News: Real Estate, Risk, Economics. Aug. 12, 2015

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Table of Contents
(Click to sections below.)

1) Washington City Sues Monsanto Over River Contamination

2) Ohio Couple Awarded $1.3M for Diesel Pumped into Basement

3) Landlord pleads guilty to insurance fraud – News, Weather and Classifieds for Southern New England

4) Dynamic Scoring in Action: Unwarranted Certainty | Jared Bernstein | On the Economy

5) mainly macro: The Bank, helicopter money and fiscal conservatism

6) 4 Simple Steps to Analyzing a Real Estate or Note Deal

7) Hartford Courant – Discrimination Lives On In Real Estate

8) Why Most American Investors Prefer Real Estate – MainStreet

9) Real estate industry ads say Little Ginny should live in the suburbs : TreeHugger

10) Landlord nation: 18,000 people own more than six properties | afrcom

11) Mine plug blows in Colorado, dumping 1M gallons of waste – US News

12) Coal giant settles pollution discharge violations with feds – seattlepicom

13) Mean Squared Errors: Schäuble's ticking clock

14) RealtyTrac: Is flipping a flop? | HousingWire

15) The roller-coaster that is China's stock market | GulfNewscom

16) In shattered economy, Greek PM claims mantle of stability | News | ekathimerinicom

17) Germany, the Troika and the EU: Who Rules Europe? – YouTube

18) Chief Economist Perspective- August 2015 – YouTube

19) NASA | Preparing for GOES-R at NOAA's Hazardous Weather Testbed – YouTube

20) Student Housing Today with Axiometrics – YouTube

21) Senior Housing Market Update from REIS – YouTube

22) Difficulty in Finding Skilled Construction Workers Evident in Jobs Report

23) Employment Situation Summary

24) Oklahoma Officials Working to End Earthquakes Say it Will Take Time

25) What you need to know about toxic algae blooms

26) Massive spider web appears in Texas | National Monitor

27) Railroad worker rallies 100 volunteers to repaint elderly couple's home

28) Co-owner of defunct Long Beach real estate firm sentenced in $169 million Ponzi scheme

29) The Hole in the Middle of the Jobs Report – The New York Times

30) SocketSite™ | San Francisco Rents Rise At Slower Rate, East Bay Rents Accelerate

31) Lessons From Chicago's South Side: Know Your Neighborhoods

32) Fed's job forecasts defy historical trend – StarTribunecom

33) Growth Diagnostics: A Crash Course | Economics and Development

34) Tech lift to productivity overlooked? The Fed doesn't think so

35) Buying Rental Properties: Cash vs. Mortgage | Club Thrifty

36) Corbyn and the Peoples' Bank of England — Medium

37) What Really Explains the Irish Economic Recovery? – Dublin European Institute

38) Repositioning Dos & Don'ts – Trouble gaining momentum during a renovation :: Apartment Ideas

39) Multifamily Myths: Why Investors Think It's is Easy to Value

40) $15 minimum wage a surprising success for Seattle restaurant | KOMO News

41) It's time to regulate rents in Seattle | The Seattle Times

42) How olive oil explains Greece's problems – The Washington Post

43) Chinese Brokerages Want to Bundle Margin Debt into Bonds – Bloomberg Business

44) The great productivity slowdown | Michael Roberts Blog

45) Apartment Demand Stays Hot, but Lending Tightens – CoStar Group

46) Should You Use a Property Management Company for Your Rental Property? – YouTube

47) Drought Worsens: Seattle Area Asked To Cut Water Use | KUOW News and Information

48) China Slashes US Debt Stake by $180 Billion, Bonds Shrug – Bloomberg Business

49) China's Hard Landing Suddenly Gets a Lot Rougher | Wolf Street

50) Helicopters and slippery slopes | longandvariable

51) China devalues yuan after weak trade data

52) A $30 Dongle Can Unlock Your Car And Garage Remotely | TechCrunch

53) Attorney: Hail Claims 'Cottage Industry' Bad News for Texas

54) Former Las Vegas real estate agent gets probation in home rental scheme | Las Vegas Review-Journal

55) The Government's a Drag on Employment – Bloomberg View

56) Federal Reserve Bank San Francisco | Is China's Growth Miracle Over?

57) The job market is improving, but low labor force participation is still holding us back | Jared Bernstein | On the Economy

58) Why Did China Devalue Its Currency? Two Big Reasons – The New York Times

59) Macro and Other Market Musings: China's Devaluation: Impossible Trinity, Deflationary Shocks, and Optimal Currency Blocks

60) A quick look at possible implications of China's record weakening of the renminbi – Bond Vigilantes

61) Beware of American econ professors! — POLITICO

62) Del. Law Aims to Improve Fire Safety, Encourage Home Sprinkler Systems

63) China's devaluation – hard landing or crash? | Authers' Note – YouTube

64) Home Prices Increase in 93% of US Metropolitan Areas – Bloomberg Business

65) HAR: Houston's housing market breaks single-family home sales record, prices up – Houston Business Journal

66) How to make money in real estate

67) Greece's third bailout at a glance: five things you need to know | News | ekathimerinicom

68) Utah City's Basements Flood After Large Reservoir Leak

69) China cannot risk the global chaos of currency devaluation – Telegraph

  1.    Washington City Sues Monsanto Over River Contamination

    Monsanto was the sole producer of PCBs between 1935 and 1979, when Congress banned them. … According to the lawsuit, Monsanto learned by the 1930s that the chemicals were toxic, but it continued making them and concealed the danger from government officials.

    Add your comment.


  2.    Ohio Couple Awarded $1.3M for Diesel Pumped into Basement

    A jury has awarded [more?] than $1.3 million in damages to a couple whose southern Ohio farmhouse was made inhabitable [should be uninhabitable] when a fuel deliverer mistakenly pumped 600 gallons of diesel into their basement.

    Add your comment.


  3.    Landlord pleads guilty to insurance fraud – News, Weather and Classifieds for Southern New England

    Landlord Rony Metellus admitted he set fire to an occupied building on Admiral Street last year so he could collect the insurance money.

    Add your comment.


  4.    Dynamic Scoring in Action: Unwarranted Certainty | Jared Bernstein | On the Economy

    Jared Bernstein:

    "For example, a dynamic score of Rep. Dave Camp's tax reform plan estimated that it would raise the level of GDP over ten years by between nothing (0.1%) and a lot (1.6%). Guess which end of that spectrum fans of his plan would choose to highlight?"

    As per political outcomes, we're stuck with dynamic scoring. Even with a Congressional majority that I trusted on fiscal issues, I'd be against the idea based on what I know of the models' limitations. With the current group, I worry that they'll try to make tax cuts look a lot cheaper than they really are. For that reason, I urge JCT and CBO to at least provide us with a range of estimates to supplement the single official dynamic estimate that Congress now requires. Let's be as transparent as we can be about the uncertainties inherent in this exercise.

    Add your comment.


  5.    mainly macro: The Bank, helicopter money and fiscal conservatism

    Simon Wren-Lewis:

    Helicopter money has become popular because of the absence of the appropriate fiscal policy response and the inadequacies of QE. As long as most mainstream politicians continue to argue against sensible fiscal policy in a liquidity trap recession, critics of helicopter money should stop assuming that this sensible fiscal policy will happen. It is strangely hypocritical for those in a central bank which is implementing QE in part because of inappropriate fiscal actions to compare helicopter money not to QE but the very fiscal measures that are not happening, and then to ignore the case where helicopter money successfully substitutes for those measures. It is saying I'm doing the second best policy B because policy A is not happening, but I'm not going to do policy C because it can be just like policy A!

    Add your comment.


  6.    4 Simple Steps to Analyzing a Real Estate or Note Deal

    A good exercise is to look closely at the deal, including the financing side and the potential exit strategies, to determine if the numbers make sense. How does this deal compare to others?

    I'm not just talking about return here, either. I'm talking about other things too, like risk and tax implications.

    When buying a house, I was always taught not to go over 65% of the ARV (After Repaired Value) all in, including acquisition costs, closing costs, repair costs and the often overlooked cost of capital. This has always served me well, especially if I couldn't flip the property and needed to refinance it. I have deviated from this model on occasion, and I ended up leaving my money either in the property, or I cash flowed less and later regretted not having that cushion.

    Add your comment.


  7.    Hartford Courant – Discrimination Lives On In Real Estate

    …real estate agents are steering clients to (and away from) particular neighborhoods. White homeowners refuse to sell — or even show — property to African American or Hispanic clients. Landlords refuse to show rentals to Section 8 clients. The list is long, disheartening — and illegal.

    People should be allowed to live where they choose. Ethical real estate agents do not serve as gatekeepers for neighborhoods or communities.

    Add your comment.


  8.    Why Most American Investors Prefer Real Estate – MainStreet

    While a homeowner's home is an investment, homeowners aren't typically thought of when someone refers to real-estate investors.

    This article conflates homeowners with real-estate investors.

    Homeowners hoping for price appreciation aren't the same as professional real-estate investors looking at all the other ways real-estate investments can pay off.

    Add your comment.


  9.    Real estate industry ads say Little Ginny should live in the suburbs : TreeHugger

    I'm not going to join this debate here. There are tons of advantages and disadvantages to core versus suburbs/exurbs living, including for little kids. I include it simply because it's unusual and interesting (in my opinion anyway).

    Add your comment.


  10.    Landlord nation: 18,000 people own more than six properties | afr.com

    Australia:

    …the chairman of a parliamentary inquiry into the housing market, Coalition MP John Alexander, warned that low interest rates had created a growing class of uber-landlords with huge property portfolios who risk big losses if the market turns or rates rise.

    "There were investors with $30 million housing portfolios with 60 properties would have to find $600,000 to cover their losses with loan rates moving from 4 to 6 per cent," Mr Alexander said.

    Add your comment.


  11.    Mine plug blows in Colorado, dumping 1M gallons of waste – US News

    Yikes!

    The U.S. Environmental Protection Agency said that a cleanup team was working with heavy equipment Wednesday to secure an entrance to the Gold King Mine. Workers instead released an estimated 1 million gallons of mine waste into Cement Creek, which flows into the Animas River.

    Add your comment.


  12.    Coal giant settles pollution discharge violations with feds – seattlepi.com

    Speaking of mining discharges:

    One of the nation's largest coal mining companies [Arch Coal Inc.] will pay a $2 million federal fine for exceeding pollution discharge limits at Appalachian mines in several states.

    Add your comment.


  13.    Mean Squared Errors: Schäuble's ticking clock

    Now this was very interesting news to me!

    On January 1, the final piece of the Eurozone banking union puzzle falls into place: the responsibility for structuring bank resolution programs will shift from national resolution authorities to a Eurozone-wide Single Resolution Mechanism (SRM), backed by a Single Resolution Fund (SRF). The goal of this institution is to break, one and for all, the link between the solvency of any particular national government and the stability of its banking system. In other words, its purpose is to take away the very leverage the Troika has been using to force concessions from the Greek government — the threat that "insolvent government = banking system collapse."

    All of which might help to explain Wolfgang Schäuble's evident desire to push Greece out of the Eurozone as quickly as possible. There's a ticking clock: in five months, it becomes a whole lot harder for the Troika to hold the Greek banking system hostage, and the consequence of trying — the activation of the SRM to recapitalize insolvent Greek banks — could have interesting political repercussions in Germany and elsewhere.

    I had read before how the ECB had failed to do what it was supposed to, but this coming change on January 1 will definitely be worth watching. Thank you, Mean Squared Errors blog.

    Add your comment.


  14.    RealtyTrac: Is flipping a flop? | HousingWire

    "Despite the rise in flipping returns in the second quarter, home flippers should proceed with caution in the next six to 12 months as home=price appreciation slows and a possible interest rate increase could shrink the pool of prospective buyers for fix-and-flip homes," said Daren Blomquist, vice president at RealtyTrac. "While average flipping returns are up substantially from a year ago at the national level and in moderately-priced markets such as Miami, Atlanta, Phoenix and Minneapolis, flipping returns are softening in some of the higher-priced markets such as San Francisco, Seattle, Denver and Los Angeles."

    "Flips are still a relevant and interesting segment in our marketplace," said Mark Hughes, chief operating officer with First Team Real Estate, covering the Southern California market. "Gross profits in dollars continue to rise with more efficient renovation technologies and work flows, and the uptick in market activity just adds fuel to the flip dynamic, too. One of the problems with a high-priced market like Southern California is that you can get into a multiple-offer situation making the acquisition price rise further. Most of the high-end flippers in our area are betting on up-and-coming neighborhoods where they don't expect to make a profit for two to five years."

    Add your comment.


  15.    The roller-coaster that is China's stock market | GulfNews.com

    The big question now is whether the recent volatility will spill over into other asset markets and the real economy. The double-digit drop in the Shanghai Composite Index since June has not triggered an economic crisis largely because fewer than 10 per cent of Chinese households participate in the stock market, and equities comprise less than 15 per cent of household assets.

    But even a small fraction of Chinese households experiencing paper losses still amounts to tens of millions of people. That has caused enough concern for the government to act, including by relaxing collateral requirements to permit real-estate assets to be used to cover margin calls.

    It was, in fact, the authorities' clampdown on margin borrowing, together with a loss in confidence as global markets declined, that is thought to have triggered the market meltdown.

    And that, too, is a feature of a market dominated by small traders: the "herding" behaviour that fuels major booms and busts becomes more prevalent, because individuals assume that others have better information.

    The result, as we are now witnessing, is that a moderate sell-off can easily turn into a stampede. And government intervention to block the exits is inadequate.

    Add your comment.


  16.    In shattered economy, Greek PM claims mantle of stability | News | ekathimerini.com

    …Tsipras's popularity remains unchallenged. While his critics say no one deserves more blame for playing a game of brinkmanship that he could never win, polls show his Coalition of the Radical Left, or SYRIZA, has as much as twice the support of its nearest rival.

    One senior aide said his shift toward the center of the political spectrum makes him the only guarantor of stability ahead of another possible election in coming months.

    "The only way he can survive politically is to move to the center-left, and the only moment he could do this is this very moment," said Aristides Hatzis, professor of law and economics at the University of Athens. "Tsipras has to move forward to hold elections, come into collision with his party, escape the image of the 'good kid' and become a national leader."

    Officials are now working against the clock to get the banks recapitalized, with one executive warning that public opinion could swing against remaining in the euro if economic normalcy isn't restored soon. For now, Greek support for keeping the currency remains strong.

    Tsipras is popular because the Greeks are afraid they don't know how to effectively run a replacement currency. He'll stay popular until the Greeks wake up to the fact that Greece is insolvent and they are working as slaves to austerity. They are currently in denial.

    Hopefully Europe will grow up and throw off neoliberalism and ordoliberalism.

    Add your comment.


  17.    Germany, the Troika and the EU: Who Rules Europe? – YouTube

    Andrew Gavin Marshall's excellent overview video:

    From the outbreak of Europe's debt crisis in 2010, Germany and the Troika institutions of the European Commission, European Central Bank and IMF have come to wield immense influence over the continent and the populations within it. This video examines the individuals and institutions of power in Europe.

    Add your comment.


  18.    Chief Economist Perspective- August 2015 – YouTube

    Some good stats to know and understand in this video:

    A local housing market reflects an interplay of demand and supply forces over time. And while it may be difficult to directly measure those forces, we do observe the end results: the number of home sales and the transaction prices. Looking forward to the next 12 months, CoreLogic expects additional supply from new construction and higher prices for existing homes to lead to an increase in the for-sale inventory.

    Add your comment.


  19.    NASA | Preparing for GOES-R at NOAA's Hazardous Weather Testbed – YouTube

    The future brings the unknown, and weather forecasts are all about seeing the future. NOAA's Hazardous Weather Testbed brings top weather forecasters and research scientists together to learn about the latest tools and techniques. In this video, we meet some of the participants in this year's campaign, and look ahead to a major advance in weather forecasting, the GOES-R weather satellite.

    Add your comment.


  20.    Student Housing Today with Axiometrics – YouTube

    Taylor Gunn, Research Analyst with Axiometrics provides an update on the performance of the student housing market. Taylor discusses how student housing differs from traditional multifamily as well as other asset classes. Discussions include growing universities and markets, sector projections and other factors impacting the sector.

    What I'm wondering is what online courses are going to do to the need for student housing.

    Add your comment.


  21.    Senior Housing Market Update from REIS – YouTube

    The discussion on affordability is highly important.

    As the baby boomers reach retirement age, the changing demographics and demand facing the senior housing market changes as well. Ryan Severino, Senior Economist with REIS provides an in depth look at what is going on with the sector. Discussions include performance and projections for the sector, CAP rate trends and investment opportunities.

    Add your comment.


  22.    Difficulty in Finding Skilled Construction Workers Evident in Jobs Report

    …construction wages will continue to expand, which will suppress construction industry profits absent countervailing improvements in productivity. Second, average construction workweeks will lengthen. Third, many workers who have been separated from the energy industry are likely to secure work in construction, but perhaps in a different region of the country. Fourth, construction firms are likely to accelerate spending on technologies to increase productivity."

    Add your comment.


  23.    Employment Situation Summary

    Only slightly better news:

    Total nonfarm payroll employment increased by 215,000 in July, and the unemployment rate was unchanged at 5.3 percent.

    The civilian labor force participation rate was unchanged.

    The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed.

    In July, 1.9 million persons were marginally attached to the labor force, down by 251,000 from a year earlier.

    Among the marginally attached, there were 668,000 discouraged workers in July, little changed from a year earlier.

    The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.6 hours.

    Average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents to $24.99.

    The change in total nonfarm payroll employment for May was revised from +254,000 to +260,000, and the change for June was revised from +223,000 to +231,000.

    Add your comment.


  24.    Oklahoma Officials Working to End Earthquakes Say it Will Take Time

    Secretary of Energy and Environment Michael Teague, who leads the panel, said it could take between six months and a year to determine the effectiveness of new regulations aimed at reducing the earthquakes.

    Add your comment.


  25.    What you need to know about toxic algae blooms

    "There are suggestions that this warmer water is giving us an indication of the scenarios that could happen under climate change," she said. "If this is an indication of things to come, it's not good news."

    Add your comment.


  26.    Massive spider web appears in Texas | National Monitor

    Although they are an unnerving sight to arachnophobes everywhere, they are completely harmless, and therefore it is unnecessary to use insecticides on the trees.

    They don't damage the trees at all?

    I'm sure some people would want to kill the spiders anyway just so they wouldn't have to see the webs on their trees. Let's hope anyone doing that looks into and uses only environmentally safe methods.

    Add your comment.


  27.    Railroad worker rallies 100 volunteers to repaint elderly couple's home

    Good deed:

    Josh Cyagnik, a train inspector in Oregon, waved to 75-year-old Leonard Bullock and his wife, Dorothy, every morning during his workday. But the two never spoke — until Cyagnik heard a few local teenagers make ugly comments about Bullock's home.

    One July day, Cyagnik heard the two kids mocking Bullock's ramshackle house, saying that it should be burned down because it was in such disrepair.

    "I could see the look on Leonard's face," Cyagnik said. "I could tell the comment bothered him."

    Add your comment.


  28.    Co-owner of defunct Long Beach real estate firm sentenced in $169 million Ponzi scheme

    The money from new investors to the Opportunity Fund was supposed to be spent on acquiring apartment buildings, but it instead went to pay off old debts, amounting to a Ponzi scheme, Sagel said.

    You'll notice that counting on appreciation to cover expenses and profit is not a sound real-estate investing plan for the long run. Timing when to get out is also fraught with risks.

    Add your comment.


  29.    The Hole in the Middle of the Jobs Report – The New York Times

    Teresa Tritch:

    Policy makers went all out to rescue the banks and car companies after the 2008 bust, which allowed many workers to avoid job loss. But policy makers have never directly focused their will and resources on creating good jobs at good pay. Instead, they seem intent on acting as if the labor market will heal completely on its own. It hasn't and it won't.

    Exactly!

    Add your comment.


  30.    SocketSite™ | San Francisco Rents Rise At Slower Rate, East Bay Rents Accelerate

    The average asking rent in San Francisco has increased 58 percent since 2009. And with the development pipeline flowing and rental rate growth having exceeded income growth for over five years, DTZ maintains "a slowdown is inevitable" but still can't decide if rents will simply flatten or go down.

    Add your comment.


  31.    Lessons From Chicago's South Side: Know Your Neighborhoods

    "Why am I buying in bad neighborhoods? Is risking my life worth it to make a little bit of money?"

    Try getting those properties insured at a low enough premium if you can get them insured at all.

    Add your comment.


  32.    Fed's job forecasts defy historical trend – StarTribune.com

    Most Federal Reserve policymakers expect the U.S. jobless rate will stop plunging and stabilize right around its long-term normal level, a risky forecast given that this apparently hasn't happened in at least a half century.

    Fed policymakers are betting history will unfold differently this time. If they get their call wrong and unemployment keeps falling sharply in coming months, they could face pressure to hike interest rates more aggressively than they would like, delivering a potential shock to the economy and financial markets.

    They should stop focusing on trying to be out front of inflation and simply wait until it actually happens. So what if they have to raise the Fed rate in a large bite on the first hike? It would be better to get unemployment down as low as possible. People need high-paying jobs and enough hours per week.

    Frankly, if it weren't for the deficit hawks, we could have had full employment back in 2010 with the right fiscal policy.

    If it weren't for people hiding the fact that we could have a debt-free currency, we could have spent our way out of the Great Recession ages ago and without hiking taxes or creating runaway inflation. Much of our deteriorating infrastructure could have been rebuilt by now in what would have been a boom without a bust to follow!

    Where's the vision?

    Add your comment.


  33.    Growth Diagnostics: A Crash Course | Economics and Development

    Anton Tarasenko:

    To be sure, governmental decisions are always accompanied by some sort of research. This research, however, often suffers from biases and politics. An economist needs a framework that keeps him disciplined. Hausmann-Rodrik growth diagnostics is such a framework.

    Add your comment.


  34.    Tech lift to productivity overlooked? The Fed doesn't think so

    Two Goldman Sachs economists recently … concluded that inflation as measured by the Fed's favorite gauge may actually be well below the current 1.25 percent estimate.

    Fed policymakers and their staff, for the most part, are having none of it.

    Add your comment.


  35.    Buying Rental Properties: Cash vs. Mortgage | Club Thrifty

    …what's the best way to invest in a rental property? In truth, the answer is different for each individual investor.

    Leverage is good in investing, but having the proper cushion is critical. The cushion is for the down times from whatever cause or causes and lasting until the market returns, which, as we've recently seen, can take years and years in some cases.

    Add your comment.


  36.    Corbyn and the Peoples' Bank of England — Medium

    I disagree that "the market" is better than more-direct democracy, but I really like Jo Michell's article because he does a very nice job of illuminating the blurring of the monetary and fiscal and because he gives credit where credit is due: Jeremy Corbyn.

    Jo Michell:

    Why has Corbyn?—?supposedly a throwback to the 1980s?—?proposed this new-fangled monetary mechanism? Rather than some sort of populist gesture, I suspect this reflects a status quo which has elevated the status of monetary policy while downgrading fiscal policy. This, in turn, reflects the belief that the government can't be trusted to make decisions about the direction of the economy; only the private sector has the correct incentive structures in place to guide us to an optimal equilibrium. Monetary policy is the macroeconomic tool of choice because it respects the primacy of the market.

    Given that the boundary between fiscal and monetary policy has broken down at least semi-permanently, that status quo no longer holds. It is now time for a serious discussion about the correct approach to macroeconomic stabilisation, the state's role in directing and financing investment and the distributional implications of monetary policy. It is to Corbyn's credit that these issues are at last being debated.

    My consistent readers will remember that I was out there before Martin Wolf and Adair Turner. Just to clarify about something Michell didn't make clear enough in my view, Wolf and Turner and I are advocating debt-free currency issuance (no bonds, no government borrowing, no government taxing to pay interest to bondholders…).

    In my post of last week (http://propertypak.com/2015/08/05/news- real-estate-risk-economics-aug-5-2015/#0 8051551), I wrote, "Of course, Mr. Corbyn is equally ignorant when he says that the state should run a deficit: borrow ." Jo now has me wondering where Corbyn stands on "sovereign money," as Positive Money likes to call it. Simon Wren-Lewis calls it "money-financed spending." The Modern Money Theorists think all money is debt (an IOU), so they don't like the term "debt-free money," whereas, I do.

    Add your comment.


  37.    What Really Explains the Irish Economic Recovery? – Dublin European Institute

    This is a great follow-up to the link directly above concerning "the market" versus governmental policies.

    Aidan Regan:

    Dr. Aidan Regan argues that the Irish recovery has nothing to do with the Troika-led adjustment of austerity and everything to do with the path dependent effect of a state-led developmental strategy.

    …expansion in ICT services has generally compensated for the decline in ICT manufacturing. Many economists and policy commentators argue that the expansion of these ICT services is a total illusion and that there is no recovery at all. Those critical of the austerity agenda argue that the supposed growth in exports reflects an accounting entry by US multinationals rather than real economic activity. It is a tax evasion strategy that facilitates a current account surplus, which makes Ireland's adjustment look like a success story, whereas in actual fact the adjustment has decimated local Irish producers, who predominantly trade with the UK. There is an element of truth in this, much like there is an element of truth in the macroeconomic stability and cost competitiveness structural reform narrative.

    Add your comment.


  38.    Repositioning Dos & Don'ts – Trouble gaining momentum during a renovation :: Apartment Ideas

    Jasmine Kraus:

    After almost two decades of property management, I have found myself on a renovation property for the first time. In fact, this property has dealt me quite a lot of firsts: private investment owner, "D" class, troubled residents, you name it. Regardless, the challenge is keeping me going but I'm finding that what might have once worked in my other life is not as effective at this community at this time.

    Add your comment.


  39.    Multifamily Myths: Why Investors Think It's is Easy to Value

    There are good reminders in here from Brian Burke.

    Add your comment.


  40.    $15 minimum wage a surprising success for Seattle restaurant | KOMO News

    This issue is going to be very interesting to watch. It will take about 5 years to really get a good picture.

    "What we expect to observe is this is not going to be a policy that's universally good for everybody or bad for everybody," said Jacob Vigdor, a University of Washington professor who is leading a study of Seattle's minimum wage law. The study includes recurring surveys of 700 Seattle businesses and ongoing interviews with about 50 low-wage workers and their families.

    Downtown Emergency Services Center, which relies heavily on government contracts to provide housing and other services for chronically homeless residents, might need to cut those services unless the city boosts its funding.

    "The economic justice that would be happening for our employees would be borne by our clients, who are extremely vulnerable people," executive director Daniel Malone said.

    In the restaurant industry, where many low-wage workers are employed, adapting could mean pooling tips among all workers, cutting shifts or relying on technology – such as cellphone applications that let customers pay electronically, rather than having someone dedicated to running the cash register.

    "This last jump wasn't that far out of market, so it didn't require a lot of reworking of the financials," says Anthony Anton, president of the Washington Restaurant Association. "Those second and third jumps will be much bigger jumps. Everyone is talking about what to do."

    The first wave of scare stories issued by anti-minimum-wage forces didn't pan out.

    Look, more of the profits can go to the top or be shared across the whole organization It's that simple. I like the latter method.

    Add your comment.


  41.    It's time to regulate rents in Seattle | The Seattle Times

    Seattle is often on the cutting edge. Here's an issue where it may join the small group of cities utilizing more progressive affordable-housing programs.

    OPPONENTS of rent control have made three broad statements:

    • It won't create additional affordable housing.

    • It would lead to fewer housing units being built.

    • It has led to disastrous results where it's been used.

    Let's look at each:

    What it can do is help to keep lower-paid people from having to commute in order to get to jobs in costly cities. That helps keep costs down across-the-board for everyone.

    Affordable-housing policies must be thought out carefully. They can be.

    Add your comment.


  42.    How olive oil explains Greece's problems – The Washington Post

    Good regulations are just that. The same holds for bad regulations.

    Greece needs to revisit everything.

    Ana Swanson:

    The hills of Kalamata, on the southern coast of Greece's Peloponnese peninsula, produce some of the best olives in the world. When pressed, they produce an oil that is almost fluorescent green and sometimes described as "liquid gold."

    But after much of that oil is pressed in Greek processing facilities, tanker trucks come to take it straight to the sea. In 2012, 60 percent of Greece's olive oil output was shipped to Italy. There, it is packaged in Italian bottles with Italian labels, and then sent around the world. And most of the profits go back to Italy — according to consultancy McKinsey, Italy captures an extra 50 percent premium on the price of Greek oil.

    Why does this happen? A segment by NPR's Planet Money described some of the issues that two Greek entrepreneurs faced when they tried to export their country's oil.

    First, they couldn't find anyone in Greece to make a bottle — they had to have the bottle made in Italy. They had difficulty getting loans to pay for the bottles, and then they were hit with the taxes. Due to Greece's economic issues, the government asked businesses to estimate and pay the taxes they would owe in 2016 ahead of time — in 2015.

    Add your comment.


  43.    Chinese Brokerages Want to Bundle Margin Debt into Bonds – Bloomberg Business

    Strange:

    China's first asset-backed security tied to stock margin loans is raising concern that authorities are fueling new risks as they attempt to reverse an equities slump.

    "So far we don't know how the brokerages are going to use the proceeds," said Gao Qunshan, an analyst at Tianfeng Securities Co. "It can be positive if they are using the funds to develop new businesses but negative for China's financial market if they keep lending out for margin financing."

    I wouldn't touch it, not with the lack of transparency in China especially.

    Add your comment.


  44.    The great productivity slowdown | Michael Roberts Blog

    Don't let the "Marxism" put you off reading this. It's quite good, and that's coming from a non-Marxist.

    Michael Roberts:

    …productivity growth still depends on capital investment being large enough.

    That's it in a nutshell, and the only place we'll get the size of investing we need is the public sector via debt-free currency issuance directly spent on highly productive projects.

    We won't have to target creating more jobs if we will invest enough publicly and spread the wealth/income across the whole citizenry.

    The number of people needed to do the work to back the productivity gains from technology, etc., will simply happen. They'll get their reward over and above the minimum guaranteed income the otherwise unemployed will get. The incentive will be there.

    Opportunities will increase too because there won't be people worrying about simply getting enough to eat or having a decent roof over their heads. They'll be able to focus on education and creativity that will simply increase productivity.

    What's standing in the way? Answer: The current banking system.

    Add your comment.


  45.    Apartment Demand Stays Hot, but Lending Tightens – CoStar Group

    It's no time to let down on building affordable apartments in areas with demand.

    Mark Heschmeyer:

    …banks are tightening their loan standards for multifamily construction and development activity.

    Otherwise, NMHC's survey provides solid evidence that, despite the strong pickup in new apartment construction this year, demand for rental housing is even stronger, Obrinsky said.

    "The many barriers to new construction of this type of housing-higher construction costs, labor issues and rising land prices-are likely to remain stubbornly in place, especially in the larger primary metropolitan areas," Betancourt said. "Exacerbating this trend is that on a national basis approximately 100,000 multifamily rental units are removed from service each year due to obsolescence, and many of these tend to be older and usually more affordable units, which are likely not being replaced with similar units."

    Add your comment.


  46.    Should You Use a Property Management Company for Your Rental Property? – YouTube

    Any responsible landlord knows a lot of work goes into managing a rental property. So is it smart to outsource some of that work to a property management company?

    Add your comment.


  47.    Drought Worsens: Seattle Area Asked To Cut Water Use | KUOW News and Information

    The easiest change to make is to stop watering your lawn, according to Kelly O'Rourke, conservation planner for Seattle Public Utilities.

    "If they haven't already let their lawn go dormant, doing that will get them 10 percent easily. If they are watering (plants) more than twice a week, reducing that will easily get them a 10 percent reduction," she said.

    The trees that depend solely on natural precipitation rather than also being watered by humans have the fewest leaves I've seen since I've been up here. It's quite noticeable.

    Let's hope El Nino kicks in the right amount. Too much, and there will be many landslides.

    Add your comment.


  48.    China Slashes U.S. Debt Stake by $180 Billion, Bonds Shrug – Bloomberg Business

    Unlike "China's central bank, global investors want to buy," said Toshifumi Sugimoto, the Tokyo-based chief investment officer at Capital Asset Management Co., which has $300 million in assets. "Investors like pension funds or life insurance companies or institutional investors, they want a higher yield with a high rating. U.S. Treasuries are very attractive now."

    That depth of demand may stand the market in good stead as the Fed moves closer to raising interest rates.

    It's too bad that the Fed is probably counting on it. They will cause a slowdown when we're still way too slow.

    Add your comment.


  49.    China's Hard Landing Suddenly Gets a Lot Rougher | Wolf Street

    No surprise:

    This has become a sign of the times: Foxconn, with 1.3 million employees the world's largest contract electronics manufacturer, making gadgets for Apple and many others, and with mega-production facilities in China, inked a memorandum of understanding on Saturday under which it would invest $5 billion over the next five years in India!

    Add your comment.


  50.    Helicopters and slippery slopes | longandvariable

    …we have calls for the authorities to solve our problems by harvesting magic money trees.

    It often seems like there are a great many who don't share the same basic understanding of the mechanics and benefits of monetary policy as the economics profession [who knows they may yet be proven right].

    In other words, there may be "magic money trees."

    Well, putting the condescension aside, I hope Tony knows 1) that government does not have to borrow money or obtain it via taxes before spending money directly into the economy to stimulate it and 2) that if the government only funds productivity that will fully utilize the new money (equalizing supply and demand), there won't be any inflation, even while the economy grows. That's not magic. That's fundamental economics.

    Add your comment.


  51.    China devalues yuan after weak trade data

    This appears to be a knee-jerk reaction to domestic unrest over factory slowdowns and closings, back wages going unpaid, and jobs being shipped to India where labor is cheaper.

    The race to the bottom will continue until all the cheap labor on the planet has been fully exploited or governments come to their senses.

    Add your comment.


  52.    A $30 Dongle Can Unlock Your Car And Garage Remotely | TechCrunch

    Are you an early or even first adopter of technology?

    …don't expect your old garage door opener to support a software upgrade. In other words, you'd better lock up your bike and snowblower.

    Add your comment.


  53.    Attorney: Hail Claims 'Cottage Industry' Bad News for Texas

    A cottage industry designed to bilk insurance companies, which will drive up costs for everyone playing by the rules? Steve Badger thinks so:

    Insurers are reacting with "increased deductibles, limitations on coverage, and, in some cases, outright exclusions of hail coverage. In the end, the effect here is not just on the insurance industry, but on the Texas building owner, who is ultimately going to suffer," Badger says.

    Powered by InsuranceJournal.tv

    Add your comment.


  54.    Former Las Vegas real estate agent gets probation in home rental scheme | Las Vegas Review-Journal

    I'll not comment because I think the article completely speaks for itself.

    A former real estate agent accused of breaking into Las Vegas valley homes he didn't own and renting the properties to unsuspecting tenants was given probation this week on seven felony charges.

    Eric Alpert staked claim to what he believed to be abandoned houses and defended his actions under what's known as adverse possession, a centuries-old method of obtaining title to property.

    Add your comment.


  55.    The Government's a Drag on Employment – Bloomberg View

    The fiscal policy choices made during the current recovery have been unique in modern American experience. There were reasons for these choices — the worst recession in 75 years left governments at all levels dealing with huge budget shortfalls. But they've definitely been a drag on overall employment growth.

    In other words, we should have had vastly more stimulus rather than the tiny bit we had!

    Add your comment.


  56.    Federal Reserve Bank San Francisco | Is China's Growth Miracle Over?

    Optimism:

    China's growth miracle since the early 1980s has significantly raised the standards of living in China. It has also made China an increasingly important contributor to world economic growth and a large and growing market for U.S. exports. The rapid growth was driven primarily by productivity gains and capital investment. The recent growth slowdown has raised the concern that China's growth miracle could be ending.

    However, if the structural reform plans from China's Third Plenum can be successfully implemented, then the recent slowdown could be a smooth transition rather than a hard landing. This gives a reason for optimism that China will avoid the middle-income trap and follow the paths of Japan and South Korea to achieve high-income status.

    Zheng Liu is a senior research advisor in the Economic Research Department of the Federal Reserve Bank of San Francisco.

    Did Japan or South Korea pollute themselves as much as China has polluted China? Did they waste as much on building empty buildings? Are they wedded to one-party dictatorship?

    We will have to wait to see what the Chinese leadership is capable of handling. So far, it hasn't looked good. They've looked willy-nilly and working at cross-purposes.

    Add your comment.


  57.    The job market is improving, but low labor force participation is still holding us back | Jared Bernstein | On the Economy

    If the job market heats up and more sideliners find work, the LFPR would improve, as would the chances for faster wage growth. But as Yellen herself said last month, "The lower level of the unemployment rate today probably does not fully capture the extent of slack remaining in the labor market—in other words, how far away we are from a full-employment economy."

    That sort of thinking, along with being correct, suggests that if the Fed must raise interest rates, they should do so slowly and carefully, with a close eye on those who still don't have much to show from the current recovery.

    "…if the Fed must raise interest rates…." They don't have to. Right now, it would be a bad move.

    I think they want to not so much for the traditional reasons but because they want to start using their "new tools."

    Add your comment.


  58.    Why Did China Devalue Its Currency? Two Big Reasons – The New York Times

    …as China liberalizes its currency, it gives up a crucial tool that the government has used for years to manage the economy and protect itself from being buffeted by global economic forces. China's leadership has been reluctant to give up that power, and that's why Tuesday's announcement came as such a shock to global markets.

    But it isn't often that a policy choice helps achieve two big national goals at once. And when faced with such a choice, it appears China's leaders were willing to give up a little bit of power for, they hope, better economic results at home and a bigger role in the global financial system.

    However, many people in China are still very poor. Their purchasing power just went down. Inflation went up. Will they be able to understand what's happening? Will they lose faith in the Communist Party's dictatorship and start demanding more say by the common people via popular democracy? Can the CCP have its cake and eat it too? I don't think so.

    Add your comment.


  59.    Macro and Other Market Musings: China's Devaluation: Impossible Trinity, Deflationary Shocks, and Optimal Currency Blocks

    Excellent article by David Beckworth:

    … a country can only do on a sustained basis two of three potentially desired objectives: maintain a fixed exchange rate, exercise discretionary monetary policy, and allow free capital flows. If a country tries all three objectives then economic imbalances will build and eventually give way to some kind of painful adjustment. China was attempting all three objectives to varying degrees. It quasi-pegged its currency to the dollar, it manipulated domestic monetary conditions through adjustment of interest rates and banks' require reserve ratio, and it allowed some capital flows. This arrangement could not last forever, especially given the Federal Reserve's passive tightening of monetary policy.

    Add your comment.


  60.    A quick look at possible implications of China's record weakening of the renminbi – Bond Vigilantes

    … any move to weaken the yuan against the USD is likely to be bullish for US treasuries at the margin, resulting in lower yields. If the yuan depreciates in value, then China will have more USD to invest in US treasuries through foreign reserve accumulation, suggesting a strengthening in demand. However, unless we see a sustained weakening in the yuan in the weeks ahead then this move is unlikely to have a large impact in the demand for US treasuries in the short-term.

    Add your comment.


  61.    Beware of American econ professors! — POLITICO

    This article attacks Krugman, Sachs, Stiglitz, Galbraith, and Varoufakis without a shred of evidence (data) to support the claims that these men are wrong about Greece's insolvency and the needless pain and suffering being inflicted on the Greeks.

    Yanis Varoufakis can defend himself from allegations that he was pushing for exit (is that what Palaiologos is suggesting Yanis was up to?). I will say that Yanis made clear that he was not, quite the contrary (unfortunately).

    Anyway, time will tell who was right.

    'Reckless gamble'

    None of this appears to have given pause to Greece's (and in particular Varoufakis's) international cheerleaders. I am referring in particular here to high profile U.S. economists, like Paul Krugman, Joseph Stiglitz and Jeffrey Sachs, who have led the global anti-austerity campaign and have made my country a cause célèbre in that struggle. They have been right to argue that too much austerity has been imposed on Greece, and that further debt relief is required. But in recent months, as relations between Athens and its creditors have deteriorated, they have served Greece's cause very poorly indeed.

    World-famous economists — men of Nobel prizes and stellar academic accomplishment — have provided intellectual cover to radicals who appeared at best to be willing to take a stupendously reckless gamble with Greece's financial, political and geopolitical future, and at worst to be planning the realization of their lifelong dream of a socialist takeover of power.

    "…further debt relief is required…"? Does he mean principal reductions? It doesn't sound like it.

    All the economists mentioned have been operating with a mixed economy in mind. Just because some people in Greece want a dictatorship of the proletariat doesn't mean the economists mentioned should stand with austerity.

    They have a perfect right to stand where they do: typically at something close to social democracy (hardly Bolshevism under Stalin).

    Add your comment.


  62.    Del. Law Aims to Improve Fire Safety, Encourage Home Sprinkler Systems

    Good idea:

    The bill, signed on Aug. 6, requires builders of new single-family and two-family homes to provide buyers a cost estimate for installing an automatic sprinkler system.

    Add your comment.


  63.    China's devaluation – hard landing or crash? | Authers' Note – YouTube

    At least one member of the mainstream realizes China is experiencing a hard landing or worse. I suspect more members will join if they haven't already.

    John Authers reports from New York on a relatively muted, but negative, reaction to China's devaluation. The critical questions: will any subsequent decline be orderly, and is China's economy facing a hard landing – or a crash?

    Add your comment.


  64.    Home Prices Increase in 93% of U.S. Metropolitan Areas – Bloomberg Business

    Home prices climbed in 93 percent of U.S. metropolitan areas in the second quarter, the broadest gain in a decade, led by Palm Bay and Port St. Lucie, Florida.

    Thirteen areas posted declines, led by Cumberland, Maryland, where the median price fell 17 percent. Bridgeport, Connecticut, had a 5.6 percent drop and Kingston, New York, was down 5.3 percent. New Haven, Connecticut, was No. 4, with a loss of 5 percent.

    Add your comment.


  65.    HAR: Houston's housing market breaks single-family home sales record, prices up – Houston Business Journal

    Houston's housing market appears to be weathering the oil slump.

    "Despite lingering concerns about falling oil prices and layoffs within the energy industry, I believe the strength of Houston's housing market continues to be buoyed by our tremendously diverse local economy," HAR Chair Nancy Furst with Berkshire Hathaway HomeServices Anderson Properties said in a statement.

    Add your comment.


  66.    How to make money in real estate

    Romana King:

    They rarely offer any real information about how to make money in real estate investing. There are no lawyers explaining the difference between commercial and residential units; there are no mortgage brokers on hand to teach attendees about the rules and regulations about investment property financing; there's not even a real estate agent to discuss the intricacies of the local market, never mind details about specific types of housing or ideal neighbourhoods. (Find a seminar or group that offers this type of information, and you may actually learn how to make money in real estate.)

    Add your comment.


  67.    Greece's third bailout at a glance: five things you need to know | News | ekathimerini.com

    The Greek recession, continued budget tightening, the debt load, a financing gap in the new rescue and a "complete lack of ownership of the measures" threaten to revive risks of Greece's exit from the euro, according to Nick Kounis, an economist at ABN Amro Bank NV in Amsterdam.

    Add your comment.


  68.    Utah City's Basements Flood After Large Reservoir Leak

    Residents of Ogden, Utah have been facing flooded basements since June, but the area-irrigation water supplier may have found the problem: a leak in a nearby reservoir.

    Add your comment.


  69.    China cannot risk the global chaos of currency devaluation – Telegraph

    Ambrose Evans-Pritchard has changed his tune from last week because he now sees in the Chinese leadership less longterm savviness.

    It is in any case wrestling with an impossible contradiction: aspiring to hi-tech growth on the economic cutting edge, yet under top-down Communist party control and spreading repression. That way lies the middle income trap, the curse of all authoritarian regimes that fail to reform in time.

    Yet this is a story for the next fifteen years. The Communist Party has not yet run out of stimulus and is clearly deploying the state banking system to engineer yet another mini-cycle right now. One day China will pull the lever and nothing will happen.

    Add your comment.


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