News: Real Estate, Risk, Economics. Dec. 3, 2015

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Table of Contents
(Click to sections below.)

1) Economist's View: 'Student Debt in America: Lend With a Smile, Collect With a Fist'

2) The Ultimate Guide to the FNMA HomeStyle Renovation Mortgage

3) New Tax Change Could Save Thousands for Real Estate Investors!

4) Iceland, Ireland, and Devaluation Denial – The New York Times

5) The candour deficit — rise and fall: what next? — Gavin Kelly's blog — Medium

6) LSE Business Review — There's no such thing as an "optimal" size of the state

7) Shenandoah council makes two-pronged assault on blighted properties – News – Republican Herald

8) John and Maynard's Excellent Adventure – The New York Times

9) Corruption: A Hidden Tax on Growth | iMFdirect – The IMF Blog

10) How much do people really know about inflation? – Agenda – The World Economic Forum

11) China's Latest Five-Year Plan by Martin Feldstein – Project Syndicate

12) Safety Lapses and Deaths Amid a Building Boom in New York – The New York Times

13) Buy-to-let calculator: how will new tax reduce your profit? – Telegraph

14) Menachem Stark | 120 S. Fourth Street Williamsburg |

15) Ayn Rand vs. Anthropology – Evonomics

16) Confidence In Oil Hub Security Shaken By Oklahoma Earthquakes : NPR

17) Deutsche Wohnen to buy $1.17 bln in real estate – MarketWatch

18) High returns bring foreign investors to Detroit real estate market – Crain's Detroit Business

19) Dozens of Alberta real estate agents fined for improper condo measurements | Edmonton Journal

20) Chinese Cash Floods U.S. Real Estate Market – The New York Times

21) There's a Big Drop in U.S. Treasury Debt Supply Coming in 2016 – Bloomberg Business

22) U.S. Banks' Changing Footprint at Home and Abroad Liberty Street Economics

23) Economist's View: 'Is Balanced Growth Really the Answer?'

24) Zillow's 2016 Forecast: Suburban Living Heats Up | Zillow Blog

25) Chinese Pull Back From U.S. Property Investments – WSJ

26) COP-21 climate deal in Paris spells end of the fossil era – Telegraph

27) How to Effectively Interview Potential Property Managers For Your Rental

28) Repossessions spike 66% as foreclosure crisis lingers

29) Challenging the Oligarchy by Paul Krugman | The New York Review of Books

30) September's nonresidential spending retains momentum in October, ABC says

31) China's gold star | Brookings Institution

32) Robert Reich on Enforcing Capitalism – Evonomics

33) Inequality and the City – The New York Times

34) Insurance Policy 'Escape' Type 'Other Insurance' Clause Given Short Shrift by California Court

35) Major Fault Near California Nuclear Reactors Links to Second Crack

36) Majority of Baltimore's Riot-Damaged Businesses Have Reopened

37) Aging U.S. Nuclear Plants Pushing Limits of Life Expectancy

38) Federal Reserve Votes to Retire AIG Bailout Tool

39) China's Market Crash Means Chinese Supergrowth Could Have Only 5 More Years to Run

40) Andrew Samwick's Blog: Hillary Clinton's Infrastructure Plan

41) The Good Old Days of the Gold Standard? Not Really, Historians Say – The New York Times

42) The New Supply-Side Economics | The Fiscal Times

43) The $400 billion ripoff that could destroy the Greek bailout

44) Bank Crimes Pay: Under the Thumb of the Global Financial Mafiocracy | Occupy.com

45) Why Good Maintenance is the Best Way to Retain Tenants

46) FRB: Speech with Slideshow–Yellen, The Economic Outlook and Monetary Policy–December 2, 2015

47) Las Vegas: The Town That Choked on Debt | Zillow Blog

48) Property Manager: 7 Tasks to Keep Tenants Happy & Paying

49) Multiplier Evidence and Multiplier Denial – The New York Times

50) Landlords saying bah humbug on deluge of packages

51) Oil speculators risk 'short squeeze' if impulsive Saudi Prince throws OPEC surprise – Telegraph

52) North Carolina County Starts Program to Address Teen Arsonist Problem

53) AG Zoeller files lawsuit against serial home repair scammers …

54) Should Opec stick or twist? | FT Markets – YouTube

55) International Military Review – Syria, Dec. 2, 2015 – YouTube

56) Sen. Corker's relationship with real estate industry highlighted in voting record – Yahoo Finance

  1.    Economist's View: 'Student Debt in America: Lend With a Smile, Collect With a Fist'

    Mark Thoma:

    We need to solve the student loan problem for existing loans, but I wish talk about how to address this problem going forward was more about how to provide adequate funding for colleges so that large loans aren't needed in the first place rather than focusing on how to change the loan program itself.

    Exactly!

    Add your comment.


  2.    The Ultimate Guide to the FNMA HomeStyle Renovation Mortgage

    William Robison:

    The HomeStyle loan is a Fannie Mae (FNMA) loan that basically allows an investor to purchase a property and include the renovation costs into the mortgage.

    Add your comment.


  3.    New Tax Change Could Save Thousands for Real Estate Investors!

    Amanda Han:

    The New Tax Change

    The details of the new tax change are expected to be released in the coming weeks, but what we do know is that the government effectively raised the deductible amount of depreciable assets from $500 to $2,500. As such, when investors make improvements to properties or buy assets for the rentals, we may be able to take an immediate tax deduction instead of needing to depreciate it over many years. The net result is a potentially larger tax write off in 2015 to generate a higher tax refund.

    Add your comment.


  4.    Iceland, Ireland, and Devaluation Denial – The New York Times

    I guess I understand the urge to make excuses for the single currency. But the evidence really does suggest that there are important advantages to keeping your own currency.

    If …, and Paul knows what those if's are too. The euro could have worked, and worked well, had the Europeans swallowed their respective prides and truly unified. We're still waiting: Germany, et al.

    Add your comment.


  5.    The candour deficit — rise and fall: what next? — Gavin Kelly's blog — Medium

    Gavin Kelly:

    Those scrutinising fiscal numbers need to constantly remind ourselves about the curse of false precision. Fiscal projections are always and everywhere wrong?—?the only question is by how much.

    Add your comment.


  6.    LSE Business Review — There's no such thing as an "optimal" size of the state

    Linda Yueh:

    With the cuts, the UK is looking closer in size to the United States, and farther from other European nations. The welfare state, though, means that Western nations won't, and may not want to, move toward the Asian small state model. With an ageing population in the West, that's unlikely in any case. But, today's plans by the Chancellor shows that the UK state is being reconfigured, and the voters will decide in five years' time if they like what they see.

    Add your comment.


  7.    Shenandoah council makes two-pronged assault on blighted properties – News – Republican Herald

    This is quite a story.

    The borough council is making a two-pronged assault on three blighted row properties that local residents are up in arms about on health and safety issues.

    Residents who live near the properties along the 200 block of North Race Street have been attending the borough council meetings for more than a year, and at Tuesday's meeting they were adamant that the situation be corrected.

    The problems with the three vacant, dilapidated properties brought groups of residents to council meetings last year, the first meeting in August with more than a dozen local residents attending.

    Add your comment.


  8.    John and Maynard's Excellent Adventure – The New York Times

    Worth revisiting:

    Paul Krugman:

    … once you are in a liquidity trap — the rules change. Even huge increases in the monetary base won't be inflationary — they shift MM to the right, but it makes no difference. Large budget deficits, which shift GG, won't raise rates. However, changes in spending, positive or negative — e.g., harsh austerity — will have an unusually large effect on output, because they can't be offset by changes in interest rates.

    All of this was predicted in advance by those of us who understood and appreciated Hicksian analysis. And so it turned out.

    Add your comment.


  9.    Corruption: A Hidden Tax on Growth | iMFdirect – The IMF Blog

    Vitor Gaspar and Sean Hagan:

    Powerful elites in business and politics collude to control public institutions, capture the policy-making process, and monopolize government contracting and procurement. Another panelist defined corruption even more broadly as "the lack of impartiality in government", where public money and authority are used in ways that impact negatively on human well-being.

    … the costs are not only economic in nature. Corruption also contributes to the loss of public trust in government, higher levels of inequality in political influence, the deterioration of public values and, ultimately, to the diminution of citizens' well-being or quality of life. These non-economic costs create a vicious cycle of under-performance of the public sector that is harmful to the economy in the long-term.

    Add your comment.


  10.    How much do people really know about inflation? – Agenda – The World Economic Forum

    This is forward-guidance forward guidance (yep, twice on purpose).

    Ylan Q. Mui:

    "The fact that the public may largely be unaware of the policies or of their implications for aggregate prices implies that their effects will most likely be limited, or at least less than predicted by models with full information rational expectations agents," the authors write.

    The authors say the knowledge gap is an opportunity for the world's central banks. The Fed in particular has made a concerted effort to increase transparency and communication with Main Street. Other studies have found that businesses that are given information about the central bank's inflation target tend to revise their forecasts to match that target.

    "This suggests that if central banks can more successfully communicate their objectives to the broader public, then this should have a pronounced effect on the beliefs of individuals," the paper states.

    Add your comment.


  11.    China's Latest Five-Year Plan by Martin Feldstein – Project Syndicate

    I have always taken Martin Feldstein with a huge grain of salt.

    … Chinese government is therefore considering several policies to increase the pace of urbanization, including the creation of several new large cities to accommodate some of the 600 million individuals who still live in rural China. Similarly, the government will phase out the hukou system of residency permits that now prevents migrants to the cities from obtaining full health care and education benefits.

    A third policy change aimed at promoting urbanization will be to allow Chinese farmers to sell their land rights at realistic market prices, thereby increasing their incentive to cash out and move. And the introduction of a Western-style rental market will allow families without substantial cash or parental support to move to cities (where families currently must purchase their apartments).

    The rental market will help to absorb some of the vacancies (the units just sitting as investments for bubble-style appreciation and doing nothing really so far but deteriorating).

    Add your comment.


  12.    Safety Lapses and Deaths Amid a Building Boom in New York – The New York Times

    This is mostly a story of corruption that includes the terrible exploitation of desperate lower- and under-class workers. It represents awfully poor risk management, both private and public.

    Reporting was contributed by Kim Barker, Veera Kaur, Ken Schwencke and Isvett Verde, and research by Susan C. Beachy.

    Add your comment.


  13.    Buy-to-let calculator: how will new tax reduce your profit? – Telegraph

    The superrich won't be hurt. More Ma 'n Pa landlords will be driven out of the business. Banks will make new loans to common buyers if possible, if the superrich don't just buy up the now rented-out properties at steep cash-out discounts offered by desperate middle-class landlords seeking to dump their new white-elephants created by George Osborne for the sake of…what's not to like if you're a rich Tory?

    If this "works" in the UK, then middle-class investors in America might look forward to the same treatment at the hands of crony "laissez-faire" capitalists in Congress.

    Add your comment.


  14.    Menachem Stark | 120 S. Fourth Street Williamsburg |

    Inspectors from the Department of Buildings on Tuesday found that the five-story, 20-unit building at 120 South 4th Street "has questionable structural integrity [because of] the installation of substandard structural steel columns, trusses, beams, welds," the New York Post reported.

    Add your comment.


  15.    Ayn Rand vs. Anthropology – Evonomics

    An interesting read and a good, moral story:

    Eric Michael Johnson:

    "Cephu committed what is probably one of the most heinous crimes in Pygmy eyes, and one that rarely occurs. Yet the case was settled simply and effectively," Turnbull concluded. Among the Mbuti, as with most hunter-gatherer societies, altruism and equality are systems that enhance individual freedom. Following these moral rules helps prevent any one individual from taking advantage of others or even dominating the group as a whole because of unequal privileges. However, just as it is in our society, the negotiation between the individual and the group is always a work in progress. Perhaps that is why, after the Mbuti had feasted on the day's successful hunt, one member of the group slipped away to give the still moaning Cephu some of the cooked meat and mushroom sauce that everyone else had enjoyed. Later that night, Cephu turned up at the main camp, where he sat on the ground and sang songs with the rest of his tribe. Holding up the world isn't so trying when there are others who can lend a helping hand.

    Add your comment.


  16.    Confidence In Oil Hub Security Shaken By Oklahoma Earthquakes : NPR

    Control center operators ordered inspections after the strong quake last month. In response, state regulators shut down and limited injection at nearby disposal wells.

    McNamara, the USGS scientist, says that was smart. They did the same thing last year, too, which he says seemed to slow the shaking — at least for a while.

    The earthquake activity near the oil hub resumed when the wells came back online.

    How many times would that have to happen before they'd say that they know for sure that the fracking industry is causing the quakes?

    Add your comment.


  17.    Deutsche Wohnen to buy $1.17 bln in real estate – MarketWatch

    Add your comment.


  18.    High returns bring foreign investors to Detroit real estate market – Crain's Detroit Business

    In major markets like New York City, Los Angeles and Miami, investors can expect capitalization rates of 4.5 to 6 percent. Locally, they are between 6.75 and 7.75 percent, Bernard said, with the best investment-grade properties in prime locations having capitalization rates of 7 to 8.5 percent.

    "That's why foreign money is coming here," ….

    Add your comment.


  19.    Dozens of Alberta real estate agents fined for improper condo measurements | Edmonton Journal

    Interesting issues concerning registered versus living size and those versus plain errors or even deliberate fraud:

    Real estate professionals in Edmonton must complete several categories for properties in the MLS system, including one described as "registered size." The size must come from the condominium plan registered with a land titles office. Building plans can be pulled for a $2 fee through an online system.

    In many cases, complaints have noted discrepancies of relatively minimal square footage — for example, a listed size of 1,109 square feet, versus an actual registered size of 1,038 square feet. But in some cases, the differences were more significant, such as a listed size of 1,044 square feet, versus an actual registered size of 943 square feet.

    Add your comment.


  20.    Chinese Cash Floods U.S. Real Estate Market – The New York Times

    This article is the length of a small book. It doesn't discuss the Chinese government cracking down on money leaving China illegally.

    At the university level, the Chinese now make up 31 percent of all international students in the United States, according to the Institute of International Education. While New York, Los Angeles and Boston are popular destinations for Chinese students, more are attending universities in the Midwest, with its giant institutions like Ohio State and Michigan State.

    China's history of corruption has also left people vulnerable.

    According to state media, a top government official, Bo Xilai, and his aides ordered the confiscation of as much as $15 billion from wealthy families, who were accused of crimes based on sometimes flimsy evidence. Mr. Bo, a former member of the Politburo, is now serving a life sentence for bribery, embezzlement and abuse of power.

    A recent Goldman Sachs analysis found that some types of capital outflows closely follow Chinese anti-corruption campaigns. As crackdowns intensify in China, outflows tend to increase.

    Add your comment.


  21.    There's a Big Drop in U.S. Treasury Debt Supply Coming in 2016 – Bloomberg Business

    While traders are pricing in a 72 percent chance the Fed will lift rates from near zero in December, they still see the rate below 1 percent in a year's time. Forward rates imply that traders also expect yields on 10-year notes, used to set interest rates on everything from mortgages to corporate bonds, will rise to about 2.5 percent over the same period — less than 0.3 percentage points above the level of 2.22 percent today.

    If the Fed gets it wrong even slightly, it will have to reverse course, which would bring mortgage and other interest rates back down where they ought to be until we see not just lower unemployment numbers but higher wages and a higher labor-participation rate enough to really cause price inflation rather than mere guessing that the broken Phillips Curve actually will work.

    The problem with the Phillips Curve is low tax rates for the superrich. You heard it here first, folks.

    How does that work? The rich keep more and spend it on regulatory capture so that labor will be held way down. So, workers fight over scraps while the wealth and income gap widens. Worker wages can't then overheat the economy. Lower interest rates don't make up the difference, not even close.

    I don't have to do the math(s) to know there's not just a correlation between tax rates and the Phillips Curve but also causation. Yes, that includes demography and automation and all the other variables.

    Add your comment.


  22.    U.S. Banks' Changing Footprint at Home and Abroad Liberty Street Economics

    Speak of the Devil: Low-and-no tax rates on the ultra-wealthy:

    Linda Goldberg and Rose Wang:

    The Tax Justice Network (TJN) categorizes countries as tax havens and financial secrecy locations based on a Financial Secrecy Index. TJN computes a tax haven score for a country based on whether it has laws that encourage tax evasion. It calculates the secrecy score by assessing many characteristics of a country's legislation including knowledge of asset ownership, corporate transparency, tax and financial regulations, and adherence to international standards and cooperation.

    Affiliates of U.S. BHCs [Bank Holding Companies] located in these types of jurisdictions grew rapidly from 2000 to 2009, with the average share of total affiliates in tax/secrecy locations rising to 9 percent. The geographic distribution of affiliates also became more concentrated: while the Cayman Islands and Ireland made up 24 percent of all tax/secrecy affiliates in 2000, by 2009, this share climbed to more than 40 percent. The share of affiliates in Jersey and the Netherlands also grew, whereas the share in Hong Kong, the British Virgin Islands, and Bermuda decreased.

    By 2013, the Cayman Islands and Ireland were the dominant tax haven locations for large BHCs as measured by the number of affiliates, followed by Jersey, the Netherlands, Bermuda, Hong Kong, Mauritius, the Bahamas, Singapore, Malaysia, and Switzerland. Among this group, Jersey, Bermuda, the Bahamas, Malaysia, and Switzerland also are classified by TJN as high financial secrecy locations.

    Add your comment.


  23.    Economist's View: 'Is Balanced Growth Really the Answer?'

    Mark Thoma:

    … as I've said many times, if the distribution of income is determined by something other than productivity, as it appears to be — if income that was not earned through higher productivity flows to those at the top of firms due to unequal bargaining power or other forces — then returning that income to those who did earn it is not taking something unjustly (taking the normative position that people should earn their contribution to national output), instead it is restoring justice.

    However, those who have, say those who get, deserve. So, labor just needs to take back? Then, though, those who have, say, "Not fair." So, just take it back and that will be just? Yes, I agree.

    Add your comment.


  24.    Zillow's 2016 Forecast: Suburban Living Heats Up | Zillow Blog

    Sounds right:

    Emily Heffter:

    More low-income Americans will be priced out of homeownership. Home values are rising faster than incomes, so in 2016, the poorest Americans will be unable to afford even the least expensive homes.

    Rents will soar in 2016, bringing the highest median rents ever.

    People will move outside cities to find affordable homes….

    Add your comment.


  25.    Chinese Pull Back From U.S. Property Investments – WSJ

    This article is a bit more realistic but still wildly overly optimistic about Chinese continuing to invest as heavily in the US. The Chinese government can't afford to let them continue to drain money away from China.

    Laura Kusisto snd Alyssa Abkowitz :

    … in recent weeks, some Chinese buyers have started to pull back, scared off by China's stock-market selloff, slowing economic growth, currency devaluation and tightened restrictions on capital outflows. …

    Chinese individuals are limited to annual overseas investments equal to about $50,000. For years, Chinese have surpassed that limit, in part, by funneling money through relatives and employees. In recent months, the government has made it tougher to transfer money abroad, said real-estate brokers in both countries.

    Add your comment.


  26.    COP-21 climate deal in Paris spells end of the fossil era – Telegraph

    Ambrose Evans-Pritchard:

    China has in effect switched sides since Copenhagen, no small matter for a country that now emits as much CO2 as the US and the EU combined. It has embraced green energy with the zeal of the converted, rushing to clean up its toxic cities and head off a middle-class revolt that threatens the legitimacy of the Communist regime.

    It will introduce a cap-and-trade system for emissions in 2017. The dirtiest coal plants are being shut down. Some 200 GW of solar capacity are to be installed by the end of the decade. President Xi Jinping has vowed to cap total CO2 emissions by 2030 – if not earlier.

    The sums of money are colossal. Macro-economists say this is just what is needed to soak up the global savings glut and rescue the world from its 1930s liquidity trap. There might even be a boom.

    Add your comment.


  27.    How to Effectively Interview Potential Property Managers For Your Rental

    Mark Ainley:

    Some of the important factors and questions you need to discuss and explore before hiring a property manager or services of a property management company are: …

    Add your comment.


  28.    Repossessions spike 66% as foreclosure crisis lingers

    Diana Olick:

    "There are so many of them coming so quickly that investor demand hasn't kept pace with the new supply. That will probably change," said Rick Sharga, executive vice president at Auction.com, a real estate auction company.

    A lot of the properties, added Sharga, are either still occupied or not suitable for owners yet. They will need to be rehabbed before they're worth anything. Also, companies like Auction.com, which investors follow, are not a part of the auction process in those judicial states, because auctions are usually done by local county sheriffs.

    Add your comment.


  29.    Challenging the Oligarchy by Paul Krugman | The New York Review of Books

    Paul Krugman on Robert Reich's new book, "Saving Capitalism: For the Many, Not the Few":

    Milton Friedman, in a deeply influential 1953 essay, argued that monopoly mattered only to the extent that actual market behavior differed from the predictions of simple supply-and-demand analysis—and that in fact there was little evidence that monopoly had important effects.3 Friedman's view largely prevailed within the economics profession, and de facto in the wider political discussion. While monopoly never vanished from the textbooks, and antitrust laws remained part of the policy arsenal, both have faded in influence since the 1950s.

    It's increasingly clear, however, that this was both an intellectual and a policy error. There's growing evidence that market power does indeed have large implications for economic behavior—and that the failure to pursue antitrust regulation vigorously has been a major reason for the disturbing trends in the economy.

    … Like a number of other commentators, Reich argues that there's a feedback loop between political and market power. Rising wealth at the top buys growing political influence, via campaign contributions, lobbying, and the rewards of the revolving door. Political influence in turn is used to rewrite the rules of the game—antitrust laws, deregulation, changes in contract law, union-busting—in a way that reinforces income concentration. The result is a sort of spiral, a vicious circle of oligarchy. That, Reich suggests, is the story of America over the past generation. And I'm afraid that he's right.

    He is right.

    It's not capitalism that needs to be saved but open and direct democracy that finally needs to be given the chance it has never had.

    Add your comment.


  30.    September's nonresidential spending retains momentum in October, ABC says

    "The data tell a simple story: October was a strong month for nonresidential construction spending," said ABC Chief Economist Anirban Basu. "Interestingly, in October, publicly financed construction spending expanded more rapidly than private construction spending, representing a stark reversal from prior years when construction's recovery was motivated almost exclusively by private spending growth. There is reason to believe that public finances will continue to improve, which should help bolster nonresidential construction's fortunes into 2016.

    Add your comment.


  31.    China's gold star | Brookings Institution

    Give the professor some credit for knowing more about this than your run-of-the-mill libertarian capitalist, such as Ron Paul.

    Ben S. Bernanke:

    Private investors and governments freely choose to hold dollars because the markets for dollar-denominated assets are, by far, the deepest and most liquid of any currency; because the United States imposes no restrictions on capital flows in or out of the country; because of the quality of U.S. financial regulation; because the Federal Reserve has kept inflation low and stable for the past thirty years; and because the United States is large, prosperous, and politically stable.

    If China continues to develop economically and to liberalize its institutions, then someday the renminbi may play a larger role in international trade and finance than it does today. Is that something we should worry about? The underappreciated fact is that the direct benefits to the United States of issuing the dominant international currency are probably quite modest. It's often argued, for example, that the dollar's status allows the United States to borrow abroad more cheaply; but, in inflation-adjusted terms, the U.S. government does not enjoy meaningfully lower borrowing costs than other advanced industrial countries. We do benefit from the fact that much U.S. currency is held abroad, since these holdings amount to interest-free loans to our government; but other currencies, like the euro, are also widely held, and in any case the interest savings from foreign currency holdings are tiny compared to the overall U.S. government budget or the size of our economy. Rather, like the gold star on your homework, the dollar's status is valuable only insofar as it is symbolic of the underlying strengths of the U.S. economy.

    Add your comment.


  32.    Robert Reich on Enforcing Capitalism – Evonomics

    The Street's political clout is not unrelated to the fact that top bank executives who took great risks or overlooked excessive risk taking retained their jobs, evaded prosecution, avoided jail, and continued to rake in vast fortunes. And why the Dodd-Frank Act, intended to avoid another financial crisis, was watered down and the rules to implement it were filled with loopholes big enough for Wall Street executives to drive their Ferraris through.

    Tom's soapbox time:

    Concerning the title of Robert Reich's book, "Saving Capitalism," it really isn't saving capitalism. It's saving the mixed economy from real socialism. In real capitalism, there is no publicly owned anything. Capitalism and socialism are diametrically opposed.

    One might properly say, saving the capitalistic aspects of the economy or by contrast, saving the socialistic aspects of the economy: meaning, saving the private sector from socialism or saving the public sector from capitalism.

    The term "mixed economy" really proves the point if one ponders it long enough. Capitalism isn't mixed. Socialism isn't mixed.

    Capitalism is where money is the only way of voting. Socialism is often mistakenly considered as being possibly also anti-democratic, but that's just a superficial view of socialism. There really can be no such thing as an anti-democratic-socialist dictator.

    The notion of a tyranny of the majority under a real, direct democracy is also a misconception, a mangling of the idea of tyranny (managed by capitalists for the sake of selfish competition over unselfish cooperation).

    In my view, Robert is making the same mistake Bernie Sanders has been making when Bernie says he's a democratic socialist and then goes on to define it as New Deal lite.

    Robert can be somewhat forgiven though because of the expression "saving capitalism from itself," typically attributed to Franklin D. Roosevelt. That's pretty much what Bernie leans on too when Bernie reminds people that the New Deal was called socialist. Well, it had a larger public component than before the New Deal, but that hardly justifies anyone calling the New Deal socialism and it doesn't entirely excuse Bernie Sanders capitalizing on the initial false claims by New Deal detractors.

    Add your comment.


  33.    Inequality and the City – The New York Times

    Paul Krugman:

    As Jason Furman, the chairman of the White House Council of Economic Advisers, recently pointed out, national housing prices have risen much faster than construction costs since the 1990s, and land-use restrictions are the most likely culprit. Yes, this is an issue on which you don't have to be a conservative to believe that we have too much regulation.

    The good news is that this is an issue over which local governments have a lot of influence. New York City can't do much if anything about soaring inequality of incomes, but it could do a lot to increase the supply of housing, and thereby ensure that the inward migration of the elite doesn't drive out everyone else.

    Too much regulation doesn't mean that, that's true everywhere about every regulation. Zoning and building codes are critically important to health and safety. Concerning environmental hazards, there is not enough regulation in most places.

    Consider noise pollution in inner cities, it can literally be deafening. Noise causes stress even to those who think they are completely ignoring it. Noise sources ought to be regulated to force technological changes bringing forth quiet systems to replace current systems often needlessly, and sometimes deliberately, way too loud. Traffic noise is a prime case in point. Some motorcycles, cars, and trucks are deliberately loud and driven hard on purpose to send out aggressive messages by drivers.

    Add your comment.


  34.    Insurance Policy 'Escape' Type 'Other Insurance' Clause Given Short Shrift by California Court

    Richard B. Wolf:

    "We adhere to the 'modern trend [of requiring] equitable contributions on a pro rata basis from all primary insurers regardless of the type of 'other insurance' clause in their policies. . ."

    It is a trend, and it will change underwriting and, consequently, premiums going forward. They will rise, but insureds will generally be better protected.

    Add your comment.


  35.    Major Fault Near California Nuclear Reactors Links to Second Crack

    … the Nuclear Regulatory Commission directed Diablo Canyon to conduct additional, in-depth analysis on earthquake risks by June 2017 … following Japan's Fukushima Dai-ichi disaster. … the California plant is among those that face the highest hazard when potential strong ground shaking is evaluated against the plant design.

    In my view, it should be decommissioned ASAP.

    Add your comment.


  36.    Majority of Baltimore's Riot-Damaged Businesses Have Reopened

    Baltimore's economic development agency says 93 percent of the businesses damaged by rioting, looting and arson in April have reopened.

    Check your insurance policy. Here's a pretty good overview of what to look for: http://blog.legalsolutions.thomsonreuter s.com/practice-of-law/riot-looting-vanda lism-insurance-coverage/

    Add your comment.


  37.    Aging U.S. Nuclear Plants Pushing Limits of Life Expectancy

    "There are a number of safety issues with pushing these technologies twice beyond their original projected life span," Tyson Slocum, … , said by phone on Nov. 18. "You've seen a number of issues from Davis-Besse to Vermont Yankee where aging components triggered a variety of leaks."

    It's a reckless gamble. We could, and should, have a new Manhattan Project effort to bring forth clean, safe, alternative-energy sources.

    Add your comment.


  38.    Federal Reserve Votes to Retire AIG Bailout Tool

    The Fed's support of major banks and non-financial firms highlighted the risks of having companies that are considered too big to fail, and of the implicit promise that they would be rescued. …Dodd-Frank reforms reined in those powers, and the rules approved on Monday put those Dodd-Frank provisions into effect.

    Add your comment.


  39.    China's Market Crash Means Chinese Supergrowth Could Have Only 5 More Years to Run

    … China lacked the good-and-honest-government, the societal trust, and the societal openness factors that appear to have made for full convergence to the U.S. frontier in countries from Japan and Singapore to Ireland and France. One of the few historical patterns to repeat itself with regularity over the past three centuries has been that, wherever governments are unable to make the allocation of property and contract rights stick, industrialization never reaches North Atlantic levels of productivity.

    … Chinese entrepreneurs have protection via their fealty to connection-groups within the party that others do not wish to cross. It is, in a strange way, almost like the libertarian fantasy in which you hire your own personal police department in a competitive market come to life. Such a system should not work: Party connection-groups should find themselves unable to referee their disputes. The evanescence of their positions should lead them into the same shortsighted rent-extraction logic that we have seen played out over and over again in Eastern Europe, sub-Saharan Africa, Southeast Asia, South Asia, and Latin America. And yet, somehow, in China, eppur si muove.

    … China's success at grasping the future depends not on economic growth but on political reform–the establishment of the rule of law and an open society rather than the rule of the CCP and a closed party elite–and only after successful political transition might economic growth and convergence resume.

    Unlike Brad DeLong, I wasn't surprised by China's rise over the last few decades. I've only been surprised over the last few years that it has taken as long as it has for things to get where they are: tenuous at best.

    I think the concept of "liberty" hasn't been strong in Chinese history is the reason. China is still somewhat cut off from "Western" ideological ideas. The Communist (in name only) Party tries mightily to block such ideological ideas from getting to the Chinese people. However, trade has caused it to happen more and more, though the promise of opening up China's markets to open up China democratically was never really what was going on. It was always all about money to be made and power and control to be had on account of it.

    However, just as Western news doesn't get through to China very well in any uncensored fashion, news coming out of China is also filtered and not simply by the Chinese but also by the "free-marketeers" who want the world to think all is well in China when, in fact, there is often large unrest.

    The low-hanging fruit has been picked. If China wants to reach the high fruit, it will have to truly open up, which means democracy.

    Even the US has been greatly stymied by the "two-party system" because both have been captured by plutocrat owners of huge corporations, corporations larger than most nation-states.

    Add your comment.


  40.    Andrew Samwick's Blog: Hillary Clinton's Infrastructure Plan

    the American Society of Civil Engineers (ASCE) has updated its quadrennial Infrastructure Report Card. As of 2013, the costs to improve our D+ grade had reached $3.6 trillion. That far exceeds what we allocate to infrastructure investment over a reasonable period, and the additional $275 billion (perhaps coupled with private funds to reach a total of $500 billion) over 5 years that Hillary Clinton has proposed is a small step in the right direction.

    Small is right. Even Bernie Sanders' plan is way, way, way too small at only double Hillary's.

    We need to spend at least $1 trillion a year for the next two decades (and increased to account for any inflation). The money needs to come right out of the Treasury created as debt-free money spent by the government directly into the economy to pay for the infrastructure.

    Of course, if we were to do it correctly, we could spend twice that and with zero price inflation.

    Compare Sanders' plan: https://www.washingtonpost.com/news/fact -checker/wp/2015/11/16/bernie-sanderss-c laims-about-his-1-trillion-infrastructur e-plan/

    Add your comment.


  41.    The Good Old Days of the Gold Standard? Not Really, Historians Say – The New York Times

    In 2012, the University of Chicago asked 40 leading economists whether a gold standard would improve the lives of average Americans. All 40 said no.

    … Nations began to rebound from the Great Depression when they began to abandon gold. Most developed nations now ask central banks to strike a balance between stabilizing broad measures of price inflation and encouraging economic growth, and then leave it to the technocrats to decide how much money to print.

    "There is a long history in the United States, going back to Andrew Jackson, of deep skepticism of the power of anonymous financial technocrats," Mr. Eichengreen said. "This wish to substitute simple rules partly reflects a strain of political ideology that thinks government intervention only causes problems and never solves them. And partly it reflects a lack of careful understanding of how these earlier regimes work."

    In fact, the gold standard did not even work during periods of calm. What is often described as an era of stable prices was more like a roller-coaster ride that ended back where it began, after bursts of inflation and deflation.

    Even economists who want to remove human judgment from monetary policy tend to look down on the gold standard. Milton Friedman, a conservative economic icon, suggested that monetary policy should not be determined by people or by gold, but instead by a computer program.

    "Ben Carson and Mike Huckabee, former Arkansas governor, both agreed that the value of the dollar should be tied to something." It should be. It should be tied to real productivity and nothing else. Milton Friedman was also right, though his concept of the program was severely lacking.

    "Monetary-and-Banking-Reform Platform for The United States": http://propertypak.com/introduction-home  /articles/monetary-and-banking-refor m-platform-for-the-united-states/

    Abraham Lincoln had it mostly right, though he was forced by banking powers to not use debt-free Greenbacks to pay off the national debt. It was similar to when FDR was prevented by commercial interests from giving high-skills training to the unemployed and then employing them in the public sector on a permanent basis. The parasitic superrich (plutocrats) didn't want the gravy train to run out. It's the same now.

    Add your comment.


  42.    The New Supply-Side Economics | The Fiscal Times

    Mark Thoma:

    Republicans have stood in the way of infrastructure spending based upon ideology or the false belief that stabilization policy is detrimental to long-term growth. But we could have our cake and eat it too — stabilize the economy and promote long-term growth. If only they'd go along.

    Correct.

    Add your comment.


  43.    The $400 billion ripoff that could destroy the Greek bailout

    Funny business but nothing to laugh about:

    Nasos Koukakis:

    As if Greece didn't have enough economic market woes, last week foreign investment funds managed to take control of four of the country's largest banks — Alpha Bank, Eurobank, National Bank of Greece and Piraeus Bank — through $6.42 billion worth of capital increases and a complex set of legal manipulations. As a result, bank shares sold like penny stocks, diluting state ownership in these important institutions that have assets totaling $358 billion.

    This is a direct result of Tsipras not implementing Varoufakis' plan.

    Add your comment.


  44.    Bank Crimes Pay: Under the Thumb of the Global Financial Mafiocracy | Occupy.com

    These financial institutions are major owners of government debt, which gives them even greater leverage over the policies and priorities of governments. Exercising this power, they typically demand the same thing: austerity measures and "structural reforms" designed to advance a neoliberal market economy that ultimately benefits those same banks and corporations. The banks in turn create the very crises that require governments to bail them out, racking up large debts that banks turn into further crises, pressuring economic reforms in return for further loans. The cycle of crisis and control continues, and all the while, the big banks and financial institutions engage in criminal conspiracies, fraud, manipulation and money-laundering on a massive scale, including acting as the financial services arm of the world's largest drug cartels and terrorists organizations.

    Welcome to the world governed by the global financial Mafiocracy — because if you're not concerned, you're not paying attention.

    Can we turn the corner on all of this?

    There are people working in these corporations who are trying to do ethical work.

    What suggestions do you have?

    Add your comment.


  45.    Why Good Maintenance is the Best Way to Retain Tenants

    I think this is a very good article by Andrew Syrios. However, on average, unless you're doing a rather poor job with maintenance, undue noise and other such problems by other tenants is probably the area where you must clamp down quickly and firmly. Most stable and good-paying tenants like relative peace and quiet even more than an emergency reaction to a lightbulb not working in the garage. Of course, if were talking about single-family homes, it's an entirely different matter.

    If it's a big maintenance issue, a high safety and/or health matter, then bend over backwards to get it taken care of. Such emergencies can be few and far between, but good tenants will remember and will speak highly of your efforts to potential tenants. You will recoup the overtime/weekend/holiday emergency charges in added goodwill and positive marketing.

    Add your comment.


  46.    FRB: Speech with Slideshow–Yellen, The Economic Outlook and Monetary Policy–December 2, 2015

    Janet Yellen:

    Ongoing gains in the labor market, coupled with my judgment that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2 percent as the disinflationary effects of declines in energy and import prices wane.

    … One indication that the neutral funds rate is unusually low is that U.S. economic growth has been quite modest in recent years despite the very low level of the federal funds rate and the Federal Reserve's very large holdings of longer-term securities. Had the neutral rate been running closer to the levels that are thought to have prevailed prior to the financial crisis, current monetary policy settings would have been expected to foster a very rapid economic expansion, with inflation likely rising significantly above our 2 percent objective.

    Two things:

    First, concerning the language "as the disinflationary effects of declines in energy and import prices wane," it needs to be understood that energy and import prices do not have to move in the same direction. In fact, it is highly possible energy costs (barring WWIII) could drop. Import prices could remain quite low for a very long time and ironically largely depending upon what the Fed does (if it raises rates).

    Second, the logic that the "neutral funds rate is unusually low" also should be applied coming at the issue from the other direction. What I mean there is that raising the rate could, under the circumstances, all the sooner undercut economic growth. Since yields are so hard to come by, small increases in the Fed's rate are actually relatively larger than in recent decades when interest rates were generally much higher. A small increase or two could cause banks to want to lend more but will all the sooner make borrowing unaffordable, not that it isn't already.

    It appears to me that the Fed is hoping against "pushing on a string." Monetarism hasn't been much of a tool relative to fiscal stimulus.

    It would be vastly superior were the US government to control inflation/deflation via fiscal spending rather than by trying to depend on interest rates so banks may constitute a grossly out-sized portion of the global economy.

    These are not easy concepts to impart or instill, but they need to be widely debated and not simply dismissed in brainwashed fashion.

    Add your comment.


  47.    Las Vegas: The Town That Choked on Debt | Zillow Blog

    There were even cases of homeowners being sued by squatters who were injured while squatting, Kiernan said.

    "I can't make this stuff up," he said. "There are all these crazy stories, and [that] story is very common — people filing bankruptcy and leaving their property thinking they were done."

    Once upon a time, before deregulation, ownership was mostly clear. The hyper-deregulators, securitizers, and fraudsters ruined a great deal of that and most of the economy too.

    Add your comment.


  48.    Property Manager: 7 Tasks to Keep Tenants Happy & Paying

    Matt Faircloth:

    If you are hiring a company to manage your building, make sure they are doing the items below and doing them well!

    The property manager's role is simple — keep the units full of happy tenants who pay their rent on time.

    William Nickerson is "rolling over in his grave." ( http://www.nytimes.com/1999/11/22/busine ss/william-nickerson-91-writer-of-popula r-investment-books.html )

    Add your comment.


  49.    Multiplier Evidence and Multiplier Denial – The New York Times

    Paul Krugman:

    One of the overwhelming lessons of the post-2008 crisis has been that fiscal multipliers are large when monetary policy can't offset the effects of spending cuts — which is what basic macroeconomics told us should be true, and is.

    That ties in with my comments above on Janet Yellen's ideas for raising rates without fiscal stimulus.

    Add your comment.


  50.    Landlords saying bah humbug on deluge of packages

    Diana Olick:

    … Monogram installed a high-tech locker system in the building's garage. It is powered by LuxerOne, a San Francisco-based firm that launched in 2005 with an automated laundry locker system. Delivery people stand at an iPad screen, punch in a delivery code, find the recipient's name and have the iPad take a picture of the package's mailing label. They then choose a locker size, which will be assigned to the package. Once the package is in, the system sends a text message to the building tenant, letting them know the package has been delivered and is ready to be retrieved. The tenant can come down, punch in the code that was texted, and the locker assigned to their package will pop open.

    This is going to be a growth industry for sure before it becomes standard, which it will, that's until we have Star Trek replicators, which we also will.

    Add your comment.


  51.    Oil speculators risk 'short squeeze' if impulsive Saudi Prince throws OPEC surprise – Telegraph

    Of course, maybe Janet Yellen sees the Saudi Royal Family falling. If she does, she may very well be right.

    Actually, it's only a matter of time. Will it be soon enough to merit a Fed rise this month? I don't think so. However, Janet needs to consider the following anyway:

    Ambrose Evans-Pritchard:

    Shale frackers will be snapping at the heels of OPEC for years to come. There is nothing the Saudis can realistically do about it.

    The real question than comes down to alternative energy and how quickly technological advancements can come on line, just as they have in fracking.

    I'm counting on it but not so much that I want us to sit on our carbon-burning hands. We need to stop burning as much as possible while undertaking a crash program for clean, alternative energy.

    It would be great for ending all the fighting for oil and gas reserves too.

    Add your comment.


  52.    North Carolina County Starts Program to Address Teen Arsonist Problem

    A very important subject:

    The reasons children set fires range from curiosity to a cry for help to thrill-seekers to children with major psychological problems, Gentry told the Asheville Citizen-Times.

    Add your comment.


  53.    AG Zoeller files lawsuit against serial home repair scammers …

    Indiana Attorney General Greg Zoeller filed a lawsuit today against serial home repair fraudsters who allegedly scammed at least 41 Indianapolis-area residents out of more than $280,000 after conducting similar schemes against Ohio and Kentucky residents.

    The Attorney General's lawsuit against Green Frog Restoration, Inc. and its owners, James Twaddle and Wanda VanWinkle, was filed in Hamilton County court today, and alleges violations of Indiana's Deceptive Consumer Sales Act, Home Improvement Contracts Act, Home Solicitation Sales Act and the Senior Consumer Protection Act.

    Tips to avoid home repair scams

    Home repair scams are a common complaint reported to the Attorney General's Office. The AG's Office encourages people to follow the below tips to avoid getting scammed by a home improvement company:

    Get multiple price quotes from different contractors.
    Check with the Better Business Bureau and the Attorney General's Office to see if complaints have been filed against the contractor.
    Check to make sure the contractor is locally licensed, bonded and insured. A performance bond provides the most direct protection for the consumer. Bonds that cover municipal code compliance may be helpful but would not offer direct monetary recovery for an aggrieved consumer.
    Opt for the local, well-established contractor rather than the door-to-door 'storm chaser.'
    Get a contract in writing that details what work is to be done and when it will be finished.
    If the contractor came to your door unsolicited, ensure you receive a notice from the contractor of your ability to cancel the contract within three days for a full refund before signing any contract.
    Never pay for the entire project before the work begins. Do not pay more than a third of the total cost as a down payment.

    Add your comment.


  54.    Should Opec stick or twist? | FT Markets – YouTube

    As Opec ministers prepare to meet in Vienna, questions are being asked about the effectiveness of the strategy that puts long-term demand over short-term financial gain. Neil Hume, commodities editor, outlines what we can expect this week.

    What with all the warring and sanctioning and so forth going on in and around oil-producing regions (pipelines, etc.), it's not an easy call.

    Add your comment.


  55.    International Military Review – Syria, Dec. 2, 2015 – YouTube

    This is the pro-Russian perspective on what's going on at the heart of the conflict zone (the heart for now). Oil and gas is a huge part of what's going on, but it is far from the whole ballgame, so to speak. Naturally, fuel is strategic, as anyone with it can become a power even if only regional.

    France agreed to coordinate airstrikes with Russia against ISIS and share information on the disposition of armed groups in Syria. On December 1, the German cabinet backed plans for military support in the fight against ISIS militants in Syria. Tornado reconnaissance aircraft, a naval frigate and a 1,200-strong force will be sent to the region under the proposals.

    Germany has an agreement with France to share information on the disposition of armed groups in Syria. Thus, Russia-France-Germany trilateral cooperation in the intelligence sharing on the Syrian crisis could be described as existent.

    Add your comment.


  56.    Sen. Corker's relationship with real estate industry highlighted in voting record – Yahoo Finance

    Where is the proper line between the mere appearance of a possible conflict of interest versus a real conflict of interest? This article doesn't answer that question but does beg it.

    So far, we must treat everything as suggested allegations: innocent until proven guilty. That said, it will be interesting to see how this plays out.

    Bethany McLean:

    As you may have seen, the Campaign for Accountability (CFA), a D.C. watchdog group, has called for an SEC and ethics investigation of Sen. Bob Corker (R-TN) for insider trading. Between 2008 and 2015, Corker, his wife and daughters made approximately 70 (70!) opportune and very profitable trades in the stock of a company called CBL & Associates Properties (CBL), which is one of the country's largest shopping mall REITs. (Just FYI, investors usually own REITS for their dividends, not as trading vehicles. It's also worth noting that the senator told Yahoo Finance several years ago that he had a Bloomberg terminal.) Nor was the full extent of Corker's trading disclosed until very recently, after the Wall Street Journal began asking questions. Corker has blamed his accountants for a technical mistake involving the use of a methodology that didn't require disclosure of the date of purchase. His spokesperson downplayed the CFA complaint and added that "these baseless accusations from a political special interest group are categorically false and nothing more than a smear campaign."

    Add your comment.


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