Linking ≠ endorsement.
⇧ China's trade drops well below expectations in October
There's that term again: "hard landing."
While Beijing has already repeatedly cut interest rates and softened the exchange rate to prop up the economy, latest trade numbers suggest that a greater risk of a hard landing remains.
⇧ The Marginal Productivity of Chinese Debt Has Gone From Bad to Much Worse — Not Good for the Rebalancing Case | Gavekal Capital Blog
Again the term: "hard landing":
Basically the amount of growth that each new unit of credit produces is plunging to levels not seen since 2009-2010 when the Chinese unleashed the largest GDP adjusted stimulus program in the world. …
… One of the signs we're looking for to indicate that the transition is taking place is actually a slowing of new loan growth and improvement in the indicator in chart 1. We've got exactly the opposite so far, which is an indication of the Chinese pushing on the debt string even more to fuel growth rather than accepting slower growth still, but a rebalanced economy. This, in a perverse way, probably increases the risk of the dreaded hard landing as the chances of a credit "event" rise even further.
⇧ Jean-Claude Juncker: Is He Just Another Fox Guarding the Chicken Coop? What's the Evidence?
Internal EU Documents: How the Benelux Blocked Anti-Tax Haven Laws
By Markus Becker, Peter Müller and Christoph Pauly
Jean-Claude Juncker has never suffered from a lack of self-confidence. Shortly before the world's 20 largest industrial countries meet for a G-20 summit in Antalya, Turkey, the head of the European Commission was already handing out praise — to himself. The European Union has "shown leadership," Juncker wrote to participants, and now it is up to them to follow Europe's example when it comes to the issue of "harmful tax competition."
This, written by Juncker of all people, the very man who led Luxembourg for years, transforming it into an international tax haven, who is now presenting himself as spearheading the effort to put a stop to the tax tricksters sitting on the executive levels of multinational conglomerates.
⇧ Stumbling and Mumbling: Blairism vs the left
It could be that all the symptoms of a loss of dynamism are in fact the result not of a secular crisis of capitalism but of weak aggregate demand. Such weakness has depressed productivity (via Verdoorn's law), interest rates, employment and capital spending. If we had more expansionary fiscal policy – not just in the UK but around the world – what looks like secular stagnation would disappear.
This, though, leads me to a paradox. If this is the case – and I don't know whether it is or not – then it is Blairites who should be most hostile to austerity. …
… The most obvious possibility lies in a difference of priorities. I want to try to understand the economy whereas Blairism is essentially about trying to win elections ….
"Blairism is essentially about trying to win elections"? No, Blairism is essentially about hiding the true reasons behind itself, which is the co-optation of the left, duping it for the sake of the plutocracy.
The cure: relentlessly educating the masses about this and other facts.
⇧ Eurozone crisis: Looking back to the future | VOX, CEPR's Policy Portal
Graciela Laura Kaminsky:
While a century apart, the systemic crises of the past offer insights on the scope of the current European crisis. Crises in the financial centre have persistent adverse effects in the periphery that are accompanied with multiple and protracted unsuccessful renegotiations of the debt. In the end, a successful restructuring implies substantially larger debt write downs than those following idiosyncratic crises.
However, there are those who will try to milk the crises for as long as possible and, more importantly, use them to cause privatization while pretending that such privatization is the only way forward.
⇧ A Special Moment for Special Drawing Rights by José Antonio Ocampo – Project Syndicate
José Antonio Ocampo:
… the problem inherent in using the US dollar, a national currency, as the global economy's primary international-reserve currency. The Belgian economist Robert Triffin first identified this problem — dubbed the "Triffin dilemma" — in the 1960s, emphasizing the fundamental conflict between national objectives, such as limiting the size of the external deficit, and international imperatives, such as creating enough liquidity to satisfy demand for reserve assets. Moreover, this system subjects the world economy to cycles of confidence in the US dollar, while placing the world economy at the mercy of a national authority — one that often makes decisions with scant regard for their international implications.
Well, a one-world currency is the right direction (not the end), but Special Drawing Rights shouldn't ultimately be it.
⇧ Does your town need small developers? Look in the mirror | Better! Cities & Towns Online
Who is going to build the finer-grained Missing Middle housing, the small workspaces, the two and three story mixed use buildings that municipalities and neighborhoods are looking for? Will it be the large development outfits who see a 10,000 SF single story commercial building or 100 apartment units as a "small deal?" Doubtful. Very doubtful, for the simple reason that large scale developers need large-scale deals to support their operations. They can't execute small deals effectively and they see a lot of opportunity cost in small deals. "Why would I take on a 4-unit project when I can build 40 units or maybe even 400 units with about the same amount of brain damage?" Big outfits are constrained by having to achieve economies of scael to get a decent return on their efforts. Small developers live with the constraint of economy of means. Small deals, small amounts of capital, small crews, services from small architecture and engineering shops, small sites that make a difference in the neighborhood.
⇧ Securitisation and growth: The collateral matters | VOX, CEPR's Policy Portal
Ata Can Bertay, Di Gong, Wolf Wagner:
… securitisation has demonstrated the potential to worsen the efficiency of financial intermediation. The main reason is the presence of informational problems. In particular, the securitising banks become less exposed to borrower risk, which undermines their incentives to screen and monitor. This may result in lower quality lending, and erodes the benefits of intermediation relative to market-financing. High complexity has also been identified as a potential cost to securitisation, as it reduces the ease with which outsiders can evaluate securitisation products, potentially resulting in inefficient investment decisions.
… Our empirical analysis shows that securitisation of loans to households is negatively related to economic activity. Securitisation of business loans, on the other hand, displays a positive association with economic activity, albeit a weak one.
⇧ Pit bull kills 9-year-old girl on Long Island – NY Daily News
Like it or not, this is why we don't do owner-liability coverage concerning this breed of dog. Insurance actuaries know that the attack data shows that certain breeds of dogs are too great a risk to cover regardless of premium amount.
My heart goes out to the little girl's family and to all those who had to witness the attack.
It is not the dog's fault that it was bred to fight and even though well-trained to behave, can suddenly and unexpectedly and without any seeming reason, turn even on its owner and with an intent to kill.
Little children, the old, and other often smaller animals are typically the most at risk; however, as the article states, the dog was going straight for a police officer when it was shot by that officer.
This also somewhat explains why police officers are trained not to take any chances with aggressive dogs.
⇧ Asia dips, dollar at seven-month high as U.S. jobs data bolsters case for December Fed hike | Reuters
Supporting the U.S. currency was higher Treasury yields. U.S. debt yields soared on Friday in the wake of the strong jobs data, with the 2-year yield US2YT=RR reaching a 5-1/2-year high.
What that means is that mortgage rates are going up, which will slow the real-estate sector and construction. If the Fed increases rates on top of that, things will slow that much more and long before we've seen a full recovery.
We've already seen that there's still plenty of labor slack and that wage rates are still quite low. Plus, the vast majority of new hires were people 55 and older.
⇧ 20+ Reasons The Fed Won't Raise Even After The Strong October Jobs Number | Seeking Alpha
I could quibble over some of this; but on balance, I'd say David White has written a very decent, detailed, data-backed argument for not raising the Fed rate.
⇧ DoubleLine's Gundlach says Fed should not raise rates in December – Business Insider
He sees it as I do.
DoubleLine Capital co-founder Jeffrey Gundlach, widely followed for his investment calls, warned on Thursday that the U.S. Federal Reserve should not raise rates in December as economic and financial conditions have become vulnerable.
⇧ Heidi Learner on Twitter: "Labor market slack has dissipated…today's #payroll report gives the Fed an "all clear" to hike in Dec.
Heidi Learner on Twitter: "Labor market slack has dissipated…today's #payroll report gives the Fed an "all clear" to hike in Dec.
Now, we need one more variable: population growth of working-age people.
We could also superimpose lines by age groups too.
⇧ Newsletter: 10 Shocking Realities of the TPP; Join The Revolt | PopularResistance.Org
The reason they didn't continue keeping the text secret squeaked by me even though I try to keep up with the news.
I'm glad they were forced to reveal the full text and that there are those who have read the entire thing and are willing to report on its terribleness in detail.
Disclaimer: I am not opposed to corporations, per se. Many, many corporations would actually be quite hurt were this "deal" to become the law of the land of the USA.
I oppose this deal because it is a very, very bad deal. It is highly undemocratic. It proposes to set up a corporatocracy run by the largest corporations on Earth. It turns over democratic sovereignty to such corporations.
This is a prime example of why we have too much consolidation in too few hands via our representational democracy and need more directness in our democracy, much more. We need vastly more transparency so our citizenry may be fully informed and be able to vote directly on such "deals."
Finally, the text of the TPP has been released. It is not as bad as we expected — it is worse.
Now we see why the US Trade Representative and President Obama wanted to keep the TPP secret for four years after it was ratified. It if had not been for a very aggressive fight against fast track trade authority in which hundreds of thousands of people participated, we would not be seeing the text. One of the compromises they had to make in order to get just enough votes to pass fast track was to agree to release the text publicly for 60 days before Congress officially began to consider ratification.
Why did they want to keep it secret? Because they knew that if the people saw the text it had much less chance of becoming law.
Here are 10 examples of things they wanted you not to know.
⇧ Budgetary sleight-of-hand | Brookings Institution
Ben Bernanke as truth-teller? Well, whether you think so or not, he is on this one.
Legislators who care about the integrity of the budgeting process should not support this budgetary sleight-of-hand.
By speaking out this way, Ben's actually got the people's back more than he's been typically given credit for caring about. Stay at it Ben.
What he could have added, and should have in my view, is that the government needs to embrace fiscal spending and without borrowing, even though Ben is telling the truth about the Fed's Treasury purchases and remittances. The problem with governmental borrowing isn't with the Fed so much, though the Fed's overhead is a silly thing for the government, but with those non-Fed bond buyers Ben mentioned.
⇧ Onto The Next Question – Tim Duy's Fed Watch
Anxiety among Fed officials regarding whether or not they are falling behind the curve is inversely proportional to the unemployment rate. If it ticks down to 4.8% in the November report, they will start to get very nervous that 25bp every other meeting is not tenable. It of course goes without saying that if core-inflation starts to firm in the next two months and tend toward trend more quickly than anticipated, policymakers will break into a cold sweat.
Really? The Phillips Curve has been that sure recently, such as the last three decades?
What of the fact that the new hires were hugely made up of those over 54 years old?
Where's the wage-rate increase that suggests 2%+ price inflation in the not-too-distant future?
How much of any such wage increase will go toward paying off ridiculously high student loans? What happens to that money? It was credit. It won't circulate. It will disappear with the paydown/off. Sure, the wages thereafter might go toward goods and services but maybe savings.
I still say that the reason for the hike is bank profits rather than fear of an over-heating economy getting out of control. It's as if Paul Volcker never existed, as if he didn't crush price inflation.
None of that is to ignore Tim's exact words "if core-inflation starts to firm." Yes, if: big if. Let's wait for it to happen, shall we!
⇧ mainly macro: Where would you get the money from?
I like Simon. Honestly, I do; but, he makes me laugh with his qualifiers.
… further austerity is no longer about stabilising debt and an imagined market panic. Instead it is about an obsessive need to cut debt to GDP really fast, or more likely a desire to shrink the state.
"…more likely"? How much evidence does anyone need to be able to say "an obsessive need to cut debt to GDP really fast to shrink the state" so the rich may take a greater cut at the expense of everyone else?
The more the state does, the less of a cut that goes to the privateers. This is not a secret.
… we have the crazy situation that no single economist is prepared to endorse the fiscal charter, but pretty well every journalist treats any suggestion that we should depart from it as unacceptable. That just cannot be right.
The vast majority of journalists are in the employ of the privateers. Stop coddling them.
⇧ Bigger homes wiping out energy efficiency gains | Pew Research Center
… after dropping sharply during the 1970s, the overall energy intensity of U.S. homes has changed little over the past three decades. Energy intensity is a metric that compares the amount of energy used against some unit of economic activity — households, in the case of the residential sector.
⇧ The 6 Commandments of Working With Contractors on Rehabs
Thou Shalt Not Use Contractors That Are Not Licensed and Insured
Through my experience, licensed and insured contractors will be a little bit more expensive, but they typically do a better job and are safer at work.
At some point an accident will happen on the job, and you don't want to foot the bill of an injury that should have been handled on the contractor's end.
The truth is, when a contractor is licensed and insured, it's a filter that signifies them as a better professional and helps you separate the gold from the dirt.
You don't want to deal with anything else, trust me!
And that's just for starters. You need to vet contractors within that sphere. Let me add another word to licensed and insured: bonded.
There are bonds, and then there are bonds: bid bonds, performance bonds, fidelity bonds…. They are not all created equal.
Get a copy if possible (why wouldn't it be possible?) and read it. Make it a contract requirement and attachment. And that's just for starters too.
⇧ Ex-GAO head: US debt is three times more than you think | TheHill
So-called unfunded entitlements, such as Social Security and Medicare, are not the issue.
Dave Walker, who headed the Government Accountability Office (GAO) under Presidents Bill Clinton and George W. Bush…, "If you don't keep your economy strong, and that means to be able to generate more jobs and opportunities …."
The issues are supply, demand, growth, and the distribution of income and wealth.
We can create all the money we want without inflation or deflation if we match supply and demand. We can fund anything if we do that. The only thing that's lacking is the awareness of it by the general population that has been deliberately kept in the dark by the monied powers that be: the bankers.
⇧ Airpocalypse now: China pollution reaching record levels | World news | The Guardian
There was indignation on social media as China confronted its latest "airpocalypse".
"The government knows how severe the smog problem is, so why haven't they tackled it?" one critic wrote on Weibo, China's Twitter.
"What's the point of having an environmental protection department? The precondition for developing the economy is not damaging the environment. Our leaders are all well educated. Can't they understand this simple truth?"
Vote them out. Oh, wait ….
⇧ Global GDP Worse Than Official Forecasts Show, Maersk Says – Bloomberg Business
"We conduct a string of our own macro-economic forecasts and we see less growth — particularly in developing nations, but perhaps also in Europe — than other people expect in 2015," Andersen said. Also for 2016, "we're a little bit more pessimistic than most forecasters."
Meanwhile, the Fed tightens?
⇧ Richard H. Serlin: Robot/AI revolution decimating employment and wages, not just could it happen, has it largely happened already? Surprising data
I enjoyed this article by Richard H. Serlin very much. My readers know that I too have been quite interested in this subject, especially from an economics standpoint.
Eventually, there is a good chance that AI will reach the point where few if any humans will be smart and skilled enough to do anything pecuniary that a machine can't. At that point, substantial redistribution will be unavoidable. Most people have little wealth outside of their human capital endowment. If that becomes worthless, they quickly starve without redistribution . If we can maintain a democracy, in spite of the efforts of many plutocrats, then large-scale redistribution will probably be inevitable.
But of course, there will be an aversion to just giving people money without it being earned. But there, a solution I see is allowing people to earn it by working to become better people, and citizens. The redistribution can be money paid for the job of being a student. Getting a college degree, a graduate degree, passing expertise exams. Or money paid for hours spent on a physical fitness program; or studying chess, and improving your intellect and game; or Tai Chi, Yoga, psychological study, or therapy…, at least until you have reached a certain number of hours worked, or age, and are allowed to retire with a pension if you wish .
So, in this way, there may be one job that we can never lose. In the end, our final job may be ourselves.
"… there will be an aversion to just giving people money without it being earned. But there, a solution I see is allowing people to earn it …."
Leave it up to the democracy. Let the people decide. Look, "an aversion to just giving people money without it being earned" is arbitrary and irrational.
There must come a time, and soon, when simply being human entitles one to have a high quality of life without toil of any kind. What humanity does after that is for humanity to decide when it's there.
⇧ Germany loses key ally in Portugal as austerity regime crumbles – Telegraph
There would then be an emerging "Latin bloc" with the heft to confront Germany and push for a fundamental overhaul of EMU economic strategy. At the very least, the political chemistry of the eurozone would change beyond recognition.
As expected, the Communists have agreed to drop their demands for euro exit and a return to the escudo, while the Left Bloc has toned down its eurosceptic language and will no longer push for debt relief.
Mr Costa has pledged to abide by EU rules, but the coalition's spending ambitions are ultimately incompatible with the Fiscal Compact, and go against the grain of market reforms.
Public sector wages cuts and the pension freeze for state workers are to be reversed. Structural reform is frozen. Plans to privatize the national water group (EGF) and the rest of the airline TAP are to be halted, and a scheme to open transport in Lisbon and Oporto to private competition is on hold.
To Hell with austerity. It's ridiculous. It is a completely artificial construct designed to enhance plutocracy over democracy. That's all.
⇧ October Downpours Damaged Hundreds of Texas Homes
Travis County emergency officials said in a statement that more than 330 properties were damaged in flooding last week. About 160 homes sustained damage considered major while inspectors say nearly 160 others saw minor damage.
⇧ Spending review: George Osborne 'secures deals' on 30% cuts – BBC News
The UK is not even out of the woods yet from the Great Recession. Osborne's plan is austerity in the face of insufficient recovery and will smack the UK economy again, just as happened before they eased off the austerity in 2010.
"I know some ask: why do we need this surplus?" he said. "I'll tell you why: to protect working people.
"A surplus will make our country more resilient, safe and secure. It means that next time we have the money to help us through the tough times when the storms come. Let me put it another way: if our country doesn't bring the deficit down, the deficit could bring our country down.
"That's why, for the economic security of every family in Britain, the worst thing we could do now as a country is lose our nerve."
If he believes that right now is an appropriate time for that, he's terribly ignorant or stupid or both. I don't think he believes it. His bosses, the plutocrats, certainly don't.
⇧ Germany And The Future Of Social Democracy In Europe
You see here the explanation that social democracy is not pure socialism but rather a mixed economic model, mixing capitalism and socialism together.
It was started in Germany to prevent complete socialism. In other words, it was a capitalist undertaking to save capitalism from itself.
The point is that without a safety net, economies would fall back into feudalism where the capitalists (the private owners of everything) would be the new "nobility" and everyone else their serfs at best.
Unfortunately, we've seen the plutocrats grab more and more for themselves over the last few decades while the rest have been duped into misbelieving that it is good for all. It is not. It is quite the opposite. It's why so many White men in the US have started committing suicide, something that was all but unheard of not too long ago. (This is not a racist observation. Many people of color have been suffering all along.)
Maria Joao Rodrigues:
Essentially, the project of social democracy is to make sure that unrestricted citizenship for all is made compatible with the dynamics of a market economy. Within that economic order, each and every citizen is to be guaranteed the same economic, social, and political rights. Here it is crucial to recall that this project came to fruition at a time in which a paradigm shift in the evaluation of social inequality was already underway. The poverty of any given individual cannot be explained satisfactorily by attributing it solely to that person's failings, an explanation dear to the hearts of conservatives. Poverty is also the outcome of problems caused by the system in which it arises. Hence, it is important to create conditions that make possible greater equality of outcome or at least greater equality of opportunity.
This paradigm shift in the way that poverty and inequality wer e understood laid the foundation for the creation of the social welfare state, a redistributive tax system, and growing regulation of the free market, just to mention the most important social democratic achievements.
Even today this founding principle of social democracy has lost nothing of its validity, although new kinds of challenges make it necessary to come up with different problem-solving approaches. …
… Social democracy will not survive on this continent unless European integration is pushed to a higher stage. Thus, the social democratic agenda calls for the expansion and rebalancing of the economic and fiscal union combined with a deepened and more fully democratized political union. These considerations are especially important in Germany, the cradle of social democracy.
⇧ Detroit's firefighting downgrade fuels insurance hikes
The Insurance Services Office ranks about 48,000 communities nationwide on their ability to respond to fires — and save homes — on a scale of 1 to 10. The lower the number, the better the protection.
Southwest Detroit has one of the highest arson rates in the city.
"I'm going to pay. It was $500 to $600 cheaper than any other rate," Carter said.
"But this is just one more thing to consider about living in Detroit."
When you go to purchase property, you can check the ISO rating first.
Here's a good summary: https://www.irmi.com/online/insurance-gl ossary/terms/p/protection-classes.aspx
⇧ The Fraught Politics of the TPP by Koichi Hamada – Project Syndicate
Talk about not honestly facing the negatives of a given proposal:
This month, 12 countries on both sides of the Pacific finalized the historic Trans-Pacific Partnership trade agreement. The scope of the TPP is vast. If ratified and implemented, it will have a monumental impact on trade and capital flows along the Pacific Rim. Indeed, it will contribute to the ongoing transformation of the international order. Unfortunately, whether this will happen remains uncertain.
⇧ Is Europe outperforming the US? – Agenda – The World Economic Forum
Kalin Anev Janse:
The EU has long been seen as the best peace creation project of all time, with no wars at its core over the last 70 years. Over recent decades it has also proven to be an enviably efficient wealth creation machine — and not just for those at the top of the population, but for the entire society, including 100 million new citizens over the past decade. This means that if you are lucky enough to belong to the top 1% or 10% in the U.S., you are no doubt quite well off. In Europe, life at the top is also not bad, but if you happen to be, like the majority of the population, in the bottom 90%, or one of 450 million people, in Europe you are far better off.
Not only is Europe producing an admirable and competitive growth model, it is, by design and conviction, deploying the wealth generated in economic solidarity with its broader population, not just for the top 1%. That is Europe's greatest economic accomplishment, its greatest competitive advantage and the key to its outperformance.
⇧ 20 most generous people in the world – Business Insider
This is a bit off-topic, but I was wowed by this.
Charles Francis Feeney
Lifetime donations: $6.3 billion
Net worth: $1.5 million
Generosity Index: 420,000%
Known as the "James Bond of philanthropy," retail magnate Chuck Feeney is on a mission to give away his entire fortune — and with his current net worth down to $1.5 million, it seems he's succeeded.
The Atlantic Philanthropies, Feeney's foundation, supports education, science, healthcare, and civil-rights causes across several countries, including the US, Vietnam, and Bermuda.
And without fanfare!
⇧ Europe's Quiet Currency War Besets Nations Losing Inflation Grip – Bloomberg Business
While ECB officials have repeatedly said they don't target the exchange rate, they've acknowledged that a weaker euro helps revive the economy and inflation by boosting exports and pushing up import prices. …
"Competitive devaluations used to be about getting more growth, and now we're trying to get more inflation without that having anything to do with the underlying economy," said Anatoli Annenkov, an economist at Societe Generale SA in London. "That shows the desperation we're in."
⇧ Fed's Rosengren sees possible bubble in commercial real estate – MarketWatch
Eric Rosengren, the president of the Boston Fed, said Monday he is worried about the rapid rise in commercial real estate prices, becoming the latest U.S. central banker to be worried about financial stability concerns in the real estate sector ….
Commercial real estate prices have grown rapidly, despite the only modest growth in gross domestic product since the end of the recession, he noted.
⇧ Combating real estate fraud in the tri-county area | Local News – Central Coast News KION
Real estate professionals and law enforcement leaders in Monterey, Santa Cruz, and San Benito County say they've had enough with real estate fraud.
… For now they're focusing on unlicensed professionals, loan modification and solar scams.
⇧ Blame Real-Estate Lending. Then Rein It In. – Bloomberg View
A basic income paid to all citizens regardless of the labor-market price for their skills ….
⇧ What the most controversial part of Obama's trade deal really does – Vox
I've slammed the TPP as undemocratic, and it is; but, in the interest of a rational debate, here's Ezra Klein's take on it.
The deal also limits the kinds of claims companies can make. Bernie Sanders, for instance, released a statement slamming the TPP because corporations could sue over "an increase in the minimum wage or any other law that could hurt expected future profits." But the text of the TPP makes clear that hurting expected profits is not sufficient cause for action.
After reading a lot about ISDS provisions and hearing from both their supporters and detractors, I don't think ISDS is likely to matter much from the American point of view. Few ISDS cases are brought against America, and no one has ever won an ISDS case against America. The heat of this argument has more to do with the principles involved, and the larger passions over TPP and multinational corporations, than with ISDS itself.
Here's the thing. You cannot judge how ISDS will be used based upon how it has been used.
Where's the democratic appeal-method if the arbitrators decide in a way that runs contrary to the actual text as Ezra reads it?
I could go on and on about it, but I think you get the point. It's way too risky gambling with what little democracy we have now.
Plus, it's not as if the extant ISDS's shouldn't be rolled back.
We have experienced ever greater corporate consolidation and the trend is still in that direction. In centuries past, many corporations would have been broken up for being overly consolidated, anti-competitive, etc. I don't think that's the ultimate solution, but the fact that antitrust is rarely if ever even mentioned screams about how much power global corporations already have. What sense is there in it for the average voter to allow such corporations to have their own judicial carve-out while the rest of us have to use the standard courts?
Yes, it is about fundamental fairness and an even playing field. It is the principle of the thing along with the actual policies and practices including how any TPP ISDS will be played in the future in ways Ezra can't begin to imagine.
⇧ To Understand Climbing Death Rates Among Whites, Look To Women Of Childbearing Age
Wow! Landlords should care because many of their tenants are needlessly suffering (which, by the way, ends up hurting the landlord's bottom line in many ways).
Laudan Aron, Lisa Dubay, Elaine Waxman, and Steven Martin:
The news that mortality is increasing among middle-aged white Americans spread like wildfire last week (see here [ http://www.nytimes.com/2015/11/03/health /death-rates-rising-for-middle-aged-whi te-americans-study-finds.html ] and here [ https://www.washingtonpost.com/national/ health-science/a-group-of-middle-aged-am erican-whites-is-dying-at-a-startling-ra te/2015/11/02/47a63098-8172-11e5-8ba6-ce c48b74b2a7_story.html ] and here [ http://www.bloomberg.com/news/articles/2 015-11-02/white-middle-aged-americans-se e-mortality-increase-deaton-finds ]) thanks to a study [ http://www.pnas.org/content/early/2015/1 0/29/1518393112.abstract ] by Anne Case and Angus Deaton, who recently won the Nobel Prize in Economics. As researchers who study the social determinants of health, we were very pleased to see such widespread interest in this urgent national problem. Unfortunately, there are a couple of pieces of the puzzle that we think the Case and Deaton study missed.
By not looking at men and women separately, Case and Deaton failed to see that rising mortality is especially pronounced among women. The authors parenthetically note that "patterns are similar for men and women when analyzed separately," but several recent studies have shown otherwise.
Two studies from the National Academy of Sciences (NAS [ http://www.nap.edu/catalog/13089/explain ing-divergent-levels-of-longevity-in-hig h-income-countries ]) and the Institute of Medicine (one [ http://www.nap.edu/catalog/13497/us-heal th-in-international-perspective-shorter- lives-poorer-health ] of which was directed by the first author of this post) have shown that Americans are s lipping behind other high-income countries when it comes to mortality and survival, and that this "US health disadvantage" has been growing particularly among women.
… Many systemic and environmental factors are likely at work behind these mortality trends, including unstable and low-paying jobs, a fraying social safety net, and other stressors.
Absolutely. The "fraying social safety net" is a direct consequence of austerity, austerity that is always and everywhere, senseless and needless. There is no such thing as a natural monetary constraint at the national level in the US. It is purely arbitrary and designed for plutocracy over democracy.
⇧ [Must read, must read, must read] Bring Back Antitrust
Wow, right on cue. Here I mentioned antitrust above, that one hardly ever hears about it anymore, and along comes this excellent article by David Dayen.
I'm quoting from it more heavily than I typically do for a linked article; but, this article is very long (needs to be), and I'm confident that the publisher and author want the word out.
Definitely read the entire article.
Market concentration has a powerful impact on the day-to-day lives of every American, not just because monopolists have pricing power. Monopolies can also stunt innovation, degrade quality of service, increase inequality, and concentrate political power.
This trend operates against a background of weakening antitrust enforcement. …
The Sherman Antitrust Act of 1890, passed almost unanimously by Congress, gave the Justice Department (and later, via the Clayton Act, the Federal Trade Commission) authority to attempt to block anti-competitive mergers and price-fixing through the courts; the act authorized criminal penalties as well as civil remedies. But the Sherman Act authors made clear that "innocent monopolies" created by superior business practices could be tolerated as long as they did not suppress innovation and price competition. So even in the heyday of antitrust, the courts rejected the proposition that size per se was anti-competitive. Restraints of trade had to be demonstrated.
IN HIS 1978 BOOK The Antitrust Paradox, Bork, a devotee of University of Chicago economic theories, contended the Sherman Act was merely a "consumer welfare" prescription, not a presumption against market power (which generally can't exist in Chicago theory). So if a merger made the resulting business more efficient, that merger should be approved. Scale, likewise, generally enhanced efficiency. In both cases, consumers would see the benefits in lower prices. If the incumbent abused its dominant position and raised prices beyond a market-clearing price, competitors (by definition) would invariably arise. The power of incumbency was assumed away. The "paradox" of his book's title was that antitrust enforcement made consumers worse off.
Recent scholarship has shown Bork's assumptions to be backward. …
SINCE THE REAGAN JUSTICE Department neutered antitrust enforcement, a posture substantially ratified by increasingly conservative courts, two new factors have reinforced the trend. The first is the rise of intensified merger and acquisition activity, driven less by economic efficiency than by the fact that M&A is a huge Wall Street profit center that fits with the desire of CEOs to run bigger empires that produce fatter paydays. Mergers and acquisitions activity is poised to hit a record this year, with $4.58 trillion in takeover announcements expected.
Despite all the buzz about the start-up culture, entrepreneurship has suffered from these barriers to competition. The New America Foundation found start-ups fell 53 percent between 1977 and 2010. This removes urgency from incumbents to invest, and makes the economy sluggish.
Monopsony creates many spillover effects. Suppliers can cut corners on labor and environmental standards to keep their profit margins up amid the squeeze. Wages can drop. So even if inflation stays low, the public can suffer. In other words, while some monopolies and monopsonies generate "cheap" goods for Americans, antitrust policy should look beyond simply prices and efficiency to incorporate all of the consumer effects of market concentration. And they are legion. [emphasis added]
… when it came to actual enforcement, the administration largely took a pass. According to data collected by Northeastern University's John Kwoka, from 2009 to 2011, for every merger that reduced competitors in a market to four or fewer, the administration made some investigation or chal lenge. But for mergers that left five or more competitors, they enforced none of them. Historically, a good chunk of those would have been challenged. "These are moderately concentrated industries, right on the cusp," Kwoka says. "They took a pass on every one of them. It's remarkable and a complete anomaly."
The administration has had a better record on mergers that created heavy market concentration, blocking proposed mergers such as AT&T with T-Mobile, and Comcast with Time Warner. More recently, enforcement agencies have been praised for investigating the airline industry for price collusion, suing to block General Electric's sale of its appliance business to Electrolux, and stopping the merger of the nation's two largest food distributors, Sysco and U.S. Foods.
… When we talk about banks that are too big to fail, we're talking about antitrust. When we talk about the high cost of health care, we're talking about antitrust. So many of our key domestic issues are fundamentally questions about whether we should tolerate monopolies, or dismantle them. But this formulation—a centerpiece of public debate in the last robber-baron era between the 1880s and 1910s—has all but disappeared from popular discourse.
There are a lot of reasons for runaway monopolies: an intellectual hijacking by Chicago-school conservative economists, the over-financialization of the economy, a failure of federal antitrust enforcement. But perhaps the biggest reason is that antitrust policy has become divorced from politics, confined to specialized lawyers and mathematicians instead of citizens and activists. Without grassroots momentum, politicians and enforcement agencies can safely ignore the issue. That's the challenge for a small band of academics, think-tank fellows, and activists: to make monopolies a vital issue again, connecting with the severe economic anxiety Americans feel.
⇧ Which city has the best housing deals?
… the national average listing price of a four-bedroom, two bathroom home is $302,632, according to a new report from Coldwell Banker Real Estate. In the nation's most expensive market, Newport Beach, California, that same home will list for $2.3 million. In the least expensive market, Cleveland, Ohio, it will list for $74,502.
What about condition?
⇧ Portugal: 'Europe is very concerned' as new gov't likely short-lived | Links International Journal of Socialist Renewal
This site is not social democratic but pure socialist. They don't want market socialism but pure socialism. I include the link so you'll see why such groups are rising. They are rising because neoliberalism (libertarian capitalism, which hasn't a sufficient mix of social welfare) causes great and needless misery.
… austerity has ground on, producing miserable economic growth at the expense of acute social pain. Hundreds of thousands of young people continue to flee their country, where youth unemployment runs at 31.8%; 60% of the country's 633,000 unemployed have been out of work for more than a year; average household income has fallen 8.9% since 2009; and "low-wage workers…need to work very long hours at the minimum wage in order to escape poverty" (OECD).
Unlike the Greek economy's violent descent into catastrophe, the Portuguese economic picture is more one of chronic stagnation. This persists because of the country's low rate of investment, its very high rate of private indebtedness and its persistent balance of payments deficit due to membership of the euro, overvalued in relation to the economy's productivity levels.
The president told Portugal: "In 40 years of democracy, no government in Portugal has ever depended on the support of anti-European forces, that is to say forces that campaigned to abrogate the Lisbon Treaty, the Fiscal Compact, the Growth and Stability Pact, as well as to dismantle monetary union and take Portugal out of the euro, in addition to wanting the dissolution of NATO.
"This is the worst moment to radically change the foundations of our democratic regime…Outside the European Union and the euro the future of Portugal would be catastrophic.
"After we carried out an onerous programme of financial assistance, entailing heavy sacrifices, it is my duty, within my constituti onal powers, to do everything possible to prevent false signals being sent to financial institutions, investors and markets."
Former PS health minister António Correia de Campos analysed the result of the speech in an October 26 comment in the daily Público: "Rarely has the impact of a political performance been so contrary to that aimed for by the performer. We can't yet quite mange to envisage Doctor Cavaco as a socialist activist, but we can at least see him as the great adhesive, the main actor, in the process of unifying the left."
The president's boomerang-speech created a constitutional crisis and enormous outrage ….
⇧ What the U.S. doesn't like about Japan's post offices – The Washington Post
"When you create anti-competitive distortions in markets through the special treatment of government-owned insurers, it not only hurts private insurers, it also hurts the consumers and the policyholders," Simchak said.
Okay, but that holds true only within a strictly defined context. My point is pointing back at the antitrust discussion above in this blog post.
If we allow privatization but also nearly endless consolidation, we're right back where we started from but rather than a governmental monopoly, we have a private one, which really ends up being worse, hence deliberate public monopolies in the first place (natural monopolies in political economy and social science).
⇧ Second Most Active Hurricane Season Not Over Yet
It's been a big year for hurricanes, typhoons and cyclones, which are just different names for the same kind of storm.
According to a measurement called ACE, or accumulated cyclone energy, this has been the second-most active year on record, bested only by 1992 ….
⇧ NIST Study of Colorado Wildfire Shows Actions Can Change Outcomes
One of the main suggestions:
High-density structure-to-structure spacing in a community should be identified and considered in WUI fire response plans. In the Waldo Canyon fire, the majority of homes destroyed were ignited by fire and embers coming from other nearby residences already on fire. Based on this observation, the researchers concluded that structure spatial arrangements in a community must be a major consideration when planning for WUI fires.
Of course, using fireproof building-materials is highly recommended by this author.
⇧ Global Temperature Increase Now Half Way to Tolerable Threshold – Bloomberg Business
The world is on track to reach 1 degree Celsius of global warming this year since the industrial revolution, the half-way point toward the maximum tolerable threshold identified by scientists.
But it's a hoax. They're all lying.
Well folks, it isn't a hoax. They aren't lying. There really is a greenhouse effect with adding more and more carbon to the atmosphere, and we're the ones primarily responsible for the addition.
⇧ Storm Damage Estimated at $500K in Northeast Nevada City
County Commissioner Cliff Eklund said at an emergency meeting that at least 30 homes and numerous vehicles were damaged, mostly from downed tree limbs.
⇧ Franklin, Indiana, Faces Big Change in Flood Plain Maps
Hundreds of homes and businesses in a central Indiana city hit hard by flash flooding seven years ago could face hefty jumps in their insurance costs if updated federal flood plain maps are approved.
But if they aren't approved, there won't be public flood insurance available and the areas could be flooded again while uninsured.
⇧ Georgia Roofing Contractor Accused of Insurance Fraud
"Insurance fraud doesn't only hurt homeowners who have legitimate roof damage claims, it makes everyone's premiums go up," Hudgens said.
⇧ Houston CRE Market Reports — Q3 2015
Known as the Energy Capital of the World, Houston is home to more than 3,700 energy related companies which make up just over half of the local economy. Houston's Q3 2015 office market indicators reflect the dramatic drop in oil prices that occurred in Q4 2014 and the subsequent reevaluation and adjustments in growth plans implemented by the "upstream" sector of the energy market. The "mid" and "downstream" players remain very strong but tend to occupy less office space than the "upstream" companies. Houston's office leasing activity declined 39.7% between quarters, recording only 0.7 million SF in Q3 2015.
⇧ 'It is a bloodbath': Calgary office towers are about to feel the full force of the oil crash | Financial Post
Don't bury your head in the tar sand.
"God only knows what'll happen if oil doesn't rebound," he said. "I try not to let that penetrate my mind."
⇧ Assessing the Health of the Labor Market: The Unemployment Rate vs. Other Indicators
The U.S. economy has recently experienced the largest economic downturn in postwar history. Five years have passed since the official end of the recession, yet the difficult question on how far we are from full employment remains.
With unemployment returning to normal levels, it has been argued that the unemployment rate may not properly capture the current amount of slack in the economy; as a result, labor market conditions indexes have been proposed as a new measure of labor market health. These indexes have the advantage of summarizing information from many different variables. At the same time, they are the result of a statistical procedure requiring several steps to compute and a nontrivial amount of judgment.
In this article, I showed that the unemployment rate is reflective of underlying labor market health, as represented by the indexes. In addition, a closer inspection of the figures suggests that this strong link between the indexes and the unemployment rate does not appear to have changed recently, which suggests that the unemployment rate is still as good at measuring labor market conditions as it has been in the past.
I don't see the point. The additional variables are to aid in understanding the makeup of the general rate: whether its strong or weak, based on worse, lower-paying jobs, etc.
⇧ More misery ahead for Greeks as economy set to shrink again | Business | ekathimerini.com
… lender-imposed austerity has crushed the life out of the economy ….
⇧ Foreclosed Dayton properties could be sold sooner | www.mydaytondailynews.com
Starting next month, qualified nonprofit groups and community organizations in the Dayton metro area will be able to buy foreclosed, single-family structures before they are publicly available for sale.
⇧ USC Launches Degree in Real Estate Development | Los Angeles Business Journal
… undergraduate degree incorporates courses on real estate fundamentals, the development process, market analysis, finance and investment, the history of cities, and designing livable communities.
⇧ Housing is the next target in David Cameron's dismantling of the welfare state | Polly Toynbee | Comment is free | The Guardian
This is the end of a 70-year era of secure tenancies in social housing.
This makes political sense as part of Cameron and George Osborne's still under-recognised attempt to reduce the state permanently to 35% of GDP, a level below anything resembling British and European standards for public services.
Where will the children live?
⇧ Moody's warns of global shockwaves as fallout from China slowdown threatens growth prospects | City A.M.
Global economic stability is at risk from financial shocks in the face of a bigger-than-expected fallout from China's slowing growth, a new report from Moody's has warned.
Simon French, chief economist at Panmure Gordon, said that while "the use of fiscal and monetary policy is impaired by higher debt levels and low yields, it is far from exhausted. There remain a suite of policy options available to governments and central banks — but these options require intelligent and swift implementation that leaves ideological biases at the door," he said.
⇧ Short-sighted monetary policy and fear of liftoff | VOX, CEPR's Policy Portal
When you cite Alan Greenspan as a model for what to do as Fed Chair, you've lost me. When you cite Paul Volcker to support the notion that one needs to apply tiny incremental raises some two years before wages might (and might not) go up in a heated/inflationary economy, you've lost me even more.
What I read here by Athanasios Orphanides is plutocracy support, anti-labor, anti-democratic.
⇧ On brilliant, neglected women economists — for Woman's Hour — Prime Economics
After reading this, I like Ann Pettifor all the more.
Since Ann brought up the house metaphor, let me say that the global economy is as a household with a legal right to produce all the non-counterfeit currency needed to eliminate all poverty and without causing runaway inflation or deflation.
It's too bad the currency overseers are working for the plutocrat bankers rather than the good of humanity.
⇧ Economist's View: Trickle Down, Starve the Beast, Supply-Side, and Sound Money Fantasies
Mark Thoma commenting on a Wall Street Journal editorial:
From the WSJ editorial page:
Marco Rubio was challenged on his child tax credit, which he would increase to $2,500 from $1,000. … Mr. Rubio's diagnosis of the changing economy has particular appeal to anxious voters. It's too bad his tax credit is such an expensive political pander.
But of course cutting taxes on the wealthy is not an expensive pander, it will generate growth!!! Tax revenue will rise and the deficit will fall!!! The benefits will trickle down to the middle class (unless that evil Fed gets in the way decades later)!!! None of which has actually happened according to the empirical evidence. Republicans seem to have a talent for telling economic stories about how their policies will benefit the middle class all the while disguising the true intent of the legislation. So long as it can be true in theory (the confidence fairy comes to mind), the actual evidence doesn't matter.
⇧ A Debate With Bernanke Over the Fed's Easy Money Policies – The New York Times
Oh boy, Ben Bernanke has come out the truth-teller.
"Go complain to Congress because the fiscal policy turned very contractionary, which meant the Fed had to bear the entire burden of creating a recovery," he continued. "If fiscal policy had been more balanced, then we could've had the same recovery with higher interest rates. But because fiscal policy was contractionary, and Congress said essentially, 'The Fed will take care of it,' then the Fed could use the only tool it had."
What he is saying, and was more than hinting at during most of his tenure as Fed Chairman, is that it was utterly stupid of Congress not to have employed a vastly larger stimulus package to get us all the way out of the Great Recession and pronto: full recovery, which still hasn't happened!
As for his defensiveness concerning QE (as to his original intentions), let me say that he must know that the Fed bailed out the banks more than it bailed out the American people in general.
I think he's upset that the Fed is getting the blame that rightly belongs with Congress and by being so upset, he's understating the lopsidedness of QE in favor of banks throwing hot money all over the place for their speculative trades (rather than focusing on making sound loans to worthy businesses and keeping all their skin in the game).
Did he have a choice? He doesn't seem to think so. I think he should have taken Congress to task right from the get go and not let up no matter how upset that would have made so many of them. They would have called for his head, but so what? Anyway, better late than never.
⇧ The Next Debt-Clearing 'Super Cycle' Starts Now
Running contrary to Ben Bernanke's position discussed above:
Martin Fridson, the world's foremost expert on the high-yield bond market, says his "base-case scenario" is for between $1.6 trillion and $2 trillion in defaults in high-yield bonds over the next three to four years. We believe default rates will be a lot worse, simply because the market has grown so much, thanks to things like CDS credit protection and the securitization of subprime consumer lending.
There are a number of questions that naturally come to mind concerning this worst-case scenario. Would the Fed sit idly by? Are these systemically critical bonds? Would Congress finally act via sufficient and properly targeted stimulus?
Yes, the Fed bailed out the deregulated economy, an economy loaded with the absolutely false promise of protection via CDS's. Also, securitization is still being used to avoid enough skin in the game to prohibit reckless speculation with other people's money.
Do I see a major crash around the corner? I do not, but I also don't see hyper-inflation either. I see continuing stagnation, especially since the Fed is liable to raise rates in the not-too-distant future.
⇧ Goldman Sachs Says Corporate America Has Quietly Re-levered – Bloomberg Business
The leverage level of Corporate America is set to become a hot button topic as the Federal Reserve gets closer to embarking on its first interest rate hike in nearly a decade. Goldman joins Citigroup in warning that investors may be growing more wary of rewarding leverage-increasing corporate actions as the credit cycle turns.
"The spectre of rising rates, potential global disinflation (dare we say 'deflation'?)….
Are equities overvalued, and is much of that due to QE? Yes and yes.
Re-regulation has been grossly insufficient, as has fiscal stimulus.
Again, the question is, what will the Fed and Congress do when things don't go well? Has Congress learned its lesson? Has the Fed?
The Fed is being quite premature regarding hiking rates. Congress is loaded with the dupes and minions of the plutocrats.
The real question is whether the American people have been sufficiently educated about the real causes of the crash and the continuing mistaken position of the deficit-hawks. If they haven't been, will the macroeconomists be able to cut through the fog to get to the people to move them to stand up and demand that the right steps be taken rather than repeating either the Great Depression or anemic, unfinished recovery from the Great Recession?
⇧ Friction is now between global financial elite and the rest of us | Politics | The Guardian
… the trend is not sustainable economically. The American economy cannot maintain positive momentum without the purchasing power of its vast middle class. This is one reason why today, six full years into an economic recovery, the US economy is barely back to where it was before it fell into the Great Recession.
Nor is it sustainable politically. A large portion of the American electorate, working harder than ever but seeing no wage gains for years, is becoming angry and frustrated. That anger and frustration, in turn, is fuelling a populist revolt against the prevailing establishment. The revolt is already manifest in the presidential election of 2016 in the forms of Democratic candidate Bernie Sanders and Republican candidate Donald Trump.
But the two are quite different. Sanders represents a tradition of leftwing reform populism that seeks to limit the influence of big money on the political process, thereby clearing the way for the enactment of new laws and rules that can deliver more broadly shared prosperity. Trump comes out of a tradition of rightwing authoritarian populism that seeks a strongman who will take power away from the prevailing oligarchy and deliver it back to the people directly. Often accompanying authoritarian populism is making a scapegoat of vulnerable minorities, including immigrants.
Both Britain and America have had brushes with authoritarian populism in the past. In the Depression decade of the 1930s, Oswald Mosley in Britain and Father Charles Coughlin in the United States offered authoritarian solutions to the nations' economic problems. But neither nation has succumbed. In times of economic stress, both Britain and the United States have opted instead for reform. President Franklin D Roosevelt arguably saved American capitalism from its own excesses, as did William Beveridge and t he postwar Labour government, with regard to British capitalism.
It is impossible to know when we will again reach a tipping point, but there can be little doubt it will come. Political economies that bestow most gains on small groups at the top are inherently unstable. The real question is not whether change will occur, but whether it will come through democratic reform or authoritarian mandate.
Robert Reich is chancellor's professor of public policy at the University of California, Berkeley, and was secretary of labour in the Clinton administration.
I think Robert is overstating both Sanders and Trump, though on Trump, more so.
Sanders would need a New Deal Congress, for one; and Trump is not a racist and is not anti-immigrant, per se. He is a law-and-order guy though, which "liberals" see as lacking sufficient compassion to look the other way concerning law breaking by border crossings.
I feel great compassion but want to solve problems globally, not export or import them. There is a limit to law-and-order when a nation's laws and policies and practices have caused many of the problems in other nations people wish to escape. Syria comes immediately to mind.
⇧ Supply, Demand, and Neel Kashkari – The New York Times
… we now have a liquidationist in a senior position in the Fed system.
The Fed is moving backwards. It is aiding and abetting the plutocrats; but of course, the plutocrats actually run the Fed to save "capitalism" from the people getting wind of what's really going on regarding governmental usury and taxes, etc.
⇧ Saudi Arabia risks destroying Opec and feeding the Isil monster – Telegraph
The Saudi Royal Family's (absolute monarchy) dictatorial lock is toast starting to burn.
The next leap foward in technology is going to be in energy storage. Teams of scientists at Harvard, MIT and the world's elite universities are in a race to slash the cost of batteries – big and small – and overcome the curse of intermittency for wind and solar.
A team in Cambridge says it has cracked the technology for lithium-air batteries that cut costs by four-fifths and enable car journeys of hundreds of miles on a single charge. By the time we reach 2040, it is a fair bet the only petrol cars still on the road will be relics, if they can find fuel at all.
"Everything will be electrified. The internal combustion engine is a dead-end. We all know that, and the car companies ought to know that," said one official handling the COP21 talks.
And none too soon by my lights.
⇧ Three Long Island men plead guilty on federal charges in Sullivan County arson
The insurance company detected the arson and ultimately denied Dominic Motta's claim when he repeatedly failed to respond to requests from the insurance company that he answer questions about the fire under oath.
⇧ 7 of 9 on plane that crashed in Ohio were from Florida real estate firm – CSMonitor.com
Two executives and five other employees of a Florida real estate investment company were on a small jet that crashed into an Ohio apartment house, killing all nine people onboard Tuesday.
The 10-seat Hawker H25 business jet clipped utility wires and crashed into the four-unit apartment building, sparking a fire that destroyed the building, Ohio State Highway Patrol Lt. Bill Haymaker said. Nobody was home at any of the apartments, and there were no other injuries.
⇧ Swift Iowa storms wreak havoc across state
A swift line of tornadoes and thunderstorms severed tree limbs and power lines and tore off roofs as it marched across Iowa on Wednesday.
⇧ Australian Employment Soars 58,600 in October, Currency Jumps – Bloomberg Business
The big jump in jobs last month prompted renewed skepticism about the accuracy of the data, which the Australian Bureau of Statistics reviewed last year after volatile readings.
"You need to treat recent ABS data with a grain of salt due its problems in recent years….
What to consider: Doubts about the data; wage rates; the coal industry/mining downturn; and most importantly, the real-estate bubble. Will the Chinese government clamp down on their people investing in Australia, which investing has driven up property prices into what many believe is a huge bubble.
⇧ How to start investing in real estate – Business Insider
Before anything else, the Edwardses make sure the numbers work out.
"No matter what you read on the internet, our mentor told us one thing: Buy where the numbers work," Kelly explains. "You buy property for cash flow, not speculating 'This will appreciate 6% over the next 10 years.'"
When the market tanked in 2008, the brothers' friends from banking would come by, asking if they were OK. "We told them as long as our cash flow is working, we could care less what the market is doing," Kelly says. "Over the long, long term we'll see that appreciation. If you're flipping homes, that's great, but to be a property manager you have to buy where the numbers work."
⇧ Global growth edges higher at start of fourth quarter | Markit Commentary
Chris Williamson, Chief Economist, Markit:
Global economic growth ticked higher in October, with robust expansions in the US, UK, eurozone and Japan accompanied by an improved performance in China. However, whereas the recent data flow has resulted in the US Fed talking up the chance of rates rising by the year-end and Japan keeping policy on hold, a gloomy Bank of England downplayed the scope for a UK rate hike and the ECB raised the prospect of more stimulus.
It remains to be seen whether the upturn in the PMI data for October is the start of a global growth revival or a blip in an easing trend, but Markit's Global Business Outlook Survey points to the latter. The survey showed PMI-participating firms were the least optimistic about the next 12 months than at any time since 2009. The data flow over the next two months will therefore be vital in giving clarity on economic growth trends and whether policy will be tightened in the US and UK, and the prospect of further stimulus in China, the eurozone and Japan.
⇧ The Rise of Renters: Housing in the Decade Ahead
There are now more Americans renting than at any other time in U.S. history. Over the last decade, the share of renter households in the U.S. has increased significantly as homeownership rates have fallen from 69.2 percent in 2004 to 63.4 percent in 2015, the lowest level since 1967, according to a recent joint report by the Joint Center for Housing Studies of Harvard University and Enterprise Community Partners. In addition, it is projected that over the next decade, the majority of new household formation will be renters, a reversal from the trend of the past few decades. As such, the demand for rental housing will continue to grow. In addition, renters will be coming from more diverse socioeconomic backgrounds.
The net increase in the rental housing inventory has not kept pace with demand and therefore vacancy rates have declined and rents have risen significantly over the past few years. Unfortunately, for most renters, household income tends to be significantly lower than that of homeowners and their wage growth has not kept pace with rent growth.
The need at the lowest income level households is acute. …
John Powell serves as executive vice president of Bellwether Enterprise, a national commercial and multifamily mortgage banking company.
It's amazing how little has been done about this while the super-rich have gotten richer in America.
It's a choice, a political choice.
It is not an issue of not being able to come up with enough money. It is also not an issue of creating hyper-inflation. There are simply people who want to keep others down so those held down will be willing to work for little to nothing while the top executives of ever-consolidating corporations pay themselves more of what would have been shared more fairly across whole enterprises.
If you think this won't hurt you as a middle-class landlord, you're wrong. When nearly all your tenants start being unable to pay the rent, you'll not be able to squeeze money from them or find different tenants to take their place. You'll be in financial pain right along with them and maybe lose your properties to the top consolidators at pennies on the dollar.
As a landlord, you should want a strong economy where tenants can afford to pay the rent with comfort, not having to scrimp on food or healthcare or whatever.
⇧ Charting public opinion on the future of the welfare state
… Europe's citizens are most worried about the adequacy of pensions and care for the elderly. When it comes to future aims of the welfare state, citizens in each of the eight countries surveyed highlight the importance of education, knowledge and skills. And looking at preferences over the future financing of the welfare state, countries with comparatively lower levels of public debt are willing to contribute more in order to maintain the current level of public welfare benefits, while countries with higher levels of public debt prefer cuts in benefits over increases in taxes.
Higher taxes when things are tight offset increases in welfare benefits. Only deficit spending will help, but that's a problem because the government can borrow too much, turning things into a worsening debt-spiral. Only using debt-free currency issued to match real productivity will work. The usurers don't want people to know it.
⇧ What We Know About the 92 Million Americans Who Aren't in the Labor Force – Real Time Economics – WSJ
Here's a look at people from their mid-20s to mid-50s, and the reasons they gave for not being in the labor force in 1999 and 2014. The biggest shift has been the share of Americans who don't work because they're disabled or ill—this has risen among every age group, in some cases pretty sharply. In 1999, 8% of those in their early 50s cited disability. In 2014, it was 11%. This gets relatively little attention among economists, despite accounting for the biggest shift.
… There are more young people who aren't in the labor force because they're in school. There are more retirees. There are more middle-aged people on disability.
To be sure, mysteries remain. There are 2.6 million who want a job but aren't looking.
Many are claiming disability where if the economy had been stronger, they would have been working. Plus, how many people have been made sick by the economic downturn? For instance, the suicide rate is significantly up.
⇧ Mario Draghi: The European Central Bank – rebuilding trust, restoring prosperity and re-establishing price stability
Mario Draghi, President of the European Central Bank:
In keeping with Article 123 of the Treaty which prohibits the ECB from monetary financing, the Governing Council imposed strict limits on the use of government securities as collateral for loans that the Greek banks received from the ECB.
We need a new pact that prevents the re-emergence of the type of challenges we have addressed, and that above all strengthens the constitutional architecture of the euro area. This is not a new conclusion. It was already reached in the summer of 2012, when the European Council mandated the President of the Council, the Commission, the Eurogroup and me, and subsequently the President of the European Parliament, to outline a credible path that completes our monetary union and makes it "more perfect". …
I hope that what I have said to you today will convince you of the urgency of this reflection, of the need to turn it without undue delay into an institutional process able to secure concrete results, in line with a clear calendar for action.
What's taking so long?
⇧ Sir John Major: Wealthy and big firms should do more to tackle poverty | Daily Mail Online
John Major, former Thatcherite UK Prime Minister:
'I have no doubt that much of this disparity is caused by poor lifestyle, poor choices, poor diet, but poor environment, poor housing and poor education must surely be contributory factors.
'Whatever the reasons, this is a shocking situation in 2015.
'As a country, we are one of the richest in the world and yet some of our communities are among the poorest in all Northern Europe.'
He said the Government was right to seek to improve conditions by strengthening the wider economy, calling for more action to ease the housing crisis, boost infrastructure and extend job creation to areas 'left behind'.
He insists poverty would not be ended by benefits only, but believes minister 'must understand how hard it is to escape from such circumstances' and have an 'equal concentration on those who are failed by the system' as those who cheat it.
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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.
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.