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- Law Opens Financing of Start-Ups to Crowds - NYTimes com
There will be real-estate deals offered this way. Be careful. Learn how to do due diligence. Request, among other things, proper proof of insurance (a Certificate of Insurance) under enforceable contract terms and provisions you'll need to help protect yourself.
Entrepreneurs looking to the crowd to finance their big ideas just got a little extra help from the government.
On Monday [September 23,2013], federal legislation goes into effect to allow small start-ups to ask for equity investments publicly, such as through social media sites or elsewhere on the Internet, without having to register the shares for public trading. Business owners will now be able to raise any amount, though only, at this point, from "accredited investors" — those deemed wealthy and sophisticated enough to understand and withstand risk.
The legislation is part of the 2012 "Jumpstart Our Business Start-ups Act," or JOBS Act, meant to encourage the growth of new businesses.
The original laws regulating how equity investments are raised date to the 1930s, and were put in place to "prevent the snake oil salesman from bankrupting the trusting and unassuming grandma," said Ajay K. Agrawal, a professor of entrepreneurship at the University of Toronto. With the new measures, he said, it will be a tough challenge to make sure any boomlet of crowdfunding ventures does not result in fraud and ordinary people being cheated.
... a revision that is expected to be approved will lower the restrictions around the definition of an accredited investor, meaning more of the public will have a chance of investing their own money into companies that they believe could be as big and successful as Facebook or Twitter.
Although it is not yet known when that will happen, Mr. Agrawal said it could lead to "the wild west" in crowdfunding.
Read the source article ... https://www.nytimes.com/2013/09/23/techn ology/law-opens-financing-of-start-ups-t o-crowds.html?pagewanted=all&_r=0
- Mortgage Rates Preview : HARP 3.0 And Falling Mortgage Rates
Falling mortgage rates helped make homes more affordable nationwide and re-opened refinance opportunities for millions of U.S. households.
The only mortgage rates which did not fall last week were jumbo mortgage rates.
On the news of "no taper", mortgage rates sank.
Momentum will likely drag rates lower until economic data improves.
Read the source article ... https://themortgagereports.com/13699/mor tgage-rates-preview-will-harp-3-pass-thi s-week-and-will-mortgage-rates-keep-drop ping
- ekathimerini.com | Merkel vows to keep up reform pressure on Greece after historic election win
Angela Merkel was reelected, and she's still in an Austerian frame of mind.
Angela Merkel has said she will keep up the pressure on Greece to carry out reforms after scoring a historic victory in the German federal elections on Sunday.
"We should not stop exercising pressure for the agreed reforms to be carried out," said Merkel after a major election win for her CDU party and its Bavarian partner, the CSU.
Merkel also insisted that she told the truth about Greece's predicament and the possible need for a third bailout, which was brought up during the election campaign by Finance Minister Wolfgang Schaeuble.
"This is not a new issue and we raised it repeatedly during the election campaign," said Merkel, adding that Schaeuble had first raised the matter before a parliamentary committee in November 2012.
Read the source article ... https://www.ekathimerini.com/4dcgi/_w_ar ticles_wsite1_1_23/09/2013_519751
- Calculated Risk: Mortgages, Eminent domain and Richmond
The following critique of the Richmond eminent-domain plan is catching on.
If the outstanding principal balance is $400,000, but the house is only worth $250,000, the starting point for the value of the note is $400,000. As Konczal writes the value could be discounted because of the possibility of foreclosure, but these loans are current and well seasoned (the borrowers have been paying for eight years or so). The value might be less than $400,000, but the value is clearly more than $250,000 - so the scheme doesn't work since the intention is to "seize the mortgage" and refinance at less than the current property value - but that will be far below fair value for the note.
The bottom line is I expect the courts to rule against this scheme (little or no public interest) - and it wouldn't work anyway (can't pay fair value).
Read the source article ... https://www.calculatedriskblog.com/2013/ 09/mortgages-eminent-domain-and-richmond .html
- Bruegel | -15% to +4%: Taylor-rule interest rates for euro area countries
The most recent recommendations would suggest that conditions in Ireland, Spain, Portugal and Greece are such to warrant even a negative interest rate (minus 15 percent in Greece!), whereas the optimal prescription for Austria, Germany and Luxembourg would be a positive interest rate of about four percent. In theory, such differences can help to rebalance intra-euro price-competitiveness divergences, whereby a boom in Germany increases prices and wages, while the high unemployment in Spain reduces them. But when unemployment is as high as in Spain, increasing unemployment further should not be the way to go and in Germany prices do not increase much despite low unemployment.
Therefore, the other side of the coin is that those countries experiencing the most depressed economic conditions face at present very tight monetary conditions, while countries in which the economic situation is better get loose monetary policy. What is more, the vicious circle linking together banks and sovereigns (whereby banks hold a large amount of debt of the government of their country of residence and are expected to be bailed out by the same government, with negative implication for the debt sustainability of the latter) in some euro-area countries further pushed both banks and governments to the abyss, thereby leading to even larger nominal interest rates.
Read the source article ... https://www.bruegel.org/nc/blog/detail/a rticle/1151-15-percent-to-plus-4-percent -taylor-rule-interest-rates-for-euro-are a-countries/
- Home Builders Buoyed by Fed Decision, August Home Starts - Developments - WSJ
Everyone, including the Fed, must feel his or her way.
"This is going to be a bumpy recovery, simply because the whole industry is trying to put itself back together," said David Crowe, chief economist at the National Association of Home Builders. "It isn't unreasonable to believe that we'll have a couple of months of hesitation and then regain the path that we should be on."
Read the source article ... https://blogs.wsj.com/developments/2013/ 09/18/home-builders-buoyed-by-fed-decisi on-august-home-starts/
- China's Trade Policies Get a Bum Rap - Real Time Economics - WSJ
Southern European nations looking to boost their economies are urging Germany to import more and reduce its current account surplus — the same policies Washington has long been hammering Beijing about.
With a currency union (the euro) but no banking and fiscal union, Germany is in a much different situation than the individual states of the United States, as the article alluded.
Read the source article ... https://blogs.wsj.com/economics/2013/09/ 19/chinas-trade-policies-get-a-bum-rap/