News: Real Estate, Risk, Economics. Dec. 20, 2014

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Table of Contents
(Click to sections below.)

1) Kocherlakota to step down: three ways he changed the Minneapolis Fed | MinnPost

2) Citigroup Will Be Broken Up | The Baseline Scenario

3) Deflation dread hits Germany – YouTube

4) [255] Raoul Pal on the strong dollar, tail risk investing and the oil freefall – YouTube

5) Winds, outages as storm moves through Western Washington

6) California needs more big storms to beat drought | The Sacramento Bee

7) 20 dead, 88 missing after mudslide in central Indonesia | CTV News

8) Peru's melting glaciers a deadly threat as temperatures rise | Reuters

9) Study: Cloud seeding can increase snowpack – Capital Press

10) SC Supreme Court blocks Kiawah bulkhead – seattlepicom

11) USA: HUGE mudslide buries homes in Southern California – YouTube

12) Venture Capital: Crude Cuts (E68) – YouTube

13) Europe's Misguided Investment Mania by Daniel Gros – Project Syndicate

14) Dodd-Frank Damaged in the Budget Bill – NYTimescom

15) 11 trillion gallons of water needed: Will Calif. rains set back water conservation? – CSMonitorcom

16) Terrorism Risk Insurance Act – Wikipedia, the free encyclopedia

17) Forecasters: This week's Storm Set New Records – capradioorg

18) Greek poll shows anti-bailout leftists hold 3pt 6-point lead over conservatives | Reuters

19) Massive Da Vinci fire in downtown LA was arson, investigators say

20) How To Curb Income Property Maintenance and Repair Costs

21) Foreclosure and eviction from the American Dream – OC Housing News

22) Total Value of All US Homes is $27pt 5 Trillion | Zillow Blog

23) Home builder's new sweet spot: the 55-plus crowd

24) Cicero landlord gets life in fire that killed 7 – FOX 32 News Chicago

25) Hawaii Lava on Course to Hit Gas Station, Stores – ABC News

26) Renovating? Don't Forget the Expediter – NYTimescom

27) You Have to Make $96,513 to Afford a Cheap House in LA – Unaffordable Housing – Curbed LA

28) Faster Growth Through Stronger Regulation by Rod Hunter – Project Syndicate

29) The Quickening of a Reborn Detroit? – Urban Land Magazine

30) Most Americans to Keep Same Holiday Budget Despite Lower Gas Prices – Page 3 – MainStreet

31) Coppola Comment: Krugman, Bowman and the monetary financing of governments

32) A Big Safety Net and Strong Job Market Can Coexist. Just Ask Scandinavia. – NYTimescom

33) Russians Quit London Luxury Homes as Only Super-Rich Stay – Bloomberg

34) Deficit mania and balanced budgets are a political fraud | Seumas Milne | Comment is free | The Guardian

35) Deflation Warning Sounds as 2-Year Break-Even Rates Go Negative – Bloomberg

36) US flash PMI surveys signal warning on economic growth | Job creation,PMI,United States | Markit Commentary

37) Americans are 40% poorer than before the recession – MarketWatch

38) As Robots Grow Smarter, American Workers Struggle to Keep Up – NYTimescom

39) Designing a minimum wage to reduce poverty and wage inequality – YouTube

40) Fed optimistic on US economy – YouTube

41) Albuquerque's Sluggish Economy Holds Back Apartment Market – YouTube

42) The Nation's Top 10 Submarkets for New Apartment Development – YouTube

43) Kent County Land Bank's handling of abandoned properties upheld by state Court of Appeals | MLivecom

44) Steve Keen on most important economic lessons – YouTube

45) Xi's Reform Gambit by Andrew Sheng and Xiao Geng – Project Syndicate

46) Bitcoin backer gets two years prison for illicit transfers | Reuters

47) WTC Retail Leasing | Old Navy 34th Street | 432 Park Retail

48) New Theoretical Perspectives on the Distribution of Income and Wealth Among Individuals | The Institute for New Economic Thinking

49) 'Piggyback' Loans Revisited – NYTimescom

50) Volcker Rule Delayed: How Wall Street Is Dismantling Financial Reform | The New Republic

51) Has a stronger renminbi contributed to financial tightening? | Guonan Ma at Bruegelorg

52) mainly macro: Monetary Impotence in context

53) macroblog – Federal Reserve Bank of Atlanta

54) 30% of the Euro Area HICP basket is now in outright deflation | Pia Hüttl and Silvia Merler at Bruegelorg

55) Peston's Mr Markets, Krugman and Wren-Lewis' Dr Pangloss | longandvariable

  1.    Kocherlakota to step down: three ways he changed the Minneapolis Fed | MinnPost

    Kocherlakota changed his views on monetary policy over time. Early in his term he argued that most of the high unemployment we experienced in 2010 and 2011 could not be reduced through low interest rates and other Federal Reserve actions. The Fed should therefore focus on keeping inflation low and let other types of policies act to reduce unemployment.

    By March 2013 Kocherlakota's views had evolved so that they were almost the opposite: the Fed should keep interest rates low for as long as it took to get unemployment below 5.5 percent. He stuck to his guns by dissenting at the most recent Federal Open Market Committee meeting and voted to continue the Fed's quantitative easing program.

    Contrary to some observers, I thought Kocherlakota's actions showed a maturity of judgment that is often lacking in policymakers. He looked at the evidence, thought about his theoretical framework for analyzing that evidence, and then changed his position based on the interplay of theory and evidence.

    That was maturing.

    Add your comment.


  2.    Citigroup Will Be Broken Up | The Baseline Scenario

    Simon Johnson prophesying the end of Citibank at its own hands/due to its own hyper-greed:

    Citigroup is a very large bank that has amassed a huge amount of political power. Its current and former executives consistently push laws and regulations in the direction of allowing Citi and other megabanks to take on more risk, particularly in the form of complex highly leveraged bets. Taking these risks allows the executives and traders to get a lot of upside compensation in the form of bonuses when things go well — while the downside losses, when they materialize, become the taxpayer's problem.

    Citigroup is also, collectively, stupid on a grand scale. The supposedly smart people at the helm of Citi in the mid-2000s ran them hard around — and to the edge of bankruptcy. A series of unprecedented massive government bailouts was required in 2000-09 — and still the collateral damage to the economy has proved enormous. Give enough clever people the wrong incentives and they will destroy anything.

    Now the supposedly brilliant people who run Citigroup have, in the space of a single working week, made a series of serious political blunders with long-lasting implications. Their greed has manifestly proved Elizabeth Warren exactly right about the excessive clout of Wall Street….

    Add your comment.


  3.    Deflation dread hits Germany – YouTube

    As WTI crude oil prices dropped below $60 per barrel, the German bund market signalled deflation ahead for the next five years. John Authers discusses the implications.

    How long will the Saudis hold out, and what are they holding out for? What are they asking the "West" to do and/or vice versa? Should the West go along with it or break the Saudi Royal Family's hold on Saudi Arabia if the Saudis are the ones putting on the pressure against "better" US judgment?

    Add your comment.


  4.    [255] Raoul Pal on the strong dollar, tail risk investing and the oil freefall – YouTube

    A bit more technical than usual but certainly still useful for the novice; plenty of historical insights without any apparent arrogance from Raoul Pal:

    Erin is joined by Raoul Pal — founder of Real Vision TV and Global Macro Investor. Though Canadian households are heavily indebted and house prices are significantly overvalued, investors are dipping back in to the market. Raoul tells us what he makes of this and what markets issues we should be cautious of. He believes that the strong dollar is driving a lot of the tail risk and believes we should expect a divergence in emerging markets and developed markets performance as a result.

    Add your comment.


  5.    Winds, outages as storm moves through Western Washington

    In Redmond, strong winds caused scaffolding at a six-story apartment complex under construction to collapse. No injuries were reported.

    Add your comment.


  6.    California needs more big storms to beat drought | The Sacramento Bee

    Despite the heavy storm that hit California last week — complete with flooded creeks and mudslides, closed highways and downed trees — it will take a lot more of the same to end the drought. In fact, experts say it may take five or six more storms like it to consider the drought over.

    One reason is that, as wet as the storm seemed on Thursday and Friday, it was not so stormy everywhere. California's water supplies are largely reliant on mountain snowpack, and this was a warm "Pineapple Express" storm. The state's reservoirs had capacity to collect nearly all the rainfall runoff that flowed in. But the storm did not deliver a great deal of snow to the Sierra Nevada, which provides the snowmelt that California relies on in summer and fall.

    Add your comment.


  7.    20 dead, 88 missing after mudslide in central Indonesia | CTV News

    Seasonal rains and high tides in recent days have caused dozens of landslides and widespread flooding across much of Indonesia, a chain of 17,000 islands where millions of people live in mountainous areas or near fertile flood-prone plains close to rivers.

    Add your comment.


  8.    Peru's melting glaciers a deadly threat as temperatures rise | Reuters

    High in the Peruvian Andes, the glacier-fed lake Laguna 513 brims with meltwater atop a populated valley in a region prone to earthquakes. Scientists warn that if a giant chunk of ice from the Hualcan glacier breaks off it could trigger a tsunami-like wave in Laguna 513 and send a lethal torrent of water cascading down the valley.

    Add your comment.


  9.    Study: Cloud seeding can increase snowpack – Capital Press

    State-funded research in Wyoming suggests that cloud seeding can increase mountain snowfall by up to 15 percent a year, has negligible environmental effects — and almost no impact on precipitation in surrounding areas.

    … Its effectiveness is a matter of debate. Under the right conditions, silver iodide can help water droplets grow and fall to the ground. Critics say the technique is not proven and could pose a threat to the environment.

    "…the technique is not proven…" in what respect: cost-effectiveness or what?

    We aren't saying we advocate such cloud seeding in lieu of curtailing carbon emissions to reduce the increase in global warming.

    Add your comment.


  10.    SC Supreme Court blocks Kiawah bulkhead – seattlepi.com

    CHARLESTON, S.C. (AP) — A divided state Supreme Court on Wednesday denied developers permission to build a half-mile of coastal walls on Kiawah Island, a ruling that Chief Justice Jean Toal warned undermines checks on state agency decisions involving private property.

    Add your comment.


  11.    USA: HUGE mudslide buries homes in Southern California – YouTube

    A cleanup operation to remove mass piles of mud, rocks and destroyed house items got underway in San Como Court neighbourhood in Camarillo Springs, California on Sunday, following Friday's storm which triggered mudslides in the area.

    Add your comment.


  12.    Venture Capital: Crude Cuts (E68) – YouTube

    Oil-price wars:

    As Iraq offers price discounts on oil to Asian consumers, Katie Pilbeam investigates if this is a sign that crude producers are waging a price war. Also, Greece's election chaos sends markets crashing on fear that an elected leftist government would pull the country out of the eurozone.

    Add your comment.


  13.    Europe's Misguided Investment Mania by Daniel Gros – Project Syndicate

    Daniel Gros says Europe's supply-side strategy will fail and that it's demand that needs attention:

    If European policymakers are serious about economic recovery, they should focus on consumption, not investment.

    We agree, but we shall see how this "experiment" plays out.

    Add your comment.


  14.    Dodd-Frank Damaged in the Budget Bill – NYTimes.com

    The incoming congressional majority has revealed its agenda — and it's all about rewarding bad actors.

    So, about that provision. One of the goals of financial reform was to stop banks from taking big risks with depositors' money. Why? Well, bank deposits are insured against loss, and this creates a well-known problem of "moral hazard": If banks are free to gamble, they can play a game of heads we win, tails the taxpayers lose. That's what happened after savings-and-loan institutions were deregulated in the 1980s, and promptly ran wild.

    Add your comment.


  15.    11 trillion gallons of water needed: Will Calif. rains set back water conservation? – CSMonitor.com

    After California's driest three years on record, there have been few sounds as disturbing to water conservationists as the whisk-whisk-whisk of automatic lawn sprinklers kicking on directly behind TV reporters covering some of the state's first heavy downpours in years.

    Recent storms eased the drought somewhat, but there's a long way to go. And state officials are worried that the rain will give people an excuse to abandon the already inconsistent conservation efforts adopted to deal with the dry spell.

    California would need 11 trillion gallons of water to replenish its natural water stores, according to a projection this week from scientists using satellite data to analyze snowpack and groundwater.

    Add your comment.


  16.    Terrorism Risk Insurance Act – Wikipedia, the free encyclopedia

    …the Terrorism Risk Insurance Program Reauthorization Act, is set to expire on December 31, 2014.

    It will expire because reauthorization didn't pass the US Senate before the Senate adjourned for the rest of 2014.

    It is our understanding that the insurance industry believes it could not withstand a major terrorist attack. Terrorism insurance for large projects will become more difficult or impossible to obtain.

    We will simply have to wait to see the steps the industry takes in reaction to the expiration of TRIA.

    Add your comment.


  17.    Forecasters: This week's Storm Set New Records – capradio.org

    Forecasters for the National Weather Service say that this week's storm set new records. At Sacramento Executive Airport, 0.99 inches fell Tuesday, beating the prior 24-hour rain record of 0.98 set in 2002. Stockton saw 0.93 inches of rain on Monday, breaking the old record of 0.69 inches set on December 15, 1962.

    California remains deep in a drought, but a steady string of wet weather is making it look and feel replenished.

    The storm prompted temporary evacuations in Camarillo Springs, which was hit by mudslides last week. This time, the wildfire-scarred hillsides held above the community about 50 miles northwest of Los Angeles.

    Add your comment.


  18.    Greek poll shows anti-bailout leftists hold 3.6-point lead over conservatives | Reuters

    Greece's radical leftist Syriza party holds a 3.6-percentage-point lead over the ruling conservatives, a poll published after the first round of a presidential vote on Wednesday showed.

    We think the label "radical" is hyperbolic, but the outcome of elections in little Greece could profoundly impact the global economy due to potential contagion of a Greek exit from the euro.

    We actually don't advocate it even though we are adamantly opposed to the German-led neoliberal economics internal to the euro zone.

    Add your comment.


  19.    Massive Da Vinci fire in downtown L.A. was arson, investigators say

    Federal investigators have concluded the fire last week that consumed a downtown Los Angeles apartment complex under construction was deliberately set, according to a source close to the investigation.

    Fire officials said previously that they suspected arson because of how quickly the building appeared to be engulfed. Even though a fire station was a few hundred yards away, two-thirds of the building was already burning by the time firefighters received the initial report at 1:09 a.m. and rushed over, Los Angeles City Fire Chief Ralph Terrazas said.

    Add your comment.


  20.    How To Curb Income Property Maintenance and Repair Costs

    As James Kobzeff says concerning "3. Impose Stricter Repair Clauses": "tread lightly in this case because no landlord wants to alienate or keep out good tenants…."

    Add your comment.


  21.    Foreclosure and eviction from the American Dream – OC Housing News

    According to Larry Roberts, to deal in buying foreclosures, one needs to be tough and to check his or her ego at the door. Read some of his experiences dealing with different types of former titleholders.

    His main point is to defend foreclosures and evictions over loan modifications.

    As we've made clear before, we aren't nearly as hardline as he is. We maintain that unless the lenders take the same or even bigger hit, the average consumer shouldn't be held to a much stricter standard of caveat emptor.

    Add your comment.


  22.    Total Value of All U.S. Homes is $27.5 Trillion | Zillow Blog

    Three U.S. cities were valued at more than $1 trillion. The highest valued U.S. metro was Los Angeles, with a cumulative home-value of $2.3 trillion. New York was close behind at $2.1 trillion, followed by San Francisco, at $1.07 trillion.

    Add your comment.


  23.    Home builder's new sweet spot: the 55-plus crowd

    Rental-complex developers, landlords, and managers should keep this in mind.

    "We have really seen a resurgence in the active adult market. It typically comes back a little slower than the rest of the market, but for the first three-quarters of this year, our sales comps for active adult are up 22 percent," said Richard Dugas, CEO of Pulte Homes.

    Add your comment.


  24.    Cicero landlord gets life in fire that killed 7 – FOX 32 News Chicago

    A Cicero landlord has been sentenced to life in prison for the deaths of seven people during a Valentine's Day 2010 apartment fire that prosecutors say was set for insurance money.

    Add your comment.


  25.    Hawaii Lava on Course to Hit Gas Station, Stores – ABC News

    Dec 16, 2014:

    Lava from a volcano on Hawaii's Big Island is on course to reach a shopping center with a gas station and a supermarket in seven to 10 days, officials said.

    Add your comment.


  26.    Renovating? Don't Forget the Expediter – NYTimes.com

    When Mark Brotter dies, the inscription on his tombstone will read simply: "Thank God — no more plumbing Schedule B."

    Mr. Brotter, 55, is an expediter, an imprecise term that is used to describe the men and women whose workdays are spent queuing up at the Manhattan branch of the New York City Department of Buildings to file the documents and pull the permits that allow construction projects — your kitchen renovation and the high-rise next door — to go forward.

    Mr. Brotter's business card and stationery describe him as a "Buildings Department liaison," but he'll go with "architectural consultant" when strangers ask about his occupation and he doesn't have time to explain. Those who want to annoy him call him a messenger. Those who really want to annoy him call him a runner.

    "I'm basically a middleman," he said. For its part, the Buildings Department insists on the title "filing representative."

    Add your comment.


  27.    You Have to Make $96,513 to Afford a Cheap House in LA – Unaffordable Housing – Curbed LA

    …if a buyer is putting down a 20 percent down payment and paying current mortgage rates they'll need to be earning $96,513 a year to buy a median-priced house of $481,900 in LA County.

    Add your comment.


  28.    Faster Growth Through Stronger Regulation by Rod Hunter – Project Syndicate

    Are you a deregulation fanatic? If so, read this from Rod Hunter.

    …a country riddled with regulatory shortcomings will find its arteries of commerce clogged and foreign investors spooked by unpredictable quality and unfair competition from unscrupulous producers. In developing countries, "poor quality regulation and implementation are formidable barriers to entrepreneurship and investment," according to a World Bank report. "Regulatory failures expose people and the environment to horrific risks."

    Regulations are not inherently bad. Well-designed-and-enforced regulatory schemes are a boon to applicable economies.

    Add your comment.


  29.    The Quickening of a Reborn Detroit? – Urban Land Magazine

    Luring people back to the city as workers and residents will be essential to Detroit's turnaround. Several initiatives going on right now—corporate investment, job creation, retail construction, the development of inviting green spaces, and the development of the M1 streetcar line along Woodward Avenue—are geared toward attracting young people to establish roots in Detroit.

    But to accomplish this, the city will have to address a serious shortage of workforce and market-rate housing. The irony of this shortage is that many of the blighted structures awaiting demolition are single-family homes. The city has set up an auction process through which blighted homes can be purchased for as little as $1,000 if owners commit to bringing them up to code and having them occupied within six months. Nonprofit groups Detroit Future City and Midtown Detroit have launched a Blight Bootcamp to teach residents how to rehabilitate properties.

    Add your comment.


  30.    Most Americans to Keep Same Holiday Budget Despite Lower Gas Prices – Page 3 – MainStreet

    Consumers are hesitant to shop more and are holding back because their wages have remained stagnant, McBride said.

    "The majority of people are still very hesitant," he said. "There is a prevailing sense of caution among consumers, because they not seen any pay increases. People don't have a lot of whole additional spending power."

    Most consumers are also cognizant of the fact that cheaper gasoline prices may not last long and is likely a temporary decline unlike receiving a raise or bonus from work, McBride said.

    Add your comment.


  31.    Coppola Comment: Krugman, Bowman and the monetary financing of governments

    Frances Coppola:

    When the economy is in a slump, no-one is spending and no-one wants to take any risk, does it really matter whether the central bank or the government reflates the economy? Where did this absurd idea come from that the only good stimulus is a "monetary" one?

    It came from the bankers who wanted control.

    Why not simply unchain the fiscal authority so it can do money-financed deficit spending, rather than getting the central bank to do it and calling it monetary policy?

    If the currency were issued without issuing corresponding bonds, there would be no deficit.

    Add your comment.


  32.    A Big Safety Net and Strong Job Market Can Coexist. Just Ask Scandinavia. – NYTimes.com

    Neil Irwin:

    It is a simple idea supported by both economic theory and most people's intuition: If welfare benefits are generous and taxes high, fewer people will work. Why bother being industrious, after all, if you can get a check from the government for sitting around — and if your choice to work means that much of your income will end up in the tax collectors' coffers?

    Here's the rub, though: The idea may be backward.

    Some of the highest employment rates in the advanced world are in places with the highest taxes and most generous welfare systems, namely Scandinavian countries. The United States and many other nations with relatively low taxes and a smaller social safety net actually have substantially lower rates of employment.

    More People Work in Countries With High Taxes and Generous Welfare

    Contrary to what theory might predict, the countries with the highest rates of participation in the labor force tend to have higher taxes and more extensive social welfare spending.

    We think Neil Irwin hedges a bit too much, as we see what they do in those Scandinavian countries as readily translatable to the US.

    Add your comment.


  33.    Russians Quit London Luxury Homes as Only Super-Rich Stay – Bloomberg

    "The sanctions are really beginning to bite on expensive property in London, on top of all of the tax which the government introduced in the autumn budget," Langton said. "It's killed the golden goose."
    French Focus

    The story is different for the oligarchs, a group of the richest Russians who have thrived since the fall of Communism. Russians accounted for 21 percent of home purchases worth more than 10 million pounds during the six months to October, up from 13 percent in the prior six months, Knight Frank LLP said in a report Nov. 25. Those that continue to shop for homes are targeting London, Paris and the French Riviera, according to Hannah at Christie's.

    Popping the bubble.

    Add your comment.


  34.    Deficit mania and balanced budgets are a political fraud | Seumas Milne | Comment is free | The Guardian

    What has made the chancellor look foolish is that his plans for austerity-without-end, drawn up to paint Labour into a corner, have instead rebounded on the Tories. Once the pliant Office for Budget Responsibility confirmed that Osborne's plans for a budget surplus in the next parliament would reduce the state to 1930s proportions, even some of his most enthusiastic supporters jumped ship. The free-market Economist called his figures "nonsense" and warned that such cuts would "needlessly put the recovery at risk".

    Add your comment.


  35.    Deflation Warning Sounds as 2-Year Break-Even Rates Go Negative – Bloomberg

    Even with the Federal Reserve reminding investors that policy makers remain on course to raise interest rates next year, one corner of the bond market is warning of the risk of deflation.

    The difference in yields between Treasury two-year notes and comparable maturity inflation-indexed securities turned negative yesterday for the first time since the aftermath of the global financial crisis in 2009. The measure, known as the break-even rate, is generally seen as reflecting investors' expectations for inflation over the life of the securities.

    Add your comment.


  36.    US flash PMI surveys signal warning on economic growth | Job creation,PMI,United States | Markit Commentary

    PMI [Purchasing Managers Index] growth warning

    A weakening of Markit's flash PMI data therefore act as a warning light that the US may not be proving quite so invulnerable to the economic malaise elsewhere. If the PMI is correct in providing an advance indication of a slowing US economy, it has important implications for policy, and also therefore the US dollar and asset prices in general.

    The manufacturing and services flash PMI surveys both showed sharp slowdowns in December, collectively signalling the slowest rate of economic growth for 14 months and suggesting GDP growth in the fourth quarter could be the weakest seen since the first quarter, when the US reeled from the impact of extreme weather. The surveys are running at a rate consistent with annualised GDP growth of around 2% in the fourth quarter, having correctly signalling growth of around 4% in the second and third quarters. The surveys have also signalled a marked easing in job creation in December alongside the weaker growth picture.
    Employment

    It should be borne in mind that Markit's PMI has, to some extent, merely fallen from historically high levels earlier in the year. But, with the exception of official factory orders data, which showed a worryingly steep fall in October, the PMI is largely isolated in sending a signal of a US economic slowdown that is not priced into the market.

    Chris Williamson | Chief Economist, Markit

    Add your comment.


  37.    Americans are 40% poorer than before the recession – MarketWatch

    The Great Recession is officially over, but Americans are still 40% poorer today than they were in 2007, the year before the global financial crisis.

    Add your comment.


  38.    As Robots Grow Smarter, American Workers Struggle to Keep Up – NYTimes.com

    There are certain human skills machines will probably never replicate, like common sense, adaptability and creativity, said David Autor, an economist at M.I.T.

    Wishful thinking.

    Add your comment.


  39.    Designing a minimum wage to reduce poverty and wage inequality – YouTube

    Professor Alan Manning discusses how LSE economics research underpinned the design of the UK's National Minimum Wage that reduced poverty and wage inequality without costing jobs.

    Add your comment.


  40.    Fed optimistic on US economy – YouTube

    The US Federal Reserve has sent a clear signal that it expects to start raising interest rates around the middle of 2015. Ewen Cameron Watt, chief investment strategist at BlackRock, talks to Ralph Atkins about why the Fed is being more optimistic.

    We think the Fed simply doesn't know what US foreign policy is going to be. They don't know for sure what Russia will or won't do.

    Add your comment.


  41.    Albuquerque's Sluggish Economy Holds Back Apartment Market – YouTube

    Most markets across the country have enjoyed a pickup in growth for both jobs and apartment revenues of late. But that's not the case in Albuquerque, where lackluster apartment fundamentals trace to a consistent lack of job growth in recent years.

    Add your comment.


  42.    The Nation's Top 10 Submarkets for New Apartment Development – YouTube

    What submarkets are seeing the most apartment development in this cycle, and what's driving the boom? MPF Research counts down the top 10.

    Add your comment.


  43.    Kent County Land Bank's handling of abandoned properties upheld by state Court of Appeals | MLive.com

    GRAND RAPIDS, MI — The state court of appeals has upheld the Kent County Land Bank Authority's practice of bypassing a county-run auction to sell abandoned property on the open market.

    Add your comment.


  44.    Steve Keen on most important economic lessons – YouTube

    We couldn't agree more.

    Steve Keen, head of the School of Economics, History, and Politics at Kingston University, tells Erin the two most important lessons he hopes his students learn in the economic courses he teaches.

    He really is going to leave his mark on the field of economics.

    Add your comment.


  45.    Xi's Reform Gambit by Andrew Sheng and Xiao Geng – Project Syndicate

    A very mixed-economy analysis of China's situation by Andrew Sheng and Xiao Geng:

    The difference between the two reform efforts is that Xi must also address the shortcomings of Deng's work. Deng mistakenly believed that the state, which retained its central role in the economy, would be able to use new market-generated resources to correct the short-run inequalities created by his reforms. But the bureaucracy and its privileged networks benefited most, and a second, non-market source of inequality — endemic official corruption — became entrenched. That is why Xi's anti-corruption campaign was a critical precursor to reform.

    The problem is that the Chinese bureaucracy prefers stability, and it has strong incentives to strengthen its own position relative to the market, thereby exacerbating power inequalities and dampening innovation and growth. Yet the bureaucracy remains integral to the implementation of any policy that promotes social cohesion.

    …Systemic reform requires recognizing and atoning for two original sins: not only that of bureaucrats who made money by abusing their power, but also that of capitalists who made money by breaking the rules.

    Add your comment.


  46.    Bitcoin backer gets two years prison for illicit transfers | Reuters

    Charlie Shrem, an outspoken supporter of bitcoins, was sentenced to two years in prison on Friday for indirectly helping to send $1 million in the digital currency to the Internet black-market bazaar Silk Road.

    "No one is doing this anymore," Shrem told Rakoff. "There's no more money laundering. They're terrified."

    We doubt very seriously that there is no more money laundering via Bitcoin.

    Add your comment.


  47.    WTC Retail Leasing | Old Navy 34th Street | 432 Park Retail

    The ever-increasing throngs of brand-hungry shoppers traipsing through Manhattan has resulted in record retail deals this year. And it's the usual suspects who are pouncing on the opportunity.

    Chanel, Giorgio Armani and Old Navy were among the retailers at the forefront of Manhattan's largest retail investment sales of the year. Retail condominiums at the World Trade Center complex and St. Regis New York topped the list of the 10 priciest deals….

    Add your comment.


  48.    New Theoretical Perspectives on the Distribution of Income and Wealth Among Individuals | The Institute for New Economic Thinking

    Suppose that land (valuable real estate) is owned mostly by the rich. Suppose also that most of it does not enter the production function. Let then this land be suddenly demanded by other rich, say the rich living outside the country with whose income distribution we are concerned. Clearly, as the real estate becomes more valuable, the average wealth of the country increases, and also becomes more unequally distributed. This happens because the asset, predominantly held by the rich, has gone up in price and made the distribution of wealth more skewed.

    Moreover, more unequal wealth distribution spills into a more unequal income distribution because income includes (as per Piketty but also as per common sense used in all empirical studies of income distribution) higher imputed rent for the real estate owners whose housing has gone up in price and who have not sold it. (Just to be clear: if I own an apartment in New York whose price has doubled because Chinese oligarchs have bought scores of similar apartments in New York, both my income and wealth are up.)

    The increase in wealth being observed does not correspond to a rise in PRODUCTIVE CAPITAL, which does put paid to the notion that a rising tide lifts all ships, as the apologists for not changing the status quo tend to argue.

    This was a last-minute addition to this aggregation. Contrary to our usual custom, we did not first watch the applicable video. We did find the cited text worthy enough that we include the linked article (and video) in this post.

    We will yet watch the video; and, if we discover in it anything we feel should be brought to your attention or otherwise merits our commentary, we will surely include that in an upcoming post of ours.

    Thank you for understanding.

    Add your comment.


  49.    'Piggyback' Loans Revisited – NYTimes.com

    In a Genworth-sponsored survey of industry executives at a recent Mortgage Bankers Association conference, 38 percent of respondents viewed the potential return of piggyback financing as a threat to the stability of the housing market.

    But the piggyback loans now available are more difficult to qualify for and limited to 90 percent loan to value. In other words, the borrower must put up at least 10 percent. They are often marketed as 80/10/10s, with the last 10 representing the down payment.

    "We do not look at our piggyback program at all as an affordability type of product," said Tom Wind, the executive vice president for home lending at EverBank Financial in Jacksonville, Fla.

    Some jumbo borrowers will choose to add a second mortgage rather than roll all the debt into the first, because they can get a lower interest rate on the first if they finance 80 percent or less, Mr. Wind said. And while the rate on the second loan will be higher, they have the ability to pay it off over a relatively short period of time, leaving them with only the lower-priced loan.

    Mr. Gupta says borrowers should not assume an 80/10/10 will be cheaper than a loan requiring mortgage insurance. They should consider paying the insurance upfront, by financing it into the rate, which can lower the monthly payment, he said.

    Add your comment.


  50.    Volcker Rule Delayed: How Wall Street Is Dismantling Financial Reform | The New Republic

    Important clarifications and observations from David Dayen:

    "It is a troubling sign that the Fed granted a two-year blanket extension without requiring a public application, justification and determination establishing the basis for the failure to comply with the law," said Dennis Kelleher of the financial reform group Better Markets in a statement.

    You have to believe that it's less a case of not being able to exit investments, and more a case of simply not wanting to. Banks lobbied the Federal Reserve for the extension because of the possibility of taking losses if they had to get out of the investments by next July, as scheduled. This "right to profit" doesn't actually exist in any formal sense, but it often gets trotted out as a justification for a light regulatory touch on the banks.

    There's a growing idea that the banking industry's success in repealing Section 716 of Dodd-Frank represented a Pyrrhic victory, that it has now put such a target on banks' backs that it won't be able to get anything else done. But maybe it was just a victory, which will lead to more victories, like the one this week at the Fed. Wall Street knows how to fight on all fronts, working the implementation lever when the Congressional lever is blocked, and vice-versa. The result is a financial sector that looks quite a bit like it did before the financial crisis.

    Add your comment.


  51.    Has a stronger renminbi contributed to financial tightening? | Guonan Ma at Bruegel.org

    Guonan Ma:

    A much stronger RMB on its own tightens China's financial conditions but is not the principal cause of its broad-based financial tightness. Instead, China's decent inflation record since 2000 should reduce its inflation risk premium, warranting lower rather than higher domestic interest rates and thus easier financial conditions.

    Add your comment.


  52.    mainly macro: Monetary Impotence in context

    Simon Wren-Lewis:

    The basic point is that the temporary increase in money is saved, not spent, because agents know it is temporary.

    It is saved when it doesn't have to be spent. When it has to be spent to, for instance, pay down debts, then it is spent. However, paying down debt decreases the money supply.

    It is when it must be spent for basic necessities that it is spent and positively impacts the economy.

    Therefore, the logical thing to do is to increase the money supply for the long run via fiscal spending on truly productive endeavors rather than via monetarism for speculating (gambling with a government backstop).

    It's fundamental. You don't need any mathematical models to see and understand it.

    Add your comment.


  53.    macroblog – Federal Reserve Bank of Atlanta

    Ellie Terry and John Robertson:

    …the CPS data suggest the decline is primarily because these workers have either found full-time work or are no longer wanting full-time work (that is, are working part-time for noneconomic reasons), and not because they have become unemployed or have joined the ranks of the discouraged outside of the formal labor market. Even better news is that the recent decline has been very broad based (see the charts).

    Add your comment.


  54.    30% of the Euro Area HICP basket is now in outright deflation | Pia Hüttl and Silvia Merler at Bruegel.org

    Pia Hüttl and Silvia Merler:

    The staff projections for HICP inflation for the Euro area were lowered to only 0.7% in 2015 and 1.3% in 2016, and HICP inflation for Germany was confirmed at +0.5% for November 2014 and at +0.4% for France. Most importantly, French core inflation turned into the negative territory for the first time since the French statistical office started measuring it (i.e. since 1990). Also, the massive plunge in Brent oil prices (-25% since September 2014) is still not reflected in the published data, but suggests further downward pressure on inflation rates.

    Definitely!

    Add your comment.


  55.    Peston's Mr Markets, Krugman and Wren-Lewis' Dr Pangloss | longandvariable

    Tony Yates:

    The point of conceptual dispute seems to be the proposition that because you can print your own currency, you will never be short of what you need to satisfy the claims of sovereign bond holders. Ergo, you need never default. Ergo, there need never be default risk premia in your bonds. Ergo you can borrow as much as you like for as long as it takes to stimulate the economy back to full employment.

    I don't dispute that you can money-finance. What I contend is that you would not want to. And for that reason, it isn't credible to promise it. And so default risk premia will emerge if tax and spending plans are not arranged with sufficient clarity and discipline. Why would you not want to pay your bondholders from the printing press? Surely you are giving them what you agreed to when you signed the loan contract, right? Because seigniorage finance is extremely inefficient, and it would require massive, and colossally damaging inflation to execute. If it came to it, it would be far better, and far more popular to default on a few either rich or remote, institutional bondholders, than devastate the typically less well inflation-indexed poor.

    We completely agree with the exception that we want to make clear that Krugman and Wren-Lewis understand that there are inflationary limits to misguided versus intelligent fiscal stimulus. We say that with the view that "money-finance" may mean different things to different people. Both Krugman and Wren-Lewis have been advocating correctly for fiscal stimulus and definitely not for monetarism alone at the ZLB.

    Add your comment.


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