News: Real Estate, Risk, Economics. Aug. 9, 2017

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Table of Contents
(Click to sections below.)

1) Supply-Siders Still Push What Doesn't Work – Bloomberg

2) Shareholder Value Theory: Social Responsibility Can Increase ROI — Olen

3) Corporations are leaving suburbs: Can anything reverse the trend?

4) Video: Fire hits Torch tower in Dubai Marina | GulfNews[dot]com

5) EconoSpeak: The Output Gap per the Gerald Friedman Defenders

6) Here's what the first Tesla solar roofs look like in the wild – Curbed

7) Coal Power Plants are the Largest Source of Toxic Water Contamination – YouTube

8) Employment Situation Summary

9) Australia Slams the Brakes on Property Investment – Bloomberg

10) Toronto Home Prices Suffer Worst Monthly Decline in 17 Years – Bloomberg

11) New Homeowners are Upsizing to Larger Homes, Research Shows

12) Massive Florida sinkhole grows as 2 more homes condemned – CBS News

13) AEP's $4.5 billion Oklahoma wind farm much less risky than building a new coal plant, AEP CEO Nick Akins says – Columbus Business First

14) GOP and Democrats Push Trump on Tax Reform – YouTube

15) How Air-Conditioning Conquered America (Even the Pacific Northwest) – The New York Times

16) Global Ocean Circulation Appears To Be Collapsing Due To A Warming Planet

17) How Single, Work-at-Home Mom Maria Bought Her First Duplex

18) Millennials Are Killing the Oil Industry – In These Times

19) The National Flood Insurance Program Is in Dire Need of Repair – The Atlantic

20) 7 Invasive Species of Tree That Will Ruin Your Yard | realtor[dot]com®

21) France's Malaise Doesn't Keep It from Employing a Larger Share of Prime Age Workers than US | The Center for Economic and Policy Research

22) How China's billion savers embarked on a household debt binge

23) MacroMania: A monetary-fiscal theory of inflation

24) 'EU membership for Poland is rather like a teaser rate on a bad loan' — RT Op-Edge

25) Tenants Under Siege: Inside New York City's Housing Crisis | by Michael Greenberg | The New York Review of Books

26) Nonprofits put tiny homes to versatile use – NeighborWorks America

27) Here's What Social Security Pays the Average American — The Motley Fool

28) Democrats Pushing the "Compete" Word to Justify Doubling Down on Failed, Middle-Class Destroying Neoliberal Policies | naked capitalism

29) Fracking-Related Water Problems Raise Issues in West Texas

30) Investigators Say Gunfire Caused Wildfire Near California's Yosemite

31) Massive Fire Devastates North Seattle Apartment Complex – Seattle, WA Patch

32) Woman Indicted in SoHo Real Estate Scam | Metro US

33) Landlord of nuisance properties sells last of his real estate | Courts | host[dot]madison[dot]com

34) Making a modern beach house in the aftermath of Hurricane Sandy – Curbed

35) Scientists Fear Trump Will Dismiss Blunt Climate Report – The New York Times

36) Zillow CEO: Redfin 'a threat to organized real estate' — GeekWire

37) Researchers discover potentially harmful nanoparticles produced through burning coal | EurekAlert! Science News

38) Malicious code in the Node.js npm registry shakes open source trust model | CSO Online

39) China's Ascent Isn't Looking So Inevitable Anymore – Bloomberg

40) Post-crisis regulation and CEO bonuses | VOX, CEPR's Policy Portal

41) Texas Appeals Court Allows Class Action Against Roofer in Hail Damage Solicitation

  1.    Supply-Siders Still Push What Doesn't Work – Bloomberg

    Noah Smith understates his argument. That's because Noah is a moderate. Austerity was actually very bad for recovery, which hasn't even been fully achieved yet.

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  2.    Shareholder Value Theory: Social Responsibility Can Increase ROI — Olen

    Pollution was more than a social concern: it was a quality of life issue, a classic commons problem that Milton Friedman no doubt understood could not be solved with traditional market forces.

    Actually, he argued against anti-pollution regulations and said that market forces were the best way to handle the issue.

    Also, GM built the EV1 (Electric Vehicle). It worked really, really well. It could be charged via solar panels. Rather than push hard on increasing sales, GM sold the patent to the oil industry and recalled and destroyed all the cars. Then you wonder what's wrong with unbridled capitalism?

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  3.    Corporations are leaving suburbs: Can anything reverse the trend?

    Flip, flop, flip? Cities price themselves out. We know that.

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  4.    Video: Fire hits Torch tower in Dubai Marina | GulfNews.com

    The 86-story Torch tower is one of the world's tallest residential buildings, rising to 337 metres, with 676 apartments,The same building was also hit by a fire in 2015.

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  5.    EconoSpeak: The Output Gap per the Gerald Friedman Defenders

    Disclosure: I defended Gerald Friedman and still do.

    Don't just read the article but also the comment section.

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  6.    Here's what the first Tesla solar roofs look like in the wild – Curbed

    How green is it all from cradle to grave?

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  7.    Coal Power Plants are the Largest Source of Toxic Water Contamination – YouTube

    Uncommon knowledge:

    Director of Beyond Coal Campaign at Sierra Club, Mary Anne Hitt, discusses Trump administration's assault on environmental regulations that protect drinking water and health from coal plant wastewater dumping and how activists organize against them.

    If your real estate investments happen to be within the vicinity, you could lose money directly. Of course, we all pay one way or another for recklessness toward the greater environment.

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  8.    Employment Situation Summary

    Ever so slightly in the right direction but mostly "little changed":

    In July, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.36. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent. In July, average hourly earnings of private-sector production and nonsupervisory employees increased by 6 cents to $22.10.

    The fact of the matter is, however, the price-inflation bogeyman has yet to raise his head. The banker has no clothes.

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  9.    Australia Slams the Brakes on Property Investment – Bloomberg

    "We've already seen developers start to shift their efforts and focus more on owner-occupiers and less on investors," said Sophie Chick, head of residential research at Savills Australia. "The restrictions have really made investors think twice."

    It didn't seem sustainable and still may not be.

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  10.    Toronto Home Prices Suffer Worst Monthly Decline in 17 Years – Bloomberg

    The measures were seen as necessary to cool prices climbing at an unsustainable pace.

    That's the way it looked: unsustainable.

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  11.    New Homeowners are Upsizing to Larger Homes, Research Shows

    "I see a lot about tiny houses and micro apartments in Seattle, San Francisco, and New York – these cities who are really grappling with housing issues and trying to fast-track 200- or 400-square-foot apartments," Miller says. "And yet the overall pattern across America is that people want these larger houses.

    The article claims the trend is still toward open-floor plans, but I've read elsewhere that, that trend is dying out. There are plenty of things to consider in terms of house size. What costs associated with housing don't go up with size, all other things being equal? Of course, fixing and flipping and buying to rent out are different matters.

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  12.    Massive Florida sinkhole grows as 2 more homes condemned – CBS News

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  13.    AEP's $4.5 billion Oklahoma wind farm much less risky than building a new coal plant, AEP CEO Nick Akins says – Columbus – Columbus Business First

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  14.    GOP and Democrats Push Trump on Tax Reform – YouTube

    Bill Black pulls no punches laying out the facts. I can't for the life of me understand why it is so difficult for the fundamentals to be understood by the masses. It seems like it is taking an eternity for this information to become mainstreamed. Don't give up!

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  15.    How Air-Conditioning Conquered America (Even the Pacific Northwest) – The New York Times

    So, are you installing air in your properties that don't have it?

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


  16.    Global Ocean Circulation Appears To Be Collapsing Due To A Warming Planet

    This scenario of a collapse in AMOC and global ocean circulation is the premise for the movie "The Day After Tomorrow." As a disclaimer, the plot line in which much of New England and Western Europe gets plunged into an ice age is significantly over exaggerated and unrealistic on human time scales.

    While geologists have studied events in the past similar to what appears to be happening today, scientists are largely unsure of what lies ahead.

    That said, they do not know just how "exaggerated and unrealistic." Things could get much, much worse much more rapidly than they now imagine. The trend has been for them to have to admit that their models were too optimistic. If we don't stop burning carbon or if we don't sequester what we're burning, things will become very bad relatively quickly.

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


  17.    How Single, Work-at-Home Mom Maria Bought Her First Duplex

    The moral of the story: be realistic going in by doing your due diligence.

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  18.    Millennials Are Killing the Oil Industry – In These Times

    According to a recent report by pollsters EY, 57 percent of teens now see the fossil fuel industry as bad for society, and 62 percent of those aged 16 to 19 say working for oil and gas companies is unappealing. Other findings suggest that millennials dislike the oil industry the most of any potential employer, with only 2 percent of college graduates in the United States listing the oil and gas industry as their first-choice job placement.

    Given that a majority of millennials now also reject capitalism, the fact that we don't feel too much warmth towards the industry that's been at its dirty, beating heart of it for 300 years shouldn't come as a surprise.

    Millennials are now the largest part of the U.S. workforce, meaning their flight could spell massive problems down the road for the world's most destructive companies.

    Keep that in mind when you consider which industries are the economic backbone where you intend to invest. If carbon fuels is the base and there isn't any local plan to radically change that in time, an investment there might be highly risky, even reckless.

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  19.    The National Flood Insurance Program Is in Dire Need of Repair – The Atlantic

    While the coalition pushes a range of reforms, among its overarching goals is to shift NFIP's focus away from rate subsidies and toward mitigation efforts. In other words, instead of making it cheaper for people to live in high-risk zones, government should work to lower those risks, either by helping owners seriously flood-proof their homes or by easing them out of an area altogether.

    … among NFIP's core insanities is that it's geared to help people rebuild in the same spot where they've already been flooded.

    The article doesn't mention AGW and directly associated rising seas and worsening weather, etc.

    Just raising rates won't work. Just bailing people out won't work either. Carbon-fuel burning is the worst problem.

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  20.    7 Invasive Species of Tree That Will Ruin Your Yard | realtor.com®

    Do you investigate what trees are on the properties you're considering buying and the costs associated with owning them and/or removing them? How about trees on neighboring properties?

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  21.    France's Malaise Doesn't Keep It from Employing a Larger Share of Prime Age Workers than U.S. | Beat the Press | Blogs | Publications | The Center for Economic and Policy Research

    … many economists regard the German government's insistence on austerity in spite of low interest rates and low inflation as "the wellspring of the country's malaise," but apparently there was no room to mention this fact.

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  22.    How China's billion savers embarked on a household debt binge

    Lu Zhe, a macroeconomic analyst at Tianfeng Securities, said the situation in China was "quite similar" to that in the US in 2004-2005, when signs of an impending crisis were beginning to emerge.

    The property loan to value ratio had reached 50 per cent by the end of last year, he said, approaching the pre-crisis level of American households. That meant any substantial correction of home prices would have a catastrophic impact on household wealth and the banking system.

    I still maintain that Xi does not understand economics. He does not know what he's doing. He wants to be a communist/socialist and capitalist at the same time. Market socialism with Chinese characteristics was a nonstarter. If they want to be a mixed economy for real, then they'll have to allow democracy. Even then, the mix must be less market for it to be at all sustainable.

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  23.    MacroMania: A monetary-fiscal theory of inflation

    I think this discussion needs to factor in globalized labor, workers' wage expectations, hysteresis, premature retirements, increased disability claims, increased financialization, and corporate stock buybacks. Those are just for starters.

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  24.    'EU membership for Poland is rather like a teaser rate on a bad loan' — RT Op-Edge

    Steve Keen:

    … what we really need to do is to say: "Let's get down and reconsider what on Earth we were trying to achieve in the EU in the first place, and why is it being so unsuccessful?" Why is it only benefitting in the northern states, which have got enormous trade surpluses, while the southern ones are suffering with trade deficits and all the contraction that forces upon them? When you look at it in that way and say, "we have to reconsider the entire structure of the EU," maybe we should even let the parliamentarians propose bills, which, of course, the EU is the only parliament that doesn't allow that. So it is a time for a fundamental reexamination of the EU. If this message doesn't get through to parliament, well… who's next? Italy?

    Of course, Steve knows what's wrong. He knows exactly why Germany has benefited and Greece suffered. The set-up was rigged in Germany's favor right from the start. Germany knew it and still knows it but doesn't want it discussed and sure as hell doesn't want anything to be done about it. Democracy is the solution, but Germany doesn't want that. Merkel has always thought small: no vision for the whole of Europe where all ships rise together. Until the German people get a grip, the EU will hobble along at best. I think Greece should have pulled out and executed Yanis's plan.

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  25.    Tenants Under Siege: Inside New York City's Housing Crisis | by Michael Greenberg | The New York Review of Books

    The article is a long read but worth it.

    With a sales tax devoted to housing, affordable buildings needn't be confined to land the city already owns; enough money would be available to purchase lots all over the five boroughs, not just in poorer districts. The buildings could be woven into the fabric of the city, rather than clumped together in self-enclosed enclaves that promote a kind of psychological as well as physical segregation. New affordable housing would no longer be contingent on giving tax exemptions to the builders of private, market-rate projects: luxury developers would be free to charge whatever the market will bear for all of their units, not just 70 or 80 percent of them, and the city, in turn, could collect from these developers the billions in property taxes that it now forfeits under 421-a. Housing built with money from a special tax fund would be 100 percent affordable. Over time homelessness would decrease—especially among low-wage working families—as would the amount (currently about $1.6 billion per year) that the city spends on homeless services.

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  26.    Nonprofits put tiny homes to versatile use – NeighborWorks America

    Okay, so maybe you're not interested in not-for-profit. How do you make this work for profit while keeping it just as affordable and just as well maintained or better? Can it be done? Will zoning and building codes allow it? Will tenants cooperate so the village won't turn into a slum without the landlord having to shell out a small fortune while making little to nothing for the effort? Can one get the governments to help the for-profits who meet high enough standards? If so, it would be quite rewarding in more ways than dollars.

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  27.    Here's What Social Security Pays the Average American — The Motley Fool

    Though Social Security was never meant to sustain retirees in the absence of other income, a frightening number of workers may wind up in a situation where they're forced to live off a mere $16,320 a year, or however much they're able to get out of Social Security. According to the Economic Policy Institute, more than 40% of households aged 55-64 have no retirement savings to show for.

    Can you say tiny-home senior village? What other help would the senior tenants get?

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  28.    Democrats Pushing the "Compete" Word to Justify Doubling Down on Failed, Middle-Class Destroying Neoliberal Policies | naked capitalism

    The notion that people must compete with each [other] for low-paying jobs undermines worker solidarity and weakens our sense of national community.

    Misguided government policies and greedy business practices ended a thirty-year period in which wages kept pace with productivity growth, resulting in soaring inequality and stagnating wages for American workers. Increasingly wealthy individuals in corporations have, in turn, used their money to hijack the political process.

    No retraining program on Earth can prepare workers for jobs that don't exist. And, as long as inequality remains the highest it's been since the 1920s, "competitive" education strategies will do little to improve wages or social mobility. To beleaguered workers, the phrase "better skills" reinforces the perception that an out-of-touch elite would rather blame the victims of its policies than take responsibility for its actions.

    … As economist Lawrence Mishel wrote in 2011: "… workers face a wage deficit, not a skills deficit."

    Compete? Democrats need to reject the idea that workers should "compete" with each other for jobs. That ideologically charged concept gained momentum in the 1990s, as the party's institutional fundraising shifted its emphasis from unions to corporate donors.

    Today we see the logical end-point of that ideology in the "Uberization" of American labor, as increasing numbers of workers are forced to scrabble like crabs in a barrel for low-paying piece work — or worse, as with Uber, are pressured to go into debt for car loans they must assume in order to "compete"

    It's no coincidence that high-ranking Democratic operatives have been associated with both Uber and its major competitor, Lyft.

    The ideology of competition owes a great deal to "new economy" popularizers like Thomas Friedman and economists like Tyler Cowen, both of whom proclaim that "average is over." It's a cold-blooded ideology.

    … The histo ry of organized labor — once the bedrock of the Democratic Party — is founded on the realization that individual workers cannot compete with powerful corporations in the fight for economic justice.

    … it's no accident that the greatest period of shared prosperity in our nation's modern history coincided with its highest percentage of unionized workers. Or that, conversely, inequality grew as union membership fell.

    Instead of training workers to "compete" for non-existent jobs, Democrats should create those jobs — by investing in infrastructure, by renegotiating bad trade deals, and by making the government the employer of last resort. And they should do more: they should call us together, by working with outside activists to form a broad coalition for economic and social justice.

    … Democrats should also be brave enough to call Americans together again — as working people, as a movement, and as a community. After all, nobody can really offer us a "better deal" unless they ask us to give our best in return.

    The government as the employer of "last resort" is not how I'd go about it. I'd make the private sector hire away government workers by offering better wages, etc. The default should be employed (or at least paid). That's why I'm for a guaranteed living (not basic) income.

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  29.    Fracking-Related Water Problems Raise Issues in West Texas

    The more I learn about the fracking industry, the more I see it as a growing risk, even threat. To me, its an extremely shortsighted, anti-environmental, self-centered business that has already come back to haunt humanity and will continue to do so for the foreseeable future (until we shut it down and live with the damage, which is largely irreparable given our current technology).

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  30.    Investigators Say Gunfire Caused Wildfire Near California's Yosemite

    Wow!

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  31.    Massive Fire Devastates North Seattle Apartment Complex – Seattle, WA Patch

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  32.    Woman Indicted in SoHo Real Estate Scam | Metro US

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  33.    Landlord of nuisance properties sells last of his real estate | Courts | host.madison.com

    This has been one strange story. A huge question concerns why it was allowed to fester so long.

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  34.    Making a modern beach house in the aftermath of Hurricane Sandy – Curbed

    Is it storm proof enough? There's no mention of insurance coverage.

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  35.    Scientists Fear Trump Will Dismiss Blunt Climate Report – The New York Times

    The agency's administrator, Scott Pruitt, has said he does not believe that carbon dioxide is a primary contributor to global warming.

    Is that his sincere belief, or is he shilling for carbon-fuel industries? It's a fair question. Not being able to connect the dots between carbon-fuel burning and global warming is simply astounding to me.

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  36.    Zillow CEO: Redfin 'a threat to organized real estate' — GeekWire

    Interesting battle:

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  37.    Researchers discover potentially harmful nanoparticles produced through burning coal | EurekAlert! Science News

    Yes, scrubbers are better than nothing, but not burning the stuff in the first place is the right move. We do not need to burn coal to provide us with enough energy. We have the truly clean technology right now to more than supply all of us with more power then we're using. Don't believe me? Just ask Elon Musk. We also have the knowhow to guarantee that no coal workers suffer economically during the rapid transition we need. What's lacking is the right politicians. Getting the right people in place is up to the People. The People have to stop doing what they are told by the plutocrats and start telling the plutocrats that we, the People, are taking completely over whether those plutocrats like it or not. That's not being too harsh. No one is calling for dusting off the guillotines. We're talking about fundamental fairness, global health-security, and ending the cycle of poverty, etc.

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  38.    Malicious code in the Node.js npm registry shakes open source trust model | CSO Online

    Open source is great, but it needs to up the game considerably. Nobody should be able to contribute who hasn't been fully vetted (earned the proper trust rating from other contributors) and who hasn't supplied real credentials: real identification. No code should be opened to download that hasn't been thoroughly examined by others first. Do you think I'm asking for overkill that would doom open source? I think it would do the opposite.

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  39.    China's Ascent Isn't Looking So Inevitable Anymore – Bloomberg

    This is the same old worn out laissez-faire capitalistic "market" this and "market" that ideology. It isn't so-called open or unregulated capitalistic markets that China needs most. It's democracy. With real democracy (which no nation on earth has right now or ever really has had), the "markets" would take care of themselves for real, for the benefit of all without any "externalities" as lame excuses for pollution or the rest. The People need information, all of it. The most usual reason various people are insane, risky, or evil is because they don't have the right information. Some nation has to get the ball rolling to set the example of how things could be and should be. Will it be China? Will it be the US? What nation is willing to step forward and do it?

    Yes, it's a radical position. That's what we need.

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  40.    Post-crisis regulation and CEO bonuses | VOX, CEPR's Policy Portal

    Compensation must vary in a symmetrical way, either up or down, conditional on performance and risk outcomes, allowing enough time between the action and the materialisation of the risk.

    Clawbacks!

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  41.    Texas Appeals Court Allows Class Action Against Roofer in Hail Damage Solicitation

    … this entire business model is flat-out illegal," said Badger, who noted that Texas law has been very clear that roofing contractors are not allowed to negotiate insurance claims.

    "We'll continue to knock these off one at a time," said Badger. "But only when the Texas legislature finally realizes that we must have roofing contractor licensing and regulation, will Texas homeowners finally be protected from these crooks and frauds.

    The Court of Appeals case is Lon Smith & Associates, Inc. and A-1 Systems, Inc., DBA Lon Smith Roofing and Construction v. Joe Key and Stacci Key.

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