Linking ≠ endorsement.
⇧ Greece submits economic reform proposals to creditors – YouTube
Greek Prime Minister, Alexis Tsipras, was told by the EU and the International Monetary Fund that his country would not receive any more bailout funding until his government provided details regarding pension, tax and public sector pay reforms along with measures to fight corruption. Detailed reform proposals were submitted to the European Commission on Friday and they will be considered by Greece's creditors over the weekend before a special meeting of EU finance ministers takes place next week to decide if the measures are sufficient. Speaking during a debate on the subject in the European Parliament, European Commission President, Jean-Claude Juncker, expressed optimism that the reform proposals will be acceptable.
⇧ UK boomtown rats: Britain's rodents grow in size & numbers, cuts in pest control blamed – YouTube
Rats becoming resistant to rat poisons:
⇧ House Rich, Land Poor – Bloomberg View
The living space in newly built U.S. homes is on a tear: Since 1982, the size of a new single-family house has increased by almost 1,000 square feet — which was the size of the average U.S. house in 1950.
Well, such houses are not being built for the working class. QE and a lack of fiscal spending are why. QE was aimed at propping up bank balance sheets. Fiscal spending was way to little and not targeted well enough to stimulate permanent demand.
⇧ Exclusive: Upset by Warren, U.S. banks debate halting some campaign donations | Reuters
We believe that it was bad national economic and financial risk management to severely weaken Dodd-Frank to allow banks to be bailed out via depositors' bank deposits if the banks gigantic derivatives bets go sour over falling oil prices.
Big Wall Street banks are so upset with U.S. Democratic Senator Elizabeth Warren's call for them to be broken up that some have discussed withholding campaign donations to Senate Democrats in symbolic protest, sources familiar with the discussions said.
"They can threaten or bully or say whatever they want, but we aren't going to change our game plan," Warren said in a blog post on her website on Friday. "It's up to us to fight back against a financial system that allows those who broke our economy to emerge from a crisis in record-setting shape while ordinary Americans continue to struggle."
Warren, a former Harvard Law professor who joined the Senate Banking Committee after taking office in 2013, has accused big banks and other financial firms of unfair dealings that harm the middle class and help the rich grow richer.
In a Dec. 12 speech, she mentioned Citi several times as an example of a bank that had grown too large, saying it should have been broken apart by the Dodd-Frank financial reform law.
In January, Warren angered Wall Street when she successfully blocked the nomination of a banker Antonio Weiss to a top post at the Treasury Department. She argued that as a regulator he would likely be too deferential to his former Wall Street colleagues.
⇧ Joe Firestone: The New York Times Soft-Pedals the Dangers of the TPP | naked capitalism
Joe Firestone, Ph.D., Managing Director, CEO of the Knowledge Management Consortium International (KMCI), and Director of KMCI's CKIM Certificate program:
In free market ideology businesses are supposed to shoulder their risks. They're not supposed to manipulate their political systems to get legislation providing them with financial protection at the expense of the public. That's not capitalism, it's lemon socialism; and it is also one of the key components of fascism.
… according to the TPP, tribunals staffed by private attorneys who frequently advocate for the very corporations whose complaints they are deciding upon have unconstrained authority to award damages of unlimited size to these same corporations and then the governments of the nations would be obligated to pay these awards. So, assuming present policies in effect for government financing in most nations including the United States, the governments would increase taxes or increase borrowing to pay these awards.
With the TPP Congress is being asked to buy the proverbial pig in the poke. Well, they've previously bought three highly touted free trade agreements, and none of them has delivered net benefits to the American people in terms of net jobs created, or a higher standard of living for most of the population, or greater economic equality. So, I think the Administration, really needs to answer the question "What's in it for us?" ….
. . . one article states that "nothing in this chapter" should prevent a member country from regulating investment activity for "environmental, health or other regulatory objectives." But that safety valve says such regulation must be "consistent" with the other strictures of the chapter, a provision even administration officials said rendered the clause more political than legal.
. . . regulatory actions meant "to pr otect legitimate public welfare objectives, such as public health, safety and the environment" do not constitute indirect expropriation, "except in rare circumstances." That final exception could open such regulations to legal second guessing, critics say.
That's a little better. But the critics are surely right that the exception clause would open the way to endless claims asserting that a complaint is an "exception." Considering the composition of the three judge panels, the exception clause clearly opens the way to corporate friendly decisions invalidating legislation pursuing "legitimate public welfare objectives."
Most importantly, what those are would then be determined by the three judge panels and not by the processes of American democracy. In fact, any delegation of Congress's authority to determine what laws will govern the United States to these three judge tribunals is giving away part of our sovereignty, and, in my view, exceeds Congress's authority to delegate.
⇧ Landslide Damages Homes, Prompts Evacuations in Des Moines, Washington – weather.com
Homes were evacuated after a landslide occurred Friday afternoon in Des Moines, Washington.
According to a South King Fire and Rescue official, four homes now have been damaged in the south Seattle suburb.
Residents were asked to evacuate after their homes were damaged, KING 5 reported. The earth continues to move, concerning authorities.
⇧ What would Paul Krugman do: Imagining the plan which defeats the ultra-rich – Salon.com
Obama thought the crisis arose not from any fundamental market flaw but from speculation and the ebb and flow of the business cycle. He saw but two remedies. One was to curb the excesses and contain the fallout, which is what Dodd/Frank did. The other was to use fiscal and monetary policy to pour mass amounts of free money into the system, which is what he and Fed chief Ben Bernanke did.
It worked as well as it could — and way better than the austerity regimes Republicans are always hawking. It gave us what we now have, an economy that outperforms nearly all other developed nations and a middle class that underperforms the one in Canada. Some people are better off. Unemployment is down. CEO pay rose 37 percent while workers' wages shrank by 0.6 percent. Never before have average wages fallen as the economy grew. The number of people living in poverty also rose, another first for an economic expansion.
We've fixed little even of what we acknowledged was broken in 2009. Banks we called too big to fail are bigger now; the 10 biggest now control over 50 percent of all our financial assets. JPMorgan Chase deposits have grown 29 percent.
⇧ Kashmir floods LIVE: Many feared dead as houses collapse in Budgam, rescue efforts underway | The Indian Express
Many are feared dead in Laden village in central Kashmir's Budgam district after three houses collapsed following a landslide triggered by incessant rains in the state. Officials said around 60 villagers are trapped in three houses and efforts are on to rescue them.
⇧ How serious is the US slowdown? | Gavyn Davies
…the sudden collapse in the growth rate in January is seen as nothing more than a blip, generated by the weather and other factors that will automatically reverse in coming quarters. This, after all, is exactly what happened last year, when the pattern of the data was seriously disrupted by the "polar vortex".
While this is the most likely out-turn, there are reasons for concern. The rise in the dollar, initially dismissed by the Fed as a non issue, is now obviously starting to worry them. The real dollar exchange rate has risen by 12 per cent since last June, and net trade has subtracted 1.2 percentage points from GDP growth in 2014 Q4, and an estimated 0.6 points in 2015 Q1. This drag is broadly in line with past estimates of dollar effects….
⇧ Foreclosure to Home Free, as 5-Year Clock Expires – NYTimes.com
"No one gets a free house," Judge Michael B. Kaplan of the United States Bankruptcy Court in Trenton wrote in an opinion late last year, reflecting what he characterized as a longstanding "admonition" he and others made during the foreclosure crisis. But after effectively ending a New Jersey homeowner's foreclosure case in November because the state's six-year statute of limitations had expired, he wrote in his opinion, "With a proper measure of disquiet and chagrin, the court now must retreat from this position."
⇧ What a property manager does in real estate | Inman
what does a property manager do? All the stuff Lucy, or perhaps your client, will have to do for herself in the absence of a management professional — market research, advertising, tenant screening, legal document creation, rent collection, escrow accounting, maintenance and repairs, and more — while also staying on the right side of the law and, hopefully, out of the courtroom.
Read the article for more detailed explanations.
⇧ On April 1, homeowners will see flood insurance rates increase | Tampa Bay Times
On Wednesday — April Fool's Day — a congressional act that revised federal insurance premiums goes into effect, and coastal homeowners such as Loft-Powers say the joke will be on them. The government is slowly phasing out subsidized flood insurance for more than a million Americans with houses in flood zones who, in some cases, pay half the true commercial rate.
Last year, a Government Accountability Office report said FEMA's debt to taxpayers is so large that the agency can only afford to pay on its interest. It hasn't made a principal payment in years. The NFIP collected about $4 billion in premiums in 2013 while insuring property worth nearly $1.5 trillion, the GAO said.
As the seas rise by a few millimeters each year, storm surge from hurricanes will only worsen. A study by the National Oceanic and Atmospheric Administration last year said long-term sea-level rise has made tidal flooding a near-daily event in many cities, as opposed to 1950, when it happened about once every two years.
Discounted insurance is "expensive for taxpayers and encourages people to live in harm's way," Lehrer said. "Stupid, rich people who want to should be allowed to build wherever they want to as long as taxpayers don't have to bail them out."
⇧ [Today's pick] Editor's Introduction: The Basic-Income Debate: The Independent Review: The Independent Institute
As our frequent enough readers have easily ascertained, we are not libertarian capitalists. The issue of a Basic-Income Guarantee (BIG), however, has been rightly joined by a number of such libertarians.
We come down on the side of the BIG. As we've noted in previous posts, we don't like Georgism (as this article puts it, "a tax on land rent").
We especially liked seeing the following in the article:
Finally, "idle" land, far from being a sign of speculative manipulation, is caused by (relative) labor shortages. Taxing unimproved land would harm both growth and the environment.
We've put forth that exact argument elsewhere than this blog but do re-endorse the point here.
In earlier posts, we've made clear that we believe technological advancements will render working for compensation moot. The only issue facing us is the BIG. We are definitely for it.
We don't know what the symposium contributors said other than what's briefly said in the linked article. Perhaps one or more touched upon the following.
We've seen lately that there is research data showing that the welfare state actually aids entrepreneurship because more people are more willing to take the risk of new ventures because they know they have an adequate safety net to fall back on (" Can Government spending Encourage Entrepreneurship? | Let's Talk Development": http://propertypak.com/2015/03/28/news-r eal-estate-risk-economics-mar-28-2015/#0 3281511). It's very commonsensical to us.
So, we feel that the sooner the BIG is put into place, the better and that eventually, technology will eliminate required labor or work for compensation and that the standard of living and quality of life for each person will be higher than the highest is now and by magnitudes of order.
⇧ Boom Time in Bordeaux as Vintner Trains Artillery on Hailstorms – Bloomberg Business
Different types of hail cannons, as they're known, have been around for more than a century in France, even though it's far from clear they do what they're supposed to do.
"We had to do something," Cruse recalls. …
…he still pays €30,000 a year for insurance "just in case," he says.
We wonder how well "the anti-hail nets that are used in Argentina" have been working out.
⇧ Supreme Court won't hear case on Obamacare Medicare board – Jennifer Haberkorn – POLITICO
Relatively speaking, this isn't very directly related to real estate, but we found it worth citing simply because so many residential tenants could be financially impacted one way or another.
Succinct reporting by Jennifer Haberkorn:
"This case is not dead; we're simply in a holding pattern," said Christina Sandefur, a senior attorney at the Goldwater Institute. "We will bring this challenge again once the Independent Payment Advisory Board takes action."
The challengers say that the unique nature of the 15-member IPAB gives it unprecedented legal power. Its decisions cannot be overridden by Congress without a super-majority and cannot be challenged in court. The challengers — an Arizona patient and doctor — say that centralized power makes the IPAB illegal.
The IPAB is a controversial piece of the Affordable Care Act, even among the law's Democratic supporters. Written by Senate Democrats, the provision was unpopular with House Democrats, who questioned handing over so much legal authority to an unelected board.
In case you're wondering, we think the SCOTUS made the right decision and we believe the issue will return if the board's decisions do what the Goldwater Institute think they will.
⇧ More Counties Added to Oklahoma Earthquake List
Oklahoma officials are expanding the number of counties that are included in earthquake "areas of interest," ….
…. Well operators in listed counties have been directed to reduce disposal volumes if earthquakes continue to occur in those areas.
⇧ Low rates to drag on insurer profits and dividends for years – analysts | Reuters
… insurers are capable of bridging the low interest rate phase and that is also the view of regulators and rating agencies….
They believe the bridging will be done via what means? Will they raise premiums? Are they banking on a rise in interest rates soon enough and high enough? Is it a combination of both and/or other means?
This is one of the reasons for Dodd-Frank and that the Fed is pursuing capital requirements and other measures regarding the insurance industry, as we've been reporting.
Finding the right balance is key. The program has to be flexible enough to adequately deal with any unexpectedly severe economic downturns.
⇧ Ben Bernanke's first Brookings blog – Business Insider
In the weak (but recovering) economy of the past few years, all indications are that the equilibrium real interest rate has been exceptionally low, probably negative. A premature increase in interest rates engineered by the Fed would therefore have likely led after a short time to an economic slowdown and, consequently, lower returns on capital investments. The slowing economy in turn would have forced the Fed to capitulate and reduce market interest rates again.
This is hardly a hypothetical scenario: In recent years, several major central banks have prematurely raised interest rates, only to be forced by a worsening economy to backpedal and retract the increases. Ultimately, the best way to improve the returns attainable by savers was to do what the Fed actually did: keep rates low (closer to the low equilibrium rate), so that the economy could recover and more quickly reach the point of producing healthier investment returns.
A similarly confused criticism often heard is that the Fed is somehow distorting financial markets and investment decisions by keeping interest rates "artificially low." Contrary to what sometimes seems to be alleged, the Fed cannot somehow withdraw and leave interest rates to be determined by "the markets." The Fed's actions determine the money supply and thus short-term interest rates; it has no choice but to set the short-term interest rate somewhere.
The overall article is helpful, but we take some exception to the last paragraph we quoted there.
"…the Fed is somehow distorting financial markets and investment decisions by keeping interest rates "artificially low." Contrary to what sometimes seems to be alleged, the Fed cannot somehow withdraw and leave interest rates to be determined by "the markets." Our view is that Mr. Bernanke's statement there misses th e point or distracts from it.
We understand what he's trying to say concerning the term "artificially." Frankly, we think the term "too" is what most critics of the Fed intend.
So read it this way and deal with that: "The Fed is negatively or detrimentally distorting financial markets and investment decisions by keeping interest rates too low."
Do we agree with that sentiment? No. We agree with Ben, given the Federal Reserve Act with amendments to the various laws governing the Fed (its limited mandate, etc.).
As our readers know, we don't agree with the Federal Reserve System as is but would radically alter the US economic system to make it entirely directly democratic where there wouldn't even be any such thing as an interest rate.
Please understand that we realize we're barely scratching the surface of this issue.
⇧ Analysts Expect Short-Term Boost To China's Slumping Real Estate As Central Bank Eases Loan Requirements
Stock markets rose Tuesday morning to hit fresh seven-year highs following Monday's announcement by China's central bank that it was reducing the minimum down payment on loans for second homes to 40 percent from 60 percent, and cutting the minimum down payment for first-home buyers using public housing funds to 20 percent from 30 percent.
The move is being seen as part of efforts to stimulate China's sagging property market, which last month saw a record drop in prices, following six months of falling prices. China's finance ministry also announced Monday that it was removing a 5.6 percent sales tax on homes that had been owned for more than two years; the move reversed a policy introduced in 2011 to cool an overheating market, which imposed tax on all property sales within five years of the purchase date.
We see this as can kicking just to keep the bubble inflated. It is a representation of China having stuck itself with a Ponzi-scheme real-estate economy.
I'll trade you this (empty, white-elephant) skyscraper in China for your Dutch tulip?
⇧ Detroit going after commercial property owners in fight against blight
Detroit's fight to reduce blight has begun to focus more on vacant, dilapidated business properties marring the city's landscape, with city lawyers quietly taking dozens of property owners to court in recent months to get them to either fix up or demolish their buildings.
A survey of properties citywide released last year by the Detroit Blight Removal Task Force, convened by President Barack Obama's administration, found nearly 85,000 blighted properties, homes and other buildings in Detroit; more than 5,400 were vacant commercial, civic and church properties.
⇧ Blackstone Group raises $15.8 billion for real estate fund: source | Reuters
Blackstone Group LP (BX.N), the world's largest private equity investor in real estate, has almost finished raising its next flagship global real estate fund, amassing $15.8 billion, a person familiar with the matter said on Monday.
⇧ China to Insure Deposits in Move Toward Scrapping Rate Curbs – Bloomberg Business
China said an insurance system for bank deposits will start on May 1, a step toward scrapping remaining controls on interest rates and allowing lenders to fail in a more market-driven economy.
⇧ Generous welfare benefits make people more likely to want to work, not less | EurekAlert! Science News
The glass is half-full.
"The notion that big welfare states are associated with widespread cultures of dependency, or other adverse consequences of poor short term incentives to work, receives little support.
"On the contrary, employment commitment was much higher in all the studied groups in bigger welfare states. Hence, this study's findings support the welfare resources perspective over the welfare scepticism perspective."
⇧ Sarah Quinn: Federal Credit Programs and the Birth of Lemon Socialism – YouTube
Dr. Sarah Quinn's answer on what new economic thinking is, is the best one we've heard yet from the numerous interviewees on INETeconomics; and that's saying something.
Holistic and interdisciplinary!
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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.
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