of Jackson plans to ask the state for help in covering the cost of a creeping landslide that damaged and threatened several homes and businesses.

    Add your comment.


  35.    Oak Creek Canyon fire leaves risky flood zone | azfamily.com Phoenix

    SEDONA, Ariz. (AP) — A risky flood zone has been created in the aftermath of a wildfire that burned around northern Arizona's Oak Creek Canyon, a report from forest officials said Friday.

    Add your comment.


  36.    Confirmed tornado damages homes in Central Texas | Latest State headlines from AP | News…

    Severe weather has spawned a Central Texas tornado that damaged several homes and floodwaters that washed away a car and left its driver missing.

    Officials say a roof was torn off one house and another home was lifted off its foundation and tossed 150 yards away. Minor injuries were reported.

    Add your comment.


  37.    FRESNO, Calif.: Records show inspection lapse in oil and gas wells | National Business News | The State

    FRESNO, Calif. — Federal officials in charge of overseeing the drilling of new oil wells on public land in California let three years pass without inspecting some high-priority sites, according to public records.

    The U.S. Bureau of Land Management records say 31 of 99 high-priority wells drilled from fiscal year 2009 to 2012 in the state's oil-rich Central Valley were not inspected during that period, the most recently available records provided by the bureau. Each of the uninspected wells is located in Kern County.

    A BLM official in Sacramento disputes the number of uninspected wells, saying that bookkeeping errors have misrepresented the problem.

    Add your comment.


  38.    Freedom Industries trench overflows for second day | The Herald-Dispatch

    CHARLESTON — A Charleston company faces state violations after a storm water collection trench overflowed two days in a row at the same site where chemicals spilled into West Virginia's largest water supply in January.

    The Department of Environmental Protection issued two notices of violations to Freedom Industries on Friday, and after learning of a second spill that day, vowed to issue more notices of violations.

    Add your comment.


  39.    Lawsuits in question in West Virginia tank law – seattlepi.com

    HARLESTON, W.Va. (AP) — Industry groups are jittery that if state regulators require the wrong type of permit, companies could be subject to citizen lawsuits under a new environmental law that regulates storage tanks.

    State regulators disagree, and are convinced the new aboveground tank law won't let citizens sue to enforce it.

    Environmentalists hope the technicality offers them another shot to make citizen lawsuits possible.

    "We just have no confidence that DEP would do an adequate job overseeing the chemical industry on these aboveground storage tank rules," said Dianne Bady, Ohio Valley Environmental Coalition project coordinator.

    Add your comment.


  40.    Hazardous sites mapped in new initiative – WCAX.COM Local Vermont News, Weather and Sports-

    CONCORD, N.H. (AP) – New Hampshire is launching a new effort to inventory hazardous sites most at risk during natural disasters.

    Gov. Maggie Hassan said Friday the effort will help the state target resources to reduce damage.

    Add your comment.


  41.    Hospital: 1 dead and 16 critical after tornadoes – NBC-2.com WBBH News for Fort Myers, Cape Coral & Naples, Florida

    PILGER, Neb. (AP) – At least one person was killed and 16 others were in critical condition on Monday after massive tornadoes swept through northeast Nebraska, destroying more than half of the town of Pilger, hospital and emergency officials said.

    Add your comment.


  42.    Man pleads guilty to arson, insurance fraud – Maryville Daily Forum: State News

    Prosecutors said Stamps and his co-conspirators bought five Kansas City houses at prices ranging from $6,500 to $15,000 but insured them for as much as $307,000. After setting the houses on fire, the conspirators filed claims for insurance payments.

    Add your comment.


  43.    The myth of a new housing bubble in Germany | Olga Tschekassin at Bruegel.org

    If house prices are growing substantially faster than rents or incomes it could indicate an overvaluation in the housing market and suggest a growth in house purchases for investment instead of purchases for the use of housing.

    Looking at the relationship to rents we see that prices were growing faster than rents since 2011, yet, the price-to-rent ratio is more or less at the same level as 10 years ago (see Figure 1) and was around 13.4% below its long-run average in Q4 2013.

    Add your comment.


  44.    Three-Year Change in Employment vs. Housing Starts

    Prior to 2008 and the housing bust, the long-term annual average ratio of new employment to single-family construction starts was 1.5, or roughly 1.5 jobs created for every single family home built. Over the last three years, that ratio averaged 3 jobs per home implying a large construction shortage. …
    A closer analysis of this imbalance indicates that it is correlated with REALTORS®' expectations for prices, which suggest continued price growth over the next twelve months, and that part of builders' reticence is linked to affordability constraints.

    Add your comment.


  45.    T-LTRO: variation on a (ECB's) theme | Silvia Merler at Bruegel.org

    The strings are yet to be announced.

    Quite obviously, the most important and delicate part of the scheme is the safeguard mechanism to ensure that the funds are actually used for the purpose they are intended to, i.e. lending to the real economy. At the moment, this is not yet entirely clear. The ECB press release says that banks will be required to pay back the funds borrowed under phase 1 of the TLTRO as early as September 2016 (i.e. 2 years before maturity), if their net lending will be below the benchmark during the period from 1 May 2014 to 30 April 2016. However, as noticed by market analysts, nothing explicitly prevents banks from using the funds of the TLTRO to buy government bonds. … ECB's president Draghi has said in the Q&A that "there are going to be additional reporting requirements", which are probably part of the "details" the ECB will publish at a later stage. The TLTRO can be a positive improvement on an established ECB instrument, potentially remedying its major flaw. For this to be the case, however, the ECB must be very careful in clarifying these "details" as soon as possible. Otherwise it would just be the same music over again.

    Add your comment.


  46.    Mortgage Rate Preview: Will The Federal Reserve Move Rates Lower?

    Good analysis by Dan Green:

    Mortgage rates have moved downward, steadily and slowly, since the start of the year. 30-year mortgage rates averaged 4.53% on January 1, and had moved to as low as 4.12% two weeks ago.

    Rates now average 4.20 percent nationwide. This week, however, rates could resume falling. This is because, at 2:00 PM ET Wednesday, the Federal Open Market Committee (FOMC) will adjourn from its fourth scheduled meeting of the year — a two-day, closed-door affair which begins Tuesday morning.

    Don't expect the Federal Reserve to move "off-course".

    The group will likely vote to keep the Fed Funds Rate within its current target range near zero percent, where it's been since December 2008; and it will likely move to "taper" its third round of quantitative easing (QE3) by another $10 billion.

    A $10 billion taper would be the Fed's fourth such taper in six months, and would reduce the cumulative size of QE3 to $45 billion.

    In theory, reducing the size of QE3 would lead mortgage rates higher. However, since the QE3 taper began, mortgage rates have managed to drop; the result of safe-haven buying and a smaller pool of available mortgage bonds.

    Investors are buying U.S. bonds at a faster pace than the Fed can exit the market.

    Add your comment.


  47.    The ill-advised rigidity of the 2% inflation target

    Hans Stegeman:

    Our macroeconomic policy is largely based on the theory mainly developed in the post-war years, and more particularly at the time of the Great Moderation. This was the period of steady, reasonably predictable economic growth from the beginning of the 1980s until the crisis of 2007/2008 and the subsequent Great Recession. As a result of the financial crisis and its aftermath, much of this macroeconomic consensus has come under fire. This also applies to the inflation target set by the central banks (Blanchard et al, 2010). So far the ECB has chosen to ignore this and the 2% inflation target remains sacrosanct, even though anyone with any knowledge of the history of monetary policy is well aware that this target has a very flimsy empirical foundation. Continuing to target 2% inflation has now become ill-advised and dogmatic, and is making the process of adjustment in the eurozone unnecessarily lengthy and painful.

    … high inflation could be reined in relatively easily by raising interest rates. But this would have an economic price — it would take the heat out of the economy. Dealing with deflation is more difficult, as the experience over the last twenty years in Japan has shown. Negative nominal interest rates cannot be achieved, or only with great difficulty. This is known as the zero interest problem, or the zero lower bound. If it becomes more attractive for people to keep their money in an old sock without a return rather than take it to the bank, which will cost them money in case of negative interest rates, the financial sector and therefore also the economy will have a big problem. …

    … there is another problem that is totally unrelated to monetary policy that makes a higher inflation target politically impossible: a higher inflation target means that debts would erode and assets would be wort h less. And this exactly coincides with the division between high unemployment and low unemployment countries in the eurozone.

    Add your comment.


  48.    Could politics trump economics as reason for growing income inequality?

    You probably knew this. We sure did.

    COLUMBUS, Ohio — Most research examining growing income inequality in the United States has focused on economic causes, for seemingly obvious reasons.

    But a new study suggests that a different cause — the politically induced decline in the strength of worker unions — may play a much more pivotal role than previously understood.

    In fact, the role that union decline has played in growing income inequality may actually be larger than many of the favorite explanations offered by economists, such as the education gap in the United States.

    … the "financialization" of the American economy and the growth of financial profits, particularly in firms that had not engaged in these activities before.

    "Financialization meant that the incomes of the high earners grew rapidly during this period, while union decline led to stagnating incomes for the less affluent. The end result was growing inequality," Jacobs ["David Jacobs, co-author of the study and professor of sociology at The Ohio State University"] said.

    Add your comment.


  49.    Jill Lepore: What the Theory of "Disruptive Innovation" Gets Wrong : The New Yorker

    In the longer term, victory in the disk-drive industry appears to have gone to the manufacturers that were good at incremental improvements, whether or not they were the first to market the disruptive new format. Companies that were quick to release a new product but not skilled at tinkering have tended to flame out.

    In the late nineteen-nineties and early two-thousands, the financial-services industry innovated by selling products like subprime mortgages, collateralized debt obligations, and mortgage-backed securities, some to a previously untapped customer base. At the time, Ed Clark was the C.E.O. of Canada's TD Bank, which traces its roots to 1855. Clark, who earned a Ph.D. in economics at Harvard with a dissertation on public investment in Tanzania, forswore Canada's version of this disruptive innovation, asset-backed commercial paper. The decision made TD Bank one of the strongest banks in the world.

    Add your comment.


  50.    More investment, for Germany's sake! — CER Insights — Medium

    Germany has not been investing enough: not in equipment, given its large manufacturing sector, not in R&D and other intangible assets to grow new sectors, not in education or in public infrastructure. This is particularly worrying as the German population is aging quickly, with the median age already close to 47 (up from 40 in 1999)?—?a high number if compared to Sweden (41.2), the UK (40.4) or the US (37.6). An ageing society needs to invest domestically to make its workers more productive, because these workers will need to support pensioners in the future.

    The only way to convince the German government to invest more is to emphasize Germany's gains from such investment rather than Europe's; to make sure it is politically more profitable than fiscal consolidation; and to ensure that the added fiscal spending really does go into investment rather than public consumption, and preferably sooner rather than later.

    Add your comment.


  51.    Investment Properties: The Great American Farce – Forbes

    What's missing in this head-to-head comparison between the stock market and real estate?

    Well, he talks about appreciation only. There's no discussion of amortization, depreciation (as in the tax-deduction, or positive cash-flow. You should always shoot for positive cash-flow.

    He's lumping home buyer values in with investor values. That makes no sense to us.

    Also, none of us invests in the stock market or real estate over the entire history of either or both. We buy at a particular time, which can be either high or low.

    What are your thoughts on this?

    From the shifty acquisition of Manhattan Island to the monumental Louisiana Purchase, investing in real estate is ingrained in America's foundation. Real estate consistently ranks as the largest financial investment (and debt burden) Americans take on in a lifetime. However, it extends far beyond simply buying a home to live in. Our property obsession has inundated the real estate market with investors looking to channel their inner Donald Trump. While many real estate investors have done well over the past several decades, they have actually underperformed the equity markets significantly on a "leverage adjusted basis." Investors should invest with their heads and not their hearts which means using caution before dumping money into real estate over the stock market.

    Add your comment.


  52.    Commercial real estate market sees more steady improvement – Atlanta Business Chronicle

    Along with Seattle, Atlanta led the nation in vacancy declines at a drop of 60 basis points with technology and health care firms leading the demand for space. With new construction and vacancy rates remaining low, our growth momentum should continue throughout 2014 as the region reaps the benefits of an improving economy and employment growth.

    Low Interest Rates

    The new Federal Reserve chairwoman, Janet Yellen, plans to keep interest rates near zero, until economic prosperity returns to Main Street. The US 10-year Treasury bond yield continues to remain at historically low levels and is predicted to remain below 3 percent as the world continues to invest in US Bonds amid a slowing and unstable world economy.

    Now that's not spinning the Fed. It's refreshing: no hype.

    Add your comment.


  53.    Dukeville concerns over coal ash: 5 things to know – Businessweek

    In the wake of a Feb. 2 coal ash spill near Eden, North Carolina, another town in the state is re-examining the possible effects of living near a coal ash dump. Residents living in some 150 homes near the Buck Steam Station in Dukeville, North Carolina, are worrying about what's in their water — and whether it's affected their health — in the wake of revelations of possible well contamination.

    Here are five things to know: …

    Add your comment.


  54.    Miami sues JPMorgan alleging mortgage discrimination | Al Jazeera America

    The city of Miami is suing JPMorgan Chase & Co., accusing the bank of predatory mortgage lending in minority neighborhoods that allegedly caused a wave of foreclosures during the last decade's housing crisis.

    The lawsuit came just weeks after the city of Los Angeles filed similar claims against JPMorgan, seeking to recoup damages for lost tax revenue and increased city services needed in blighted neighborhoods.

    Add your comment.


  55.    Nest's Smoke Alarm Returns, With Price Cut – NYTimes.com

    Nest's smoke and carbon monoxide detectors are coming back to store shelves two months after safety concerns prompted a recall of the devices.

    The company said the detector, known as Nest Protect, will go back on sale without a feature that prompted the recall in April. That feature, which it calls Nest Wave, was designed to let people temporarily silence the alarm by waving their arms beneath it. In laboratory tests earlier this year, Nest said it had determined that body movements near the detector could be misinterpreted by software in the device, resulting in the unintentional silencing of the alarm.

    Nest has still not fixed the glitch.

    Add your comment.


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