Linking ≠ endorsement.
⇧ Nomi Prins on Public Banking – YouTube
Nomi Prins is a renowned journalist, author and speaker. Her latest book, All the Presidents' Bankers, is a groundbreaking narrative about the relationships of presidents to key bankers over the past century and how they impacted domestic and foreign policy.
On January 31, 2015 she spoke at the Banking on Colorado Conference in Denver, Colorado.
Nomi understands risk management and the Ponzi nature of much of Wall Street finance.
⇧ Robert Reich (How Trade Deals Boost the Top 1% and Bust the Rest)
If you're into American real estate, if you know that you need Americans in general to be doing well so that you too may do well, then you need to pay attention to what Robert Reich is saying here.
The Apple iPhone is assembled in China from components made in Japan, Singapore, and a half-dozen other locales. The only things coming from the U.S. are designs and instructions from a handful of engineers and managers in California.
Apple even stows most of its profits outside the U.S. so it doesn't have to pay American taxes on them.
This is why big American companies are less interested than they once were in opening other countries to goods exported from the United States and made by American workers.
They're more interested in making sure other countries don't run off with their patented designs and trademarks. Or restrict where they can put and shift their profits.
In fact, today's "trade agreements" should really be called "global corporate agreements" because they're mostly about protecting the assets and profits of these global corporations rather than increasing American jobs and wages.
We certainly aren't opposed to workers in other nations being lifted out of poverty. In fact, we're all for it; but there are ways to do it without American workers and the global environment being sacrificed.
⇧ How razing the rainforest has created a devastating drought in Brazil – Telegraph
The gathering crisis was ignored in the run-up to last year's World Cup, and in the elections that followed it. So does lack of maintenance: it is estimated that 40 per cent of the Brazil's water supplies are lost through leaking pipes and outdated infrastructure.
But population growth and other environmental factors are also to blame. Climate change is believed to have had an effect. So is the way that cities burn so much energy they become 'heat islands', sucking up moisture. But perhaps the biggest and most alarming factor behind the drought is deforestation in the Amazon basin to the north.
⇧ California Drought May Force New Limits On Restaurants, Hotels, Decorative Fountains – CBS Sacramento
SACRAMENTO, Calif. (AP) — As the California drought drags on, water officials are considering expanding mandatory outdoor water restrictions on homeowners and adding new limits on restaurants, hotels and decorative fountains.
They need to work on ending Anthropogenic Global Warming and creating desalinization plants.
⇧ Detroit pays high price for arson onslaught
Its human toll is unmeasurable: Last year, 17 people died from intentionally set fires, and half of all suspicious fires were in occupied homes.
"People don't realize arson is a felony. They think it's just a crime against the insurance company," said Lori Conarton, a spokeswoman for the Insurance Institute of Michigan, an industry group that funds anti-arson efforts. "It's a crime against all your neighbors."
"You can get away with it because it's not going to be investigated," said Robert Trenkle, a retired Detroit arson investigator and owner of Certified Investigations International, a Redford-based firm that investigates about 800 Detroit fires a year for insurance companies.
Along with burglary, arson has pushed rates for homeowner insurance to the highest in the state.
The average policy in Detroit is at least $1,700 per year, said Eric Huffman, who owns a State Farm agency in New Center. The average policy in Michigan was $774 in 2011, the last year figures are available, according to the Insurance Institute of Michigan.
⇧ Hoffman bill would create task force on copper theft | Metro-east news | News Democrat
Insurance groups say more than 10,000 insurance claims for copper theft are typically made per year in the United States, in part due to high prices for scrap copper.
⇧ Dutch gas field earthquake dangers ignored for decades: Safety Board | Reuters
"The uncertainty about earthquakes is larger than was assumed in the past," NAM head Gerald Schotman said in a statement. "We understand the residents' feelings of anxiety and insecurity."
Gas extraction has resulted in increasingly strong earth tremors, some measuring as much as 3.6 on the Richter scale.
The cost of damage repairs, structural improvements to buildings, and compensation for home value decreases has been estimated at 6.5 billion euros. Around 35,000 homes are said to be affected, parliament heard last week.
⇧ mainly macro: Endogenous supply and depressed demand
If you are intelligent and not doing the bidding of plutocrats bent upon keeping the masses down (even though keeping them down is also bad for the plutocrats' rapid increase in quality of life): Simon Wren-Lewis:
…after a severe recession which appears to result in a loss of capacity, you use policy to explore the boundaries of just how much capacity has really been lost, and run the risk that inflation may rise as you do so. You do not sit back, tell yourself that below target inflation is probably temporary, and do nothing. And, of course, you do not plan for more fiscal austerity.
⇧ FHFA Announces Minimum Capital and Liquidity Requirements for Non-Bank Servicers | Morrison & Foerster LLP – JDSupra
Melissa D. Beck, Kenneth Kohler, and Anna T. Pinedo:
The passage of the capital standards adopted in the U.S. pursuant to the Dodd—Frank Wall Street Reform and Consumer Protection Act as set under the Basel III international capital accords eliminated the favorable treatment of MSRs, which previously could comprise up to 50% of a bank's Tier 1 capital. Now faced with the increased regulatory, legal, and reputational risks of operating in the post-financial crisis environment, many banks are feeling pressure to exit the mortgage servicing business or decrease their mortgage servicing portfolios.
⇧ Record Sales Volume and High Prices for Apartments in 2014 | Multifamily content from National Real Estate Investor
Prices for apartment properties rose again in 2014 as investors bought a larger volume of properties than they did even in 2007—the biggest year of the last real estate boom for apartments.
"Investor demand for multifamily has not wavered at all," says David Young, managing director for JLL.
Cap rates are way down. There aren't enough apartment units!
⇧  Greece is the perfect example of debt deflation – YouTube
On Thursday, Germany rejected Greece's proposal for a six-month extension to its Eurozone loan agreement. Germany said that the proposal was "not a substantial solution" because it didn't obligate Athens to stick to the conditions of its international bailout. As the biggest creditor and EU paymaster, Germany has the clout to block a deal which would leave Greece without a financial lifeline and potentially put it towards an exit from the Eurozone. Erin weighs in.
Then, Edward sits down with 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 possibility of a Greek default and its potential effects. Pippa believes that the voting public in Greece and elsewhere in the periphery has become radicalized after years of economic hardship. She sees this as one big reason that Greece could eventually exit the Eurozone. Pippa also gives cogent analyses of shrinkflation, the downsizing of portion sizes in retail packaging to increase margins, as well as the UK trade data and what they mean for the upcoming UK elections.
After the break, Erin is joined by Steve Keen — head of the School of Economics, History, and Politics at Kingston University and author behind "Steve Keen's Debtwatch." Steve tells us that new Greece finance minister Yanis Varoufakis is not as radical as some make him out to be and gives us his take on the rest of the periphery. He believes that the situation in Greece is a textbook case of debt deflation and proves how destructive pro-cyclical cuts to government spending are for an economy. Dr. Keen goes further and suggests that the rest of the periphery is still not out of the woods. He believes even France is at risk economically.
And in The Big Deal, Erin and Edward Harrison continue the discussion on Greece and the turmoil surrounding the German Finance Minister's rejection of Greece's proposal to extend its loan agreements. Take a look!
We'll write our view here before Friday's meeting and not edit it after that meeting.
We think Germany is going to stick with its position because it is wrongly obsessed with hyper-inflation and Austrian School economics.
We also hope we're completely wrong, but to be wrong would be like Margret Thatcher and Ronald Reagan suddenly espousing Keynesianism and or even Post-Keynesianism and Modern Money Theory!
We can hope. (See number 30 below.)
⇧ Chinese Buyers Target Central Coast Real Estate | News – KEYT
"They have cash, they are coming in with cash", Kopcho says about Chinese buyers in the local real estate market, "the same issue happened that we are seeing in China happened in Japan in the 1980's, they were very concerned in Japan about being locked out of the market, so what they decided to do was come and buy, buy, buy, buy, buy, now we are seeing the same thing, not with Japan, but with China and we're seeing it with the cash people."
⇧ Low borrowing costs influence foreign investment in Japanese real estate | CCTV America
"The Japanese yen is depreciating by a significant 20 percent this makes really attractive for foreign interests to come to the Tokyo market," said Koshiro Hiroi, managing director at Grosvenor Asia Pacific.
⇧ Critics: Wal-Mart wage hikes aren't enough for workers | Boston Herald
"It showed that Wal-Mart is actually starting to listen to us," said Fatmata Javvie, a Wal-Mart cashier in Alexandria, Va., and Our Wal-Mart member. "But, at the same time, we're looking for $15 and full-time."
⇧ The profit motive behind Wal-Mart's minimum wage hike – The Washington Post
There are certainly a lot of good reasons for a company to pay its employees more. A handful of large retailers — including the Gap, Ikea and Aetna — have apparently realized this in recent months. But companies like Costco and Trader Joe's have known for a long time that better wages reduce turnover and improve productivity, which saves money over the long term.
… The left-leaning Economic Policy Institute has illustrated how the economic recovery hasn't translated into income gains for most Americans over the past few years, instead flowing mostly into the pockets of people who own stock. If workers have better options, the theory goes, they'll start to jump ship. If too many of them do that, as Neil Irwin writes at the Upshot, the cost of replacing them starts to eat into the bottom line.
Bad PR doesn't help either.
⇧ The Great SIM Heist: How Spies Stole the Keys to the Encryption Castle
The only effective way for individuals to protect themselves from Ki theft-enabled surveillance is to use secure communications software, rather than relying on SIM card-based security. Secure software includes email and other apps that use Transport Layer Security (TLS), the mechanism underlying the secure HTTPS web protocol.
You may say to yourself that you have nothing to hide; but most of you will not only discuss personal matters over the network, you'll also conduct business that could be the target of espionage.
⇧ HSBC files: 10 days on, bank faces 10 separate inquiries | News | The Guardian
Ten days after revelations about HSBC's Swiss subsidiary first broke, the bank is now facing 10 separate inquiries around the world.
⇧ High rents trickle down to smaller cities
Now smaller cities are falling in line, seeing rents rise faster than those in even some of the hottest markets. The reason is rising demand. As employment improves, new households are finally being formed again, and they are all renter households. The home ownership rate is still falling.
… Kansas City rents, for example, rose 8.5 percent in January from a year ago, according to Zillow. That's more than twice the national rate and a bigger jump than rents in major cities such as Boston, Seattle, and even Los Angeles.
… Since 2000, rents have grown roughly twice as fast as wages, and you don't have to be an economist to understand why that is hugely problematic," said Zillow's chief economist, Stan Humphries.
Also, younger Americans are simply renting longer, partially because of social, generational preferences and partially because rents are so high and incomes so low that they can't afford to save for a down payment to buy a home.
⇧ Cameron, Clegg and Miliband sign joint climate pledge | Environment | The Guardian
Some conservatives think good stewardship is, well, conservative. We agree.
David Cameron, Nick Clegg and Ed Miliband have signed a joint pledge to tackle climate change, which they say will protect the UK's national security and economic prosperity.
The agreement of the three party leaders is highly unusual and comes amid a general election campaign that is becoming increasingly bitter.
The prime minister, deputy prime minister and leader of the opposition have all clashed over green issues, but the joint declaration states: "Climate change is one of the most serious threats facing the world today. It is not just a threat to the environment, but also to our national and global security, to poverty eradication and economic prosperity."
⇧ Swimming with the Sharks: Goldman Sachs, School Districts, and Capital Appreciation Bonds | WEB OF DEBT BLOG
Ellen Brown, attorney, founder, Public Banking Institute:
The fliers touted new ballfields, science labs and modern classrooms. They didn't mention the crushing debt or the investment bank that stood to make millions.
— Melody Peterson, Orange County Register, February 15, 2013
Remember when Goldman Sachs — dubbed by Matt Taibbi the Vampire Squid — sold derivatives to Greece so the government could conceal its debt, then bet against that debt, driving it up? It seems that the ubiquitous investment bank has also put the squeeze on California and its school districts. Not that Goldman was alone in this; but the unscrupulous practices of the bank once called the undisputed king of the municipal bond business epitomize the culture of greed that has ensnared students and future generations in unrepayable debt.
In 2008, after collecting millions of dollars in fees to help California sell its bonds, Goldman urged its bigger clients to place investment bets against those bonds, in order to profit from a financial crisis that was sparked in the first place by irresponsible Wall Street speculation. Alarmed California officials warned that these short sales would jeopardize the state's bond rating and drive up interest rates. But that result also served Goldman, which had sold credit default swaps on the bonds, since the price of the swaps rose along with the risk of default.
In 2009, the lenders' lobbying group than proposed and promoted AB1388, a California bill eliminating the debt ceiling requirement on long-term debt for school districts. After it passed, bankers traveled all over the state pushing something called "capital appreciation bonds" (CABs) as a tool to vault over legal debt limits. (Think Greece again.) Also called payday loans for school districts, CABs have now been issued by more than 400 California districts, some with repayment obligations of up to 20 times the principal advanced (or 2000%).
In 2013, California finally passed a law limiting debt service on CABs to four times principal, and limiting their maturity to a maximum of 25 years. But the bill is not retroactive. In several decades, the 400 cities that have been drawn into these shark-infested waters could be facing municipal bankruptcy — for capital "improvements" that will by then be obsolete and need to be replaced.
Then-State Treasurer Bill Lockyer called the bonds "debt for the next generation." But some economists argue that it is a transfer of wealth, not between generations, but between classes — from the poor to the rich. Capital investments were once funded with property taxes, particularly those paid by wealthy homeowners and corporations. But California's property tax receipts were slashed by Proposition 13 and the housing crisis, forcing school costs to be borne by middle-class households and the students themselves.
Ellen's solution: Public Banking.
⇧ Roof Cave-Ins Across Boston Area Could Quicken With Rain – Bloomberg Business
Unlike every system since Jan. 27, it will switch to all rain through the overnight hours, said Alan Dunham, a National Weather Service meteorologist in Taunton, Massachusetts.
"The snow will basically just absorb all the rain," Dunham said. "All that snow sitting on roofs will be even heavier and it will exacerbate an already large problem."
⇧ FEMA Shows Some Progress Implementing Flood Insurance Changes: GAO
FEMA said [it] has been unable to make insurance rate changes for business properties because it cannot distinguish among policies for businesses, nonprofits, and other nonresidential properties.
The article also covers mapping, reserve-fund assessments, and grandfathered policies.
⇧ Washington state quake shows early warning system is slow – US News
Results would have been better for a quake in the Puget Sound area where there are more sensors, he added later in a phone call.
⇧ mainly macro: Greece and educating economists
Some have used events like the financial crisis to call for a complete overhaul of how economics is taught. Heterodox economists want much more pluralism, and many other social scientists want economists to be much more familiar with what they know and do. I have some sympathy with both views, but – as an economist would say – only at the margin. The reason is very simple: to go even half way towards what these heterodox economists and social scientists want would involve throwing out much that is even more valuable.
That is my third point. What has it got to do with Greece? To be able to say intelligent stuff about what is going on at the moment (which you would hope an economics education would enable you to do), you need to know quite a lot of economic theory.
We beg to differ with Simon here. (By the way, he's no snob. We want to say that up front. Some macroeconomists are very snobby, but we won't name names. If you're tempted to think we include Paul Krugman in that, we don't.)
Anyway, we just don't agree with Simon's conclusion that to increase the economists' understanding of the social sciences would necessitate throwing out anything of value.
Perhaps Simon is simply thinking about the limited number of credit hours students spend getting their doctorates in macroeconomics. Well, tack on another year if necessary to get it right and fund it publicly.
⇧ Looking at Student Loan Defaults through a Larger Window
Meta Brown, Andrew Haughwout, Donghoon Lee, Joelle Scally, and Wilbert van der Klaauw:
Our analysis of borrower distress uncovers some new facts. Perhaps most important, cohort default rates appear to have been worsening over time, and the two- and three-year analyses that feed much of the public discussion are only part of the story. CDRs continue to rise in years four through nine. Second, defaults appear to be concentrated among the lowest-balance borrowers, who may not have completed their schooling, or may have earned credentials with lower payoffs than a four-year college degree. Finally, snapshots of delinquency and default rates miss the fact that many borrowers who are current today have had serious stress in the past. Only about 63 percent of borrowers appear to have avoided delinquency and default altogether.
It's a national disgrace that we charge our youth to become educated. It's plain dumb too.
⇧ Brief history of middle-class economics | VOX, CEPR's Policy Portal
Jason Furman, Chairman, Council of Economic Advisers [hence his strong pro-Obama statement at the end]:
…important factor influencing the dynamics of middle-class incomes is inequality. This, too, is a global issue. In the US, the top 1% has garnered a larger share of income than in any other G-7 country in each year since 1987 for which data are available, as shown in Figure 4. From 1990 to 2010, the top 1%'s income share rose 0.22 percentage points a year in the US versus 0.14 percentage points a year in the UK. While comparable international data are scarce after 2010, the gains of the top 1% continued since then in the US, until a noticeable downtick in 2013.
We want to be on record here saying that we strongly disagree with the secretive natures of the Transpacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) and with any fast-track authority for either.
⇧ Global Economy Shows Signs of Stabilization | BlackRock Blog | Global Market Intelligence
Here at home, however, there are some disappointments. U.S. retail sales fell for a second month in a row as consumers are saving, not spending, their windfall from lower gasoline prices. This suggests to us that even with a stronger labor market, the U.S. consumer will no longer be the engine of global growth.
⇧ Water Risk Analysis and Saving Money | Sustainable Cities Collective
A powerful tool, the Water Risk Monetizer, is helping companies recognize, strategize and monetize water's impact on the bottom line. It can have quite a trickle-down effect (pun intended!) on every consumer, their communities and future generations.
The Water Risk Monetizer is free, available now for use, and full of potential for advancing local, national and global goals for water conservation and sustainability. In essence, the Water Risk Monetizer helps a corporation look at the potential costs and benefits of their water-use strategies … in dollars and cents.
⇧ Housing Prices Keep Rising in San Francisco and the Number of Sales Keeps Falling – The Numbers – Curbed SF
Absentee buyers (mostly investors) accounted for 21 percent of Bay Area homes in January, down from 24.5 percent in January 2014.
If this spring is anything like prior selling seasons and we're in for another bonkers year, as a recent Paragon report predicted, January's relatively flat numbers may not hold for long. "January isn't really a bellwether month when it comes to housing trends," DataQuick analyst Andrew LePage noted in the report. "For that we'll have to wait until spring."
⇧ Greece bailout extended for four months – YouTube
Eurozone finance ministers and the International Monetary Fund (IMF) reached an agreement on Friday evening to extend Greece's international bailout package for four months.
Germany, Greece's largest creditor,…demanded "significant improvements" in reform commitments by Athens before agreeing to the extension in eurozone funding.
Keep your eye on Germany because it hasn't backed down (and sadly, we don't think it will).
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