Linking ≠ endorsement.
⇧ Will Interest Rates Defy Expectations Again? | BlackRock Blog | Global Market Intelligence
…inflation expectations to come up from today’s very low levels. There are signals that this is already happening. Inflation expectations embedded in the 10-year Treasury Inflation-Protected Securities (TIPS) have rebounded from 1.50% in January to 1.70% today. If expectations move back toward 2%, closer to the Federal Reserve’s (Fed’s) target, this will translate into upward pressure on long-term rates.
The bottom line: While we still expect the low-yield world to persist throughout 2015 and probably next year as well, U.S. long-term interest rates are likely to gradually climb back to where they were early last year… just when everyone got it wrong.
There’s still a great deal of slack. Wages are still depressed. The dollar is still strong.
Eventually (1.5-2 years), the Saudis will, however, have to let up because they’ll run out of currency reserves.
It will be a few months more before we see the main results of the shakeout in the fracking sector.
⇧ Magnuson Park barracks to become 128 rental units – Tom Kelly | MyNorthwest.com
Mercy Housing Northwest will redevelop the former United States Navy barracks at Magnuson Park into 128 affordable housing units, according to the Northwest Reporter, the communications arm of the Northwest Multiple Listing Service.
⇧ Why no one died in Dubai skyscraper fire (+video) – CSMonitor.com
A fire that ripped through a luxury residential tower in Dubai’s Marina district early Saturday morning engulfed several stories and displaced hundreds, but caused no casualties, according to multiple news reports.
⇧ Dubai tower fire was an accident, say police – Middle East – World – The Independent
High winds from a sandstorm whipped through the area, fanning the flames, and debris from the fire cluttered nearby streets. Several balconies were damaged, and a number of people who sustained minor injuries were treated by ambulance crews at the scene. Investigators were examining the scene, but there are no indications of foul play, Maj Gen al-Mazeina said.
⇧ Syriza’s honeymoon over as Greece strikes debt deal with EU | World news | The Guardian
Greece, still down to receive a last instalment of aid under its old bailout programme, has been told the €7.2bn tranche will only be disbursed once reforms are agreed and a review of its economic progress concluded at the end of April. In a huge concession, Athens accepted continued oversight of its finances by officials representing the country’s hated “troika” of creditors at the EU, ECB and IMF, albeit under a new name — the “institutions”.
It also reneged on demands for a write down of its monumental debt — at over 175% of GDP one of the largest in the world — and conceded that it would not take any unilateral measures that would wreak havoc on its fiscal stability.
While the pause button has been pressed on the Greek drama, it is not over. Haggling over reforms expected to focus on eradicating corruption, overturning the tax system and modernising Athens’ dysfunctional public administration will take months — if, indeed, creditors accept them in preliminary form on Monday [February 23, 2015]. And Tsipras will have to placate hard-left militants in his party while also selling the deal to disappointed voters.
Binghamton, NY (WBNG Binghamton) More than 50 homes and vacant lots were up for grabs at Saturday’s Broome County Auction.
The county says these auctions are mutually beneficial. It gives people the opportunity to buy homes at a low price while also helping to put vacant properties back on the tax roll.
⇧ January median home prices in Flagstaff jump 20 percent
“There’s no doubt that we’re in the midst of a very hot housing market that even appears to be getting stronger,” Century 21 Flagstaff Realty agent Stephen Brighton wrote in an email. “Fueling this surge in prices are mortgage rates which have dropped about a percentage point from a year ago along with a real lack of inventory.”
⇧ Big investors gone, but all-cash deals still common in residential real estate – Sacramento Business Journal
RealtyTrac vice president Daren Blomquist said why institutional investors left isn’t hard to figure out. Since bottoming out in February 2012, he said, the median Sacramento home price has gone up 62 percent.
“It’s fair to say they’ve been priced out of the market,” he said.
Two kids died in a four-alarm blaze that engulfed a house in New Jersey Friday evening, while the other children in the house escaped the blaze by jumping off the third-floor window.
Fire officers found two kids dead on the third floor of the residential building in Orange, outside of Newark, while five other residents escaped the fire.
⇧ Belgian nuclear reactors riddled with 16,000 unexplained cracks – The Ecologist
If this is happening to all the other reactors, the world may have to go on a crash course to safe, non-carbon alternative, energy sources.
The discovery of over 16,000 cracks in two Belgian reactor vessels may have global implications for nuclear safety, says the country’s nuclear safety chief. He and independent experts are calling for the immediate checks of nuclear reactor vessels worldwide.
⇧ A closely watched fight brewing over nitrates in Iowa water | Star Tribune
Landlords often pay for water. Some states require it. Landlords have a stake in the cost of water treatment.
Are there better ways to raise the nation’s food?
Iowa’s largest water utility is threatening to sue three rural counties for allowing excess farm chemicals to contaminate drinking water, a dispute that is triggering a wider debate over the best way for Midwestern states to stop pollution from fertilizer runoff.
⇧ Coppola Comment: Greece and the EU: a question of trust
Germany’s Wolfgang Schaueble was criticised by many people, including me, for his uncompromising attitude. And there are features of the agreement that do seem to be particularly aimed at soothing frayed German nerves: at the press conference, Jeroen Dijsselbloem said the reason for transferring HFSF funds back to the EFSF was to ensure that they could only be used for recapitalising banks and not to shore up the sovereign finances, which was a key worry of the German delegation. The insistence that the November 2012 agreement must remain in place for the four months is also a concession to member states worried that removing the existing framework completely would give Greece carte blanche to reverse all the reforms it has made. Evidently the supervising institutions still have some work to do to win the trust of member states, too.
It is therefore a considerable concession for member states to relinquish their power of veto over Greece’s reforms to three institutions that have a chequered history and now appear to have a somewhat softer approach than some member states would really like.
Oh, we think Germany is still completely in the driver’s seat. If things don’t go the way Germany wants, Germany will still have the power to pull the plug.
Greece has to appease Germany or leave. That’s how we see it. Unfortunately, nothing has really changed.
We think it’s just unconscionable that Greece has to win so much trust, jump through so many hoops, when others before this government caused the mistrust, others who were of a completely different ideology, and when the humanitarian crisis is so terrible and dire. People are dying from extreme poverty in Greece right now, lots of them. Children are going to bed hungry every night, if they even have a bed anymore. What do those children have to do with being untrustworthy?
⇧ Why Public Investment? by Michael Spence – Project Syndicate
Faced with tight fiscal (and political) constraints, policymakers should abandon the flawed notion that investments with broad — and, to some extent, non-appropriable — public benefits must be financed entirely with public funds.
We strongly disagree. It is a matter of education and persuasion. Borrowing and privatization are errors.
⇧ Day after pact, ports say full productivity could take months – SFGate
A day after West Coast dockworkers and the association that represents shipping lines and terminal operators reached a tentative agreement, port officials signaled Saturday that it could be months before operations return to normal.
Terms of the agreement were not released Saturday, and union members still need to ratify the agreement, a process that typically takes several months, said Craig Merrilees, a spokesman for the longshore workers union. The next step is for a caucus meeting with 90 elected union delegates to discuss the agreement, which he expects will take about a week. If the caucus recommends the agreement, workers will then vote on the deal.
Members of the Pacific Maritime Association also must ratify the agreement.
⇧ Are robots eating into your wages?
As the Economic Policy Institute’s Elise Gould reported Thursday, among all educational categories, the greatest real wage losses between 2013 and 2014 were observed among those with bachelor’s and advanced degrees. “If demand for high-skilled workers were driving wage inequality, we would expect to see these workers’ wages increasing, or at the very least, falling less than their low-skilled counterparts.” But the demand is dwindling — even for them.
There was a certain irony watching a stage full of well-connected panelists address their well-heeled peers about the future of work in one of Washington’s most “insidery” venues. Certainly, former Office of Management and Budget director Peter Orszag, who sat in the front row, and now holds multiple titles at Citigroup, isn’t too concerned about a robot taking over his leadership role. But as Brynjolfsson and McAfee remind us, the “second machine age” isn’t just coming; it’s here. And this time, it’s not just factory workers for whom the robots toil; they toil for thee.
However, there is zero to fear if we will simply share the benefits across-the-board as a right of birth.
⇧ Fiscal Austerity Versus European Society by Kemal Dervis – Project Syndicate
For the millions of workers — and especially young people — with no job prospects, fiscal sustainability simply cannot be the only priority. When unemployment benefits are slashed, they are the ones who suffer. And when budget cuts extend to education, it is their children who are unable to gain the skills they need to reach their future potential.
Austerity-induced suffering is particularly extreme in Greece. Severe pension cuts are preventing the elderly from living out their lives with dignity. A large burden has been placed on those who actually pay their taxes, while many — often the wealthiest, who long ago stashed their money abroad — continue to evade their obligations. Health care has lapsed, with many cancer patients losing access to life-saving treatment. Suicides are on the rise.
Yet Greece’s creditors have continued to ignore these developments. …
…fiscal caution cannot be abandoned; after all, if governments or the private sector were to spend borrowed or newly minted money freely, the result would simply be more crises, which would hurt the poor most. …
Well, “freely” there is in need of qualification. If spending of “newly minted money” (debt-free; no bonds) were to be matched exactly to real productive gains in the real, main-street economy rather than just blowing bubbles in finance capitalism, there would be zero crises.
The political system could more easily do that than the Fed has been at juggling interest rates in a vain attempt at meeting its dual mandate.
The Federal Reserve System has been a scam against the democratization of currency pegged to real productivity for the highest quality of life for all.
It should be replaced as soon as possible.
It’s time we move to democracy out from under the plutocracy of, by, and for international, private financiers.
Going forward, Greece will submit its list of reforms for approval to the Troika and the Troika will have to iterate back and forth with Greece to get this list approved. After Monday, Greece and the Troika have until the end of April to finish off the finer points regarding reforms and targets for this deal to become etched in stone. Lagarde was at pains to point out during the press conference that the IMF is bowing out in March 2016. And I get the sense that this is by design and mutual consent. Going forward, this will become an EU affair and the IMF will not be as integrally involved. From what I understand, however, Lagarde was just as helpful as Moscovici in diffusing tension between Germany and Greece as well as tamping down on the opposition from centre-right governments in peripheral Spain and Portugal who have signed up for austerity and reforms already. The IMF will be missed.
Edward’s analysis is quite good, though we disagree a bit concerning Germany’s position. We think it’s more hardline rather than nuanced/flexible to allow Merkel to sell it to the German people without appearing to have caved in. We’d call it seeing the light rather than caving. (Note that at number 28 below, Edward modified his views a bit from this report.)
The video cuts off prematurely, but it’s still worth watching.
Lower oil prices are affecting national budgets in most Gulf Co-operation Council countries. Florence Eid-Oakden of Arabia Monitor explains to emerging markets editor James Kynge which countries are worst hit and what the fallout might be.
You’ll note that Florence says the data might allow the Saudis to hold prices down for even 5 years. We don’t think they’ll need to do that to achieve gaining and holding more market share in the face of fracking. Though we’ve been told that cranking up fracking rigs and producing is vastly easier than the pre-fracking method.
Keeping prices down is also a method of temporarily somewhat holding back the tide of electric cars.
⇧ Poison Spring: The Secret History of Pollution and the EPA
…audits by FDA and EPA soon found that most of the thousands of industry safety studies used to approve pesticide registrations were fraudulent. Alerted by FDA scientist Adrian Gross, EPA had discovered in 1976 that Industrial BioTest Laboratories [IBT], which had conducted many of the pesticide safety tests submitted to EPA by manufacturers, had been routinely faking tests, falsifying data, and altering results for years. Subsequent investigations of other testing laboratories found similar practices in more than half the labs whose tests supported EPA registrations of pesticides.
In 1979, during the seven years of EPA dithering over this scandal, Vallianatos came to work at EPA. He soon learned that not a single pesticide registration was to be canceled due to fraudulent or nonexistent test data. Instead, he notes, EPA’s reaction was to outsource science. It shut down its own testing laboratories, closed its own libraries of toxicity data on thousands of chemicals, and outsourced all evaluations of industry-sponsored studies. “The unspoken understanding in this outsourcing of government functions has been the near certainty of finding industry data satisfactory — all the time.” This issue is relevant today, given that chemicals such as 2,4-D and glyphosate (Roundup™), whose uses have been vastly increased by GMO practices, were originally registered on the basis of invalid IBT studies.
Do you use non-organic pesticides at your properties?
⇧ 6 biggest challenges of real estate crowdfunding | Inman
Good points: Omri Barzilay:
While crowdfunding has been used successfully when it comes to investing in all types of projects, there are still some obstacles when it comes to the real estate field:…
⇧ City planning to auction 3,000 tax-delinquent properties | News | The New Orleans Advocate — New Orleans, Louisiana
The process described Monday by Chief Administrative Officer Andy Kopplin and Director of Finance Norman Foster will be unlike any previous tax sale in New Orleans, with the most notable difference being that winning bidders will be purchasing full legal ownership of properties, not just the liens against such sites.
At the conclusion of a typical tax sale, a buyer does not actually own a property and must initiate foreclosure proceedings against the property owner, who can fight such action, in order to gain full control.
⇧ Farbman Group Brings Miniature Camera Technology To Real Estate – CBS Detroit
The Farbman Group is utilizing cutting-edge, mini-cameras to revolutionize real estate services.
With the click of a mouse, personnel at the Southfield-based company can access a Drop Cam [https://www.dropcam.com] located in one of its buildings to see streaming video from the camera.
Additionally, Farbman also utilizes Narrative Clip [https://getnarrative.com] wearable cameras which collects photos and creates a video clip. This can be used by the company’s current clients to show how space is utilized, and how it can be better situated.
⇧ The Greek plan is in, breath bated
There may eventually be some scope to lower the primary budget surplus Athens is charged with achieving and extending maturities on some bailout loans. That would allow a small measure of extra public spending but is a pale imitation of what Prime Minister Alexis Tsipras promised on the campaign trail.
He will be able to choose to spend more in some areas but that will by and large have to be met by cuts elsewhere. The overall spending envelope will not change much, Germany has already made clear.
We’ll just have to wait it out to see who caves in or whether Greece leaves.
⇧ Sun & climate: moving in opposite directions
Over the last 35 years the sun has shown a slight cooling trend. However global temperatures have been increasing. Since the sun and climate are going in opposite directions scientists conclude the sun cannot be the cause of recent global warming.
See also: https://www.washingtonpost.com/news/energy-environment/wp/2015/02/23/no-the-sun-isnt-driving-global-warming/
⇧ Greek debt negotiation: does this constitute a sell out?
It doesn’t take much to find the neoliberal side of the debate. It’s the mainstream view/news in the US. What usually isn’t presented is the democratic view, which happens to be closer to many forms of socialism, as there is social democracy of the left-leaning mixed economies and then the more socialist “democratic socialism,” which seeks to eliminate much more of the private sector but in its pure form, stands opposed to one-party dictatorships or the dictatorship of the proletariat (that is, Marxism). We would place Syriza mostly in the social democracy camp (left-leaning mixed economy).
The following is a very good analysis of the current situation with Syriza versus Germany (neoliberal; Austrian School). It’s by Nathan Bolton, who would call himself a democratic socialist but not of the pure form we mentioned above but rather dictatorial (which we stand squarely against whether capitalist or socialist-leaning). As far as we are concerned, there’s no place in democracy for dictators. There’s more to it than that, but we’ll leave it there for now.
A deal has been made. But the deal made is sufficient to allow commentary to rage for days, perhaps even longer. Does this represent a full capitulation by the Greeks, a capitulation by the Germans, or simply a ‘kicking of the can further down the road’, as is so often the case when it concerns matters of the European Union? How the deal is perceived will also depend on one’s own particular position on the deal and this economic war, whether one is supportive of Syriza’s attempt to bend the institutions from within, whether one is a proponent of Grexit in either its debtor led or creditor led forms, or whether one wanted to see the full capitulation of the Greeks (see Wolfgang Schauble).
⇧ Robert Reich (Why We’re All Becoming Independent Contractors)
It’s absurd to wait for the courts to decide all this case-by-case. We need a simpler test for determining who’s an employer and employee.
I suggest this one: Any corporation that accounts for at least 80 percent or more of the pay someone gets, or receives from that worker at least 20 percent of his or her earnings, should be presumed to be that person’s “employer.”
Congress doesn’t have to pass a new law to make this the test of employment. Federal agencies such as the Labor Department and the IRS have the power to do this on their own, through their rule making authority.
They should do so. Now.
We like it that Robert cares deeply about workers; however, his idea wouldn’t work for the simple reason that there really are independent contractors who want to stay that way who do get more than 80% of their income from one source whether sometimes or always. Their contract(s) can last an hour or a day or a decade or more.
…for the most part we have not seen anything like the classic image that we have of the Great Depression, with huge numbers of middle class people suddenly becoming poor. What we have seen is something different, with the numbers of homeless people rising, for instance. So it is very important to analyse precisely what impact welfare states are having, which is now feasible because we have good data on aspects like incomes, consumption patterns, and labour markets. This is the kind of ‘stress test’ of the European welfare state that I have been trying to do in my work.
⇧  Galbraith, Magnus: Greece cannot pay debts, Europe ad hoc + dysfunctional – YouTube
Good commentaries on the Greek situation:
Erin is joined by James Galbraith — professor of government at the University of Texas in Austin and author of “The End of Normal.” James tells us about his recent trip to Greece alongside former colleague and current finance minister Yanis Varoufakis. Galbraith gives us an inside view into the apparent dysfunctionality that reigns at the highest levels of European institutions. He also says that the mood in Athens had changed demonstrably due to Syriza’s election. But many hurdles remain as the recent agreement details are hashed out.
After the break, Erin sits down with George Magnus — former chief economist at UBS and author of “Uprising: Will Emerging Markets Shape or Shake the World Economy?” George tells us that trust between the Greek government and the EU has broken down. In fact he believes that the trust issue goes beyond Greece to the whole southern periphery of the Eurozone. While the Greek government’s interim loan extension has bought it time, Magnus believes Greece will not be able to repay its debts under the current policy framework. That sets up a problem for negotiations for what would effectively be a 3rd bailout down the line. George also weighs in on why he is cautious on European asset markets despite some modest improvement in the economic outlook.