News: Real Estate, Risk, Economics. Mar. 7, 2016

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Table of Contents
(Click to sections below.)

1) China's Economic Blueprint Raises Questions About Ability To Balance Stimulus And Reform

2) Li Keqiang's Speech Unveils a Path to Stronger Economic Growth and a Greater Responsible China

3) China aims to maintain growth pace, fend off unemployment in five-year plan | Reuters

4) Trump's Softened Stance on Visas Alarms Some Immigration Critics – The New York Times

5) Flint water crisis could cost US $300 billion

6) Goodyear's Eagle-360 Magnetic Tires Steal the Spotlight at Geneva Motor Show • Lighthouse News Daily

7) Blackstone's Gray sees lower real estate returns | The Salt Lake Tribune

8) Five reasons real estate beats the market | www myajc com

9) Legal-Ease: Capital gains tax and trading properties – LimaOhio com

10) How real estate tycoons like Donald Trump can avoid paying federal taxes – The Washington Post

11) Americans Are Finally Returning To The Workforce | FiveThirtyEight

12) [Wrong] Bernie Sanders's trade problem: helping American workers would hurt the world's poorest – Vox

13) What the Mortgage Industry Needs to Know About Housing This Year – theMReport com

14) The State of American Retirement: How 401(k)s have failed most American workers | Economic Policy Institute

15) Small businesses report improving prospects, easier access to loans – The Washington Post

16) The February Jobs Report in 14 Charts – Real Time Economics – WSJ

17) How Much More Can the Labor Force Grow? – The New York Times

18) Galbraith: Attack on Sander's Economic Plan By Former CEA Chairs Irresponsible – YouTube

19) mainly macro: The strong case against independent central banks

20) Time for helicopter money? | Brookings Institution

21) EconoMonitor : Ed Dolan's Econ Blog – Sanders is Right, the US Needs a Healthcare System More Like Those in Europe

22) What Is the Economy's Speed Limit?

23) No, raising the local minimum wage doesn't hurt local businesses – The Washington Post

24) Restaurant industry unharmed by modest minimum wage hikes | Cornell Chronicle

25) The Mitt-Hawley Fallacy – The New York Times

26) China's Coming Mass Layoffs: Past as Prologue? | The Diplomat

27) EU superstate would have no democratic legitimacy, warns euro architect

28) China's Rebalancing Is Overrated – Bloomberg View

29) Construction Firms Add 19,000 Workers In February | Construction Equipment

30) Denmark teaches us some more about the impact of negative interest-rates | Notayesmanseconomics's Blog

31) Roofstock is a Marketplace for Investing in Leased Single-Family Homes. Generates Cash Flow on Day One. – Crowdfund Insider

32) Demolitions, rehabs reducing vacant properties across Columbus | The Columbus Dispatch

33) What is the cost of a disintermediated real estate industry? – REB

34) El Paso housing market improves

35) The End of Big Banks by Simon Johnson – Project Syndicate

36) Threat of a synchronised downturn & G20 Finance Ministers' complacency — Prime Economics

37) The Best Landlords Are Firm But Fair: Here's How to Adopt Their Principles

38) High-Skill Immigration: Experimental Evidence — LaborEcon

39) [This one truly is a "better late than never"] Who's afraid of John Maynard Keynes?

40) China: A 5-Year Plan And 50 Million Jobs Lost – The Automatic Earth

41) Sober Look: Canada's Changing Financial Landscape: Part 2, Banking

  1.    China's Economic Blueprint Raises Questions About Ability To Balance Stimulus And Reform

    The Communist Party's top leadership under party chief Xi Jinping is seen by many observers to be focused on political concerns and worries. …

    … Joerg Wuttke, head of the European Union Chamber of Commerce in China, which has called for faster reforms, told International Business Times that for the top party leadership, economic success may not be the top priority.

    "Foreigners always assume that for the party, its legitimacy depends on the economy functioning well," he said, "[but] I think they're mistaken. I think the priority list is still different. The party is concerned about the party first and foremost, [about] ideology, corruption. If you are busy as a leadership with military reform, party reform, you might actually believe that the economy is not in such dire straits, let's keep muddling through."

    "The party is concerned about the party first and foremost, [about] ideology…." It's about power and control, not ethics.

    Add your comment.


  2.    Li Keqiang's Speech Unveils a Path to Stronger Economic Growth and a Greater Responsible China

    I don't see this lasting. They do not govern with the consent of the people. They dictate to the people, who live in fear of punishment for simply advocating democracy or the basic freedoms we wish to enjoy here in the US under our Bill of Rights. Sooner or later, the people will demand and take power. In my book, the sooner, the better.

    I think major international corporations have been making a huge mistake by allowing the Chinese dictators to become hugely wealthy and to work to solidify their iron grip on power. Where is the social conscience of the leadership of those major corporations? It is severely lacking. Their positions on China are unethical. Some corporations have stood up to the dictatorship, but the entire world needs to do it to make it work.

    Add your comment.


  3.    China aims to maintain growth pace, fend off unemployment in five-year plan | Reuters

    … slower growth raises the specter of social unrest, as the transformation from low-end manufacturing to high technology and services leads to rising structural unemployment.

    … moves prompted heavy-handed intervention from the government, leading some to question whether the Chinese Communist Party was capable of following through on its commitment to let markets play a "decisive role" in setting the price of assets.

    Letting markets do that is akin to letting people vote for who will be the political leaders. Until the world moves into the next phase of economics, why push for one and not the other? Those who are only interested in neoclassical-capitalist economics, don't appear to understand what liberty really is. The people in China are actually primarily wage slaves. They don't have much say at all. The current Chinese dictator is only moving to make that worse.

    The dictatorship is harshly clamping down on press freedom. It is moving to prevent a democracy movement. It's insisting that it owns the "South China Sea," even though international laws of the sea make it clear that it does not and should not.

    It's time people around the world begin seriously discussing not sourcing from China until China becomes democratic. Naturally, some changes would have to be phased in, as China nearly corners the market in some sectors; but, it's doable with proper planning and would be good for increasing freedom in the world, something we should be striving for peacefully.

    What we shouldn't do is turn from sourcing from China to sourcing from other dictatorships (anti-democracies, places where some people are second-class citizens or less, as in China).

    Add your comment.


  4.    Trump's Softened Stance on Visas Alarms Some Immigration Critics – The New York Times

    On Friday, Mr. Perrero said he was not troubled by Mr. Trump's latest remarks. Mr. Trump, he said, was drawing a distinction between foreign workers with exceptional skills and the younger, less-skilled immigrants from India who Mr. Perrero said replaced him in his job.

    But Mr. Trump also unapologetically made a similar argument about filling labor shortages with foreigners on guest-worker visas when he parried attacks from Mr. Rubio and another rival, Senator Ted Cruz of Texas, over the foreign waiters and hotel workers he has hired at his resort in Palm Beach, Fla.

    "It's very, very hard to get people" in the winter high season, Mr. Trump said. "It's part of the law. We take advantage of it. There's nothing wrong with it."

    Was he drawing that distinction Mr. Perrero mentioned? He's intentionally not easy to read, but that is probably the distinction he was making.

    As for the "There's nothing wrong with it" quip, he likely meant that there's nothing wrong with taking advantage of the lax law and not that the lax law is a good one.

    It's fine if a person evolves in the right direction, even in the midst of a political campaign; but, there will come a time when Mr. Trump will have to be clearer on his thinking.

    The recent flip on waterboarding and killing terrorists' family members is a case in point. Why didn't he know that those were not good policies and practices before hearing it from so many people, even staunchly militaristic Republicans?

    Why do I discuss this on this blog? Again, it's a huge risk-management issue. If we grossly mismanage international affairs in the name of security, we run the huge risk of painting an even larger target on ourselves as the enemies of common decency.

    Killing the innocent members of a terrorist's family is nothing short of grossly obscene. Other innocent family members who survive such an attack from the US will detest the US and might well seek vengeance. Most astute international analysts believe US drone strikes have already led to a deepening violent radicalization against the US in many parts of the world.

    We must think before we speak and act or increase the risk of loss for no good reason.

    Add your comment.


  5.    Flint water crisis could cost U.S. $300 billion

    Fitch Ratings noted that if those costs are spread over a sufficient amount of time, they could be manageable. However, if those changes need to be implemented faster, it could cause financial stress for some water utilities. Those costs could eventually be passed on to consumers, said Andrew DeStefano, director for U.S. public finance at Fitch.

    This is a perfect example of where issuing debt-free currency to pay for infrastructure upgrades should be used ASAP. It would put people to work. The training would not be that time-consuming or difficult. It would help ramp up the economy without causing hyper-inflation.

    Let's not forget that if we were to run out of unemployed people seeking jobs, we could than easily bring in foreign workers without causing any harm to the US economy or workers.

    Add your comment.


  6.    Goodyear's Eagle-360 Magnetic Tires Steal the Spotlight at Geneva Motor Show • Lighthouse News Daily

    This is not one of my usual topics, but this could significantly impact how investors get around.

    Maglev the car from the tires instead of having springs and shocks? Wow. Do I have that right? The tires sound amazing too.

    Add your comment.


  7.    Blackstone's Gray sees lower real estate returns | The Salt Lake Tribune

    Blackstone remains bullish on U.S. housing, which "has a lot of room to run," Gray said. The firm's Invitation Homes unit — the biggest single-family landlord in the country, with 50,000 rental houses — is seeing rent gains of about 5 percent and occupancy at about 97 percent, according to Gray. The division is valued at about $12 billion and still plans to pursue an initial public offering at some point, he said.

    Add your comment.


  8.    Five reasons real estate beats the market | www myajc com

    The word ideal can be an acronym for five key factors of real estate investing that have made it attractive as an investment alternative.

    Let's take a closer look at each key characteristic: …

    Be very careful not to overuse leverage.

    Add your comment.


  9.    Legal-Ease: Capital gains tax and trading properties – LimaOhio com

    Good overview of the 1031 exchange by Lee R. Schroeder:

    Add your comment.


  10.    How real estate tycoons like Donald Trump can avoid paying federal taxes – The Washington Post

    Let's say you buy a building for $10 million. Every year, the value of that property depreciates. Say it depreciates $1 million a year. (The IRS mandates such a depreciation schedule.) After year one, it's worth $9 million. After year two, $8 million, and so on. After nine years, it has depreciated $9 million. If it were sold at that point for more than you paid — say, $11 million — you'd pay taxes on the $10 million difference between the $11 million you got and the $1 million value to which it had depreciated.

    But there's benefit! That $1 million a year counts as a loss. So if you make $10 million a year in income, but also own 10 properties that are each depreciating at $1 million a year, your income and your losses are equivalent. Boom. No net income, no income tax.

    Add your comment.


  11.    Americans Are Finally Returning To The Workforce | FiveThirtyEight

    Nice analysis work by Ben Casselman:

    The monthly labor force data is noisy, and the participation rate has risen before during the recovery, only to dip down again a few months later. The latest rebound has been longer and stronger than those short-lived upticks, but it's still possible that it could fade.

    … the improving labor market — the unemployment rate held steady at 4.9 percent in February — is encouraging Americans to come off the sidelines. That supports some economists' contention that there is a large pool of potential workers who aren't formally part of the labor force right now but who would be willing to work under the right circumstances. …

    … If more people start looking for work there will be more competition for available jobs, holding down wages. Average hourly earnings fell by three cents in February, and the year-over-year rate of growth dropped to 2.2 percent, the slowest pace since last summer. Wages are volatile, and it would be a mistake to read too much into one month of disappointing numbers (earnings growth was strong in January), but the increase in labor participation suggests wage growth could remain muted.

    … a larger pool of available workers means that job growth can continue without the economy overheating and driving up inflation. And over the long run, a higher participation rate should boost economic growth because more people are contributing to the economy.

    … average workweek fell by 0.2 hours (about 12 minutes), the biggest one-month drop in more than two years. When the economy is strong, companies often ask employees to work more hours as a precursor to hiring. So falling hours could be a sign they're seeing less demand for their goods and services.

    Add your comment.


  12.    [Wrong] Bernie Sanders's trade problem: helping American workers would hurt the world's poorest – Vox

    Zack Beauchamp:

    There's a solution for the damage trade has done to the American working class, one embraced by the Nordic countries that Sanders often cites as models for the United States.

    These countries tend to be extremely open to free trade. But they also have expansive welfare states that take money from globalization's winners and use it to compensate the workers who lose out. Everyone in these countries benefits from cheaper goods, the domestic lower middle class doesn't suffer, and the global poor benefit from selling their goods to rich consumers.

    According to the experts, something like this is the ideal solution to the dilemma of American trade policy. "I hope the next president would look for policies that help the poor both here and in poor countries, and don't pit them against one another," Elliott says.

    But American politics, clearly, won't allow that: It is, to say the least, unlikely that a Republican-controlled Congress would allow President Sanders to expand the US welfare state to Nordic levels in order to compensate the losers of the global economy.

    Which puts Bernie in a very awkward position: Delivering on his campaign promises requires doing real damage to the global poor.

    What this article deliberately avoids are 1) all the international negatives caused by the so-called "free trade" and 2) the real impetus behind the trade arrangements mentioned in the article.

    The Chinese people have seen wages increase. However, they've been inundated by massive pollution. They've had little to no say over policies and practices. The most that most can do is protest or riot, which just results in severe governmental crackdowns, not increased democracy.

    The real reasons behind the trade deals was not to lift people out of poverty or because growing incomes would invariably lead to democracy. The real reason was that profit margins would greatly increase for the top executives and shareholders of the various corporations that moved from the US.

    Worker safety and labor rights are not nearly as high on the agenda in most emerging markets.

    I too opposed all of the trade agreements Bernie Sanders opposed. I did so for the reasons I mentioned above. Had the US demanded high standards (for workers and the environment) in those other nations and had demanded democratic reforms before opening up to them, I would have been all for it. As it is, the superrich have only increased the wealth gap and managed to do it on the back of more wage slaves.

    Look what's happening in China right now. Jobs are leaving there and going to Vietnam because labor is cheaper there. That's happening before China gets beyond the middle-income gap too.

    I agree with Bernie Sanders and not with this VOX piece. Let it be understood that VOX is squarely in the Hillary Clinton camp, where lip-service is paid to progressivism but cozying up to megacorporation CEO's is the norm.

    What Sanders is against is the race to the bottom while the billionaire class gets richer and richer.

    Look at the sanctions placed on various nations. It's not as if Hillary's supporters are opposed to them. They're just highly selective concerning the poor they really hurt.

    Bernie Sanders is an international welfare-state advocate with fairly strong social-democrat leanings (he may be even more socialistic in his heart). He is not opposed to any other nation becoming a social democracy. He actually wants it. He is not opposed to open trade with other social democracies. Again, he's for it. Bernie wants fair trade, really fair trade, and globally. Ask him.

    Add your comment.


  13.    What the Mortgage Industry Needs to Know About Housing This Year – theMReport com

    The building permit statistics in January 2016 does not seem to suggest a big supply of housing is coming to makeup for the shortage, especially in affordable homes market. Thus, I would expect the prices of existing houses to increase based on the intensity of bidding wars. I am, however, optimistic about a comeback of supply. If the prices increase to a certain level, supply side can not pass the opportunity to make profits.

    Land costs and skilled-labor shortages are the main issues.

    Add your comment.


  14.    The State of American Retirement: How 401(k)s have failed most American workers | Economic Policy Institute

    This is an excellent argument for not privatizing Social Security. Things are bad enough already. A very thorough analysis:

    The trends exhibited in these figures paint a picture of increasingly inadequate savings and retirement income for successive generations of Americans—and growing disparities by income, race, ethnicity, education, and marital status. Women, who by some measures are narrowing gaps with men, remain much more vulnerable in retirement due to lower lifetime earnings and longer life expectancies.

    Decades after the number of active participants in 401(k)-style plans edged out those in traditional pensions, 401(k)s are not delivering substantial income in retirement, and that income is not equally shared.

    Retirement security has also been affected by changes in Social Security, notably the gradual increase in the normal retirement age and other benefit cuts implemented in 1983; by broader income and wealth trends, such as growing earnings inequality and the collapse of the stock and housing bubbles; and by other factors, such as trends in out-of-pocket medical costs. A description of these broader trends is outside the scope of this chartbook. However, we can assume that as the value of employer-based retirement plans is declining and retirement savings are growing more unequal, retirement security is declining and growing more unequal, since there is little evidence of countervailing trends.

    The shift from pensions to account-type savings plans has been a disaster for lower-income, black, Hispanic, non-college-educated, and single workers, who together add up to a majority of the American population. But even among upper-income white college-educated married couples, many do not have adequate retirement savings or benefits. The evidence presented in this chartbook—that the retirement system does not work for most workers—underscores the importance of preserving and expanding Social Security, defending defined-benefit pens ions for workers who have them, and seeking new solutions for those who do not.

    Add your comment.


  15.    Small businesses report improving prospects, easier access to loans – The Washington Post

    There were also signs of optimism: About half of surveyed businesses said they plan to add jobs in the next 12 months. (In 2014, by point of comparison, only 34 percent hired new workers.)

    Add your comment.


  16.    The February Jobs Report in 14 Charts – Real Time Economics – WSJ

    U.S. employers added 242,000 jobs in February and an uptick in the number of Americans joining the labor force kept the unemployment rate unchanged at 4.9%, the Labor Department said Friday. Of course, the guts of the monthly employment report provide a more textured view of the job market. Here's the latest overview, in charts: …

    Add your comment.


  17.    How Much More Can the Labor Force Grow? – The New York Times

    Neil Irwin nails many of the questions:

    The American work force, according to the Labor Department's survey of households, rose by a whopping 555,000 people in February. Over the last three months, that number totals 1.52 million, the highest it has been in 16 years. …

    We still don't know for sure how much more room there is to grow. Presumably most people who dropped out of the labor force around retirement age are out of the work force for good, no matter how many job opportunities present themselves. …

    … If the labor force keeps growing at the gangbusters pace of the last three months, all those new entrants will keep the downward pressure on wages. On the other hand, it might take higher wages to keep pulling people out of their homes and into the workplace.

    Won't many retirees come out of retirement because their retirement savings were severely hurt by the crash? Won't many also want to help contribute to family wealth, their children's and grandchildren's? We shall see.

    Add your comment.


  18.    Galbraith: Attack on Sander's Economic Plan By Former CEA Chairs Irresponsible – YouTube

    Professor James K. Galbraith [great heterodox economist and economic historian], author of INEQUALITY, says the attacks on Sanders plan were politically motivated assertions without evidence, it is professionally irresponsible to criticize a fellow economist, without having done any work.

    Here are the previous places where I've covered this issue on this blog. Some of them contain a great deal of detail on why the critics of Gerald Friedman and Bernie Sanders simply got it wrong. Even though a url appears to be a duplicate, each link points to a different place in the given post.

    1. http://propertypak.com/2016/02/26/news-r eal-estate-risk-economics-feb-26-2016/#0 2261632

    2. http://propertypak.com/2016/02/26/news-r eal-estate-risk-economics-feb-26-2016/#0 2261658

    3. http://propertypak.com/2016/03/01/news-r eal-estate-risk-economics-mar-1-2016/#03 01162

    4. http://propertypak.com/2016/03/01/news-r eal-estate-risk-economics-mar-1-2016/#03 01163

    5. http://propertypak.com/2016/03/01/news-r eal-estate-risk-economics-mar-1-2016/#03 01164

    6. http://propertypak.com/2016/03/03/news-r eal-estate-risk-economics-mar-3-2016/#03 03168

    7. http://propertypak.com/2016/03/03/news-r eal-estate-risk-economics-mar-3-2016/#03 03169

    8. http://propertypak.com/2016/03/03/news-r eal-estate-risk-economics-mar-3-2016/#03 031631

    Add your comment.


  19.    mainly macro: The strong case against independent central banks

    This is called letting the cat out of the bag, again. It used to be common knowledge. The bankers saw to it that the knowledge was flushed as much as possible. It's back and with a vengeance, I hope.

    Simon Wren-Lewis:

    Economists knew that the government could always get the economy out of a demand deficient recession, even if it had a short term concern about debt. The fail safe tool to do this was a money financed fiscal expansion. [It means create new money for the government to spend. It doesn't mean tax it out of the existing money supply.] This fiscal stimulus paid for by the creation of money was why the Great Depression could never happen again. But the existence of ICBs [Independent Central Banks] made money financed fiscal expansions impossible when you had debt obsessed governments, because neither the government nor the central bank could create money for governments to spend or give away. Central banks were happy to create money, but refused to destroy the government debt they bought with it, and so debt obsessed governments embarked on fiscal consolidation in the middle of a huge recession.

    "Central banks were happy to create money, but refused to destroy the government debt they bought with it…." Did you know that?

    I've written a number of times that the Fed could simply destroy the debts. The Fed doesn't answer to anyone in the typical balance-sheet sense, in the typical insolvency sense or bankruptcy sense. The Fed can't go bankrupt. It can never be insolvent. It can create all the credit it wants and regardless of the US budget, regardless of the US debt ceiling. There aren't many people who realize this.

    The Fed didn't ask anyone in government before the Fed financed even foreign governments' central banks. It simply ostensibly acted on its mandate to support US employment and keep inflation in check. It did what it thought best to do those things while performing its real mandate: saving the banking industry's riches and future potential for further gains and even if that meant, and means, which it does, holding the people down and even though not holding them down wouldn't cause harm to the economy, higher unemployment, or hyper-inflation or deflation but their direct opposites if things were done democratically enough.

    Add your comment.


  20.    Time for helicopter money? | Brookings Institution

    More and more people are finally talking about this. We definitely need to do it.

    Kemal Dervis:

    … policymakers have one more option: a shift to "purer" fiscal policy, in which they directly finance government spending by printing money — a so-called "helicopter drop." The new money would bypass the financial and corporate sectors and go straight to the thirstiest horses: middle- and lower-income consumers. The money could go to them directly, and through investment in job-creating, productivity-increasing infrastructure. By placing purchasing power in the hands of those who need it most, direct monetary financing of public spending would also help to improve inclusiveness in economies where inequality is rising fast.

    Helicopter drops are currently proposed by both leftist and centrist economists. In a sense, even some "conservatives" — who support more public infrastructure spending, but also want tax cuts and oppose more borrowing — de facto support helicopter drops.

    Add your comment.


  21.    EconoMonitor : Ed Dolan's Econ Blog – Sanders is Right, the US Needs a Healthcare System More Like Those in Europe

    This is a typical Ed Dolan article: well researched.

    Presidential candidate Bernie Sanders has reopened the healthcare debate by urging America to adopt a system more like that of other wealthy countries. "The United States is the only major country on earth that doesn't guarantee health care to all people," he says, "And we end up spending far, far more per capita on health care as do the people of any other country: Canada, U.K., France, whatever." Yet, even though he's right, his healthcare platform is under attack, not just from the right, but also from the left. Here is why I think his critics are wrong.

    Ed substantiates my claims that other countries get better outcomes at much lower costs. So, what's not to like, unless you make millions off the current mess and are very shortsighted.

    Add your comment.


  22.    What Is the Economy's Speed Limit?

    Brad DeLong:

    The two questions are (a) how much higher could expansionary fiscal and cooperative monetary policy permanently push annual GDP up above its current trend without triggering massive inflation, and (b) how large would the expansionary policies have to be to push the economy up that far? My guesses are 5% to (a)–that we could permanently raise annual GDP $800 billion relative to our current trajectory without triggering an upward spiral in inflation–and that we would need $300 billion more of annual government purchases to get us there to (b).

    … a mere $140 billion or so of increased government spending is very unlikely to get us there. That would require a multiplier of nearly six–that only 17.5% of dollars earned as income from higher government spending leak out of the flow of spending on domestically-produced commodities either as savings or as spending on imports. And we know that it's more like 33%-40% of dollars that so leak. That gives us a multiplier of 2.5-3. And that gives me my desire to see $300 billion more of government purchases.

    I think he's being too conservative by that 5%. I think it could easily be double that if we shovel intelligent debt-free dollars into R&D on a permanent basis as a National Industrial Policy.

    Balancing supply and demand is the issue. Anticipation of demand is the solution. Funding up stream in the supply chain is the refinement.

    Add your comment.


  23.    No, raising the local minimum wage doesn't hurt local businesses – The Washington Post

    Jared Bernstein:

    … companies can cut profit margins or top-level salaries to meet higher wage mandates. This last mechanism is one reason such policies get so much pushback from business, and it is particularly germane in an economy where income inequality stands at historically high levels. According to data from the Economic Policy Institute, the real earnings of low-wage workers in Alabama are down 6 percent compared with 1979, while those of the state's highest-paid workers are up 17 percent.

    Those low-wage workers have been left behind. And now the Alabama political establishment has blocked action to help them.

    This is the same political establishment that professes to support "local control" when it finds it convenient. For example, dozens of Alabama state representatives who voted to preempt Birmingham's minimum-wage ordinance were all for "necessary freedoms to address .?.?. issues at the local level" when voting on a school reform bill in 2013.

    My sentiments exactly.

    Add your comment.


  24.    Restaurant industry unharmed by modest minimum wage hikes | Cornell Chronicle

    "There is no doubt that restaurateurs face higher expenses as a result of minimum wage increases, but if restaurants are raising prices to compensate, those increases do not appear to decrease demand or profitability enough to sizably or reliably decrease either the number of restaurants or the number of employees," said co-author Michael Lynn, the Burton M. Sack '61 Professor in Food and Beverage Management and professor of consumer behavior and marketing at the School of Hotel Administration (SHA).

    Add your comment.


  25.    The Mitt-Hawley Fallacy – The New York Times

    Paul Krugman:

    But didn't the Smoot-Hawley tariff cause the Great Depression? No. There's no evidence at all that it did.

    Thank you.

    The American School of Economics worked and worked very well while based upon intelligent tariffs.

    Aren't we moving to block China's steel dumping? Didn't we block Japan's chip dumping? [After I wrote this but hadn't published it yet, Paul Krugman published the same point in one of his blog posts.] If we wanted to protect the US fracking industry and remain completely fossil-fuels independent, would putting a tariff on certain OPEC products help more than hurt, since the carbon bust hasn't been a wash or even made up by consumer driving, etc.? Well, I don't want to do that but for a different reason: Anthropogenic Global Warming. If it's going to be burned though, I'd rather it be American in America than Saudi in America. Wouldn't you?

    Add your comment.


  26.    China's Coming Mass Layoffs: Past as Prologue? | The Diplomat

    The problem today is that China's boom period of breakneck economic growth is drawing to an end. With growth slowing, will China's private sector — particularly in the service industries — really be able to provide enough jobs to absorb the hit? Only time will tell, but even if unemployment spikes that doesn't mean that social stability in China will come crashing down. History shows that the CCP has made it through worse challenges without losing its grip on power.

    The CCP has never faced this situation where the people have had a big taste of prosperity and have higher expectations concerning what can be provided. There's more I could write here, but I don't want to give the dictatorship any more ideas than I already have via this blog.

    Add your comment.


  27.    EU superstate would have no democratic legitimacy, warns euro architect

    If they aren't ready for democracy, they don't deserve democracy's benefits.

    Add your comment.


  28.    China's Rebalancing Is Overrated – Bloomberg View

    Before China can truly transition to a new growth model, its government is going to have to get out of the way.

    The dictator is going to get out of the way while remaining the dictator? Hmmm.

    Add your comment.


  29.    Construction Firms Add 19,000 Workers In February | Construction Equipment

    Construction is still a leading economic indicator.

    Construction employment totaled 6,631,000 in February, the most since December 2008, and is up by 253,000 jobs compared to a year ago, a 4.0 percent increase. Residential construction increased by 15,900 in February and by 155,100, or 6.4 percent, compared to a year ago. Nonresidential construction employment increased by 3,500 jobs for the month and is up by 98,300 jobs compared to February 2015, a 2.5 percent increase., according to an analysis of new government data by the Associated General Contractors of America. AGC said, however, that sluggish gains in nonresidential construction employment may reflect the fact contractors are having difficulty finding workers to keep up with growing demand.

    AGC said they would continue to push for the measures outlined in the association's Workforce Development Plan, including steps to make it easier for schools, not-for-profits and firms to establish construction training programs. They added that the measures were needed to begin the process of rebuilding a pipeline for recruiting and preparing new construction workers that has been largely dismantled during the past three decades.

    "In our eagerness to send every student to college, our education system has inadvertently signaled that high-paying careers in fields like construction are less than desirable," said Stephen E. Sandherr, the association's chief executive officer. "Yet if we give more students multiple paths to success, more of them will graduate from high school and find the right path to fulfilling and rewarding careers."

    Not everyone is cut out for college right now. Many just barely make it through high school. Society has to make sure those people don't linger unemployed without a living income. Just because college-level work is too difficult for some doesn't mean those people are disposable.

    As far as I'm concerned, society should approach things with the view that every life is invaluable/priceless. It's what makes us human rather than monsters.

    Yes, I know. Some people really do act like monsters. Well, we need to change the culture to change that. Not leaving people unemployed or in poverty will go a long way to correcting things. It is a choice. We do not have to have poverty. It does not have to exist and shouldn't.

    Add your comment.


  30.    Denmark teaches us some more about the impact of negative interest-rates | Notayesmanseconomics's Blog

    From the first use of a negative deposit rate, Denmark implemented a threshold for banks' excess funds and required that they only pay the negative rate above that line. That didn't diminish the effectiveness of the policy but meant bank profitability didn't suffer unduly, he said……..Last year the Danish banking system had its most profitable year since 2008.

    Meanwhile, there are people running around like chickens with their heads off (or is it more like Chicken Little) saying negative rates will crush bank profits.

    Add your comment.


  31.    Roofstock is a Marketplace for Investing in Leased Single-Family Homes. Generates Cash Flow on Day One. – Crowdfund Insider

    This sounds like a logical next step. I'm not endorsing this entity here, just referring to the concept.

    Roofstock matches buyers with sellers in a completely digital transaction. Roofstock states it offers a proprietary inventory of leased, certified, professionally managed homes that generate immediate cash flow. The platform provides analytical tools and diligence information to help investors evaluate and compare properties before buying them. Closing is made easy by leveraging electronic document delivery and e-signatures, allowing transactions to close rapidly and securely.

    Due diligence should include researching the management firm too.

    Add your comment.


  32.    Demolitions, rehabs reducing vacant properties across Columbus | The Columbus Dispatch

    An aggressive effort to raze or rehabilitate abandoned houses across the city has reduced the number of vacant buildings in Columbus by about 1,000 since 2012.

    There now are 5,305 vacant structures, down from a high of 6,284 in 2012, according to the Columbus code enforcement office.

    They did the smart thing and started with the worst ones first.

    Add your comment.


  33.    What is the cost of a disintermediated real estate industry? – REB

    1. The ability to follow-up
    2. Customer service
    3. Negotiation skills

    Agents who aced these three basic skills were rated extremely highly and more likely to be recommended for additional business ….

    Add your comment.


  34.    El Paso housing market improves

    El Paso County new home sales increased last year for the first time in two years while sales of used homes chugged along with another double-digit increase, new data show.

    "We had a sizable increase over the last two years," said Jorge Arroyo, Classic American president. The 28-year-old company "had a good share of affordable lot inventory" in several areas of the county. which allowed it to accommodate first-time buyers — its bread-and-butter market, he said.

    "If you have more lots, you have more opportunity to sell," Arroyo said. …

    … Developers have been slow to bring lots online so far this year, especially on the far East Side, which is a big chunk of the new-home market, Arroyo said. That means the company probably won't have the ability to build as many entry-level homes this year, he said.

    Shawn Gray, president of CareFree Homes, which for several years prior to 2015, was El Paso's top home builder by number of home sales, said CareFree will have no trouble getting enough lots to build this year because it develops many of its own subdivisions.

    I included the parts that discussed land. Unfortunately, there wasn't any discussion about skilled construction-workers. It also didn't mention the average size of the houses or their prices. Are they building affordable housing at all? Are they even building for the middle class? I assume they are, but it would have been good to include that info.

    Add your comment.


  35.    The End of Big Banks by Simon Johnson – Project Syndicate

    … Kashkari is correct in his assessment of the Dodd-Frank financial reforms of 2010. This legislation and the ensuing regulations have moved some issues in the right direction. "But given the enormous costs that would be associated with another financial crisis and the lack of certainty about whether these new tools would be effective in dealing with one," he argues, "I believe we must seriously consider bolder, transformational options."

    Kashkari is now proposing exactly the right approach: to hold public conferences and extensive discussions to evaluate whether large banks should be broken up, whether they (and other financial institutions) should be forced to fund themselves with more equity and less debt, or whether there should be a debt tax to discourage excessive leverage.

    … blockchain technology has the potential to reduce substantially, or even eliminate, the value of being a trusted intermediary such as a large bank. And yet the big banks themselves are pouring money into this technology — presumably hoping to save at least some part of their business by limiting the degree of ultimate decentralization.

    I am no fan of blockchain technology for currency purposes in the absence of a centralized monetary authority. Disintermediation is a buzzword right now. It can lead to being fleeced by hyper-deregulators and privatizers. It is not, per se, good risk-management.

    Add your comment.


  36.    Threat of a synchronised downturn & G20 Finance Ministers' complacency — Prime Economics

    This was slow to load but worth the wait.

    Ann Pettifor:

    … while the international club of bankers is worried that "vulnerabilities make the global economy highly fragile, and susceptible to being tipped into synchronized downturn" [7] – G20 finance ministers refused to bury both their differences, and their obsession with austerity – to synchronise their response to this "highly fragile" global economy.

    Their confidence in austerity is surely misplaced. For as Mark Carney, governor of the Bank of England noted recently, the British Chancellor expects "the largest fiscal consolidation in the OECD" to lead to a decline in the structural deficit of around 1 percentage point a year over the next four years. This after the deficit has only fallen by 1/3 of a percentage point on average over the last three years – despite a massive fire sale of UK taxpayer-owned assets.

    So, expect very little global leadership or co-ordination from our elected politicians. They remain captured by contractionary, deflationary economic theory and policies; policies which serve the interests of the rentier — the titleholders of money. Policies which threaten to tip the global economy once more into a "synchronised downturn".

    Add your comment.


  37.    The Best Landlords Are Firm But Fair: Here's How to Adopt Their Principles

    This is all true, but tenant screening is the most important thing.

    Also be sure to know about any assistance a tenant may receive from the government and telephone company and other utilities. It might make all the difference, and your tenant will think you're a savior/hero.

    You might also suggest getting someone to cosign in terms of being responsible for making rent payments if the tenant does not. Sometimes a relative will be willing to do that if the relative is well off and knows that the tenant's income is sometimes slow to come in but reliable.

    If a tenant is still employed but has a reduction in income and you have a vacancy that the income would support, suggest the tenant move into the cheaper rental.

    If the tenant has skills to do work that you pay others to do, you might consider paying the tenant for doing work for you that really needs doing and that you'd be paying for anyway.

    Be creative while being firm and fair.

    Sometimes tenants have a misguided perception that their landlord is a wealthy real estate tycoon who burns cash to keep warm at night. We all know that investing in real estate requires a ton of hard work and is by no means easy. Inform your tenants of the business you are trying to build. Let them know how hard you have worked to acquire and run your properties. Stress that you sympathize with their situation, but that you are in no position to ignore the rules and let your business suffer.

    Add your comment.


  38.    High-Skill Immigration: Experimental Evidence — LaborEcon

    The evidence supports logic. I know, I know, it has too.

    George J. Borjas:

    … the evidence that high-skill immigrants produce beneficial spillovers is most convincing when the immigrants that make up the supply shock are really, really high-skill; when the number of such exceptional immigrants is sufficiently small relative to the market; and when those immigrants directly interact with the potential recipients of the spillovers.

    Add your comment.


  39.    [This one truly is a "better late than never"] Who's afraid of John Maynard Keynes?

    Ryan Cooper:

    The question, at heart, is a basic one: Will the economy always tend towards full employment, when economic output is maximized and most everyone who wants a job can find one?

    Modern economic models say yes. But an older tradition says no — including John Maynard Keynes, who is supposedly the godfather of today's center-left economic establishment. …

    … there is only one way of resolving this question for sure: Attempt aggressively expansionist policy, and see how far we can get. No one knows for sure where the top is, or whether serious efforts to bring the millions of discouraged workers with fiscal stimulus, active labor market policies, or paid family leave would pay dividends. But they are unquestionably worth trying.

    Insofar as the professional center-left economist corps is creating a sense that such efforts are futile, they are doing their nation a massive disservice.

    Bravo!

    It is true that Jamie Galbraith pointed out the failings of the Romers'-style (economic model/methodology/assumptions) prediction concerning slack. Watch the video above: Galbraith: "Attack on Sander's Economic Plan By Former CEA Chairs Irresponsible – YouTube."

    Add your comment.


  40.    China: A 5-Year Plan And 50 Million Jobs Lost – The Automatic Earth

    Raúl Ilargi Meijer:

    … China has something in the order of a billion workers, give or take 100 million or so. Even with the largest mass migration in human history, in which 100s of millions moved from the countryside to the cities, there are still an estimated 300 million people working in agriculture. That's the entire US population. It's also 30% of the Chinese workforce. In the US just 2 or 3% work in farming.

    But that still leaves 700 million Chinese in other jobs. Many of these jobs were 'invented' in the past 20 years, as China's 'miracle growth' transformed it first into the world's no. 1 trinket producer, then into a kind of powerhouse that built highways to nowhere cities, and today a powerhouse with a fast plummeting global consumer base.

    Many millions of Chinese workers produce things that can't be sold. This is by no means confined to just coal and steel. The sharply dropping Chinese import and export numbers, as well as the purchasing indices, tell a bleak story. It's evident that China must re-invent itself. And while that may be exactly what it claims it's doing, the -alleged- transition to a service- and/or consumer economy may sound good, but its practical success is far from guaranteed.

    Transforming a factory worker into a service sector employee is not a matter of flicking a switch. Repeating this 10 million times over, or 20 or 30 million, is a nightmare in an economy that is seeing its growth rates plummet while at the same time needing to deleverage its debt levels.

    … Mind you, the Chinese haven't even started talking about 'recovery' like we have, they're still thinking -or propagandizing- that they're on an ever upward trail. Well, they're not. One of the early notes coming out of the People's Congress was this: "China Says Will Keep Yuan Basically Stable Against Basket Of Currencies .."

    That's not happening. They know it, we know it, and Kyle Bass knows it. Perhaps once the Congress is ove r, they'll come clean? Hard to say. What's certain is that global markets WILL force a substantial re-adjustment of the yuan, and there's nothing Xi or the entire Communist Party can do to prevent it. And then, after a 30% readjustment, take another look at that dollar-denominated debt!

    And they'll have to cut many millions of jobs, and try to 'pacify' the newly unemployed, and deleverage the insane debt levels they've created, and find a way to explain to their people where it all went so wrong.

    China no longer lives in a kids' fantasy Toy Story.

    Then there's the issue of the lack of democracy. They won't make it under a dictatorship. The dictator obviously doesn't have the collective brains to pull it off.

    Add your comment.


  41.    Sober Look: Canada's Changing Financial Landscape: Part 2, Banking

    Norman Mogil:

    Canadian banks feature a high percentage of assets in personal loans, especially mortgages; whereas, the US banks sell their loans through the securitization market. The Canadian banks carry very little risk of loss since higher loan-to-value mortgages must carry mortgage insurance.

    Canada's housing market poses an additional challenge to improving NII. There are many different opinions as to when and to what degree a slowdown in housing prices will take place. It is clear, however, that mortgage originations are not going to continue at the recent rapid rates of growth. The banks have signaled that they are concerned regarding the connection between household debt and home prices. Given that mortgages represent about half of all loans outstanding, this possible slowdown combined with a flattening yield curve will impinge on NII.

    Could the mortgage-insurance companies withstand a housing-market crash?

    Add your comment.


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