Linking ≠ endorsement.
↑ Blogs review: The return of narrow banking | Jérémie Cohen-Setton at Bruegel.org
“Narrow banking” is like Glass-Steagall on steroids. There are definitely aspects of it that we like very much, but we have felt for many years that United States Notes are even more important.
We’d take aspects from the Chicago Plan and merge them with aspects of MMT (Modern Money Theory) and round everything out under United States Notes (debt- and interest-free currency) that we’d have issued to exactly match real “main street” productivity rather than private financial speculation of Wall Street. That would result in no inflation or deflation and no business cycle (no booms followed by busts but only gains in the absence of temporary, natural-disaster setbacks).
What’s at stake: Narrow banking has made a surprising comeback in the debate about the regulatory response to the crisis. While the idea has been around for a long time and was until recently dismissed as unrealistic, several specific versions of how this could be applied in the current environment have received support from a number of economists.
↑ Revenue Growth Opportunities For Affordable Properties | Property Management Minutes
Revenue growth and opportunity is a performance indicator for every property under the Property Management umbrella.
Many affordable properties are restricted from increasing rents or limited by agency restrictions to increases that are deemed necessary by expenses. There are still several opportunities to increase revenue.
↑ Commercial Real Estate Sales Up 6.1 Percent In March – Memphis Daily News
All other things being equal, year-over-year (yoy) is the right way to gauge change in the real-estate sector.
The 208 sales in the first quarter were up 6.l percent from 196 sales in the first quarter of 2013. Commercial sales volume for the quarter was $319.6 million and the average sales price for a commercial property was $1.53 million, with an average price per square foot of $38.34. That compares to sales volume of $254.9 million and an average sales price of $1.3 million in the first quarter of 2013.
↑ Iran Tears Up Azadegan Contract With China
Will this hurt China?
China — one of the few countries to invest in Iran despite international sanctions against it over its nuclear program — has had its contract to develop Iran’s Azadegan oil field terminated.
On April 29, the National Iranian Oil Co.’s legal department informed state-run China National Petroleum Corporation (CNPC), China’s biggest oil and natural gas company, that Iranian Oil Minister Bijan Namdar Zanganeh had issued a decree canceling its contract to develop North Azadegan, citing unacceptable delays.
↑ Do we understand the math behind the PPP calculations? | Michael Pettis’ CHINA FINANCIAL MARKETS
The always brilliant Michael Pettis on China and the PPP calculation:
… if we are interested in the relative weight of two countries in geopolitical terms you would almost certainly want to compare their GDPs on the basis of current exchange rates. Exchange rates may be volatile, as this article notes, but a direct comparison, unadjusted for price differences, better measures the relative importance of each economy for its trade partners.
The problem is that in China bad debt is rarely recognized, repayment isn’t enforced, and default is almost non-existent. Banks simply roll bad debt over indefinitely. This makes comparisons between the two countries pretty hard.
… bad investments are simply not recognized within the banking system to the same extent that they are in the US, and are in fact rolled over. Because even government officials and senior bankers have admitted many times that this is what happens, I think we can assume that it does. The automatic consequence, if this is true, is that a lot of what should be recorded as “expenses”, e.g. loan losses, are actually treated in China’s GDP calculations as “assets”.
My back of the envelope calculation is that GDP may be overstated relative to US GDP by 20-30%.
↑ What The Fed Is Really Doing To Your Money
Another brilliant economist, Warren Mosler:
QE, then, because it costs the private sector interest income and doesn’t add money to the economy, is not inflationary. “The evidence is that it is not inflationary,” Mosler says.
Let’s look at it another way. The bank of Japan has been trying to create inflation for 20 years. The Fed’s been trying to create inflation as hard as it can. The European Central Bank too. “It is not so easy for a central bank to create inflation,” he says, “or you’d think one of these guys would’ve succeeded.
“People act like you have to be careful because one false move on inflation expectations and, bang, you have hyperinflation,” Mosler chuckles. “If you know what that false move is, tell Janet Yellen [the current Fed chief], because she’s trying to find it.”
Here’s the thing. The Fed hasn’t caused an increase in the velocity of money, which velocity is the rate at which money is moving through the economy. Also, US fiscal policy has been to keep velocity down in the real economy (the non-financial sector). So what do we need to happen?
We need Fed and fiscal policies and practices that will force lenders to lend into the real economy and the government to spend directly into the real economy. If done correctly, we still wouldn’t have inflation, but we would have a dynamically growing economy the Chinese would never catch unless they were to adopt our same Fed and fiscal policies and practices.
↑ Nouriel Roubini says that if the global order blows up, the detonation will occur in Asia. – Project Syndicate
Nouriel Roubini on the geopolitics of the Chinese question:
The biggest geopolitical risk of our times is not a conflict between Israel and Iran over nuclear proliferation. Nor is it the risk of chronic disorder in an arc of instability that now runs from the Maghreb all the way to the Hindu Kush. It is not even the risk of Cold War II between Russia and the West over Ukraine.
All of these are serious risks, of course; but none is as serious as the challenge of sustaining the peaceful character of China’s rise.
We think China’s economy is much weaker than generally characterized in Western media and that Chinese militarization is misdirected, ego-driven, and a serious waste of precious resources.
↑ The outlook is so bad, housing can’t help but get better – OC Housing News
This is an excellent piece differentiating the typical pros and cons of the real-estate market. What is somewhat missing are the cautionary aspects of macroeconomics, international relations, and the growing and gross inequality. We say “somewhat” because some of these things are implied in some of the arguments on both sides.
The national real-estate-market negatives mentioned by “Irvine Renter” do imply the nation’s macro policy, which policy according to Irvine Renter, isn’t good. The issues raised by Nouriel Roubini in the link above though are often completely missing in real-estate-market analysis, as if major conflicts don’t come back to haunt the economy and its subsectors, such as real estate (a huge subsector). The inequality issue, however, is probably the most automatically directly connected with real estate in general.
If the people don’t have good paying jobs and enough hours to work, it doesn’t bode well for real estate, whether privately owned or rented, residential or commercial, etc. The whole economy suffers.
All of this said, we always look forward to reading both Bill McBride and Irvine Renter to help round out the various perspectives out there.
↑ FEMA Continues Implementation of New Flood Law
This week, FEMA announced implementation of a Homeowner’s Flood Insurance Affordability Act of 2013 provision that would allow new buyers of homes or businesses to assume a property’s existing flood insurance policy.
↑ UBS defeats shareholders’ U.S. appeal over mortgage losses, tax probe | Reuters
A federal appeals court in New York rejected appeals by UBS AG shareholders seeking to hold the Swiss bank liable for their losses for having concealed its exposure to risky mortgage-backed securities and helping clients evade U.S. taxes.
The moral of the story: read the fine print.
↑ Florida woman loses battle for insurance coverage after home was damaged by ‘exploding’ corpse – NY Daily News
Judy Rodrigo’s nearly six-year battle for full insurance coverage ended Wednesday after a Palm Beach County court ruled that the type of bodily explosion that grotesquely soaked in her walls wasn’t the kind her policy covered.
The moral of the story: read your policy and don’t expect every jurisdiction to widely interpret its wording.
↑ ‘Meth labs of the ’90s’: Hash oil explosions rise with legalized pot | Fox News
DENVER — The opening months of Colorado’s first-in-the-nation recreational marijuana industry have seen a rise in fiery explosions and injuries as pot users try to make the drug’s intoxicating oil in crude home-based laboratories.
“These today are the meth labs of the ’90s. We have to change our thinking and what we’re looking for,” said police Sgt. Pat Long in Thornton, a Denver suburb where officers were puzzled by the city’s first hash oil explosion in January.
Hash oil is typically made by packing the castoff leaves and stems of pot plants into a pipe and pouring highly flammable butane through it. The concoction is heated to make the potent oil for far cheaper than it can be purchased in stores.
↑ $100K damage estimate at fire near Circus-Circus – Las Vegas Sun News
Clark County fire officials are investigating a two-alarm blaze at a vacant building near the Circus Circus hotel-casino.
↑ AP Exchange: Quake safety concerns at UNR dorms – seattlepi.com
The more than a century-old Manzanita and Lincoln resident halls at the University of Nevada, Reno are steeped in history, but their vulnerability in the event of an earthquake is causing some concern about the students who live in them.
Michael Wixom, a member of the Nevada Board of Regents, is among those who have raised concerns about the situation in recent weeks.
“If we have a seismic event, those two are the sites that will have the most damage and the most loss of life,” Wixom said.
↑ Bloodhounds help find forest-fire arsonists – SFGate
“We’ve had great success at apprehending arsonists,” he said. “And the word has gotten out. It doesn’t matter if people are on foot, riding four-wheelers or inside vehicles. The dogs can track them back to their homes. Once people realize that, they tend to be a whole lot less inclined to go out and start fires.”
↑ Improperly vented heater blamed for 5 cabin deaths in Pennsylvania – NY Daily News
Two adults and three children died in the cabin in Elimsport due to a propane heater that did not vent carbon monoxide properly, authorities said. The mom of two of the kids left the cabin before the deaths.
↑ California city looks to sea for water in drought – SFGate
With California in a drought, the coastal city of Santa Barbara is thinking about firing up a desalination plant that has been in storage for more than two decades.
Many environmentalists think desalination should be a last resort.
We’ve been calling for desalination for years. Of course, it should be done as environmentally safely as possible and all other reasonable water measures should be taken first.
↑ Study links wastewater injection, Oklahoma quake in 2011 | Dallas Morning News
New research suggests that the sharpest earthquake to strike Oklahoma may have been triggered in part by wastewater injection — which if true, would make the 2011 temblor the strongest ever linked to disposal practices within the oil and gas industry.
More property owners in Oklahoma are purchasing earthquake insurance.