Linking ≠ endorsement.
⇧ EU leaders back down from challenging Erdogan | Middle East Eye
Important analysis from David Barchard:
…Erdogan has said in the past that he might prefer membership of the Russian and Chinese led Shanghai Cooperation Organisation to the EU….
⇧ Los Angeles Real Estate: 3 Booming Areas – The Hollywood Reporter
The most important tip in the article:
“The Ellison sale really changed everything. She was the first to really push the high, high-end market east of Laurel Canyon, and people follow her,” says real estate agent Josh Altman.
The path in that type of real estate appears to consists of anticipating, getting out front of the push, knowing who’s who, and being there when it’s brand new (or even causing it to happen). After all, Megan Ellison must have learned from someone that her move would earn her big real-estate gains.
⇧ Macomb County housing market roaring back with double digit assesement gains
With the Macomb County [Michigan] housing market finally turning the corner in a big way, property tax assessments have come roaring back over the past year, with many homeowners due to see increases of 10 to 15 percent on their upcoming assessment notices.
⇧ Confidence increases in housing market
“They’re too scared to buy (again).”
Because of that, many are choosing to continue renting, which is causing another problem.
“This has kept up demand for rentals, and prices to rent are high,” he said.
The area is experiencing a shortage in the rental market, specifically in St. George and the surrounding cities, Curtis said.
Many foreclosed and distressed properties were picked up by investors, who are using the shortage to make money, Hollingshead said.
⇧ The reason oil could drop as low as $20 per barrel | Arab News
There are several reasons to expect a new trading range as low as $20 to $50, as in the period from 1986 to 2004. Technological and environmental pressures are reducing long-term oil demand and threatening to turn much of the high-cost oil outside the Middle East into a “stranded asset” similar to the earth’s vast unwanted coal reserves. Additional pressures for low oil prices in the long term include the possible lifting of sanctions on Iran and Russia and the ending of civil wars in Iraq and Libya, which between them would release additional oil reserves to the world markets.
The US shale revolution is perhaps the strongest argument for a return to competitive pricing instead of the OPEC-dominated monopoly regimes of 1974-85 and 2005-14. Although shale oil is relatively costly, production can be turned on and off much more easily — and cheaply — than from conventional oilfields. This means that shale prospectors should now be the “swing producers” in global oil markets. In a truly competitive market,low-cost producers would always be pumping at maximum output, while shale shuts off when demand is weak and ramps up when demand is strong. This competitive logic suggests that marginal costs of US shale oil, generally estimated at $40 to $50, should in the future be a ceiling for global oil prices, not a floor.
⇧ Painstaking tests at high-tech lab hunt for cause of Noyes Street fire: See the video – The Portland Press Herald / Maine Sunday Telegram
A team of scientists at a federal lab in Beltsville, Maryland, is working to re-create the characteristics of the fire that burned the apartment house at 20-24 Noyes St. in Portland on Nov. 1, killing six people.
The Fire Research Laboratory of the federal Bureau of Alcohol, Tobacco, Firearms and Explosives is trying to replicate in a computer model, as precisely as possible, the exact conditions under which the fire occurred, including the location and type of furniture in the building, whether doors or windows were open, and the burn rates for the various materials used in construction of the two-story duplex, built in 1920. That could provide answers about how the fire started, why it spread the way it did, where smoke and superheated gases concentrated and, ultimately, why it was so deadly.
⇧ 2014 is FDNY’s Busiest Year in 150 Years | Firefighter Nation
2014 will go down in the record books as the FDNY’s busiest year in its very active century-and-a-half history, according to the Uniformed Firefighters Association of Greater New York and FDNY data.
⇧ $501M round of Sandy aid will target housing
Restoring housing and expanding a fund that finances thousands of affordable rental units for low- to moderate-income families will be how New Jersey spends most of what will likely be the final round of Superstorm Sandy relief money.
⇧ How does the money system affect Inequality, Housing & Environment? – YouTube
Many of the big social and economic problems that we’re facing today are due to the way that money is created. Most of us learn that only the government can create money but in reality more than 97% of money is created by private banks. This has led to inequality, indebtedness, unaffordable housing and high unemployment.
Positive Money’s Executive Director, Fran Boait, presenting on 12th June 2014 in Edinburgh.
⇧ German construction orders fall for fifth straight month | Reuters
Merkel’s foolish Austerian economics and sanctions against Russia coming home to haunt Germany:
German construction contracts dropped by 4.5 percent on the year in October, their fifth consecutive monthly fall, data from the Federal Statistics Office showed on Friday, suggesting this sector of Europe’s largest economy is stuck in a rut.
⇧ U.S. labor market weaker than jobless rate shows: Fed study | Reuters
The U.S. jobless rate registered 5.8 percent in November, down from 7 percent a year earlier.
That decline is in part driven by people dropping out of the workforce because of a dearth of available jobs for those without a college degree, Chicago Fed’s chief of research Dan Sullivan and three of his colleagues wrote in the regional Fed bank’s latest Economic Perspectives.
…only about half of the decline over the last five years is from changing demographics, a smaller portion than many economists believe.
⇧ The riddle of Argentina | VOX, CEPR’s Policy Portal
Nauro F Campos:
Acemoglu and Robinson (2006, p.7) note that “The political history of Argentina reveals an extraordinary pattern where democracy was created in 1912, undermined in 1930, recreated in 1946, undermined in 1955, fully recreated in 1973, undermined in 1976, and finally reestablished in 1983”. Alston and Gallo (2010) identify the onset of widespread electoral fraud in the 1930s as a turning point and argue that this erosion of the rule of law is a main reason for the decline.
…institutions do matter but among them, political institutions and financial institutions seem fulcral. We should try to do more to understand not only how these two sets of institutions individually affect growth but also how the manner in which they interact may ultimately shape economic development.
⇧ China issues real estate registration rules – Xinhua | English.news.cn
BEIJING, Dec. 22 (Xinhua) — The State Council, China’s Cabinet, has issued provisional regulations on real estate registration, according to a statement released on Monday.
⇧ Connecting the Dots: From US Shale Oil to London Real Estate | Enterprising Investor
What do the US shale oil play and London real estate have in common? A lot, it turns out. And if oil prices keep falling, the London (and for that matter Paris) property bubble(s) will burst.
Oil prices are now down about 45% from their 2014 peak of about $102 per barrel in June to $57.13 as of this writing. But marginal demand (outside the United States) is slackening. Japan is in recession. China’s bad debt problems are slowing its growth. Emerging markets are sputtering and the ruble is falling. Europe is weakening as well. Unless something changes these emerging trends, the flow of new money out of Russia and China will slow to a trickle and then new real estate investment in London will weaken.
And Londoners can’t make up for all the diminishing Chinese and Russian wealth. And if oil prices continue to fall, pop goes the real estate bubble in London. Boom.
The Russians started pulling out of London some time ago (https://propertypak.com/2014/12/20/news -real-estate-risk-economics-dec-20-2014/ #12201433), just as we had said they would even when others were claiming they’d pump more in to escape a recession in Russia.
⇧ A Minneapolis start-up threatens to upend commercial real estate | Star Tribune
Crelow team members say they recognize that many businesses need help in negotiating lease terms and understanding industry jargon, which is why they will be rolling out FAQs, tutorials and a glossary. Tenant brokers could move into a consulting role….
⇧ Atlantic City demolishing vacant properties
Finch said the abandoned properties are bad for the city in several ways, including their effect on the value of neighboring properties.
“Also, they are hangouts for illegal, illicit activities, drug use and crime, and people living in them that don’t have any reason to be there — squatters,” he said.
Unauthorized occupants can most likely be linked to fires….
⇧ When Forests Are Cut, Rainfall is Affected and Temperatures Increase : SCIENCE : Tech Times
Deforestation of tropical forests in the world’s southern hemisphere is threatening world food production by distorting rainfall patterns across the rest of the globe, a study has indicated.
The deforestation is accelerating global warming and could result in changing rainfall patterns across Europe, the U.S. Midwest and China, researchers said.
⇧ Orem fire caused $1M in damage, could be arson – SFGate
OREM, Utah (AP) — Investigators are on the scene of a Friday [December 19, 2014] morning fire at an unfinished Orem condominium complex that appears to have been intentionally set.
⇧ South Florida floating-home owner loses in court | The Miami Herald
A South Florida man who two years ago won a U.S. Supreme Court case over the difference between a floating home and a vessel has lost a legal battle against the city of Riviera Beach.
Lozman says he intends to appeal once again.
⇧ Retailers Await Investigation Results in Columbus Farmers Market | NBC 10 Philadelphia
An investigation into a fire that destroyed a building at the Columbus Farmers Market last month has ended, but store owners are still awaiting its results.
⇧ U.S. Seeks BP Fine of Up to $18 Billion for Gulf Oil Spill Disaster – Bloomberg
The government wants BP Plc to pay $16 billion to $18 billion in water-pollution fines for the worst offshore oil spill in U.S. history while seeking more than $1 billion from the co-owner of the blown-out well that caused the 2010 Gulf of Mexico disaster.
⇧  Steve Hanke on the right response to currency crisis and Collum on the year in review – YouTube
[@ 2:55] Erin sits down with Steve Hanke, professor of economics at Johns Hopkins University and senior fellow and director of the Troubled Currencies Project at the Cato Institute. Dr. Hanke tells us why he thinks Russia should institute a currency board and gives us his take on what Russia should be doing to stabilize the economy.
Concerning Steve Hanke’s suggestion that Russia peg to the USD, Linda Yueh had the following to say about such pegging, “By not being pegged to the dollar, the currency can take the brunt of the adjustment, instead of costly interventions or painful hits to the economy. Not completely of course, but it is less pressurised than having to defend the currency that’s been a part of most emerging market balance-of-payments crises.” https://www.bbc.co.uk/news/business-3054 1941
⇧ Why Are Commodity Prices Falling? by Jeffrey Frankel – Project Syndicate
…speculators are thinking ahead and shifting out of commodities today in anticipation of future higher interest rates in 2015; the result has been to bring next year’s price decrease forward to today.
⇧ Do falling oil prices raise the threat of deflation? | Econbrowser
…any deflation associated with the gasoline price drop is not going to discourage aggregate demand. What it does do, however, is give the Fed a little more time to be patient before it needs to worry about raising interest rates.
We think that’s an oversimplification: leaving out the negatives of the “busting” of the US-fracking boom.
⇧ New report: Texas home prices overvalued, “may be unsustainable” | Dallas Morning News
One of the country’s top financial ratings firms is blowing the whistle on Texas’ hot housing market.
Fitch Ratings warns that Texas has the most overvalued home prices in the country and that a correction may be coming thanks to falling oil prices.
“After largely skirting the excesses and downsides of the last housing boom, significant recent growth has made Fitch cautious on the Texas housing market,” the New York-based financial analyst says in a just released report. “Fundamentals do not appear supportive of current prices and the economy is vulnerable to the energy sector.
“Overall, Fitch views Texas prices as approximately 11 percent overvalued….
We lean toward that view but recognize, as does Fitch, Texas is not just “oil.”
⇧ Pacific winds change the speed of global warming, says new study | Carbon Brief
“We do know that the typical lifetime of a phase of this cycle is less than 30 years, and the current one began about 15 years ago. So although the timing of that switch remains difficult to anticipate, it would be most likely to happen within the next one to two decades.”
⇧ Subdivided flats a social tragedy: Anthony Cheung
Despite the surge in the number of subdivided flats, Cheung said the government has no intention of imposing regulations on such units or reintroducing rent controls.
He said the key to resolving the issue lies in the increase of housing supply.
The government should impose regulations and see to it that there is a sufficient increase in the housing supply. Both are certainly doable and humane. To simply allow the so-called market to control the situation is obviously the opposite: inhumane.
⇧ Coppola Comment: The gullible economist
Gotta love Frances Coppola here:
The UK and the US don’t look very similar in this chart, do they? By the way, the effect of the sequester is clearly visible on the US line. What had been rather good GDP growth suddenly fell. So much for Cochrane’s claim that austerity caused “modest” growth to return.
… The 2014 Budget continued this theme: more tax reductions, pensions reform, extension of Help to Buy (now laughably known as Help to Buy Votes), promises of infrastructure investment.
…infrastructure investment, tax cuts, pension increases and help for homebuyers are fiscal stimulus, are they not? And of course expectations matter. Austerity starts with its announcement, and so does stimulus. Just as fiscal consolidation was a cause of the UK’s poor performance in 2011-12, so fiscal stimulus seems likely to be a cause of the UK’s outstanding performance in 2013-14.
So the Chancellor whom Cochrane quotes approvingly as saying that Keynesians wanting fiscal stimulus were “wrong” has actually been doing, er, fiscal stimulus – though more for political than economic reasons. It’s amazing what effect the growing proximity of an election has on economic policy.
And it’s also amazing how gullible a Keynes-hating (or perhaps more accurately Krugman-hating) US economist can be.
⇧ More Groups Urge FHA To Lower Premiums | Realtor Magazine
…the agency says it has no plans to lower the cost of its loans.
We would like to see a detailed report on exactly why FHA believes it needs to maintain the current rate and policies before deciding whether the FHA is right or wrong in this matter.
⇧ LA Mayor Proposes Mandatory Earthquake Retrofitting for Commercial and Residential Buildings | Sheppard Mullin Richter & Hampton LLP – JDSupra
Are you a landlord in LA or thinking of becoming one? If so, then “heads up.” Tetlo Emmen and Alfred Fraijo:
…Mayor Eric Garcetti released “Resilience by Design” last week, a plan that includes an ambitious set of proposed seismic regulations. The plan proposes a series of ordinances to be reviewed by the City Council in the coming months, requiring, among other things, mandatory seismic retrofitting of soft-first-story buildings within five years and non-ductile concrete buildings within thirty years. …the proposal is short on details about assistance to building owners for the costs of retrofitting. …
1. What buildings are subject to the ordinances?
Soft-First-Story: All existing commercial buildings and all existing residential buildings with 4 units or more that: (a) are of wood frame construction; (b) are two or more stories in height; (c) were issued a Certificate of Occupancy before January 1, 1980; and (d) the ground floor portion of the wood frame structure contains parking or other similar open floor space.
Non-Ductile Concrete: All existing concrete buildings permitted before January 1, 1980 except detached single-family dwellings.
⇧ BBC News – Is Putin right?
By not being pegged to the dollar, the currency can take the brunt of the adjustment, instead of costly interventions or painful hits to the economy. Not completely of course, but it is less pressurised than having to defend the currency that’s been a part of most emerging market balance-of-payments crises.
We’d like to see more on this line of thinking.
⇧ Righting Rogoff on Japan’s Monetary Policy
…debt hurts growth is congenial to Republicans, while the claim that it is normal for slumps to last a long time after a financial crisis is congenial to Democrats.
Actually not. Both are congenial to Republicans. What would be congenial to Democrats of the New Deal variety, which is the thrust of the concept of fiscal stimulus, would be fiscal stimulus on the order of many fold what was actually done, which if had been multiplied enough, would have lessened the length of the recovery by decades down to perhaps as little as 1 year.
⇧ 5 distinct ways to classify value | Inman News
2 . Appraised value is the estimated fair market value of a property at a designated point in time, as developed by a licensed or certified appraiser following accepted appraisal principles. Although it’s based on a fair market value, appraised value does not always equal market value; it is an opinion developed by an appraiser based upon comparable closed sales. Appraisers typically consider active and pending homes, but closed sales are the basis of value.
Mortgage lenders always require an appraisal because the real estate will be the collateral for the mortgage loan. Appraisals for purchases are written to underwriting standards; these are mandated by the lenders, and appraisers are required to follow them.
⇧ Drilling Our Way Into Oblivion – The Automatic Earth
Raúl Ilargi Meijer:
Who wants to be manager of Norway’s huge oil-based sovereign fund these days? With all these long-term obligations entered into when oil was selling for $110, no questions asked? The Vikings must be selling assets east, west, left and right. But they’re not going to tell us, not if they can help it.
Just like all the other money managers who pray every morning and night on their weak knees for this nightmare to pass. Your pension fund, your government, they’re all losing. BIG. They’ll try and hide those losses as long as they can. But trust me on this one: all major funds have oil in a prominent place in their portfolios. And there’s a Bloomberg index that says the average share values of 76 North American oil companies, i.e. not just the price of oil, have lost 49% of their value since June. There will be Blood with a capital B.
…strictly speaking my title is a tad off: we’re not drilling our way into oblivion, the drilling is about to grind to a halt. But it will still end in oblivion.
There’s no mention of the upside of lower oil-prices, but we still lean in the same direction as Raul.