Linking ≠ endorsement.
⇧ Schäuble's Gathering Storm by Yanis Varoufakis – Project Syndicate
It's building and building and building.
Nothing short of macroeconomically significant institutional reforms will stabilize Europe. And only a pan-European democratic alliance of citizens can generate the groundswell needed to overcome German resistance and ensure that such reforms take root.
⇧ Monti: Ignoring the Greek referendum was a violation of democracy | EurActiv
"Many of us praised Alexis Tsipras for going directly to the public with a referendum. He had a huge majority for the no, and then he decided, I believe very wisely for the interest of the Greek people, but very undemocratically, to throw away the result of the referendum and to accept for Greeks heavier conditions."
Monti also said that the Greek public opinion is incredibly mature compared to other nations like Italy or France.
"They want Greece to stay in the euro and all the governments know that they will lose if they try to get Greece out of the euro," he said.
To me, that line of reasoning is inherently contradictory.
⇧ TTIP: EU negotiators appear to break environmental pledge in leaked draft | Business | The Guardian
… the bloc promised to safeguard green laws, defend international standards and protect the EU's right to set high levels of environmental protection, in a haggle with the US over terms for a free trade deal.
But a confidential text seen by the Guardian and filed in the sustainable development chapter of negotiations earlier this week contains only vaguely phrased and non-binding commitments to environmental safeguards.
An EU promise that TTIP would "support our climate targets, for example by promoting trade and investment in green goods and services" has already been thrown into doubt by the leak of a draft energy chapter last May. In it, Europe's negotiators pushed for "a legally binding commitment in the TTIP guaranteeing the free export of crude oil and gas resources".
By comparison, "sustainable development is being treated like an appendage or unwanted stepchild," Grabiel said. "The unequal treatment of sustainable development cannot be reconciled with the EU policy objectives in this area."
⇧ Uniting Behind the Divisive 'Cadillac' Tax on Health Plans – The New York Times
N. Gregory Mankiw and Lawrence H. Summers:
Compensation in the form of wages and salaries is subject to the income tax and the payroll tax. But compensation in the form of employer-provided health insurance is not subject to either. If a firm gives a dollar in wages to a typical worker, the worker keeps only about 65 cents; if the firm gives a dollar in health coverage to the same worker, the worker keeps the full dollar.
This asymmetry tilts the playing field in favor of paying workers in insurance rather than in cash. As a result, people end up with insurance that is excessive and wages that are too low. The nation ends up spending too much on health care.
The Cadillac tax helps level the playing field by curbing this subsidy for the most generous insurance plans, which do the most to drive up health costs.
⇧ Are Canadian progressives showing Americans the way? | Economics for public policy
The final dimension is one of personality, and the new leadership style that Mr. Trudeau seems to sincerely espouse. I served as a member of his council of economic advisors, and he made clear to the committee members that he was not interested in their opinions about what was politically feasible, clearly stating he wanted to have discussions that informed economically sound policies. In other words, there was a clear channel and openness to hear a message about good ideas.
The Harper years were characterized by a decade of denigrating experts, reducing analysis from a professional public service to the sidelines, and chipping away at the evidence base for policy. This in itself became a political issue, with scientists and the most educated members of the public clearly falling in line behind Mr. Trudeau.
If Trudeau intends to hear the best solutions good for the general population rather than the plutocrats and then sell those solutions to that general public (to convince them via education), then I'm all for it! It's what I've been advocating for years.
⇧ Draghi the Fiscal Hawk | Sparse Thoughts of a Gloomy European Economist
Carefully avoiding to mention fiscal policy, when answering a question on fiscal policy, speaks for itself. In fact, saying that "Fiscal policies should support the economic recovery, while remaining in compliance with the EU's fiscal rules" and putting forward for the n-th time the confidence fairy, amounts to a substantial approval of the policies followed by EMU countries so far. We should stop fooling ourselves: Within the existing rules there is no margin for a meaningful fiscal expansion …
⇧ McKinley CEO makes case for more affordable workforce housing in Ann Arbor | MLive.com
Someone has to do it.
McKinley has a $4.6 billion portfolio consisting of more than 35,000 apartments and more than 21 million square feet of shopping centers and office buildings in 27 states across the nation. …
Berriz said the reason he's able to build workforce housing for those in the middle and still make a profit is because he's not building fancy clubhouses and extra amenities. He said he's still providing a great product in a great location, but at lower costs.
⇧ The 57-Year-Old Chart That Is Dividing the Fed – The New York Times
If you simply look at the unemployment rate in the United States versus the Consumer Price Index, excluding volatile food and energy prices for every year since 1958, there is nearly no statistical relationship at all, just a jumble of dots. (A best-fit line actually points the wrong direction, correlating higher unemployment with higher inflation, albeit very weakly.)
If you take only subsets of that period, the relationship looks stronger. For example, research from the Federal Reserve Bank of Minneapolis shows a fairly clear (negative) correlation between unemployment and inflation from 1977 to 1990, but suggests that relationship basically disappeared in the 1990s and was barely evident in the first decade of the 2000s.
⇧ Sober Look: The possibility of a 2015 rate hike in the US should not be ignored
Many argue that the US economy can withstand a rate hike at this point. Indeed it can. However, given that much of the world is currently in a monetary easing mode, such a move by the Fed would result in a further rally in the US dollar. We saw the Bank of Canada strike a dovish tone recently, the PBoC is in the middle of a major easing cycle, the BoJ is in a perpetual QE, and the ECB is fully expected to expand its stimulus.
A further dollar rally would exacerbate the rout in emerging markets, potentially forcing China to resume the RMB devaluation. Disinflationary pressures in the US could worsen and the manufacturing sector would take another hit. Nevertheless, it seems that many at the Fed are willing to overlook such an outcome and begin the first rate hike cycle in nearly a decade.
⇧ Listen – is that the sound of a bubble bursting Down Under? – Independent.ie
… Australians are relying on their other secret weapon: luck. Chinese buying of Australian real estate-partly as insurance against things going bad in China, partly to buy blue skies, which can't be bought in China for love nor money – has given Australia's debt-booze-addled gamblers a possible way to walk away from it all and appear sober rather than sozzled.
However, China itself is going through its own property market crash, and there's no external force that will rescue its speculators from that fate. So Australians are now gambling on whether the fallout from China's crash will prick their own bubble, or inflate it once more.
As fans of rugby will appreciate, Australians can win on luck as well as talent. But it's only luck now that is keeping Australia from tasting the bitter brew that Ireland was forced to sip when the myth of the Celtic Tiger was exposed as a debt-drunkard's delusion.
⇧ China communist party paper says country should join U.S.-led trade pact | Reuters
China should join at an appropriate time the U.S.-backed regional trade accord the Trans-Pacific Partnership (TPP) as its broad aims are in line with China's own economic reform agenda, an influential Communist Party newspaper said on Sunday.
One question: Have they read it? How could thay have when they aren't involved in the negotiations and its secret? Okay, they've obtained it regardless?
What I've read about it that's leaked, it's a terrible plan and definitely not in line with China's stated goals. So, what are they thinking?
⇧ The Investor's Guide to Vetting a Rental: The House Exterior
For October 24th, 2015, I linked to, and discussed briefly, "Landscaping and Your Property Appraisal – YouTube" (http://propertypak.com/2015/10/23/news- real-estate-risk-economics-oct-24-2015/# 10231529).
Well, this linked post discusses the exterior from a pretty much non-landscaping perspective.
Personally, I know it all matters. Of course, you can blow money on things that won't return a profit. Be careful. Research first.
⇧ Barcelona Threatens to Print Parallel Currency, Madrid Seethes | Wolf Street
… likely that Colau's primary motive in launching a community currency on this scale is somewhat more mundane: i.e. increase local government spending. It's what she pledged to do before the municipal elections. And there's no easier way of increasing government spending than printing your own money and then using it to pay salaries, benefits and public services!
That is the motivation. Of course, it's better to have a national currency that is bond-free, but the bankers work overtime to block that from happening. They don't get a cut from it; and more importantly, their system doesn't control it. Under proper circumstances, the people do, democratically.
⇧ Exxon's Own Research Confirmed Fossil Fuels' Role in Global Warming Decades Ago | InsideClimate News
What a shame!
Exxon's about-face on climate change earned the scorn of the scientific establishment it had once courted.
⇧ EP and Commission in a Row over the Future of the Euro Area, Council Is Indifferent
According to one of the co-authors of the current economic governance of the EU and Rapporteur on some of the most important dossiers in the European Parliament Elisa Ferreira (Socialists and Democrats, Portugal), "It is appalling that the Commission has been completely unable to draw the lessons from the way the crisis was managed, particularly inside the Eurozone. There is no critical evaluation neither of the legal instruments created for the economic governance – 6 pack, 2 pack and fiscal compact – nor of the huge problem that was created by the handling of the crisis from the Community method approach to an intergovernmental setting based on the Eurogroup".
She is also outraged by the fact that the Commission is planning on changing the interpretation and the content of these instruments with no prior evaluation of what went wrong. Another member of the most powerful parliamentary committee, also a socialist, Pervenche Berès (France), thinks it is unacceptable that the EC with its new proposals is going to make it more difficult for the EP to influence the process of adopting recommendations for the euro area, since the timeframe is much shortened. "This cannot become a simple deal between Commission and Council!", she said. The boss of the economic committee Roberto Gualtieri (Italy) protested the lack of ambition in the EC's proposals, having in mind the challenges that the euro area is facing. He also sees a circumvention of the European Parliament and a desire for an arrangement between Berlaymont and the Consilium.
⇧ More Retail Developers Adding 'Live/Work' Elements to Lifestyle Center Plans – CoStar Group
"The data shows that the millennials in particular are very social — they want to get together with friends to do several things at once, like exercise at a spin studio, get a bite to eat and then go grocery shopping — and they want to do it at one multipurpose lifestyle center area," McAvey said.
The oldest and most influencial segment of millennials are now in their mid to late 30s and starting to have children and form households. About 35% of millennials now own their own homes, lured by more affordable housing in transit-oriented outer-ring suburbs, McAvey said.
The demographic changes are creating some interesting hybrids, such as suburban office landlords who are joining the mixed-use trend by adding apartments and condos in response to their tenants who hope to recruit 20- and 30-somethings in the increasingly competitive job market.
⇧ No One Hurt In Taunton House Explosion – CBS Boston
It was an inferno in Taunton, as a house was destroyed and totally engulfed in flames after a huge explosion Sunday afternoon.
⇧ mainly macro: Keynes never left Canada, and intends to stay
… voters do not always suffer from deficit fetishism.
⇧ China Containerized Freight Index Collapses to Worst Level Ever | Wolf Street
By early July, the index dropped below 800 for the first time in its history, which started in 1998 when the index was set at 1,000. It soon recovered to about 850. And just when bouts of hope were rising that the worst was over, it plunged again and hit even lower levels.
The latest weekly reading dropped another 1.7% from the prior week to 752.21, the worst level ever. The CCFI is now 30% below where it had been in February this year and 25% below where it had been 17 years ago at its inception.
But what about the increase in the Chinese-consumer sector? What about services? Keep reading.
⇧ A China twist: why are malls closing if consumption is rising? | Reuters
… rising competition from online shopping and government purchases possibly boosting retail statistics. Add poorly managed properties into the equation and the empty malls aren't much of a surprise.
"If you build it and they're not coming, that's a non-performing loan," said Condon of ING.
"That's the banks' problem."
⇧ Scientists devise new method to solve significant variables conundrum | EurekAlert! Science News
Shaw-Hwa Lo and Tian Zheng of Columbia, Adeline Lo of UCSD and Herman Chernoff of Harvard present findings in a paper to appear in Proceedings of the National Academy of Sciences on Monday, October 26, that demonstrates that statistically significant variables are not necessarily predictive. In addition, very predictive variables do not necessarily have to appear significant and thereby evade a researcher using statistical significance as a criterion to evaluate variables for prediction.
"What we're saying here is that using the previously very well-known methods might not be appropriate when we care about predicting important outcomes," says Professor Lo. "Our alternative approach seems to do very well in prediction, and is relevant for many scientific fields.
Hat tip to Mark Thoma for the link.
⇧ Hurricane Flooding May Cost Texas Billions – Bloomberg Business
Damage from Patricia, the strongest hurricane ever measured in the Western Hemisphere, may cost the U.S. billions from floods, even after the storm spared the largest cities in Mexico.
Flooding in Texas may lead to more than $3 billion in losses, though it's too early to project the extent of damages ….
⇧ NASA Study Says 99% Probability of Los Angeles Quake
There is a 99.9 percent chance of a magnitude-5 or greater earthquake striking within three years in the greater Los Angeles area, where a similar sized temblor caused more the $12 million in damage last year, according to a study by NASA and university researchers.
⇧ FEMA Urges Californians to Buy Flood Insurance Ahead of El Nino
Federal emergency officials are urging Californians to buy flood insurance — even those who don't live near creeks or rivers — as El Nino conditions get underway in the Pacific Ocean, increasing chances for heavy storms this winter.
Understand the following about public flood insurance: "Damage from mudflows is covered by flood insurance; damage from landslides and other earth movements is not." (https://www.floodsmart.gov/floodsmart/p ages/flooding_flood_risks/mud_flows.jsp)
Certain areas of California are mudslide prone, but what the insurance policy considers a mudflow can preclude a mudslide, per se.
You could find yourself in a debate or argument about the percentage of slope from where the mud originated and the "flowing characteristics" of the mud as it approached and covered your property/land.
⇧ Investing Vs. Flipping | Seeking Alpha
How do you know, I asked, that these houses are sensible investments? Houses in Detroit are cheap too, I observed. Unlike Detroit, with an aging and shrinking population, Dave explained, Atlanta is a vibrant growing city. How do you know the price is right? Are you kidding, he asked? I'm buying houses at a small fraction of replacement and renting them at 25% of my cost. I get my money back in rent in four years!
Over the coming days, Donna and I talked about getting into the residential real estate business. Our alternative investment opportunities in the U.S. capital markets at the time, much like today, were 2% bond yields and 2% dividend yields. Investing in houses seemed an attractive alternative. Thus began our business of investing in houses in Atlanta. We are still buying there today.
⇧ The global debt overhang | Bruegel
Dieter Wermuth in der Herdentrieb writes … if deflationary tendencies remain, further steps towards helicopter money might have to be taken, until a general inflation rate of 2% is again considered as normal.
Adair Turner states … major debt write-downs or increased fiscal deficits financed by permanent monetization — will be required to increase global demand, rather than simply shift it around.
⇧ "One very simple, but radical, idea: to democratise Europe." An interview with Yanis Varoufakis | openDemocracy
… I followed my own thinking through to the extent that I can, logically, and reached the conclusion that a pan-European movement is the only solution. It sounds utopian, but this idea cemented in my mind in August when I started travelling across Europe, and realised that there was a great deal of hunger and thirst everywhere I went for such an idea.
People would come to listen to me in their thousands, not because they so much wanted to lend solidarity to Greece, or to me, but just because the experience of this negotiation between Greece and the troika hit a nerve everywhere. And the people who come to listen and to discuss with me and my colleagues are worried about themselves, their own countries, Europe. So I put two and two together and end up with the conclusion, at least for me personally, that the only thing that is worth fighting for is this coalescence at the European level with one very simple, but radical, idea: to democratise Europe.
People might say, "pah, Europe is democratic." No it is not. Not democratic at all. So to democratise it is actually a very radical idea that goes against every fibre in the body and soul of those people in Brussels.
Oh, democratizing Europe is absolutely the best idea by far. Exiting is only the thing that should be done if left with no alternative, if left with starving people and an inability to feed them, to finance the general welfare. Of course, I backed Yanis's "Plan X," though I didn't know he had it completely ready in the wings, though I also could hardly fathom that he wouldn't have such a plan. He met my expectations and then exceeded them. Now he's stepping forward with a solid plan for the whole of Europe.
⇧ 4 Fall Home Maintenance Tips that can Prevent Fires – Zen of Zada
A home fire occurs every 86 seconds in the US and in 2014, there was an increase in home fires resulting in $11.6 billion in property damage. Here are some fall home maintenance tips that can help you prevent any risk of fire in your home and protect your family.
⇧ Starwood Capital To Buy $5.37 Billion Suburban Multifamily Portfolio from Equity Residential – CoStar Group
Starwood Capital Group, a leading global private investment firm, has struck a deal to acquire a portfolio of 23,262 apartment units in 72 communities across the U.S. from Equity Residential.
Following the final closing of the transaction, Starwood Capital Group will control more than 88,000 units, making it one of the largest owners of multifamily housing in the U.S. Including this transaction, Starwood has acquired or is under contract to acquire approximately 67,800 multifamily units over the last 12 months.
⇧ How Obama Could Beat the Debt Ceiling and Go Out a Hero | WEB OF DEBT BLOG
Wow! Ellen really pulled it all together in this one.
In the early days of his presidency, Barack Obama claimed Abraham Lincoln as his role model. One of Lincoln's less well known achievements was to avoid a massive debt to private banks at usurious interest rates by restoring an earlier form of government-issued money, the paper scrip of the American colonists. In the 1860s, these US Notes or Greenbacks constituted 40% of the national currency. Today, 40% of the circulating money supply would be $5 trillion.
This massive money-printing during the Civil War did not lead to hyperinflation. US Notes suffered a drop in value as against gold, but according to Milton Friedman and Anna Schwarz in A Monetary History of the United States, 1867-1960, this was not due to "just printing money" but was caused by trade imbalances with foreign trading partners on the gold standard.
The Greenbacks aided the Union not only in winning the war but in funding a period of unprecedented economic expansion. Lincoln's government created the greatest industrial giant the world had yet seen. The steel industry was launched, a continental railroad system was created, a new era of farm machinery and cheap tools was promoted, free higher education was established, government support was provided to all branches of science, the Bureau of Mines was organized, and labor productivity was increased by 50 to 75 percent.
The article is full of such info. Check it out!
Thank you, Ellen.
Of course, Barack Obama could not pull any of this off completely alone, as others would move to block and reverse him.
⇧ Mish's Global Economic Trend Analysis: Keen vs. Keen: Will the Real Steve Keen Please Stand Up?
Mike "Mish" Shedlock:
One either has faith in free markets, or one doesn't!
If we were to put all our faith in the markets the way Mish is suggesting, where would democracy fit in other than via voting solely via spending dollars?
We'd be doing away with one-person-one-vote entirely and replacing it with ultra-plutocracy ultimately and in short order resulting an absolute monarch again owning everything as the sole sovereign.
Mish's concept is completely self-defeating.
⇧ A Strategy to Ignore Poverty – The New York Times
… what's most worrying about the block grant strategy to address the bane of poverty: It allows the assistance to wither while poverty survives.
⇧ Another Money Is Possible, Part I: Will the ScotPound Succeed As A Parallel Currency? | Occupy.com
The proposal suggests BancaAlba should be not-for-profit, politically impartial, with democratic governance and full transparency.
Running contrary to the mission of central banks like the Bank of England and the U.S. Fed, which delivered immense sums of capital to the very same banks that collapsed the global economy, the ScotPound would enable Scotland to shift away from big finance, abandon austerity policies, and inject money directly into the productive economy.
⇧ Judge Claims Regulators Not Enforcing Duke Coal Ash Clean-Up in North Carolina
North Carolina's environmental watchdog agency has not been trying very hard to force Duke Energy to clean up toxic groundwater pollution near a coal-burning power plant where neighbors can't drink their well water, a federal judge said.
⇧ Why is public banking important for social change? – YouTube
Thomas Marois, Senior Lecturer in Development Studies argues that until people regain control of money and credit, we will not be able to stop economic and ecological crises. Most people don't know that fortunately there is untapped potential in public banks, that make up a quarter of all banks worldwide. Drawing on his research on public banks in Turkey, Costa Rica and elsewhere, Marois points to the potential and problems of public banks and how we might harness them to deliver social and environmental justice.
⇧ Class-B, Suburban Class-A Apartment Properties Gain Momentum
"Class-B has enjoyed the benefit of job growth (demand), without the drag of new supply," says Jay Denton, senior vice president with Axiometrics. "Class-B properties are priced at the midpoint of the market, and more people can afford them."
⇧ 19th-century economic lessons | FT Markets – YouTube
Deflationary tendencies of technology enhancements:
The 19th century changed the economic environment through technological advances and world trade. Jim McCaughan of Principal Global Investors sees echoes of the era, through digitisation. He discusses what investors can learn by taking a long view.
Democratic banking and monetary reforms will also radically change the landscape (if allowed).
⇧ FBI — Georgia Real Estate Investor Admits to Bid Rigging and Mail Fraud Conspiracies at Home Foreclosure Auctions
WASHINGTON—A Georgia real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia.
Trent Gaines admitted that he and others conspired not to bid against one another at public real estate foreclosure auctions from October 2008 to November 2010 in Fulton County, Georgia, and from September 2006 to February 2011 in DeKalb County, Georgia. Gaines also admitted to conspiring with others to use the mail to carry out a scheme to fraudulently acquire title to selected Fulton and DeKalb properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that should have gone to mortgage holders and others. The selected properties were then awarded to the conspirators who submitted the highest bids in private side auctions open only to Gaines and his co-conspirators.
⇧ Owners of 24 properties in New Bedford warned about problems – News – southcoasttoday.com – New Bedford, MA
Owners of 24 properties were notified Monday that they would have been deemed a problem property and assessed police response costs if the new "problem properties ordinance" had gone into effect last year from March 2014 through March 2015.
If you are an investor in 1-4 unit properties in Arizona, California, Nevada, Oregon, Utah, or Washington, please do the financially responsible thing and make sure you have proper Landlord Insurance with PropertyPak™. We love focusing on real estate and the economy in general, but we are also here to serve your insurance needs.
Hill & Usher (PropertyPak™ is a division) has many insurance offerings. See our menu above for more info and links.
Did this post help you? Let us know by leaving your comment below.
Note: This blog does not provide legal, financial, or accounting advice. Seek professional counsel.
Furthermore, we, as insurance producers, are prohibited by law from disparaging the insurance industry, carriers, other producers, etc. With that in mind, we provide links without staking out positions that violate the law. We provide them solely from a public-policy standpoint wherein we encourage our industry to be sure our profits, etc., are fair and balanced.
We do not necessarily fact checked the contents of every linked article or page, etc.
If we were to conclude any part or parts of our industry are in violation of fundamental fairness and the legal standards of a state or states, we'd address the issue through proper, legal channels. We trust you understand.
The laws that tie our tongues, so to speak, are designed to keep the public from losing confidence in the industry and the regulatory system overseeing it. Insurance commissioners around the country work very hard to analyze rates and to not allow the industry to be damaged by bad rate-settings and changes in coverages. The proper way for people in the industry to deal with such matters is by adhering to the laws, rules, and regulations of the applicable states and within industry associations where such matters may be discussed in private without giving the industry unnecessary black eyes. Ethics is very high on the list in the insurance industry, and we don't want to lose the people's trust. That said, the industry is not perfect; but what industry is?
For our part, we believe in strong regulations and strong regulators.
We welcome your comments and ask you to keep in mind that we cannot and will not reply in any way or ways where any insurance commissioner could rightly say we've violated the law of the given state.
We are allowed to share rating-bureau data/reports and industry-consultant opinions but make clear here that those opinions are theirs and do not necessarily reflect our position.