News: Real Estate, Risk, Economics. Dec. 2, 2017

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Table of Contents
(Click to sections below.)

1) Sheriff says Las Vegas shooter fired over 1,100 rounds | TheHill

2) Australia faces housing hangover twice size of US subprime era, Real Estate – THE BUSINESS TIMES

3) China cash injections to quell bond rout: Liquidity, debt, FX reserves

4) China Reports Breaking Up Gang That Moved $3 Billion Abroad – Bloomberg

5) Canada's household debt levels higher than any other country, report says

6) 37 of 38 economists said the GOP tax plans would grow the debt. The 38th misread the question. – The Washington Post

7) Council proposes £1,000 fines for homeless people sleeping in tents | Society | The Guardian

8) The Changing Face of America's Renters (& What It Means for Investors)

9) FCC doubles down on its dead-wrong definition of how the internet works | TechCrunch

10) Civitas: Institute for the Study of Civil Society The Land Question

11) CoStar News – Working Out & Watching Movies, That's What Millennials Do

12) USGBC to Adopt RELi, a Resilient-Design Standard for Buildings and Neighborhoods

13) Washington, Seattle spending $1.1M to fence off highways and bridges from the homeless | The News Tribune

14) New eBook: Ordoliberalism: A German oddity? | VOX, CEPR's Policy Portal

15) Snake Appears In Seattle Apartment Toilet | Seattle, WA Patch

16) How Delhi became the most polluted city on Earth – Vox

17) Why Ending Homelessness Isn't That Easy – Arlington Magazine

18) Keystone's existing pipeline spills far more than predicted to regulators | Reuters

19) Labour will win argument on borrowing to invest, says John McDonnell | Politics | The Guardian

20) Houston unveils 20-year plan to rebuild its downtown | Smart Cities Dive

21) Jared Kushner's Maryland apartment company asks court to shield investors' identities – Baltimore Sun

22) Australian Banks Face Wide-Ranging Probe Amid String of Scandals – Bloomberg

23) Coinbase Loses Bid to Block US Tax Probe of Bitcoin Gains – Bloomberg

24) When Affordable Housing Meets Free-Market Fantasy | Dissent Magazine

25) Deregulator: Judgement Day for Australian Banks – LF Economics – Lindsay David and Philip Soos

26) We are in the most dangerous period in the business cycle

27) Former governor of Bank of Spain is in favour of the money creation by public entity – YouTube

28) Dear colleagues, please explain your letter to Steven Mnuchin | Larry Summers

29) Actually, Maybe China Shouldn't Open Up Just Yet – Bloomberg

30) Bitcoin Bubble Makes Dot-Com Look Rational – Bloomberg Gadfly

31) Top 10 Best Practices for 1031 Exchanges — Commercial Agent Success Strategies

32) When Ayn Rand Collected Social Security & Medicare, After Years of Opposing Benefit Programs | Open Culture

33) The GOP Tax Cuts Are Even More Unpopular Than Past Tax Hikes | FiveThirtyEight

34) There's one 'huge' opportunity in US property, CEO says

35) A Look at One Family Office's Bet on the Multifamily Sector | National Real Estate Investor

36) CONVERSABLE ECONOMIST: The Family Options Experiment: Reducing Homelessness with Long-Term Rent Subsidies

37) A Tax Bill that could Increase the Deficit and Lead to Recession. :: Fox&Hounds

38) globalinequality: Adam Smith: is democracy always better for the poor?

39) FEMA's Staff `Tapped Out' After Mounting Disasters

40) All hail new weather radar technology, which can spot hailstones lurking in thunderstorms

41) Breakthrough in tornado short-term forecasting could mean earlier, more accurate warnings – Scienmag: Latest Science and Health News

42) Cohoes fire: Inferno in upstate New York sparked by amateur bladesmith John Gomes, mayor says – CBS News

  1.    Sheriff says Las Vegas shooter fired over 1,100 rounds | TheHill

    Speechless …

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  2.    Australia faces housing hangover twice size of US subprime era, Real Estate – THE BUSINESS TIMES

    Aussie banks can claim against other income and assets or chase individuals into bankruptcy if borrowers default.

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


  3.    China cash injections to quell bond rout: Liquidity, debt, FX reserves

    "With the foreign exchange reserve being relatively fixed, foreign exchange reserve as a share of money supply has fallen from 40 percent just five years ago to 10 percent today," Victor Shih, a professor and China expert at UC San Diego, told CNBC.

    The foreign currency reserve is a primary tool for managing currency values — an important issue for China — and the increasing base of liquidity should continue to dilute its power, Shih added.

    Over time, as the ratio declines, it will get harder for the FX regulator to counteract capital flight: Beijing keeps money in its system (and the yuan strong) by buying up its currency in international markets with its horde of foreign cash. So if there's more RMB to buy, then the reserves won't go as far. Shih suggested such a situation could eventually "wipe out" the reserves entirely.

    That would leave Asia's largest economy exposed to outside shocks.

    "That is a great weakness of China, it's something external, especially if we have things like multiple rate hikes in the Federal Reserve," Shih said.

    He knows what he's talking about.

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  4.    China Reports Breaking Up Gang That Moved $3 Billion Abroad – Bloomberg

    Companies and investors rushed to export money after a change in the mechanism used to set the government-controlled exchange rate in 2015 prompted expectations the yuan would weaken in value.

    That forced the Chinese central bank to spend heavily to shore up the yuan. Regulators meanwhile tightened controls on outflows and stepped up scrutiny of proposed investments abroad, prompting some people to turn to underground operations.

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  5.    Canada's household debt levels higher than any other country, report says

    "OECD countries that have experienced the strongest increases in household debt since the crisis have also the steepest rise in house prices," the group said.

    However, no two national economic systems are alike. That's why some escaped the Great Recession while others did not.

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  6.    37 of 38 economists said the GOP tax plans would grow the debt. The 38th misread the question. – The Washington Post

    This is a false article. Everyone in the know knows that the deficit will increase. Growing GDP isn't even the target. Increasing the share of the superrich even of a stagnant economy is the goal. Further increasing it by chopping at welfare and other benefits and chopping at all government to lower wages and to increase privatization is the goal. Blaming the deficits (actually increased by the tax cuts) on welfare and other subsidies is the plan. Keeping the government locked into borrowing (that isn't even legally required) is the method.

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  7.    Council proposes £1,000 fines for homeless people sleeping in tents | Society | The Guardian

    The policies and practices of government and society lead directly to the anti-social behavior people complain about, people who then want to only make matters worse simply by pushing the problem away rather than solving it with reformed policies and practices and the funding to back it up, funding that should come from government simply creating the money without any borrowing or taxes involved.

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  8.    The Changing Face of America's Renters (& What It Means for Investors)

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  9.    FCC doubles down on its dead-wrong definition of how the internet works | TechCrunch

    … the FCC's argument (which is to say, the broadband industry's argument) already failed in court and may do so again. Here's hoping.

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  10.    Civitas: Institute for the Study of Civil Society The Land Question

    As the classical economists knew, the increase in the value of land owing to its location is the product of the labour and the investment of the community, not the individual landowner.

    Here, Bentley argues that we need to revisit the land question and design a new framework to ensure that sites for new housing are brought forward in the quantities and at the prices that are compatible with the country's housing needs today.

    Eminent domain in the US …

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  11.    CoStar News – Working Out & Watching Movies, That's What Millennials Do

    Victory Park in Dallas added nearly 10,000 apartment units since 2010 and is building a 44,000-square-foot luxury cinema. The Seaport in Boston has added almost 3,000 units since 2014 and saw the construction of a 44,000-square-foot luxury theater. The development in Wrigleyville will include more than 150,000 square feet of retail space, 150 apartment units, a 31,000-square-foot luxury theater, and plenty of parking across the street from Wrigley Field.

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  12.    USGBC to Adopt RELi, a Resilient-Design Standard for Buildings and Neighborhoods

    … new criteria for resilient design including: fundamental access to first aid, emergency supplies, water, food, and communications; adaptive design for extreme rain, sea rise, storm surge, and extreme weather, events, and hazards; develop or expand local skills, capabilities, and long-term employment; provide for social equity and edible landscaping, urban agriculture, and resilient food production.

    Love it!

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  13.    Washington, Seattle spending $1.1M to fence off highways and bridges from the homeless | The News Tribune

    You wouldn't need all the fences, the hygiene centers and the rest areas if everybody had a place to live ….

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  14.    New eBook: Ordoliberalism: A German oddity? | VOX, CEPR's Policy Portal

    … one can argue that the reference to ordoliberal principles is nothing but a mechanism to defend German interests as largest creditor in the recent sovereign debt and banking crises, as Charles Wyplosz holds.

    In modern terms, the focus of ordoliberalism has been on microeconomic issues. Macro (stabilisation) policies, other than the stabilisation of the value of money, were seen of not much avail, if at all. In this regard, ordoliberalism shares a quite unconditional faith in the self-stabilising capacity of a market economy with the US freshwater schools of macroeconomics.

    The Ordo school was — is — highly influential in German economics as well as, possibly more important, in politics and the public discourse. The post-WWII Wirtschaftswunder of the 1950s and 60s was understood as corroborating its analysis. Ordo philosophy also had a decisive impact on the institutional design of Europe's economic community (in particular competition policy and prohibition of state aid) as well subsequently on its monetary union (think of the ECB's mandate as well as the rule-based Stability and Growth Pact).

    Beggar thy neighbor …

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  15.    Snake Appears In Seattle Apartment Toilet | Seattle, WA Patch

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  16.    How Delhi became the most polluted city on Earth – Vox

    With the rice harvest over, farmers are burning crop stubble — specifically the remnants of the rice crop to prepare the fields to plant wheat and return nutrients to the soil.

    You don't return nutrients that way.

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  17.    Why Ending Homelessness Isn't That Easy – Arlington Magazine

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  18.    Keystone's existing pipeline spills far more than predicted to regulators | Reuters

    Not good.

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  19.    Labour will win argument on borrowing to invest, says John McDonnell | Politics | The Guardian

    McDonnell said he could not predict a figure for the cost of the extra borrowing, when asked about the Institute for Fiscal Studies projection that additional interest would be around £2bn a year.

    Is this just bad reporting, or did John McDonnell really not openly discuss the fact that the government does not have to borrow to obtain the funds to invest? Is he afraid to say it, or is he really with the lenders over the people?

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  20.    Houston unveils 20-year plan to rebuild its downtown | Smart Cities Dive

    This would mark quite a change in ideology. Would it be enough? I doubt it. What about you?

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  21.    Jared Kushner's Maryland apartment company asks court to shield investors' identities – Baltimore Sun

    Interesting legal argument ….

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  22.    Australian Banks Face Wide-Ranging Probe Amid String of Scandals – Bloomberg

    Australia's four biggest banks, responsible for 80 percent of the nation's loans, have been hit by allegations they gave poor financial advice, failed to honor insurance claims, mistreated small business owners and that some attempted to manipulate benchmark interest rates.

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  23.    Coinbase Loses Bid to Block U.S. Tax Probe of Bitcoin Gains – Bloomberg

    If there is tax to be paid, the government is going to go after it if it makes an example ….

    It's only the beginning.

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  24.    When Affordable Housing Meets Free-Market Fantasy | Dissent Magazine

    …as planner and University of Southern California faculty member Murtaza Baxamusa has written, "regulatory hurdles are a bogeyman for the housing crunch." Baxamusa backs up this claim with evidence from his own city of San Diego, where, downtown, "there is virtually no NIMBYism, and development permitting is mostly by right," yet "private developers are building fewer units than the zoning allows, and avoiding building affordable housing altogether, despite a tower of regulatory incentives." More affordable housing is "being demolished than [being] built." Since 2015, the unsheltered homeless population downtown has spiked 60 percent.

    Last April, Glaeser, the superstar dean of neoclassical urban economics, commended Hsieh and Moretti's calculations. "Whether these exact figures are correct," he advised, "they provide a basis for the claim that America's most important, and potentially costly, regulations are land use controls."

    Yes, they do: a basis in a free-market fantasia whose speculative prognostications should have no place in the formulation of public policy.

    As for whether land-use controls are good or bad, think Houston and the recent hurricane damage due to a severe lack of proper zoning and code, etc.

    On the issue of creating more affordable housing, non-profit development certainly seems a good alternative for enterprising executives who'd be willing to take vastly less money to do the job.

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  25.    Deregulator: Judgement Day for Australian Banks – LF Economics – Lindsay David and Philip Soos

    Wow! I was looking for something more on the Australian-banking crisis.

    … toxic subprime junk ….

    This sounds so much like what was happening in the US before the crash.

    I'll try to bring you more news about this issue as it unfolds.

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  26.    We are in the most dangerous period in the business cycle

    If history is any judge and if one can accept the talk coming out of the Fed, they'll end up having overly tightened.

    The big picture then is this: a global economy into its ninth year of the business cycle that is starting to gain momentum with the US flirting with 3% growth and 4% unemployment with richly priced asset markets but a flattening yield curve.

    We've seen this picture before.

    In fact, in the post-Bretton Woods era of floating exchange rates since the early 1970s, every economic cycle in the US has ended with a Fed tightening cycle that pushed the yield curve to inversion.

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  27.    Former governor of Bank of Spain is in favour of the money creation by public entity – YouTube

    It's catching on.

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  28.    Dear colleagues, please explain your letter to Steven Mnuchin | Larry Summers

    We may disagree on the merits of particular proposals, but as professional economists we can all agree on the importance of critical discussion and debate to advance the improved understanding that is the basis of better public policies.

    You hope, or maybe you're hinting.

    By the way, the only question that I don't agree with is this:

    "As a matter of logic, won't increased capital inflows require an increase in the trade deficit, totaling hundreds of billions of dollars annually if they are to finance your projected 15 percent increase in the capital stock?"

    It doesn't necessarily follow. Increasing capital inflows could be put to productive capacity that would render US goods and services more competitive and result in more profits coming back to the US.

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  29.    Actually, Maybe China Shouldn't Open Up Just Yet – Bloomberg

    … China is unlikely to suffer a financial crisis, and this is precisely because of the government's ability to restructure banking-sector liabilities at will.

    The real threat is different. Once a country's debt burden is high enough to create uncertainty about allocating future debt-servicing costs, the debt itself becomes an obstacle to growth. This process — known as "financial distress" — is well-understood in finance theory but is still unfamiliar to many economists.

    So, unfortunately, is the corroborating history. In the past two centuries, there have been dozens of cases of overly-indebted countries whose policymakers have promised to implement liberalizing reforms meant to allow the country to outgrow its debt. None has succeeded. No excessively indebted country has ever outgrown its debt until a meaningful portion has been forcibly assigned to one economic sector or another.

    Try explaining that to Xi.

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  30.    Bitcoin Bubble Makes Dot-Com Look Rational – Bloomberg Gadfly

    … as the river of ways to invest in cryptocurrencies widens, the flood that has lifted the price of the bitcoin will surely recede, and, as always, much faster than people expect.

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  31.    Top 10 Best Practices for 1031 Exchanges — Commercial Agent Success Strategies

    Short and sweet …

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  32.    When Ayn Rand Collected Social Security & Medicare, After Years of Opposing Benefit Programs | Open Culture

    Speaks for itself …

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


  33.    The GOP Tax Cuts Are Even More Unpopular Than Past Tax Hikes | FiveThirtyEight

    … Republicans could help their chances if they amend their package to make it focus more on the middle class. A majority of Americans want a middle-class tax cut ….

    Tax cuts should be from the bottom up, not top-down or middle-up. As an example, nobody making under $36K a year should pay taxes. To make up any difference (assuming we don't have needed monetary reform), the very top would pay more, not less.

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  34.    There's one 'huge' opportunity in US property, CEO says

    Buy to let is now a "huge" investment opportunity in the U.S. as single-family rentals surge, says John Burns, CEO of John Burns Real Estate Consulting.

    She doesn't sound like she's from the UK, but saying let is okay if you're old-school American. Ha.

    There's one 'huge' opportunity in US property, CEO says from CNBC.

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  35.    A Look at One Family Office's Bet on the Multifamily Sector | National Real Estate Investor

    Puerto Rico-based family office Grupo Ferré Rangel recently formed a wholly-owned subsidiary to invest in multifamily properties in the U.S.

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  36.    CONVERSABLE ECONOMIST: The Family Options Experiment: Reducing Homelessness with Long-Term Rent Subsidies

    Section 8 should be vastly expanded to the extent that no child in America is homeless or living in squalor, etc. I do not advocate vouchers only but rather whatever help is needed by children and adults, all adults.

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  37.    A Tax Bill that could Increase the Deficit and Lead to Recession. :: Fox&Hounds

    Demand-side rather than supply-side economics:

    Richard Green

    Lusk Chair in Real Estate, Professor, Price School of Public Policy and Marshall School of Business, University of Southern California:

    …we are in a world where corporations have, according to S&P, a record amount of cash on their balance sheets. This cash is earning very low rates of interest—surely investing the money would earn a higher rate of return than letting it sit. Still, corporate leaders have decided that there is not enough future demand for their products to justify investment. And so the money sits. It has hard to see how advancing corporations more cash will produce more capital spending.

    The article is short, accessible, and correct.

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  38.    globalinequality: Adam Smith: is democracy always better for the poor?

    So true:

    Smith's lesson here has broader applicability. An oligarchic democracy may be worse for the poor than an arbitrary government. A state, relatively autonomous from the elite, may care more about the "general interest" than an ostensibly democratic government that is in reality the government of the rich. Smith highlights, I think, in both his discussion of social cleavage in interests when it comes to colonies and in his discussion of slavery, the ambivalence of the connection between the state and class. In more democratic (but exclusivist) settings the state may be less autonomous and more directly "hitched" to the interests of the ruling class. In an autocracy, the state may be less subject to the power of moneyed interests, and more concerned with the position of the poor.

    What's the answer? Real democracy rather than what we have.

    Branko Milanovic, the post's author, makes a mistake of semantics by using the term democracy as being synonymous with his posited connotation of "more democratic (but exclusivist)". It's the same error people make when they confuse socialism, per se, with social democracy. We are speaking of whole nation-states here, not simply a public utility, such as a municipal water-system.

    Please note that he used the qualifier "ostensibly" when referring to the democratic government in question. That really means fake democracy. So, democracy (at least in general) is not worse for the poor (and, of course, there are no slaves in a real democracy).

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  39.    FEMA's Staff `Tapped Out' After Mounting Disasters

    Is Brock Long proving to be Trump's best appointment?

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  40.    All hail new weather radar technology, which can spot hailstones lurking in thunderstorms

    Rather than using a single radar beam, dual-pol uses two simultaneous beams aligned horizontally and vertically. When these beams scatter off precipitation, they provide relative measures of horizontal and vertical size.
    Therefore, an observer can see the difference between flatter shapes of rain droplets and the rounder shapes of hailstones. Dual-pol can also more accurately measure the size and density of rain droplets, and whether it's a mixture or just rain.

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


  41.    Breakthrough in tornado short-term forecasting could mean earlier, more accurate warnings – Scienmag: Latest Science and Health News

    Of the 31 documented tornadoes, specific profiles of cloud overshoot into the stratosphere, wind velocity and turbulence were uniquely present 90 per cent of the time — with all three signature features evident 10 to 20 minutes before the tornado formed.

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  42.    Cohoes fire: Inferno in upstate New York sparked by amateur bladesmith John Gomes, mayor says – CBS News

    Only minor injuries …

    "We often tell people we don't allow open burns in the city and they often say, 'What's the worst that could happen?'" Morse said. "Well, this open burn just caused millions of dollars of damage and destroyed half our downtown."

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


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