News: Real Estate, Risk, Economics. Jan. 29, 2015

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Table of Contents
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1) Prague earthquake suit before Supreme Court could set precedent – Tulsa World: Energy

2) NJ wants to tear down 600 Sandy-damaged homes

3) Nebraska could require carbon monoxide detectors in homes – Washington Times

4) Family Accused of $20M Fraud Amid Mansion Fires, Theft Claim – NYTimescom

5) After apartment fire, power restored, lawmaker aims at code – SFGate

6) Taxing the Wealthy Promotes Economic Growth | The Fiscal Times

7) mainly macro: Post Recession Lessons

8) Agreement on German External Debts – Wikipedia, the free encyclopedia

9) NYC Multifamily Sales 2014 | Ariel Property Advisors

10) Finance Ministry slows blogging down but ends it not | Yanis Varoufakis

11) Foreign real estate developers hit US shores | The Investor

12) East New York Rezoning Preserves Side Streets, Focuses on Subsidized Housing | Brownstoner

13) Norway Regulator Raises Warning Housing Market Is Out of Control – Bloomberg Business

14) No relief: Despite a 30% drop in sales, home prices will remain unaffordable in 2015-16 – Firstpost

15) Dubai rents and prime property prices set to fall 10% on average this year | The National

16) Obama Proposes Offshore Oil Drilling From Virginia to Georgia – Bloomberg Business

17) Russia mulls "bad bank" to fight economic woes – fastFT: Market-moving news and views, 24 hours a day – FTcom

18) Bad link removed

19) Washington's unusual unemployment trend | Jon Talton | Seattle Times

20) Global Leaders – The Economic Power of Southern Germany | Made in Germany – YouTube

21) The Real Impact of Employment on the Office Sector via Xceligent – YouTube

22) Rental property number 12 before rehab – YouTube

23) Independence Movements: Europe's Paradox | Roubini's Edge

24) Republican lawmakers warn of housing bubble 2.0 – OC Housing News

25) [280] Merkel on the US profits slowdown and Weisbrot on Greece – YouTube

26) Drought monitor says 1.8 million Oklahomans being affected – Norman Transcript: News

27) We must stop Angela Merkel's bullying — or let the forces of austerity win | Owen Jones | Comment is free | The Guardian

28) 'Nuisance properties' are focus of Fort Worth crackdown

  1.    Prague earthquake suit before Supreme Court could set precedent – Tulsa World: Energy

    Studies published in Science magazine and elsewhere have found the waste pumped deep into faulted zones causes pressure to build up, triggering earthquakes miles away.

    The U.S. Geological Survey cited a study by one of its seismologists and other scientists that found the Prague quake was triggered by three wastewater injection wells nearby. The federal agency warned last year that chances had increased for a damaging 5.5 or greater earthquake in central Oklahoma.

    Oklahoma recorded 567 earthquakes last year of 3.0 magnitude or greater, more than in the previous 30 years combined.

    Add your comment.


  2.    NJ wants to tear down 600 Sandy-damaged homes

    TRENTON — State officials, relying on some $25 million in federal funds, have identified for demolition about 600 homes ravaged by Superstorm Sandy. Far more than that require attention.

    Add your comment.


  3.    Nebraska could require carbon monoxide detectors in homes – Washington Times

    Carbon monoxide has no color, smell or taste, and produces symptoms often mistaken for the flu. The gas can induce sleepiness, headaches, vomiting, dizziness, blurred vision, nausea, shortness of breath and ultimately death. The most common causes of a home buildup are faulty furnace equipment, cars left running in garages and propane heaters used in enclosed spaces.

    More than 400 Americans die every year from unintentional carbon monoxide poisonings and another 20,000 are seen in emergency rooms, according to the U.S. Centers for Disease Control and Prevention. More than 4,000 are hospitalized. The fatality rate is highest among Americans 65 and older.

    Nebraska would join 29 other states that require carbon monoxide detectors in certain residential buildings….

    Add your comment.


  4.    Family Accused of $20M Fraud Amid Mansion Fires, Theft Claim – NYTimes.com

    Authorities said the ensuing probe uncovered a decades-long pattern of questionable insurance claims by Risoldi. She still possessed jewelry she reported stolen in 1993, according to investigators. She had reported another jewelry theft from a different home in 1984 and a house fire in 1977.

    As a result of the investigation, authorities seized about $7 million in family assets, including $3 million in bank accounts, $1.2 million in jewelry, six Ferraris and two Rolls-Royces.

    Add your comment.


  5.    After apartment fire, power restored, lawmaker aims at code – SFGate

    Officials say workers accidentally started the fire, and Fire Chief Thomas Jacobson said the building's lightweight, wooden structure fueled the flames and made fighting the fire difficult. The construction was done appropriately based on building codes, officials said, and no one died or was seriously hurt.

    Assembly Speaker Vincent Prieto said he plans to introduce a bill aimed at strengthening building codes.

    Add your comment.


  6.    Taxing the Wealthy Promotes Economic Growth | The Fiscal Times

    Mark Thoma:

    …the efficiency benefits from reducing taxes on the wealthy have been overstated by a considerable margin by tax cut advocates.

    There is mounting evidence, for example, that too much inequality reduces growth, so taxes that are used to promote equality can also promote growth.

    It's time to do away with the myth that taxing the wealthy always reduces our economic potential, a myth that serves the ideology of the right. A tax system that reduces inequality of the type that diminishes economic growth reclaims income that should have flowed to workers in the first place, and helps to move us toward the meritocracy that underlies our national identity and fuels our economic system is in our collective interest.

    We should not allow ideological arguments dressed up as economic facts, arguments that serve wealthy interests but have little foundation, to deter us from pursuing what's best for the vast majority of Americans.

    Add your comment.


  7.    mainly macro: Post Recession Lessons

    Simon Wren-Lewis:

    The political right in all three countries/zones was always set against fiscal stimulus. It is true that during 2009, when no one was sure how bad things might get, Germany enacted a modest (if fairly ineffective [2]) stimulus, but in the US and UK the political right opposed it [PropertyPak note: See our comment on US stimulus below]. Without Greece, we still would have had a Conservative led government taking power in the UK in 2010, and we still would have had Republicans blocking stimulus moves and then forcing fiscal austerity. The right's strength in the media, together with the 'commonsense' idea that governments like individuals need to tighten their belts in bad times, would mean that opposition to austerity within the political elite would be lukewarm, and so austerity was bound to prevail. While we might hope that this right wing opportunism does not happen again during a future crisis, there is no clear reason to believe it will not. Greece may have just voted against austerity, but there is every chance that in the UK the Conservatives will retain power this year on an austerity platform and the Republicans are just the presidency away from complete control in the US.

    However, the US did engage in some stimulus in 2009 via the "American Recovery and Reinvestment Act of 2009."

    Add your comment.


  8.    Agreement on German External Debts – Wikipedia, the free encyclopedia

    …repayments were only due while West Germany ran a trade surplus, and that repayments were limited to 3% of export earnings. This gave Germany's creditors a powerful incentive to import German goods, assisting reconstruction.[3]

    The agreement significantly contributed to the growth of the post-war German economy and reemergence of Germany as a world economic power.

    Germany should do unto others good things that have been done unto Germany: Think Greece.

    Add your comment.


  9.    NYC Multifamily Sales 2014 | Ariel Property Advisors

    The dollar volume of New York City multifamily sales in 2014 skyrocketed to nearly $12.6 billion, according to a year-end report from Ariel Property Advisors.

    Add your comment.


  10.    Finance Ministry slows blogging down but ends it not | Yanis Varoufakis

    Yanis Varoufakis:

    …keep watching this space!

    Will do. Oh, and it's not crass at all but rather refreshing.

    Add your comment.


  11.    Foreign real estate developers hit U.S. shores | The Investor

    …development of many of the most prominent towers is being funded by foreign developers, as well as Middle Eastern sovereign-wealth funds and Asian investors, which are outbidding traditional U.S. players as they search for higher investment returns and new places to expand.

    "We've seen more new names, new faces, new investors with large capacity in the last two years than we've seen at any other time," said Jeff Blau, chief executive of privately held Related, one of the country's largest commercial developers.

    It's quite risky, but it's bringing money into the US right now while it plans to take more money out later.

    Add your comment.


  12.    East New York Rezoning Preserves Side Streets, Focuses on Subsidized Housing | Brownstoner

    The new housing generated by the de Blasio's rezoning of East New York will be mostly subsidized, according to new details revealed by the administration Saturday. Other than that, the plan follows the same pattern carved out by Amanda Burden and the Bloomberg administration, as New York YIMBY pointed out: Upzone the avenues, downzone the residential side streets.

    Add your comment.


  13.    Norway Regulator Raises Warning Housing Market Is Out of Control – Bloomberg Business

    A combination of plunging oil prices and falling interest rates risks pushing Norway's housing market beyond its breaking point, the financial regulator said.

    The economy of western Europe's biggest oil exporter is now struggling to expand amid a slump in crude. The central bank cut rates in December and said there's a 50-50 chance for another reduction, triggering a mortgage war as banks such as DNB ASA and Nordea Bank AB lowered rates to lure customers.

    "Lower interest rates and strong competition in the mortgage lending market could contribute to continued rapid growth in debt and house prices," Morten Baltzersen, head of Norway's Financial Supervisory Authority, said in an e-mailed reply to questions this week. That could drive the housing market into a "self-augmenting spiral," he said.

    Norway's housing market, which Nobel laureate Robert Shiller all the way back in 2012 said was in a bubble, has been inflated amid an oil boom that has driven wealth creation and kept unemployment below 4 percent. Norwegians have more debt than ever before, owing their creditors about twice their disposable incomes, a level that Olsen and FSA's Baltzersen have said is unsustainable.

    If they keep that up, they'll be toast. It was bad enough before the oil-price crash.

    Add your comment.


  14.    No relief: Despite a 30% drop in sales, home prices will remain unaffordable in 2015-16 – Firstpost

    According to this Firstpost article, Mumbai had the highest inventory of 50 months, followed by Gurgaon at 30 months, Hyderabad at 27 months, Bangalore at 22 months, Chennai at 20 months and Pune at 21 months. The number of months denotes the time estimated for a company to completely sell its apartment stock.

    Add your comment.


  15.    Dubai rents and prime property prices set to fall 10% on average this year | The National

    "What we're saying is that this 10 per cent fall will be an average," Mr Plumb said.

    "For the new-build market the actual fall is likely to be less than that, while the secondary market will be down by more. For the developers you might not see any change to the actual price, instead you'll see things like they'll extend the payment terms or offer rental guarantees or new cars."

    JLL also noted, the strong US dollar, to which the dirham is pegged, is deterring European and Russian buyers from investing in Dubai, JLL noted.

    It sounds too optimistic to us.

    Add your comment.


  16.    Obama Proposes Offshore Oil Drilling From Virginia to Georgia – Bloomberg Business

    We're concerned with leaks and global warming.

    (Bloomberg) — The Obama administration proposed opening to offshore drilling an area from Virginia to Georgia in a policy shift sought by energy companies but opposed by environmentalists worried about resorts such as the Outer Banks or Myrtle Beach.

    Add your comment.


  17.    Russia mulls "bad bank" to fight economic woes – fastFT: Market-moving news and views, 24 hours a day – FT.com

    The government also said it would collect proposals by the end of the week for a "bad bank" to buy problem assets from the financial sector.

    It did not say how much money would be available to support such a bad bank, nor where it would come from.

    Where it would come from? The Russian rouble is a sovereign currency. Russia can produce as many roubles as it wants. The only issue for Russia is inflation. If they push new roubles into real-domestic-diversified productivity, they won't have that problem. Their real problem will be if they issue bonds when they create the money and if they don't create enough of it and public jobs to employ everyone the private sector cannot right now.

    There are many things Russia could do in the face of Western sanctions. It could default on Western debts. It could raise the price of natural gas to Europe. It could do those things exactly to match the fall in the Russian economy due exactly to the sanctions.

    Why wouldn't it do those additional things? The US would jump back into fracking as prices rise and offer the gas and oil to Europe, though it would be difficult logistically at first. That would mean that Russia would be burning its bridges to Europe and letting the US further dominate there.

    An alternative would be to offer sweeteners to Europe to stop going along with the US. Russia could offer lower gas rates if Germany ends sanctions for instance.

    The possibilities are nearly limitless.

    There are also covert military operations Russia could undertake, but we won't go there because we aren't interested in that approach.

    We really don't like how Russia has been duplicitously approached by the West since the fall of the Berlin Wall and would rather see the US end its preoccupation with trying to obtain global-neoliberal-economic hegemony but rather become cooperative and facilitating of righteousness instead. Inflicting austerity on people for the sake of profits for lenders is unrighteous. It is completely unnecessary unless the object is sadistic greed; and austerity was and remains the West's plan for Ukraine and its people, including those in Crimea, who by order of Vladimir Putin, now enjoy a full Russian sized pension vastly higher than a Ukrainian one.

    Add your comment.


  18.    Bad link removed


  19.    Washington's unusual unemployment trend | Jon Talton | Seattle Times

    …the rate has come down almost in stair-step fashion, reaching a low of 5.6 percent last July and August.

    Then it started back up: 5.7 in September, 6.0 in October, 6.2 in November and 6.3 percent last month.

    The conventional explanation is that the improving labor market is bringing out more active job seekers. And Washington created 82,600 jobs in 2014.

    And that's what we said would happen. The fall in the labor participation rate is far from all about people retiring when they would have anyway and that they wouldn't get back in to boost their financial standard of living.

    What one needs to do here though is also look at population gains. How many people have moved to Washington and especially the Seattle area to look for work? In addition, look at layoffs.

    Add your comment.


  20.    Global Leaders – The Economic Power of Southern Germany | Made in Germany – YouTube

    This is what Germany is risking via a bad approach to European finances, such as in Greece.

    Vineyards, castles and palaces – that's what many tourists associate with southern Germany. But the region around Heilbronn-Franken offers more than just idyllic scenery. It's also home to 80 top companies – all global leaders in their sectors. But there are problems too. The companies can't find enough apprentices and are facing a shortage of skilled, specialized workers.

    Add your comment.


  21.    The Real Impact of Employment on the Office Sector via Xceligent – YouTube

    As employment improves in the U.S., business will be faced with a changing CRE market. James Cook, National Director of Analytics for Xceligent joins the show via Skype to discuss just how much of an impact employment improvement will have on tenants and landlords.

    Add your comment.


  22.    Rental property number 12 before rehab – YouTube

    Mark Ferguson:

    I just got rental property number 12 under contract! $133k and should rent for $1,400.

    When he's ready, he'll say how much he had to put into it and how long it took.

    Add your comment.


  23.    Independence Movements: Europe's Paradox | Roubini's Edge

    This is one of Nouriel Roubini's more informative articles we've seen.

    There is growing discontent about the transfers of money from the haves to the have-nots of the EU. It is seen in Germany's reluctance to lend to the so-called PIGS, but is increasingly being seen within the constituent nation states and wealthier regions now facing economic headwinds, who are less inclined to transfer to poorer regions.

    While ethnic and cultural conflicts are often cited as the root cause of independence movements, we see that many of the problems boil down to something baser: Simple economics.

    When it comes to wealth transfers, the sentiment across the board seems to be: "We don't like it in the good times—and we hate it in the bad times." Let's take a look now at some of the country specific problems, and explore what these independence movements may mean for the future of the EU and the Eurozone.

    The EU can break up or move to become more as the United States. One other possibility is a European-wide coercive dictatorship. We recommend the US option even while seeing problems in it. We need radical reforms in Europe and the US.

    Add your comment.


  24.    Republican lawmakers warn of housing bubble 2.0 – OC Housing News

    Larry Roberts:

    I'm not sure which I find more offensive: the Republicans housing bubble lie, or the Democrats housing policy hypocrisy.

    Generally, we agree with Larry there (given our mixed economy). He lays out his reasons, and they're rational (again, given our mixed economy).

    Larry's emphasis on good-paying jobs and creating enough housing is exactly our emphasis too.

    Whatever you think of Larry, you can't rightly accuse him of not being an independent thinker.

    At this point, we think it might be right to label him a moderate but not because he's vacillating. No, he's decided and can present a strong case for his position.

    We're not saying we are marching in lockstep with Larry Roberts. We're saying we appreciate the sincerity with which he holds and puts forth his beliefs.

    Add your comment.


  25.    [280] Merkel on the US profits slowdown and Weisbrot on Greece – YouTube

    Excellent pinpointing of the EU/eurozone problem (lack of democracy) by Mark Weisbrot:

    [@ 13:46,] Erin is joined by Mark Weisbrot — co-director of the Center for Economic and Policy Research and columnist at The Guardian Unlimited. Mark tells us what the fundamental problem in the Eurozone is and gives us his take on the key economic and negotiating issues in Greece.

    Add your comment.


  26.    Drought monitor says 1.8 million Oklahomans being affected – Norman Transcript: News

    The U.S. Drought Monitor says more than 1.8 million Oklahomans are being affected by an ongoing, deepening drought.

    The Oklahoma Water Resources Board says that in the past month, the percentage of Oklahoma classified as being in exceptional drought has decreased slightly, but more than 60 percent of the state still remains classified in moderate drought or worse.

    Most areas experiencing exceptional drought are in the southwest corner of the state. The percentage of the state that has moved from no drought classification to abnormally dry has increased significantly in the eastern half of the state.

    The seasonal drought outlook says that through late April, drought conditions will likely persist or intensify in all of the western half of the state, the north central region and part of south central Oklahoma.

    Add your comment.


  27.    We must stop Angela Merkel's bullying — or let the forces of austerity win | Owen Jones | Comment is free | The Guardian

    Scathing criticism of Angela Merkel by Owen Jones:

    Angela Merkel is the most monstrous western European leader of this generation. Politicians who inflict economic cruelty on a mass scale, trashing the lives of millions as they do so, do not end up in courts to face justice. But Merkel undoubtedly stands tried and convicted in the dock of history already. The EU's high priests of austerity conjure up the words of Charlie Chaplin's rousing speech at the end of The Great Dictator: "Machine men, with machine minds and machine hearts". The Greeks have rebelled against machine men — and women — and they are crying out for others to follow.

    However, Merkel, the EU bureaucrats and international financiers are cruel but not stupid: they know hope is a contagion, and will do all they can to stop Syriza inspiring others. Merkel has already demanded that Alexis Tsipras, the new Greek prime minister, ignore his democratic mandate and stick to foreign-imposed austerity measures.

    Wow, and we thought we were the ones being perhaps too tough with our language concerning Angela.

    Add your comment.


  28.    'Nuisance properties' are focus of Fort Worth crackdown

    "Vacant houses and rundown properties bring the drug element into the neighborhoods," said Fort Worth resident Vaughn Durham.

    … The city wants owners to be proactive, pay attention and take action. If there is no positive response, the city may take over.

    Add your comment.


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