Linking ≠ endorsement.
⇧ Playing it safe: A 10-point risk management checklist for residential rental properties | PropertyCasualty360
Proper Insurance Coverage
Even with all these strategies in place, disasters still occur. Landlords should ensure that they have the property insurance with appropriate coverage limits. At a minimum, the policy should include the following coverage:
- Property damage
- Loss of rental income/business interruption
- Flood insurance
⇧ Report: W.Va. water intakes at risk from thousands of tanks | The Herald-Dispatch
"It's remarkable to see the number of tanks so close to rivers or streams," said Angie Rosser, executive director of the West Virginia Rivers Coalition. "So while it's appropriate to look most closely at tanks closest to existing drinking water intakes, focusing protection efforts solely on those zones would miss thousands of tanks that could easily harm our water supplies."
⇧ Flowery Branch woman charged with arson, insurance fraud
A Flowery Branch woman was charged Tuesday with first-degree arson and insurance fraud in connection with allegedly setting a fire at her home.
⇧ Misgen receives 58 months in prison for arson, insurance fraud – Owatonna MN: Owatonna Peoples Press
OWATONNA — An Ellendale man convicted last fall of setting fire to his family home to collect on insurance money was sentenced to nearly five years in prison Wednesday.
⇧ Maryland man charged with setting his house on fire – The Washington Post
FOREST HILL, Md. — Authorities say a Harford County man has been charged with setting his house on fire.
⇧ Judge lets Margate dune construction plan proceed — for now – SFGate
CAMDEN, N.J. (AP) — A federal judge ruled Thursday to let a beach replenishment project proceed — for now — over the objections of a Jersey shore town that does not want the sand piles.
Judge Renee Marie Bumb decided that neither Margate nor the state of New Jersey will suffer irreparable harm if the U.S. Army Corps of Engineers is allowed to award bids for the project, which she says would not begin until late April.
⇧ SEC.gov | SEC Announces Charges Against Standard & Poor's for Fraudulent Ratings Misconduct
It seems like a mere slap on the wrist for such a huge financial crime. It's a moral hazard going forward.
"…Standard & Poor's elevated its own financial interests above investors by loosening its rating criteria to obtain business and then obscuring these changes from investors. These enforcement actions, our first ever against a major ratings firm, reflect our commitment to aggressively policing the integrity and transparency of the credit ratings process."
⇧ Flood Death Toll Across Southern Africa Reaches 260 – Bloomberg
The likely death toll from flooding and torrential rain in Mozambique, Malawi and the Indian Ocean island of Madagascar reached 260, with about 360,000 people driven from their homes.
⇧ Chicago luxury towers raise the roof on rentals
Fifield, which develops both multifamily apartment and office properties in Chicago, cites the growing number of younger millennials who are moving not just to cities, but to city centers. In fact, the Chicago metro area saw the largest gain in population in its downtown area from 2000 to 2010 than any major city in the nation. This is according to a U.S. Census Bureau survey that measured the number of residents living less than two miles from city hall. The biggest driver of that growth was younger workers.
⇧ Keep cash, but let the public hold central bank reserves | VOX, CEPR's Policy Portal
Dirk Niepelt, Director, Study Center Gerzensee; Professor, University of Bern:
Recent experience with the zero lower bound on nominal interest rates, and the use of high-denomination notes by criminals and tax evaders, have led to revived proposals to phase out cash. This column argues that abolishing cash may be neither necessary nor sufficient to overcome the zero lower bound problem, and would severely undermine privacy. Allowing the public to hold reserves at central banks could reduce the need for deposit insurance, although the transition to the new regime and the effects on credit supply must be carefully considered.
We think the arguments for cash are very overstated. Cash (defined here as paper and coins accepted by the IRS) is a tiny percentage of money. Also, we're for one bank, a public bank in the form of the US Treasury, and no interest.
⇧ mainly macro: Encouraging dialogue between economists and social scientists
Let me take a real world economic problem: the response to the financial crisis. Some have suggested that banks have become too large and need to be broken up, or that the activities of high street banking need to be separated from the activities of the casino. Your economic analysis tells you that networks of many small entities can be as subject to crises as networks involving a few large banks. You are also able to devise a system of Chinese walls that mean that the activities of the casino can be separated from those of the high street even within the same company, and your political masters seem to prefer this approach. You recognise that different assets differ in their liquidity, and so you devise complex weighting algorithms for computing capital ratios. Your suggestions form the basis of negotiations between officials and bankers, and a set of rules and regulations are agreed.
Over the next few years you watch in dismay as your complex system begins to unravel. The CEOs of the large banks seem to constantly have the ear of politicians, who in turn gradually compromise your elaborate controls to render them less and less effective. Those in charge of administering the rules find it much more lucrative to work for the banks, and so regulators gradually lose expertise and resolve.
And you realise that right from the start you made the wrong choice. You decided to focus on what you knew, which was how to design systems that worked well as long as those systems remained unchanged, but which were not robust to intervention by self-interested parties. In short, they were too open to rent-seeking. You realise that actually the best thing to have done was to break up the banks so that their political power was forever diminished. And you recall a conversation with your social science colleague when this all started, who might have be en trying to tell you this if only you had understood the words he was using.
Someone just got slapped. "… design systems that worked well as long as those systems remained unchanged, but which were not robust to intervention by self-interested parties. In short, they were too open to rent-seeking." Oh, yes!
That's why political economy (http://en.wikipedia.org/wiki/Political_ economy#Current_approaches) was, and remains, superior to economics, per se.
It's the way we were trained and how we approach "economics" (not in a vacuum).
⇧ We are nowhere near the zero bound – Bond Vigilantes
So let's actually try zero interest rates.
He says it would work, but here's the rub. The bank wants the principal back. The loans have to meet proper standards. Where's the consumer demand so that there's a demands for even TZB loans?
That's been the problem all along in the US with QE versus fiscal spending. There's more to it than that in that the Fed was buying time for the banks assets to rise again in value rather than having them taken over and nationalized for being insolvent, which they all were when marked to market, as they should have been.
Rather than this TZB, just do the helicopter-money drop to all citizens. Don't expect the money back in the form of principal. It wouldn't be the best way, but it would be really easy.
⇧ Four Key Voices in Washington's Housing Finance Reform Debate | Squire Patton Boggs – JDSupra
The next two years are critical to the future of the GSEs and shaping the future of mortgage origination, servicing, and the securitization market. As evidenced by the last two years, even with congressional inaction, Washington can have a significant impact on mortgage finance reform without passing new legislation. With the start of the 114th Congress, it remains to be seen whether future changes will come through law, regulation, enforcement, or other administrative measures. Regardless, it is clear that Capitol Hill is not the only player in the housing reform debate. Whether it be the White House, Treasury, FHFA, CFPB, or other agencies, each brings its own interests and objectives to the table. The interplay and coordination among these bodies remain as important as each institution's individual actions.
⇧ Goldman Sachs Investments Test the Volcker Rule – NYTimes.com
Goldman Sachs has been on a shopping spree with its own money, snapping up apartments in Spain, a mall in Utah and a European ink company, all of which the bank hopes eventually to sell for a profit.
These are the sorts of investments that many, including some of the bank's regulators, had assumed would be prohibited by one of the signature elements of the 2010 financial overhaul legislation, the Volcker Rule.
In the years just before the financial crisis, most Wall Street banks had big merchant banking operations that bought assets with bank money. In many cases, these investments were made alongside clients through in-house private equity funds, but the banks themselves were the biggest investors in the funds.
During the crisis, these funds were the source of some of the banks' biggest losses. Goldman Sachs and Morgan Stanley had to write off billions of dollars they lost in commercial real estate funds.
Those losses were part of the impetus for the Volcker Rule, which prohibited banks from contributing more than 3 percent of the money invested in in-house private equity and hedge funds.
Private equity firms have grumbled that Goldman has an unfair advantage as an investor because it is a federally insured bank and can borrow money cheaply from the Federal Reserve.
"We simply cannot accept a system in which hedge funds or private equity firms inside banks can place huge, risky bets that are subsidized by taxpayers and that could pose a conflict of interest," President Obama said when he introduced the law.
"It may be worthwhile taking a look at those merchant banking guidelines, not just for commodities but for all activities actually," Mr. Tarullo said.
"…Goldman has an unfair advantage as an investor because it is a federally insured bank and can borrow money cheaply from the Federal Reserve." That's right, and it's both unfair and dangerous.
⇧ Apartment complex fire accidentally caused by workers – The Washington Post
EDGEWATER, N.J. — Workers doing maintenance at an apartment complex across the Hudson River from New York City accidentally started a fire that caused massive damage and displaced more than 1,000 people, officials said Thursday.
⇧ Chinese buy up overseas real estate | The Japan Times
What do New York's most famous hotel, the Lloyd's of London building and the headquarters of the U.K.'s top law firm have in common? They are all owned by Chinese insurers.
This new breed of buyers, who weren't allowed to invest overseas before 2012, are flooding into the global market for prime commercial real estate after being given more freedom to deploy their $1.6 trillion of assets. That has meant good times for sellers of trophy real estate in major cities.
⇧ The ECB makes its mind up: The launch of euro-style QE | The Economist
The council's decision on QE reflects a compromise. The scale of the programme is bigger than expected. But the trade-off for that is an important breach in the ECB's usual risk-sharing arrangements, which creates within the very heart of the monetary union the fragmentation it has been seeking to fight. That is a worrying augury for a programme on which so many economic hopes now rest.
Germany is a problem for European and global recovery.
⇧ Draghi's bold promise to do what it takes for as long as it takes – FT.com
The bloc now benefits from lower oil prices, some structural reforms, a strengthened banking sector and a big reduction in yields on sovereign debt. The ECB's commitment might now trigger an upward spiral in confidence. One can at least be forgiven for hoping so.
Critics fall into two opposing camps. The first accepts that the eurozone suffers from chronically weak demand, requiring the deployment of standard macroeconomic tools. But, these people argue, monetary action is insufficient and, worse, takes pressure off governments to deploy expansionary fiscal policies.
The second camp consists of those who think QE is close to being an invention of the devil. Let me put aside the view that it is the first step to hyperinflation; the evidence is overwhelmingly against that. The more serious arguments are that a mild deflation is not damaging, that monetary policy cannot resolve structural weaknesses and that QE will lift the pressure on governments to reform.
"…takes pressure off governments to deploy expansionary fiscal policies." That's what our camp says.
⇧ $170K reward offered in probe of downtown Los Angeles fire- Crime Blog: Orange County Register
LOS ANGELES — A $170,000 reward is being offered for information that leads to the person responsible for igniting a huge inferno that destroyed an unfinished apartment building in downtown Los Angeles.
Investigators say the blaze was an act of arson that caused an estimated $20 million to $30 million in damage.
⇧ Shreveport Fire Department to give away smoke alarms
The department recently received a donation of $12,500 from the Caddo Parish Commission to purchase more than 1,200 10-year lithium battery powered smoke alarms. The department's goal is install more than 300 of the devices in the target community.
"…10-year lithium battery powered smoke alarms" Do you install those in your properties?
⇧ Living the High Life – Bloomberg View
Although Manhattan is a locale where building taller often is the sole option, the city accounted for just 12 of the 445 residential towers built or under construction around the world in excess of 650 feet. The top three cities — Dubai, Mumbai and Shenzen, China, respectively — accounted for eight times that. China alone accounts for more than a quarter of tall residential developments worldwide.
⇧ Matteo Renzi: 11 quotes on the future of Italy – Agenda – The World Economic Forum
"Every continent, every country, spoke about the necessity to invest in growth… Eurozone spoke only about austerity."
"Europe is not simply the euro. Europe is not simply a currency. Europe is first of all an idea that ensured 70 years of peace."
Are we not counting Northern Ireland or the Greek Civil War or Yugoslavia? The list is actually quite long. If we are talking only about a European-wide war, then okay. However, now there's Ukraine, which certainly could be worked out peacefully well short of the people in Eastern Ukraine having to completely capitulate to austerity that's being forced upon the Western Ukrainians, many of who are justly protesting in the streets of Kiev about it.
⇧ George Magnus: European Central Bank's last throw of the dice- Nikkei Asian Review
George Magnus, economist, senior independent adviser to UBS:
…while the ECB will likely be able to achieve some intermediate financial goals, it will fail by acting alone, without the support of member governments, to realize its grander and more important economic goals.
Fans of QE also overlook the important preconditions for successful easing programs in the U.S. and U.K., which included early and forced bank recapitalization and budgetary stimulus, or at least the absence of Eurozone-style austerity programs.
…there probably is no successful QE policy that, in addition to longer-term labor and product market reforms for debtor and creditor nations, does not also rely on comprehensive debt restructuring and relief, properly recapitalized banks, and greater fiscal activism by countries and institutions that are able to implement it.
⇧ The Undertow in the Job Market: Weak Wages | BlackRock Blog | Global Market Intelligence
…the growing impact of technology on a broader array of jobs, the global wage arbitrage and employer sponsored healthcare becoming a bigger part of employee compensation. These undercurrents are not new, and their effects on the labor market have been felt in some ways for decades. But together they help explain why real wage growth has remained lackluster even during periods of relatively strong growth.
⇧ China flash PMI signals ongoing downturn but factories gain from lower oil prices | China,Exports,Flash,GDP,Manufacturing | Markit Commentary
…manufacturing conditions deteriorated for a second successive month, signalling a continuation of the near-constant malaise that has hit the Chinese manufacturing economy since mid-2011.
⇧ The Fall of the House of Samuelson by Robert Skidelsky – Project Syndicate
"Robert Skidelsky, Professor Emeritus of Political Economy at Warwick University and a fellow of the British Academy in history and economics":
Reading The Samuelson Sampler, it is extraordinary to realize just how confident economists of his generation were that the New Economics (as the Keynesian approach was called in America) had solved the problem of depression and mass unemployment. As Samuelson put it in his 1973 introduction, "the specter of a repetition of the depression of the 1930s has been reduced to a negligible probability."
Yes, there would still be small fluctuations; but, as he wrote in 1966, "Great Depressions — cumulative slumps that feed on themselves — are indeed extinct." The reason was that governments now had the tools, especially discretionary fiscal policy, to check any incipient downturn. "What is important about the budget," he said in 1970, "is whether it is inflationary or deflationary, not whether [it is] balanced or unbalanced." In other words, "A deficit in a good cause is good business." How many economists or politicians believe this today?
Because governments knew how to stop depressions, voters would insist that they use this knowledge. "If printing bits of green can save banks and business from ruin," he argued in 1966, "today's electorate will ensure that either party in power will [so] act."
…governments have abandoned the goal of full employment; as a result, all of those bits of interventionist policy previously thought necessary to keep economic activity on an even keel have gone by the wayside as well. The New Economics may be temporarily resurrected to deal with extreme situations, but policymakers no longer take precautions to prevent extreme situations from arising. How to do this, while preserving freedom and efficiency, is now the "unsolved frontier in modern economics."
"…governments now had the tools, especially discretionary fiscal policy, to check any incipient downturn." We learned that as a schoolboy and thought for sure that Keynesianism would come roaring back in 2009. We had no idea so many people would rather stick to ideology and "weather" a massive recession rather than just whip the thing with fiscal spending and cure it from happening again with proper re-regulation.
How in the world did full-time laissez-faire capitalism, which is so utterly backward, get so deeply entrenched in the American psyche? How did liberty become synonymous with hating even good governance? Why in the world would the United States lean so much toward anarchy and chaos to avoid tyranny?
Good fiscal policy and practice to stimulate the economy at the proper time in the proper amount is not bad. It is not tyranny. Some people think its socialism. It is not.
Socialism is public ownership of all the means of production. America is a mixed economy: public and private.
100% private (0% public) would result in 100% monopoly, 100% concentration, indistinguishable from absolute monarchy. We'd have a dictatorship under an Emperor for life who would hand power to whomever he wanted and also take it away. It would be worse than Rome at its worst.
⇧ Chinese Premier Li Keqiang's speech at Davos 2015 – Agenda – The World Economic Forum
In a nutshell, entrepreneurship without rent-seeking:
…the full text of Chinese Premier Li Keqiang's speech to participants at the World Economic Forum's Annual Meeting in Davos, Switzerland.
Avoiding rent-seeking will be one major challenge. It's avoiding cronyism. It's typically privatization.
To avoid all rent-seeking, a nation must be comprised of individuals (including entrepreneurs) who put the welfare of the whole nation first. Have we really seen one yet? If not, will China be the first?
⇧ Jim Armitage: PwC whistleblower deserves a medal, not a jail sentence – Business Comment – Business – The Independent
Mr Deltour should be given Luxembourg's equivalent of the Legion d'honneur, not the potential 10-year jail sentence his lawyer says he faces.
⇧ Debunking Wall Street's Chatter on its Volcker Rule Assault — Bull Market — Medium
Just substitute Jamie Dimon (Barack Obama's favorite banker) for J.P. Morgan in the drawing, and you're up to date. You don't even have to change banks. Alexis Goldstein:
After winning big by getting a Wall Street-reform gutting provision included in the 2014 year-end government spending bill, the big banks were not content to take a victory lap. As one of the first acts after convening the 114th Congress, House Republicans hurried to provide yet more favors to the biggest banks.
It's not really PR that's at work in the Congress. It's money and favors (leading to money) for the Congressional members in question. That money also leads to gigantic moral hazards. It's terrible risk management. It's putting the short-term, mistaken interests of the banking elite above the interest of the nation as a whole. In short, it's bad governance.
The PR is actually aimed at the masses who often barely have time to follow the mainstream-news headlines, let alone dig for the real facts.
Members of Congress just echo the PR as talking points.
⇧ World Employment and Social Outlook — Trends 2015: Unemployment on the rise over next five years as inequality persists
The report says income inequality will continue to widen, with the richest 10 per cent earning 30 to 40 per cent of total income while the poorest 10 per cent will earn between 2 and 7 per cent of total income.
These trends have undermined trust in governments and kept the risk of social unrest high, the report warns.
⇧ Development, Design and Demographics – YouTube
Toby Bozzuto updates MHN on his company's approach to creating authentic living environments. Instead of focusing on demographic tranches, The Bozzuto Group is looking to consumer behaviors in order to create projects with emotional resonance.
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