Linking ≠ endorsement.
⇧ EU eyes some 2,000 new investment projects – YouTube
The European Commission has finalised a wish list of nearly two thousands projects to be financed by a new investment plan.
The six hundred page document includes possible investments in energy, environment, transport, education and digital infrastructure amongst others.
EU governments submitted their ideas after a call from European Commission president Jean-Claude Juncker.
The list was put together by Europe's capitals, the European Investment Bank and the European Commission.
⇧ Sangeeth Ram on the global affordable housing challenge – YouTube
Principal Sangeeth Ram presents the main ways government and the private sector can address the global affordable housing challenge.
⇧ Ellen Brown-5 Big Banks will Survive Next Financial Calamity-Everybody Else Bankrupt – YouTube
We aren't as pessimistic about the outcome of the FDIC, but this is certainly worth being well aware of.
When a financial crash does happen, you can forget about getting immediate access to your money. Ellen Brown of The Web of Debt Blog says, "The banks will say, well, we don't have it. All the money goes into one big pool since Glass Steagall was repealed. They are allowed to gamble with that money and that's what they do. I think maybe Bank of America is the most vulnerable because of Merrill Lynch. Everybody is concerned, and they do very risky deals and they are on the edge. I think they have over $50 trillion in derivatives and over $1 trillion in deposits. . . The Dodd-Frank Act says we, the people, are no longer going to be responsible for the big banks when they collapse. It is not clear the FDIC will even be able to borrow from the Treasury, but even if they could, who is going to pay that money back? Let's say they borrowed $1 trillion. Who is going to pay that $1 trillion dollars back? It will bankrupt all the small banks that had to contribute to this premium. They will say we're raising your premium to everything you got, basically. Little banks will go out of business, and who is going to survive–the big banks. . . . What we're going to have left is five big banks, and everybody else is going to be bankrupt."
…The G-20 met recently in Australia to make new banking rules for the next financial calamity. Financial reform advocate Ellen Brown says these new rules will allow banks to take money from depositors and pensioners globally. Brown explains, "It became rules we agreed to actually implement. There was no treaty, and Congress didn't agree to all this. They use words so that it's not obvious to tell what they have done, but what they did was say, basically, that we, the governments, are no longer going to be responsible for bailing out the big banks. These are about 30 international banks. So, you are going to have to save your selves, and the way you are going to have to do it is by bailing in the money of your creditors. The largest class of creditors of any bank is the depositors."
…"Theoretically, we are protected by deposit insurance up to $250,000 in the U.S. and 100,000 euros in Europe. The FDIC fund has $46 billion, the last time I looked, to cover $4.5 trillion worth of deposits. So, even though we are protected by the FDIC, the FDIC is not going to have the money. . . . This makes it legal for these big 30 banks to take our money when they become insolvent. They are too-big-to-fail. This was supposed to avoid too-big-to-fail, but what it does is institutionalizes too-big-to-fail. They are not going to go down. They are going to take our money instead."
As our readers will probably know, we hold that we need only one public bank and one currency. That currency should be debt-free, meaning no bonds should be issued to create the money.
The system should be fully democratized rather than bankers making money via interest.
Anyway, Ellen Brown is great!
⇧ New Leak Reveals Luxembourg Tax Deals for Disney, Koch Brothers Empire | International Consortium of Investigative Journalists
Juncker has firmly maintained that his home country's tax practices are legitimate but also admitted after the "Lux Leaks" publications that the system was "not always in line with fiscal fairness" and may have breached "ethical and moral standards."
"Americans are sick and tired of big corporations arranging sweetheart deals with tax havens to dodge their U.S. tax obligations," said U.S. Senator Carl Levin, D-Mich., who has led investigations and held hearings into corporate tax avoidance, including by Apple and Caterpillar. "It is unfair and unaffordable to let another year pass without eliminating the unjustified corporate tax giveaways that force everyone else to pick up the tab for government services."
"We actually facilitate international tax avoidance with policies like check-the-box," said Kimberly Clausing, an economics professor at Reed College in Portland, Oregon, who specializes in multinational corporate taxation. While such provisions are bad policy, she said, "it's not really wrong for the firms to make use of them."
Companies also use a strategy called cost-sharing, where they attribute some of the costs of developing new products to foreign subsidiaries, according to Stephen Shay, a professor of practice at Harvard Law School and a former international tax official at the U.S. Treasury. That way they can attribute the profits from those products, or the licensing of trademarks and patents, to the company outside the U.S.
Clausing estimates that companies shifting profits to low-tax countries rather than booking them where they are actually earned costs the U.S. between $57 billion and $90 billion a year.
Clausing said, in discussing corporations in general and not Disney and Koch specifically, "There's obviously a lot of lying going on, mischaracterization of what 's really happening."
⇧ Wall Street Seeks to Tuck Dodd-Frank Changes in Budget Bill – NYTimes.com
We completely oppose these Wall Street efforts.
The Glass-Steagall Act should not have been monkeyed with in the first place. It was a solid law enacted for a very good reason that applies today more than ever. Just read about what the Wall Street people in Congress are trying to do (more on that below).
After four years of twisting arms in Congress, Wall Street may have finally found the opportune moment to reshape financial regulation.
A flurry of legislative deal-making surrounding the federal budget has opened a window of opportunity for bank lobbyists to challenge the Dodd-Frank Act, the sweeping regulatory overhaul passed in response to the financial crisis. With the clock ticking on a budget bill — lawmakers have vowed not to shut down the government, but need to act by Thursday night — banks are seeking to tuck their proposals into the giant federal spending package.
⇧ ECB's Praet Says Falling Oil Price May Push Inflation Below Zero – Bloomberg
European Central Bank Executive Board member Peter Praet said falling oil prices could push the euro-area inflation rate below zero, just as policy makers prepare to examine options for quantitative easing.
Why didn't this article use the term "deflation"?
⇧ Risk study on mining town finds even small amount of asbestos exposure can lead to lung problems | Fox News
Cleanup efforts in the scenic mountain town that's become synonymous with asbestos dangers already have addressed more than 2,000 homes and businesses, at a cost of roughly $500 million.
⇧ Fatal Elberton fire linked to improper use of fireplace | AccessNorthGa
Georgia Insurance and Safety Fire Commissioner Ralph Hudgens said in a statement that a fire that killed 49-year-old Anita Boyd of Elberton Friday afternoon was caused by the improper use of a fireplace.
⇧ Flooding spurs emergency declaration in NE Florida – Daily Commercial: Florida
ST. AUGUSTINE, Fla. (AP) — A local state of emergency has been declared in parts of northeast Florida after flooding in downtown St. Augustine and other coastal areas due to high tides, strong winds and big surf.
⇧ Rewards offered for Ferguson, Dellwood arsons | Local – KY3.com
FERGUSON, Mo. (AP) — The federal Bureau of Alcohol, Tobacco, Firearms and Explosives is offering rewards up to $10,000 for information leading to arrests in the intentional fires set after the grand jury announcement in the Ferguson police shooting.
⇧ Weather Bomb: Extreme wind & waves batter Northern Ireland – YouTube
A 'weather bomb' hit the north coast of Northern Ireland in the early hours of Wednesday morning bringing with it winds and gigantic waves. Residents in the coastal town of Portstewart woke to find their local beach and children's park completely submerged by the waves, with a number of buildings near the beach badly damaged by flooding.
⇧ Sen. Warren Calls on House to Strike Repeal of Dodd-Frank Provision in Funding Bill – YouTube
This is why so many people literally love Elizabeth Warren regardless of their serious reservations about some of her foreign-policy positions (concerning which, she recently appears at least a bit to be evolving in a better direction in our view).
Senator Elizabeth Warren spoke on the Senate floor on December 10, 2014 to call on the House of Representatives to remove from the government funding bill a reckless provision that would repeal important financial protections in Dodd-Frank.
She appears to be a Senator clearly for the people and the whole economy rather than the very narrow elite at the top of the upper economic and financial class.
We can't find one hole in her speech.
⇧ How To Prep Your Chimney For Winter
The Chimney Safety Institute of America estimates that there are nearly 25,000 house fires due to improper chimney care annually and that high of a number is not unique to the United States alone.
Why risk letting your family become part of that statistic?
There are plenty of others things to know about proper fireplace-usage. If you are not seasoned (pun intended), we suggest you research the issue on the Internet before starting fires in a fireplace.
For instance, make sure the damper is functioning properly and is open!
Then of course, there are no-burn days established by local governments due to poor air-quality.
You can often sign up for email notifications from your areas governmental agency in charge of issuing no-burn alerts. A side benefit is that you'll also be informed that staying indoors and especially not exercising outdoors is advisable on certain bad-air days.
⇧ Many Feel the American Dream Is Out of Reach, Poll Shows – NYTimes.com
…only 64 percent of respondents said they still believed in the American dream, the lowest result in roughly two decades. …
… Fifty-four percent of respondents said that "over-regulation that may interfere with economic growth" was a bigger problem than "too little regulation that may create an unequal distribution of wealth." Only 38 percent said that too little regulation posed a bigger problem.
That answer was particularly noteworthy given the persistent concerns among economists and politicians from both parties about a growing gap between the wealthiest Americans and the middle class.
Still, the poll showed that a slim 52 percent majority of Americans think the country's economic system is fair, giving everyone an equal opportunity to succeed; 45 percent think it is unfair. Those with higher household incomes were more likely to believe the system is fair.
…almost six years after the height of the financial crisis, Americans' wariness about the banking industry that was at its center remains. Only 4 percent of respondents said they had "a lot" of confidence "in Wall Street bankers and brokers," though 31 percent said they had "some" confidence in Wall Street.
It's important to keep in mind that the design of the questions can have a great deal to do with exactly what people think they are addressing when answering.
We also believe that over the last few decades, the people's education has been severely and deliberately lacking concerning exactly what Keynesian economics is and what Keynes believed in terms of how fiscal policy should operate during both up and down aspects of any cycle.
We believe they have been fed a great deal of incorrect ideology (libertarian-capitalist ideology, which is not based upon actual data but rather an incomplete notion of "liberty").
⇧ Greek Borrowing Costs at Most Since 2012 Amid Political Turmoil – Bloomberg
Draghi will be fighting Germany's Merkel to keep Greece from exiting the euro area.
The Prime Minister "doesn't hesitate to beg markets to attack the country," Syriza said in an e-mailed statement today.
Failure to rally enough support for Samaras's presidential nominee, Stavros Dimas, by a third and final ballot on Dec. 29 would force the prime minister to dissolve parliament. Opinion polls suggest the resulting election would be won by the anti-austerity Syriza party.
We are anti-austerity, but we want to see Germany rise to the call to lead Europe. What we've written for several years now is that German needs another Bismarck-level leader rather than its current Merkel. We'd like to see her see the light that her libertarian policies are going to backfire and in fact, already have.
We don't mean Bismarck's exact policies but at least his welfare-state policies but for the whole of Europe, which would save Germany rather than rape her.
This would be Germany's opportunity to finally get it right (foreign and domestic policies and practices).
Germany needs to step out from America's shadow and do so in a sustainable anti-austerity, anti-fascist manner.
⇧ IMF Global Housing Watch
The Global Housing Watch tracks developments in housing markets across the world on a quarterly basis. It provides current data on house prices as well as metrics used to assess valuation in housing markets, such as house price-to-rent and house-price-to-income ratios.
⇧ US high-yield feels full force of oil price collapse /Euromoney magazine
"We remain more concerned about the future trajectory in oil than any other macro risk at this point in time, including the Fed, rates, flows and market liquidity," declared Oleg Melentyev, strategist at Deutsche Bank in New York, in late November.
It is not hard to see why. …
The billion-dollar question is at what point the negative repercussions on the energy sector outweigh the more general benefit to the broader economy of cheaper oil.
"The fall in the oil price presents a huge transfer of wealth to the consumer," says BlackRock's Cameron Watt.
This is particularly true in the US, where the reaction is characterized as people getting into their SUVs, driving to Walmart and buying something. Indeed, Federal Reserve Bank of New York chairman William Dudley has claimed that lower energy costs will lead to a substantial rise in real income growth for households and should be a strong spur to consumer spending.
However, the reaction in Europe, and more particularly from the European Central Bank (ECB), has been much more cautious, given the pressing concern over deflation.
"In Europe, the fall in the oil price is seen as deflationary and may move the ECB closer to quantitative easing," points out Scott Thiel, deputy CIO of fundamental fixed income at BlackRock.
However, current data show(s) that people in general are not thusly spending (wisely). How long that will last, we cannot say.
⇧ Bank of Canada Says Home Prices Overvalued as Much as 30% – Bloomberg
Of all the major English-speaking nations of the world, we've known the least about Canada's economic and financial system even though we are next-door neighbors and Canada's largest trading partner.
We had thought that Canada would have had a housing crash by now due to contagion, etc., from the US 2008 crash.
It has turned out that Canada's system is sufficiently different that it didn't happen. That, however, does not mean that Canada isn't in any trouble, and we aren't referring simply to falling oil prices impacting upon Canada's tar-sands industry (which we think is environmental recklessness).
Canada's housing prices are overvalued by as much as 30 percent, the central bank said in its latest assessment of a financial risk that's built up over years of rising prices and low interest rates.
Home prices are 10 percent to 30 percent above where the bank's model suggests they should be, according to the Ottawa-based bank's Financial System Review. Today's report is the first time the central bank has published such a direct calculation of housing overvaluation.
Governor Stephen Poloz reiterated near-record consumer debts and high housing prices pose an "elevated" risk to the domestic financial system, adding the bank still believes a housing crash will be avoided.
⇧ Norway's Shock Rate Cut Drives Krone to Lowest Since 2009 – Bloomberg
Norway's central bank cut its main interest rate for the first time in more than two years and signaled it may ease again next year as plunging oil prices threaten growth in western Europe's biggest crude exporter.
A 44 percent drop in oil prices from a June high is proving to be the worst since the financial crisis erupted in 2008. The slump comes as an investment boom in Norway's petroleum industry fades with companies such as Statoil ASA lowering planned spending. A survey this month showed oil companies anticipate offshore investments will drop by 13 percent next year.
The fall in oil prices "will have spillover effects on the wider economy and unemployment may edge up ahead," the bank said.
⇧ How the Rising Dollar Could Trigger the Next Global Financial Crisis – Washington Wire – WSJ
A very succinct article: David Wessel:
Here's how Mr. Shin sees the world: A manufacturer in an emerging market borrows in dollars, perhaps because it sells a lot of goods in dollars and sees borrowing in dollars as a hedge. A local bank lends the dollars, borrowing from some big global bank. When the emerging-market currency is strong and the dollar is weak, that manufacturer's balance sheet looks sturdier—and the local bank sees that and lends more readily. Thus a weak dollar can lead to a global credit boom.
When the dollar rises, though, all this runs in reverse, effectively tightening global financial conditions, particularly in emerging markets. The emerging-market currency falls. The manufacturer has trouble making payments on its dollar loans; so do its peers. Banks lend less readily. Capital investment stalls. Global money managers—the ones with lots of short-term wholesale deposits that search the world for the best yields—see a falling local currency and a weakening economy and pull money from the emerging-market banks.
Then, global asset managers who had been lured by a high-growth story see that it is now over and do the same thing, selling emerging-market corporate bonds. That pushes up interest rates that businesses in emerging markets have to pay, and weakens them further in a vicious cycle.
That's how we see it too.
However, we see oil as somewhat the wild card in all of this, though not as wild were it sure just what American consumers will do with the gas savings. If they save those savings or use them to continue paying down debt, the paradox of thrift will kick in and be a clear sign for fiscal stimulus, which the Republicans will not see or correctly act upon.
The whole thing will be more of a vicious downward spiral.
The positives though will be a lessening of dirty oil from Canada and less other pollution resulting from the environmentally misguided fracking boom.
⇧ Can You Afford to Rent? — Zillow Blog – Real Estate Market Stats, Celebrity Real Estate, and Zillow News
How much do you need to make per hour to afford the median rent where you live? $10 per hour? $15 per hour? According to a Zillow Rentals analysis, in most places it is much, much more than that, especially in many major U.S. cities.
"According to Zillow."
Keep in mind that this is about median averages (half way between the highest and lowest: a very high rental will severely skew the data), not the mean averages and not lower rentals. Also, just how much of the various metropolitan areas are in the data? The farther out (depending upon the direction: toward a higher-priced suburb or away). the lower the rent rate. Of course, commute times/costs, if any, are a factor in affordability.
⇧ Western New York's November lake effect snow storm claims 14th life | syracuse.com
Local media report that Erie County officials say a man from Hamburg has died of complications from a cardiac arrest suffered while clearing snow during the week of Nov. 17, when up to 90 inches fell on the region over several days.
⇧ House Passes Bill to Ease Dodd-Frank Rules for Insurers – Bloomberg
A measure that would ease capital and liquidity standards for insurers under the Dodd-Frank Act was approved by the U.S. House of Representatives.
The House unanimously passed the bill today to give the Federal Reserve flexibility in setting the standards. The Senate unanimously approved the legislation in June and it now heads to President Barack Obama's desk for his signature.
Considering that the insurance industry was not responsible for the 2008 crash and did not itself crash as a result of that crash and also considering that the Fed is being fairly strict with the banks, we agree with this legislation provided the Fed doesn't later change course making it easier for banks to recreate the 2008 crash.
We should also point out that AIG's insurance-wing fared the storm. It was AIG's speculative (non-insurance proper) side that harmed that company. It was AIG's gambling in the derivatives market.
That's why we oppose relaxing Dodd-Frank concerning the banks and their derivatives gambling. The US taxpayers and depositors in those banks should not bail them out. The FDIC should be strengthened via the full backing of the US government; but the failed banks should be taken over (nationalized), and the shareholders should take the only "haircuts."
⇧ Inequality harms the most vulnerable among us – CBS News
As usual, a very helpful article by Mark Thoma:
Evidence is mounting that inequality is harmful to economic growth, and recent findings also suggest that increasing inequality "is linked to more deaths among African Americans."
⇧ Impact of low oil prices on U.S. commercial real estate – YouTube
CBRE's Mike Lafitte, Global Chief Operating Officer, and Spencer Levy, Americas Head of Research, discuss how the recent drop in oil prices will impact commercial real estate and the economy in the U.S. and Houston.
He's more optimistic short term than we are.
⇧ How much do gas prices affect home prices? | www.ajc.com
The Brookings Institution says that for every 10 percent hike in the price of gasoline, the average house price outside the city slides $7,800, while the average price in the heart of a city climbs $5,600.
⇧ Competition is High For Boston-area Foreclosures – Real estate news – Boston.com
One of the biggest barriers to scooping up a foreclosure is competition. Investors large and small are constantly on the hunt for distressed properties, ready to snag battered houses on the cheap with call cash offers.
"We make money turning over properties," Nick Aalerud, principal of Woburn-based AA Real Estate Group. "This is how we feed our families. We buy, fix, and sell."AA Real Estate Group has bought, fixed up, and sold 150 distressed homes over the last nine years from southern New Hampshire to the South Shore.
Aalerud is always on the lookout for deals, networking with other real estate agents, attorneys, and the like.
And he is just the tip of the iceberg, with the market packed with similar, small-time investors, as well as larger operators, said Darin Bloomquist….
⇧ Houston's real estate bull run hits a snag: Record home sales to drop – CultureMap Houston
Houston home sales surged in November toward a record-setting year, but the Houston Association of Realtors warns that falling oil prices will bring a slowdown in 2015.
The Houston Association of Realtors is predicting that home sales activity will drop 10 to 12 percent over the next year.
They're being quite conservative in our view.
⇧ Hiring, Cheaper Fuel Give U.S. Retailers a Boost: Economy – Bloomberg
Seasonally adjusted? Retail always goes up at this time of year in the US: Christmas purchasing.
Things are seen as improving, but will it continue after the season? Will the global impacts from a strong dollar and all the rest slap the US economy back?
⇧ Crude oil dips below $60 a barrel
Crude oil prices settled below $60 a barrel Thursday as renewed selling pressure pushed benchmark prices to new five year lows. And the carnage may not be over yet.
The slide came after Bank of America warned that crude oil prices could fall to $50 a barrel in 2015 as North American output, coupled with increased production in Iraq and Libya, hits markets already awash in supply. …
… "We could see $45 this month. We haven't found a bottom yet."
⇧ Water levels of Great Lakes rebound at record rate – News – Voice News
We were wondering about this just yesterday.
After record low water levels in the winter of 2012-2013, the Great Lakes have rebounded at record rates. Through May 2015, Lakes Michigan and Huron, which are hydrologically considered to be a single body of water, are expected to remain 15 to 21 inches above 2014 levels for the same months.
Lake St. Clair in November was 12 inches above its level of a year ago and 8 inches above long-term average. The lake is projected to be 7 to 18 inches above last year's levels by next May.
We're surprised the article doesn't mention the Polar Vortex impact due to AGW. We're also surprised it doesn't mention potential flooding in coming years.
Of course, pipelines to drought-stricken areas could handled that at least partly if not entirely.
If you are an investor in 1-4 unit properties in Arizona, California, Nevada, Oregon, Utah, or Washington, please do the financially responsible thing and make sure you have proper Landlord Insurance with PropertyPak™. We love focusing on real estate and the economy in general, but we are also here to serve your insurance needs.
Hill & Usher (PropertyPak™ is a division) has many insurance offerings. See our menu above for more info and links.
Did this post help you? Let us know by leaving your comment below.
Note: This blog does not provide legal, financial, or accounting advice. Seek professional counsel.
Furthermore, we, as insurance producers, are prohibited by law from disparaging the insurance industry, carriers, other producers, etc. With that in mind, we provide links without staking out positions that violate the law. We provide them solely from a public-policy standpoint wherein we encourage our industry to be sure our profits, etc., are fair and balanced.
We do not necessarily fact checked the contents of every linked article or page, etc.
If we were to conclude any part or parts of our industry are in violation of fundamental fairness and the legal standards of a state or states, we'd address the issue through proper, legal channels. We trust you understand.
The laws that tie our tongues, so to speak, are designed to keep the public from losing confidence in the industry and the regulatory system overseeing it. Insurance commissioners around the country work very hard to analyze rates and to not allow the industry to be damaged by bad rate-settings and changes in coverages. The proper way for people in the industry to deal with such matters is by adhering to the laws, rules, and regulations of the applicable states and within industry associations where such matters may be discussed in private without giving the industry unnecessary black eyes. Ethics is very high on the list in the insurance industry, and we don't want to lose the people's trust. That said, the industry is not perfect; but what industry is?
For our part, we believe in strong regulations and strong regulators.
We welcome your comments and ask you to keep in mind that we cannot and will not reply in any way or ways where any insurance commissioner could rightly say we've violated the law of the given state.
We are allowed to share rating-bureau data/reports and industry-consultant opinions but make clear here that those opinions are theirs and do not necessarily reflect our position.