News: Real Estate, Risk, Economics. June 29, 2016

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Table of Contents
(Click to sections below.)

1) Europeans Contest US Anti-Russian Hype — Consortiumnews

2) Under pressure from Presbyterians, RE/MAX announces it will no longer profit from sales of Jewish settlements — Mondoweiss

3) I'm Jewish, and I want people to boycott Israel – The Washington Post

4) "Who the hell is Boris Johnson?" Voters have to ask Donald Tusk some hard questions before they accept his EU 'deal' – Telegraph

5) Fed Once Again Overtaken By Events – Tim Duy's Fed Watch

6) Parish Officials Warn of Isolation for Louisiana Flood Buyout Refusal

7) Mother of Oregon Child Strangled by Window Blinds Sues Apartment for $4M

8) Brexit impact will be worse than the 2008 crash

9) Coppola Comment: The snake oil sellers

10) Brexit: A great day in European history – New Cold War: Ukraine and Beyond

11) Trump Blasts Trade Deals, Departing From GOP Orthodoxy – ABC News

12) Jeremy Corbyn picks up support

13) Why the Public Has Stopped Paying Attention to Economists | The Fiscal Times

14) Italy eyes €40bn bank rescue as first Brexit domino falls

15) US Federal Reserve 'Might Legitimately Consider' Public Money Creation – Positive Money

16) New Owner Anbang Insurance to Convert Most Waldorf Astoria Rooms into Condos

17) Get Ready to See This Globalization 'Elephant Chart' Over and Over Again – Bloomberg

  1.    Europeans Contest US Anti-Russian Hype — Consortiumnews

    Currently, my favorite European politician in a high place is German Foreign Minister Frank-Walter Steinmeier. Read why in this article.

    Let me preface by saying that I am not anti-American but just the opposite. What I am is anti-neocon and anti-neolib.

    Does risk management get any more important than avoiding total global thermonuclear exchange? We have big issues on our plate but man oh man, nuclear war would create more hell on Earth than anything before.

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  2.    Under pressure from Presbyterians, RE/MAX announces it will no longer profit from sales of Jewish settlements — Mondoweiss

    In my last blog post, I discussed the Israeli/Palestinian issue on this blog for the first time (if memory serves).

    That issue touches on more than just risk management and economics but also quite directly, the real-estate industry.

    The object here is not anti-Semitism (common usage; Palestinians are actually a Semitic people) at all but pro-equality of ethnic groups under the law (internationally and within nation-states, every one of them) and pro-democracy.

    It is not a singling out of Israel (ignoring offenses by other nation-states). This blog hasn't pulled any punches when it has come to calling the Chinese leadership what it is: dictatorship that should not be treated as a mere technocratic issue but a moral one and where I have stated that the US was mistaken to have "opened" China under false pretenses (that turning China more capitalistic would cause China to become more democratic).

    I was for BDS concerning Apartheid South Africa at the time and long before the US government woke up and got on board. I see no moral or practical differences here at all.

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  3.    I'm Jewish, and I want people to boycott Israel – The Washington Post

    Look, I'm not going to rub this in, so to speak; but, people need to realize that this issue has gone mainstream in the US now and it is not going to go away until equality is reached.

    Everyone, absolutely everyone, would be better off were equality and democracy to prevail in Palestine/Israel.

    Reaching a political solution that embraces equality and full democracy guaranteed by the UN Security Council not to be overturned by any side, would be a shining example to all the nations of the world because Palestine/Israel would thrive as never, ever before and do so for everyone there.

    It would prove that so many hot-spots in the world are hot-spots solely on account of visionless leadership.

    Add your comment. Including the article/link number will help.


  4.    "Who the hell is Boris Johnson?" Voters have to ask Donald Tusk some hard questions before they accept his EU 'deal' – Telegraph

    I read all over the place from Americans, "Who the hell is Boris Johnson?"

    Well, this article is from February 7, 2016, about Brexit. It give some insight into Johnson's style. It was cited 2nd hand by Simon Wren-Lewis ( https://mainlymacro.blogspot.com/2016/06  /the-uk-will-soon-get-as-prime-minister .html ) from Nick Cohen ( https://www.theguardian.com/commentisfre e/2016/mar/26/boris-johnson-mendacious-e u-referendum-next-prime-minister ).

    To Johnson's credit, he did use the term "anti-democratic" in his article, something the technocrats hate: focusing at all on the lack of democracy when they want you focused on their "expertise."

    By the way, this is the same Nick Cohen as here referenced and analyzed by yours truly: http://propertypak.com/2016/06/27/news-r eal-estate-risk-economics-june-27-2016/# 0627164

    Anyone who wrote about Jeremy Corbyn as Nick Cohen did is someone I will take with a block of salt concerning Boris Johnson, not that there's no truth to any of what he said about Boris but that I just would have to read it from a credible source.

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  5.    Fed Once Again Overtaken By Events – Tim Duy's Fed Watch

    Good old Tim to the rescue …

    Tim was up and down after December while all along, I was saying the Fed hawks are wrong. Toot-toot!

    Well, to be fair, I understood Tim's ups and downs, as he was dealing more with the horse race at the Fed, the psychology of everything, while I was simply not seeing daylight in the economy that would overrule the broken Phillips Curve at the ZLB and even negative rates in the world.

    Had Tim been at the Fed, I believe he would have been a strong dove the whole time because he wouldn't have been calling the horse race but doing what I was doing (and probably better what with all the data at his disposal there).

    I do like Tim's "unforced error" analogy.

    Look, the time has come for the Fed to go back to the drawing board to look at their models with a vastly more critical eye in terms of "the new normal."

    That new normal really isn't. There is no normal. The Fed is way too steeped in "equilibrium think." There is no equilibrium. We don't have even a hypothetical steady state. What we have are brand new variables showing up constantly.

    What the Fed needs to do is increase its tolerances, to run faster and looser, to let the economy do what they incorrectly think is to overshoot on inflation and then yank the reins if overheating really becomes a scary ride and not attempt to prejudge the horse or economic engine.

    They need to always react rather than preempt. They need to reduce and reduce and reduce the time between 1) the action proven at the time to cause problems and 2) the time they react.

    They'll never get there (to simultaneousness), but the closer they get the better, provided they don't try to prejudge variables they don't even know at the time even exist yet. If they overshoot clamping down, they need to reverse on a dime and look at what variables they missed or miss judged.

    Their whole system is way too slow. They meet in July and then not until September? Honestly, what century is this? They concern themselves with "forward guidance." Forget forward guidance. Just react as I've described and do it so well that others realize the best is being done.

    Don't be confused. This is not hindsight I'm advocating but a serious form of foresight.

    The Fed is using 19 indicators right now, we're told. Switch to focus on an all-items basket of goods and services, meaning all transactions in real time.

    It's one reason why multiple currencies is such a bad idea.

    Now, that's all assuming we continue down this Fed path rather than go the smarter way: do away with interest and rather use monetary financing of government spending as the sole money creator and all based upon real democratic decisions in a transparent society with everyone having an equal say and easy access to the information and tools for analysis, etc.

    Add your comment. Including the article/link number will help.


  6.    Parish Officials Warn of Isolation for Louisiana Flood Buyout Refusal

    … home was flooded 3 feet deep after 2008's Hurricane Gustav, but he has refurbished the house and says he and his wife are comfortable there.

    "I'm staying until they push me out," ….

    Why? Are they not offering enough? Is he holding out for more regardless? Does he think climate change won't make things more dangerous there? Is living there really worth being flooded out again and without insurance?

    Add your comment. Including the article/link number will help.


  7.    Mother of Oregon Child Strangled by Window Blinds Sues Apartment for $4M

    Add your comment. Including the article/link number will help.


  8.    Brexit impact will be worse than the 2008 crash

    The uncertainty fairy? Hardly. It's the pros and cons of quite possible reality.

    Many have suggested that this is not a Lehman moment. We agree, but only because it may be much worse than Lehman, at least for the UK.

    The big question is whether the UK tries to rollback the non-binding decision. If it does, will the rest of the EU want to wait for that?

    I suspect it will be debated in England, but that the rest of the EU will actually be secretly glad the anti-integration Brits are out.

    I don't think that will save the EU from ordoliberalism and anti-democracy though.

    Add your comment. Including the article/link number will help.


  9.    Coppola Comment: The snake oil sellers

    Frances Coppola:

    The fallout from Britain's historic decision to leave the European Union continues. Domestically, there are regrets, recriminations and accusations. Young people,particularly those aged 16-17 who did not have a vote, complain that the vote did not take their interests into account A petition for a second referendum reached over 3m votes in a few days, although it was subsequently found to have been hacked: the true number is uncertain. The media have spent the weekend tracking down people who voted to Leave and now regret it, and publishing increasingly desperate schemes for avoiding Brexit. There is a sense of denial. If only we could turn back time….

    But it's too late. The UK is now persona non grata in the EU, and EU foreign ministers are pushing for formal exit procedure to be triggered as soon as possible. The political meltdown in both main parties currently makes this impossible, but chaos can't continue forever. Eventually, Article 50 will have to be triggered, and the UK will leave the EU, never to return.

    The lies that made Brexit

    There you go. Democracy isn't mentioned. The technocrats are vehemently defended from those who might mention democracy but do so to mask their real agenda: increased personal wealth, power, and control at the negative expense of everyone else.

    Someone is saying somewhere, "A plague o' both your houses!"

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  10.    Brexit: A great day in European history – New Cold War: Ukraine and Beyond

    So many people didn't know to be in favor of Brexit for the right reasons. People should not be in favor of the status quo EU system just to show that they are opposed to racism and laissez-faire, "Anglo-Saxon" economics. People need to understand that the EU system is about technocracy, not democracy, about ordoliberal and neoliberal economics, not social democracy, not the welfare state, not democratic socialism but corporate and corporate-executive wealth, power, and control. It's about capture of the continent by anti-democratic forces for selfish money.

    I wrote the above before reading this linked article. I'm glad I ran into it. It's nice to see someone else who gets it.

    Boris Kagarlitsky:

    The fact that many of the people who oppose the European Union decided to vote for Brexit after the Brussels bureaucracy devastated and humiliated Greece was deliberately ignored. They were against the EU because they understood that the elimination of the neoliberal monster is the only chance to return Europe to the path of social progress and democracy.

    Add your comment. Including the article/link number will help.


  11.    Trump Blasts Trade Deals, Departing From GOP Orthodoxy – ABC News

    This ABC News article is ridiculously muddled to the point of making me laugh out loud, but it's also very, very sad because so many people simply don't know how to sort things out.

    If you will read the article and look closely at it, you will see Trump's position being bashed as being too Bernie Sanders like.

    NAFTA was terrible. I opposed it at the time. It threw open the doors to products from where labor rights, worker safety and health, and environmentalism were not even on the radar.

    It did that not for the sake of lifting Mexican workers but to lift US executives' compensation packages.

    Both Sanders and Trump know that. It doesn't mean Trump has all the right ideas about why such deals are bad, but the fact that he opposes them is absolutely an utterly stupid reason to support them.

    Add your comment. Including the article/link number will help.


  12.    Jeremy Corbyn picks up support

    Last year Jeremy won a quarter of a million votes. Today he lost the confidence of 170 people who never supported him in the first place.

    The vote of no confidence by Labour MPs has no standing under Labour rules; it's window-dressing a thoroughly undemocratic coup with a made-up attempt to look democratic.

    35 MPs nominated Jeremy last year and 40 stood with him today — an increase in parliamentary support if anything.

    Hundreds of thousands have indicated their support for Jeremy in the last forty-eight hours.

    He isn't going to stand down.

    Add your comment. Including the article/link number will help.


  13.    Why the Public Has Stopped Paying Attention to Economists | The Fiscal Times

    Mark Thoma is on the right track. See my commentary above concerning Tim Duy's article. "Fed Once Again Overtaken By Events – Tim Duy's Fed Watch."

    Economic models have two uses, as a way to understand how the economy works and as a way to forecast the future. It's possible to forecast the economy through extrapolation from the past and from fishing for empirical models that that can explain past data. But these models can be unreliable when they encounter circumstances that deviate from past experience. It is much better if the forecasts are derived from flexible theoretical models based upon a solid understanding of the mechanisms that drive the economy.

    Unfortunately, we do not yet have the understanding needed to do this. For example, we cannot agree on the answers to the following questions:
    Why has productivity fallen? Will it stay low in the future?
    What has caused the decline in labor force participation?
    How strong is the economy's self-correction mechanism in recessions, and how does it work?
    Is there a Phillips curve (i.e. a reliable relationship between inflation, inflation expectations, and unemployment)?
    How are expectations formed, and do they converge to rational expectations over time?
    What is more important in the determination of wage and capital shares of income, marginal products or bargaining power and other institutional features of labor markets?
    What frictions should we focus on? Price and wage stickiness? Financial frictions? Both? How do these frictions vary over the business cycle?
    How high can the minimum wage be raised before there are significant employment effects?
    What is the cause of inequality? Is it baked into the capitalist system, or is it the result of political and institutional forces?

    And that's nowhere near a complete list of the things we don't fully understand.

    His questions properly acknowledge the new variables constantly being thrown at the economy (as a whole and at it's constantly changing parts).

    We know more than Mark seems to think though.

    Mark might start with defining productivity. He might ask whether even what he's defined is being measured well enough.

    "What is the cause of inequality? Is it baked into the capitalist system…"? Of course it is.

    Add your comment. Including the article/link number will help.


  14.    Italy eyes €40bn bank rescue as first Brexit domino falls

    Ambrose Evans-Pritchard:

    Hedge fund veteran George Soros warned that Italy faces the risk of a "full-blown banking crisis" that could bring the rebel Five Star Movement to power as early as next year.

    The banking squeeze has become politically explosive in Italy after thousands of small depositors were wiped out at four regional banks late last year. They were classified as junior bondholders, even though most of them were just ordinary savers who did not realize what was being done with their money.

    Mr Renzi may be forced to take matters into his own hands and enact a unilateral sovereign rescue of the Italian banking system in defiance of the EU, unless he wins concessions soon from Brussels. Those who know him say he will not go down in flames for the sake of European ideological purity.

    I hope they're right. If he goes down in flames, Italy goes down in flames just as Greece did and for nothing but more needless pain and suffering for the sake of bankers and their closest bond-holding buddies.

    The People over bondholders is what's needed and worldwide. I'm not saying to put the bondholders into poverty but to keep others from entering it so bondholders can get even richer off mindless, counter-productive privatization. (Is there any other kind?)

    Add your comment. Including the article/link number will help.


  15.    US Federal Reserve 'Might Legitimately Consider' Public Money Creation – Positive Money

    Janet Yellen:

    … central bank playing a role in financing fiscal policy. This is something that academics are debating. And it is something that one might legitimately consider.

    Wow, is that timid and careful, careful not to upset the bond/usury system and show people that independent central banks are definitely not needed. In fact, they are part of the problem. We need real democracy, which is transparent to the extent that the People will know in advance how much money needs to be created to avoid inflation but allow for maximum, clean, safe, sustainable growth truly lifting all boats.

    Add your comment. Including the article/link number will help.


  16.    New Owner Anbang Insurance to Convert Most Waldorf Astoria Rooms into Condos

    Anbang bought the Waldorf Astoria … for $1.95 billion … and has said it plans to convert most of the property to luxury condos.

    Does that pencil out? Probably. It would be interesting to know what they'll spend per unit on rehab. Also, what's the time value of $1.95 billion all that time?

    Add your comment. Including the article/link number will help.


  17.    Get Ready to See This Globalization 'Elephant Chart' Over and Over Again – Bloomberg

    "When people like Deutsche Bank are starting to say, 'maybe capitalism needs a form of reinvention,' maybe that's the time to start listening to that," he said during an interview on BloombergTV. "It's not Bernie Sanders; it's a global investment bank."

    That's insulting. Bernie Sanders was simply right all along. Deutsche Bank is simply being dragged into reality kicking and screamingg.

    You shouldn't have been listening to Sanders and others all along because, well, even though the global investment bankers were wrong all along, ….

    Who can fall for such nonsense? Who can swallow such illogical ideas?

    Perhaps I'm misreading the intention.

    "Reinhart and Rogoff brought a focus to government debt burdens that lent support to austerity movements…." No, that's completely wrong. They got the math wrong and lent support to the wrongheaded movement called austerity, which you didn't have to know the math to know was wrong.

    I didn't see their data or their math before intuitively knowing that austerity is simply deception and ignorance. There's no way around it.

    Add your comment. Including the article/link number will help.


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