News: Real Estate, Risk, Economics. Aug. 23, 2016

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Table of Contents
(Click to sections below.)

1) New Towers, Higher Prices Lift Chicago's Real Estate Market – Forbes

2) Finance is Not the Economy | Michael Hudson

3) Is the US Staging a Middle Class Comeback? | US News

4) Happy days may soon be over for China's real estate companies | South China Morning Post

5) Would you give up your Seattle home for affordability?

6) Big Rewards — Top Fix & Flip Markets in the US | Colony American Finance

7) Will DC's Housing Ever Be Affordable Again? – The Atlantic

8) So What If New York Is Unaffordable? That Helps the US – Bloomberg View

9) 'Next year or the year after, the Arctic will be free of ice' | Environment | The Guardian

10) Free money is not so funny anymore: Confessions of a (former) skeptic of basic income – Salon com

11) How Much CapEx Do You Need to Include in Your Pro Forma?

12) China Is Grappling With Hidden Unemployment – Bloomberg

13) Anger after fire kills 3 kids, man; arson suspect's family defends him – Chicago Tribune

14) Global-Risk Management: Distorted Geopolitical Analysis by Fort Russ News Editorial Team on US-YPG Connection | PropertyPak

15) State of Emergency Declared in Eastern Washington as Wildfires Intensify

16) Wildfire prevention | WA – DNR

17) FEMA Extends Grace Period to Renew Flood Insurance Policies in Declared Louisiana Parishes | FEMA gov

18) Why houses in America are getting smaller

19) Converting Your Home to a Rental: 6 Tips to Protect You & Your Property

20) Follow the Money – IMF Cannot Quit Fiscal Consolidation (in Asian Surplus Countries)

21) It's time to bring more realistic models of human behaviour into economic policy and regulation | Bank Underground

22) Oregon Officials Believe Arson Behind 14 Or More Wildfires

23) Texas Researchers Offer Faster Method to Rebuild Disaster Destroyed Homes

24) RMS: Flood Insurance Uptake Low in Areas Hit Hardest by Louisiana Flooding

25) $6M Settlement Reached for West Virginia Coal Mine Cleanup

  1.    New Towers, Higher Prices Lift Chicago's Real Estate Market – Forbes

    Articles such as this one read as if everything is dandy so long as the rich get theirs.

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


  2.    Finance is Not the Economy | Michael Hudson

    Excellent:

    Abstract: Conflation of real capital with finance capital is at the heart of current misunderstandings of economic crisis and recession. We ground this distinction in the classical analysis of rent and the difference between productive and unproductive credit. We then apply it to current conditions, in which household credit — especially mortgage credit — is the premier form of unproductive credit. This is supported by an institutional analysis of postwar U.S. development and a review of quantitative empirical research across many countries. Finally, we discuss contemporary consequences of the financial sector's malformation and overdevelopment.

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


  3.    Is the U.S. Staging a Middle Class Comeback? | US News

    Even in recent years, Dudley and his colleagues found that more than 78 percent of the jobs added to the labor market between 2010 and 2013 were concentrated in high-wage — with annual pay north of $60,000 — and low-wage — with annual pay south of $30,000 — positions.

    But that trend took an abrupt turn between 2013 and 2015. During that window, the share of jobs added that qualified as middle-wage rose from just 22 percent to nearly 43 percent. The "U-shape" the labor market had taken in the immediate aftermath of the Great Recession — with job growth concentrated at the extremes with little opportunity in the middle — had inverted, becoming more "hump-shaped," says Jaison Abel, a research officer and function head at the New York Fed.

    That's not to say, however, that middle income jobs have rebounded entirely or that industries like manufacturing or administrative support will ever fully return to their previous greatness. Manufacturing employment has rebounded more than 7.4 percent from where it bottomed out in March 2010 but is still down more than 37 percent from where it sat during the industry's 1979 peak.

    "Manufacturing has been getting slowly suffocated over the course of decades, because that industry is just leaving the U.S. in large part. And the industry is getting so productive and so automated," says Andrew Chamberlain, chief economist at employment hub Glassdoor. "Manufacturing output is rising and wages are rising for the people who are able to maintain their jobs, but they're getting so efficient with these manufacturing systems that they just don't need as many hands."

    Administrative roles, likewise, have largely been phased out by technological advancement.

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


  4.    Happy days may soon be over for China's real estate companies | South China Morning Post

    "It's our impression that, between mid-2015 and February 2016, the government tried hard to reflate housing demand. However, compared to the previous two rounds in 2008-09 and 2012, it took the government much more strenuous efforts to get the market going as the impact has been moderate," they said.

    Overall results have remained mediocre.

    Of course.

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  5.    Would you give up your Seattle home for affordability?

    For me, affordability comes before everything else. If affordability offends some people, then those people need to press government to create decent, affordable housing so that such housing won't cause overcrowding.

    There is only so much land in Seattle, so affordable needs to be a county, state, and federal issue.

    People need decent housing. Children are still living out of cars while trying to attend school and to do well with their grades.

    There's no excuse for our various governments not to work together to provide the solution.

    Money certainly isn't the obstacle. We can create all the money we want and without inflation if we spend it on sustainably productive endeavors.

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


  6.    Big Rewards — Top Fix & Flip Markets in the US | Colony American Finance

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


  7.    Will D.C.'s Housing Ever Be Affordable Again? – The Atlantic

    … the gaps between what policies and plans can provide and what is actually needed are vast. Claire Zippel, a housing associate at the D.C. Fiscal Policy Institute, says that despite the fact that the city has spent a record amount on affordable housing in recent years, housing still accounts for only 3 percent of the city's total annual budget. "That's an absolutely tiny share compared to the investments we make in other critical areas like education, public safety," she says. According to Zippel's research, meeting the housing needs of all D.C. residents would require an investment of around $5 billion.

    Most places take a patchwork approach. We need a national approach, and it needs to be progressive and not designed or underfunded to fail.

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


  8.    So What If New York Is Unaffordable? That Helps the U.S. – Bloomberg View

    There's plenty right with this article, but moving isn't always affordable either. How does a person living right on the edge, paycheck-to-paycheck, at best, manage to afford moving to a place and without a job guarantee on the other end? What about the elderly and the infirmed? Are they supposed to be uprooted just because the market says so? I don't like that idea at all.

    Also, this is why I said above that we need our cities to work with our counties, states, and the federal government; but we need a national plan.

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


  9.    'Next year or the year after, the Arctic will be free of ice' | Environment | The Guardian

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


  10.    Free money is not so funny anymore: Confessions of a (former) skeptic of basic income – Salon.com

    As I've said before, I don't like the term basic income. It doesn't need to be, nor should it be, limited to funding just the "basic" necessities. People need a decent amount of discretionary funds after meeting the necessities.

    The how is easy. It's getting "conservatives" to not be self-centered and shortsighted about it that will be the challenge.

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


  11.    How Much CapEx Do You Need to Include in Your Pro Forma?

    Ben Leybovich does not have low self-esteem. He has a thick skin and doesn't care if you don't.

    He is absolutely right here about CapEx.

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


  12.    China Is Grappling With Hidden Unemployment – Bloomberg

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


  13.    Anger after fire kills 3 kids, man; arson suspect's family defends him – Chicago Tribune

    Terrible. People died. People come first, possessions second. Nevertheless:

    "I'm trying to get my mind wrapped around it. I have to replace everything. I'm grateful that my family got out."

    She added: "Thank God for renters insurance. Hopefully everything will be taken care of."

    I'm not quoting that to be self-serving. This is an insurance blog, and insurance really does help in such situations. What we really want is to prevent losses in the first place, especially loss of life.

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


  14.    Global-Risk Management: Distorted Geopolitical Analysis by Fort Russ News Editorial Team on US-YPG Connection | PropertyPak

    The issue here ("BREAKING: US Occupation of Syria now official," August 21, 2016 — Fort Russ News — FR Editorial Team) is whether the US is formally recognizing the Rojava state or only the Kurdistan of Northern Iraq. I say …

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  15.    State of Emergency Declared in Eastern Washington as Wildfires Intensify

    New fires in Washington are forcing evacuations even as California's Blue Cut fire evacuees return home.

    We need to start constructing nothing but 100%-fireproof homes.

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  16.    Wildfire prevention | WA – DNR

    Good list of tips and requirements:

    So far in 2016, two-thirds of Washington state's wildfires have been human-caused. That's why DNR works to prevent wildfires through education and the use of burn bans, Industrial Fire Precaution Levels and burn permits, which help people to modify their activities in accordance with the risk.

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


  17.    FEMA Extends Grace Period to Renew Flood Insurance Policies in Declared Louisiana Parishes | FEMA.gov

    In order to avoid a lapse in coverage, there is typically a 30-day grace period to renew policies under the National Flood Insurance Program (NFIP). In Louisiana, the extensive damage to homes and businesses, as well as widespread disruption of power, transportation, and communication infrastructure may affect the ability of policyholders to meet the standard 30-day deadline to renew policies.

    Today's action extends the grace period to a total of 120 days ….

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


  18.    Why houses in America are getting smaller

    "If you look at what rentals are doing today and the accoutrements that these apartments are putting in, they are making them resortlike. It's not a surprise that millennials might not want to leave the comforts of a rental apartment because they can't replicate that in a home," said Paul.

    Preference also plays a role, as younger Americans seem to be drawn to smaller, simpler living. The tiny house trend has been growing exponentially, as technology allows people to trick out small spaces with big amenities.

    Micro-apartments are also seeing big demand. And millennials, too, are far more cautious with their finances, having grown up in one of the worst financial crises in history. They don't seem to crave size as much as they do a smart, high-functioning, environmentally friendly home.

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


  19.    Converting Your Home to a Rental: 6 Tips to Protect You & Your Property

    Thick pads and semi-gloss, what do you think?

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


  20.    Follow the Money – IMF Cannot Quit Fiscal Consolidation (in Asian Surplus Countries)

    The IMF's right hand doesn't know what its left hand is up to? Maybe the IMF is afraid to stand up for what it actually knows: that the IMF has been terribly wrong for decades and needs to stop pussyfooting around about fiscal spending and needs to completely rebuke the neoliberal approach once and for all.

    Take the Fund's advice on Japan. The first consumption take hike—from 5 to 8 percent—didn't go that well. Consumption never recovered, and the economy lost momentum.

    But rather than reconsider consumption tax based consolidation, the Fund wants Japan to double down and commit to raise the consumption tax to 15 percent (rather than 10 percent):

    "a gradual increase in the consumption tax towards at least 15 percent, e.g., in increments of 0.5—1 percentage points over regular intervals, would better balance the objectives of supporting growth and achieving fiscal sustainability in the long run. … Starting the increases as soon as possible and replacing the currently planned 2019 hike with such a pre-announced, gradual path would enhance the credibility of the long-run fiscal adjustment effort…"

    (paragraph 23, on p. 14 of the staff report)

    That isn't exactly a call to use the fiscal arrow to relaunch Japanese demand growth.

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


  21.    It's time to bring more realistic models of human behaviour into economic policy and regulation | Bank Underground

    I've been saying this for decades.

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


  22.    Oregon Officials Believe Arson Behind 14 Or More Wildfires

    Pyromaniac(s), homegrown or imported terrorist(s), disgruntled firefighter(s), or … what?

    State authorities and forest officials say at least 14 wildfires that have erupted across central Oregon over the last three weeks are believed to have been intentionally started.

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


  23.    Texas Researchers Offer Faster Method to Rebuild Disaster Destroyed Homes

    It's amazing that this idea has taken so long to get traction. I'm all for it though.

    Once accepted into the RAPIDO program, families move into pre-assembled modules erected on their property within days of a disaster.

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


  24.    RMS: Flood Insurance Uptake Low in Areas Hit Hardest by Louisiana Flooding

    … flood insurance participation is low in the parishes most affected by floods.

    Land more prone to flooding is cheaper. Poorer people who can't afford flood insurance buy that cheaper land. Flood insurance is more expensive in more flood-prone areas if it is available at all. It's expensive to be poor.

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


  25.    $6M Settlement Reached for West Virginia Coal Mine Cleanup

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


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