Linking ≠ endorsement.
⇧ EPA Being Urged To Tighten Up Ozone Standards | Sci-Tech Today
It is time to strengthen the nation's smog limits to improve the health of millions of people who suffer the ill effects of air pollution, dozens of environmentalists, doctors, asthmatic children and religious leaders told a panel of federal officials Monday at a daylong hearing.
⇧ Warsaw reinvents itself as a 21st-century city – YouTube
Martin Sandbu reports from Warsaw on the city's varied and at times troubled architectural past and how today it is reinventing itself into a modern European city.
No music credits. Anyone know what it is?
⇧ THE EMPLOYMENT SITUATION — JANUARY 2015 | US Bureau of Labor Statistics
Here are the highlights with "…" indications not included.
Total nonfarm payroll employment rose by 257,000 in January, and the unemployment rate was little changed at 5.7 percent. Job gains occurred in retail trade, construction, health care, financial activities, and manufacturing.
The unemployment rate, at 5.7 percent, changed little in January and has shown no net change since October. The number of unemployed persons, at 9.0 million, was little changed in January.
After accounting for the annual adjustments to the population controls, the civilian labor force rose by 703,000 in January. The labor force participation rate rose by 0.2 percentage point to 62.9 percent, following a decline of equal magnitude in the prior month. Total employment, as measured by the household survey, increased by 435,000 in January, and the employment-population ratio was little changed at 59.3 percent.
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged in January at 6.8 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.
In January, 2.2 million persons were marginally attached to the labor force, down by 358,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.
Among the marginally attached, there were 682,000 discouraged workers in January, down by 155,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.6 mil lion persons marginally attached to the labor force in January had not searched for work for reasons such as school attendance or family responsibilities.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.6 hours in January.
In January, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $24.75, following a decrease of 5 cents in December. Over the year, average hourly earnings have risen by 2.2 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees increased by 7 cents to $20.80.
The change in total nonfarm payroll employment for November was revised from +353,000 to +423,000, and the change for December was revised from +252,000 to +329,000. With these revisions, employment gains in November and December were 147,000 higher than previously reported.
So, overall it's an improvement but still not enough in our view. There will be premature talk of the Fed raising rates again. We need to wait until price inflation is really going up above the Fed's target.
⇧  US shows stellar growth as Europe enters crisis – YouTube
…Dr. Pippa Malmgren — founder of DRPM Group and author of "Signals: The Breakdown of the Social Contract and the rise of Geopolitics." Dr. Malmgren gives us her take on the recent jobs report and tells us what impact policy divergence will have on stocks, commodities, and oil. She also breaks down some of the important points affecting the political outcome in the Greek crisis.
⇧ Creativity and discipline at play in multifamily lending – YouTube
As lending in the multifamily sector becomes even more competitive, how are lenders differentiating themselves? JLL's Holly Minter explains that while underwriting remains strong, some lenders are beginning to show their creative side.
⇧ Hiring grows in January; are bigger pay raises next? | The Sacramento Bee The Sacramento Bee
There are indications that these so-called missing workers are returning to look for jobs.
An estimated 6 million workers have yet to come back, suggesting that the unemployment rate should be much higher than its official number. As more of these people re-enter the labor force and find jobs, it should tighten the job market, giving workers a stronger hand to demand wage increases.
We can't help commenting here that if more re-enter the market than do find jobs, it will create downward pressure on wages and inflation.
"It means that we've gotten people back in, but they're still finding it difficult to find a job," said Bill Spriggs, chief economist for the AFL-CIO. "We still have a way to go before people can declare this done. We're nowhere near normal."
We agree and will add that there's no guarantee the Saudis will be able to hold out long enough to destroy the competition. Sooner or later, prices will go up and perhaps as dramatically as they dropped. The question is how soon relative to the US recovery.
Plus, the stronger economy, on paper anyway, will only boost the dollar. It will cut US exports more and put the US in a bad position again of being more dependent on imports thereby increasing the trade deficit (debt).
We aren't being pessimists here. We're simply stating variables.
⇧ Chicago's 'zombie' properties decline, but number still scares housing experts – Chicago Tribune
Zombie foreclosures, so labeled because they're vacant and stuck in the foreclosure process, declined 35 percent in the Chicago area last month from a year ago, but there are still plenty of homes to worry about, according to a report.
⇧ NAHB: Builder Confidence in the 55+ Housing Market Ends Fourth Quarter on a Record High
All segments of the market—single-family homes, condominiums and multifamily rental—registered increases compared to the same quarter a year ago. The single-family index increased six points to a level of 54, which is the highest fourth-quarter reading since the inception of the index in 2008 and the 13th consecutive quarter of year over year improvements.
A recovering economy means a stronger dollar means lower interest rates. When coupled with lower gas prices, the construction industry in general has reason to feel better — so long as oil doesn't jerk higher.
⇧ Syriza and the French indemnity of 1871-73 | Michael Pettis' CHINA FINANCIAL MARKETS
The article is the length of a small book, but it is extremely informative. We haven't heard from Michael Pettis lately, but this was worth waiting for. He completely dismantles Wolfgang Schaeuble's comment that Greece's problem is solely Greece's doing. Wolfgang Schaeuble is Germany's Federal Minister of Finance.
From an "asset-side" analysis, as I discuss in my January 21 blog entry, the transfer of capital over three years from France to Germany equal to more than 20% of either country's annual GDP would have had very predictable impacts — they should have been very negative for France, as Berlin expected, and very positive for Germany. In fact the actual results were very different. This is because there are monetary and economic conditions under which liability structure matters much more, and conditions under which it matters much less. Economists and the policymakers they advise are too quick to ignore these differences, perhaps because there is not as well-formulated an understanding of balance sheets in economics theory as in finance theory, so that when someone like Yanis Varoufakis proposes that there are ways in which partial debt forgiveness increases overall economic value, instead of merely creating moral hazard, worried economists often recoil in horror, while finance or bankruptcy specialists (and an awful lot of hedge fund managers) shrug their shoulders at such an obvious statement.
If the restructuring is well designed, within a year of the restructuring I think we could easily see Greek growth surprise us with its vigor. I was delighted to see that Greece's new Finance minister agrees. An article in Monday's Financial Times starts with the claim that "Greece's radical new government revealed proposals on Monday for ending the confrontation with its creditors by swapping outstanding debt for new growth-linked bonds, running a permanent budget surplus and targeting wealthy tax-evaders." Today's Financial Times has an article by Martin Wolf that mentions the benefits of "a growth linked bo nd". In The Volatility Machine I spend chapters explaining how to create liability structures that minimize external shocks, align the interests of creditors and citizens, and improve the quality of payments for creditors, and I show why these make a restructuring much more successful for all parties concerned. This is just basic finance theory. Yanis Varoufakis should really take the lead in designing an entirely new form of sovereign debt restructuring, not just for Greece but for the many countries, in Europe and elsewhere, that will soon follow it into default.
… Throughout modern history even "good" reforms have failed to generate growth in nearly every previous case of overly indebted countries, unless of course those reforms sharply reduce outstanding debt.
… I am hesitant to introduce what may seem like class warfare, but if you separate those who benefitted the most from European policies before the crisis from those who befitted the least, and are now expected to pay the bulk of the adjustment costs, rather than posit a conflict between Germans and Spaniards, it might be far more accurate to posit a conflict between the business and financial elite on one side (along with EU officials) and workers and middle class savers on the other. This is a conflict among economic groups, in other words, and not a national conflict, although it is increasingly hard to prevent it from becoming a national conflict.
But didn't Spain have a choice? After all it seems that Spain could have refused to accept the cheap credit, and so would not have suffered from speculative market excesses, poor investment, and the collapse in the savings rate. This might be true, of course, if there were such a decision-maker as "Spain". There wasn't. As long as a country has a large number of individuals, households, and business entities, it does not require uniform irresponsibility, or even majority irresponsibility, for the economy to misuse unlimited credit at excessively low interest rates. Every cou ntry under those conditions has done the same. …
I am not rejecting the claim that "Spain" acted irresponsibly, in other words, only to place the blame on "German" irresponsibility. But it is absolutely wrong for Volker Kauder, the parliamentary caucus leader of German Chancellor Angela Merkel's Christian Democrats, to say, according to an article in last week's Bloomberg, that "Germany bears no responsibility for what happened in Greece. …
… If a huge amount of capital, equal say to 10-30% of a country's annual GDP, is forcibly distributed to an enormous group of entities within that country in a short time period, and if the only way in which to distribute this capital is through a wide variety of banks, with biases such that the more optimistic and irresponsible the bank, the more it profits, and the more optimistic and irresponsible the borrower, the more it receives, is it meaningful to refer to either side as behaving "irresponsibly", and if so, which side? Does this sound like a loaded question? If it is, can it be rephrased in a less loaded way?
⇧ Santander deal raises doubts over ECB stress test /Euromoney magazine
… here was Europe's biggest bank bowing to what analysts and investors had long argued, that its capital level was far too low, even though the new regulator had blessed it.
… In Spain, many economists see signs of deflation taking hold. Portugal isn't growing. Analysts at Berenberg, for example, remain sceptical that Santander's capital is sufficient, even after the €7.5 billion raise, citing the high level of private debt and need for further deleveraging in Spain and exposures in Brazil.
⇧ Atlanta Fed president: low inflation, wages a concern as national economy improves – Naples Daily News
Atlanta Fed President Dennis Lockhart is right to point out the differences between how Wall Street and Main Street view coming interest-rate rises, that Wall Street is most interested in timing.
We think that there are aspects of Main Street interested in that too perhaps more than President Lockhart might believe.
Planning purchases and improvements, among other issues, in real property and how to figure rent rates, etc., can be quickly impacted by interest-rate changes.
⇧ Bracing for Another Storm in Emerging Markets – TripleCrisis
Kevin P. Gallagher:
Some analysts predict that emerging-market and developing countries can weather the storm through floating exchange rates, the development of local bond markets, interest rate hikes, or by using some of their foreign exchange reserves. These tools are important, but may not be available or enough.
⇧ Debt Is Money We Owe To Ourselves – NYTimes.com
Paul Krugman wrote:
…debt is money we owe to ourselves….
He said that without qualifying it until the end of this short article. "The rhetoric of fiscal debates has been, for the most part, nonsense." So he meant fiscally speaking. However, where's the interest payment in his observation? We certainly do not pay all the interest back to ourselves (the collective American population).
⇧ U.S. wage growth remains sluggish despite employment gains – Washington Center for Equitable Growth
For wage gains that reduce income inequality and strengthen family income, nominal wage growth would need to exceed 3.5 to 4.0 percent, assuming a productivity growth rate of 1.5 percent and the Federal Reserve's target inflation rate of 2.0 percent. Wage growth may begin to pick up as the economy continues to add jobs, but it is outside of recent historical experience for the labor market to exhibit healthy wage growth without substantially higher levels of employment.
… Unfortunately at the current pace of employment growth, the prime-age employment rate will not exceed 79 to 80 percent until sometime in 2017 or 2018.
If the Federal Reserve raises interest rates this year, as it has suggested, it will slow employment growth and limit the possibilities for wage gains especially for workers at the bottom of the income ladder. Even when workers begin to receive significant pay raises, it will take several years of high wage growth to make up for the ground lost in the Great Recession.
Now that's what we're saying.
⇧ Fisher Island bucks luxury housing slowdown trend in Fla.
… what we're finding in the last year is all our key buying powers, whether they come from Argentina, Venezuela, Colombia, Brazil, Russia, all their currencies are falling against the dollar. So suddenly the foreign buyer who saved us the last go around are still present, but they're not as prevalent as they had been," said Peter Zalewski, founder of Condo Vultures, a Florida real estate consultancy and analytics firm.
⇧ Man Gets 4 Years For Setting House On Fire For Insurance – CBS Baltimore
A man who pleaded guilty to plotting to burn down his house to collect insurance proceeds has been sentenced to four years in prison.
⇧ Southaven approves bid for storm shelter
The city plans to use the facility as an emergency shelter during severe weather but having it available to host a variety of community events the rest of the time.
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.