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⇧ No housing jackpot: Vegas price gains still hurting sellers
Large-scale investors have now moved out of Las Vegas, leaving it to smaller, often mortgage-dependent investors. In January, just 36 percent of local home sales were conducted in cash, down from nearly 47 percent a year ago.
⇧ Consumer Price Index Summary, February 26, 2015
The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.7 percent in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index decreased 0.1 percent before seasonal adjustment.
⇧ Bostonians Losing IPhones, Roofs and Time in 102 Inches of Snow – Bloomberg Business
The television news is full of startling photos and testimonials of how snow has collapsed what seemed like the soundest of structures.
⇧ NASA drones in national airspace to spot wildfires | News OK
Logan said using the drones would cost about $25 per hour, compared with upward of $2,000 an hour to rent a manned helicopter or airplane.
⇧ Legislators Introduce Bill to Improve Wildfire Disaster Relief and Prevention
Under current law, victims of wildfires aren’t eligible for the “post-disaster” mitigation resources that victims of other natural disasters, such as hurricanes and tornadoes, are. These resources can be used to mitigate the effects of wildfires, such as post-fire flooding and mudslides, and prevent future fires.
⇧ Insurer wins dispute over fire, pot growing in basement | KSL.com
Brien Matthews had a medical marijuana card and could grow pot for others. But Nationwide Mutual Fire Insurance said the insurance policy was violated because it wasn’t informed about the basement nursery at the Bay City home.
Natural disasters in Asian and Pacific nations cost almost 60 billion dollars and killed 6,000 people in 2014.
There were 119 ‘disaster events’ recorded in the Asia-Pacific last year, including cyclones, storms, floods, landslides and earthquakes.
⇧ macroblog – Federal Reserve Bank of Atlanta
Whitney Mancuso, a senior economic analyst in the Atlanta Fed’s research department:
Would average wages have been higher if we had the same mix of employment across industries as we had before the recession? The answer seems to be yes, but not much higher.
Whitney, start 45 years ago. Focus on the bottom 25% of jobs in terms of average wages.
⇧ The Libertarian Delusion
In the idealized libertarian world, individuals are “free to choose”—never mind that some are born with far more resources with which to choose than others. In the Hayek-Friedman world, government, except for its minimal role of keeping the peace and protecting property values, is the enemy of freedom. Hayek went so far as to write a book in 1944, The Road to Serfdom, contending that democratic forms of planning were destined to lead down the same road to totalitarianism that ended with Stalin and Hitler. Hayek remained a revered figure to libertarians—he even won a Nobel Prize—despite the fact that there is not a single case where democratic planning led to dictatorship, but countless instances where market turbulence led displaced citizens to turn to anti-democratic strongmen. Adding insult to injury, the Hayek-Friedman remedy for when markets don’t work is: We need even more market. We saw how well that worked in the financial collapse.
…if we are to win the argument with the libertarians, we need to take back effective government. Friedman was wrong to argue that the cure for market failure is more market. However, the cure for weak or corrupted democracy has to be more democracy. The only way to redeem public confidence in government as a necessary check on the market is to repair faith in democracy itself. It is not difficult to prove that the claim of market efficiency is delusional. Reclaiming our democracy will be harder—but it must be done.
Given our mixed economy, we largely agree with Robert Kuttner’s article. We certainly oppose laissez-faire capitalism for the very reasons Robert spelled out.
⇧ mainly macro: Can helicopter money be democratic?
Simon Wren-Lewis on democratic helicopter-money (which we’ve been advocating on this blog for some time):
If it increases the size of the stimulus following the government’s decision on how to spend it, this gives perverse incentives to government: think of inefficient ways to stimulate the economy, and we will give you more money.
The term “stimulate” there is the wrong idea. It should be “sustainably grow.” Then Simon’s concern becomes moot. In addition, the democracy would need to be grassroots. Do it that way, and we could more than eliminate poverty and without any appreciable inflation or deflation even in the short run.
⇧ Emerging Economies’ Demographic Challenge by Martin Neil Baily and Jaana Remes – Project Syndicate
With a comprehensive approach, 11 emerging economies (Argentina, Brazil, China, India, Indonesia, Mexico, Nigeria, Russia, Saudi Arabia, South Africa, and Turkey) could, on average, boost their annual productivity growth to as much as 6% by 2025. Four-fifths of that growth would be achieved through the adoption of approaches that have already been successful elsewhere, with new technological, operational, and business innovations covering the rest.
⇧  Eichengreen: Greece’s original program targets are unattainable – YouTube
The whole show is interesting, but we want to draw your attention to the last segment starting at the 21 minute mark where Erin and Edward discuss renting. It’s especially important given the high student-debt amounts we are very shortsightedly saddling our youth with in the US.
Since 2010 the troika, consisting of the International Monetary Fund, the European Central Bank and the European Union’s commission, has forced different governments in Athens to implement six consecutive austerity programs which have severely lowered the living standards of working people, devastated Greece’s social systems and plunged millions into poverty. This is why on 25 January, the majority of the Greek population decided to vote for a party that raised their hopes for a better future by promising an end to austerity.
Four weeks later this dream has been shattered.
As our consistent readers will no doubt have concluded, with a few tentative exceptions, we agree with Ernst Wolff’s assessment. We’re taking a wait-and-see approach as to where Syriza will finally come down ideologically.
⇧ Buck almighty – YouTube
As the US dollar hits its highest point since 2003, John Authers points out that its strength is in part because the yields on treasury bonds are rising, while many other government bonds are trading with negative yields.
This will keep the Fed from raising rates. It will keep mortgage rates low. Will US developers build much-needed rental units while the money is cheap? Also, what will happen to oil prices? Should construction/development firms take advantage of low fuel prices while they can before the Saudis and others run lower and lower on their currency reserves?
⇧ Freddie Mac 2015 Multifamily Housing Outlook – YouTube
What’s in store for the Multifamily Housing markets in 2015? Freddie Mac says it will be another strong year.
Freddie Mac seems to be more cautious now after having been so wrong on inflation and interest rates. We’ll find out if they are still too optimistic here.
Greece used “creative ambiguity” to win a loan lifeline from its international partners, Finance Minister Yanis Varoufakis said, provoking anger in Germany’s parliament that approved the deal on Friday.
Varoufakis, a hero of the anti-austerity left who has raised hackles among his more orthodox euro zone peers, said Greece had drawn up an economic reform plan that was “full of ambiguities” to fulfill a condition of the Eurogroup’s four-month lifeline.
He had to say that for the Greeks.
Frankly, this changes nothing. We’re still going to have to wait to see what happens during the second half of this year.
Was such “creative ambiguity” dishonest? Well, one would have to ask whether the Germans can read. The Germans read it and could see where flexibility exists while also having a German game plan that will be played out.
The only thing that’s really happened is some can kicking, but Greece had no choice given the Greek majority wanting to stay rather than exit.
If Greece leaves, Tsipras wants it to be clear that Germany kicked it out by virtue of impossibly draconian/in-human terms.
⇧ Varoufakis highlights battle between rules and macroeconomics at the euro group table
Paul Gillespie sees it.
…out of rules and back to macroeconomics — and to the politics of deeper integration, EU fiscal capacity and debt mutualisation. High officials in this process along with political leaders ask whether Germany is willing to do transfers and mutualisation, whether France can contemplate the treaty change needed and whether the euro’s political leaders have yet got used to existing intrusive rules, much less taking on even more highly conditional ones.
So while the single currency needs to be strengthened, this may not be politically feasible. Macroeconomists such as Varoufakis bring a new politics to bear on this question. Their success will be judged by the precedents they set in inspiring others over that longer term. The euro will not achieve accountability and legitimacy unless its systemic needs and socio-political bases are more closely linked. This requires a solidarity capable of creating closer political identities. Otherwise how can it survive?
⇧ The Trans-Pacific Partnership clause everyone should oppose – The Washington Post
The proposed Trans-Pacific Partnership (TPP), there’s something in it for everyone but the largest corporations to hate and fear. Elizabeth Warren:
This isn’t a partisan issue. Conservatives who believe in U.S. sovereignty should be outraged that ISDS would shift power from American courts, whose authority is derived from our Constitution, to unaccountable international tribunals. Libertarians should be offended that ISDS effectively would offer a free taxpayer subsidy to countries with weak legal systems. And progressives should oppose ISDS because it would allow big multinationals to weaken labor and environmental rules.
⇧ China to cut benchmark interest rates by 25 basis points | Reuters
Beijing has been trying to lower borrowing costs and stimulate investment to reinvigorate an economy that expanded at its slowest rate for 24 years in 2014.
But the surprise interest rate cut in November, followed up by a February reduction in banks’ reserve requirement ratios (RRR) that poured fresh cash into the financial system, had shown little effect on confidence.
Nashville Mayor Karl Dean on Wednesday unveiled a $100 million flood protection plan for Music City that includes a 2,100-foot-long flood wall located on the city’s downtown riverfront.
⇧ Credit supply and the housing boom | VOX, CEPR’s Policy Portal
Alejandro Justiniano, Giorgio Primiceri, and Andrea Tambalotti:
Shifting the focus of the inquiry into the causes of the boom from credit demand to credit supply has potentially important implications for the study of macro-prudential policy, since much of the literature on this topic has tended to model the boom as stemming from looser borrowing constraints.
What are we missing? The supply was used via looser borrowing constraints. They naturally ramped up together.
PCA cautioned the committee “to not confuse brains with a bull market,” advising that price increases for properties in some core markets are not sustainable when interest rates and new construction starts return to more normalized levels.
…10 Real Estate Tips that will give you an excellent feel for how I view the world of real estate and that you can benefit from financially and psychologically.