Linking ≠ endorsement.
⇧ Every Forest Biome on Earth Is Actively Dying Right Now | Motherboard
Every forest biome on Earth is actively dying right now, and if this course isn’t corrected, the deterioration of these valuable ecosystems will accelerate over the coming decades.
Of course, in each of the studies, the authors pointed out numerous ways to slow the alarming decline of forests worldwide, such as stricter conservation policies, better forestry management, and a global framework for policing climate change. These kinds of actions “would lessen the unwelcome shocks that living in the Anthropocene will bring this century,” as Lewis’s team put it.
In other words, it is absolutely possible for humans to curb the damage to forests, or perhaps even reverse it in some places.
⇧ Jeremy Corbyn’s economic plan to rescue British capitalism – World Socialist Web Site
The vast majority of people read either from the left or right or center but not all three. I read from all three on purpose. For example, the Tories and Blairites in the UK are almost up in arms concerning the prospect of Jeremy Corbyn coming to lead Labour (the political party by that name). They call him far-left and such. However, if you really want to know whether he’s far-left, read at least what actual socialists have to say. So, here’s one such article.
Please note that this is not an endorsement of the politics of Trotskyists. In addition, the article is incorrect concerning the Greferendum. The people of Greece voted “No” but also were making perfectly clear via nationwide polling that they did not want to leave either the EU or eurozone. Also, while Syriza has lost some popularity from within, it has not crashed (at least not yet).
Corbyn’s programme is largely drawn from the work of Richard Murphy of the Green New Deal Group, which is closely linked to the Trades Union Congress. Murphy’s writings stress more efficient tax collection and quantitative easing as a route out of the economic crisis. In a 2011 book, Murphy advanced the concept of “Courageous States”—by which is meant governments prepared to “constrain the world of feral finance [and to] rebuild the role of the state in supporting real business activity.”
In January, Murphy even appealed to Osborne to include plans for “Green Infrastructure Quantitative Easing” in his final budget before May’s general election. Politely complaining that the £375 billion QE programme used to bail out the banks had only increased asset values rather than investment, he reassured the chancellor that the measures he proposes “can be undertaken without creating new debt that will have to be repaid in future.”
“… without creating new debt that will have to be repaid in future.” Does he mean financing via debt-free currency, as others and I have been recommending for years? Sadly, critically important information comes out in drips and drabs and in often highly ambiguous terms at best.
⇧ The Death of Neo-Liberalism – YouTube
Gerard Dumenil, a Director of Research at the Centre National de la Recherche Scientifique in Paris, emphasizes the lack of a “radical left” in Europe to counter-balance the rise of neoliberalism. It’s a very interesting interview.
Gerard Dumenil is a gradualist as well.
Personally, I oppose gradualism. In my view, Europe ought to undergo a large and sudden shift away from neoliberalism towards deep and wide integration under intensive democracy of the more direct type.
⇧ Banks have treated our housing market like a Ponzi scheme, and it’s about to bust | Lindsay David | Comment is free | The Guardian
On the rare occasion when one challenges the perceived fundamentals of the Australian housing and mortgage markets, the view is often brushed aside and considered a “lazy analysis” versus the mainstream view that high house prices in Australia are a rational outcome of efficient markets, superior risk management and falling nominal interest rates.
That’s precisely what the Americans, Irish and Spaniards were thinking before hell froze over their property markets and banking systems.
Government, Treasury, the central bank (RBA) and the prudential regulator (Apra) do not seem overly concerned about booming mortgage debt. By cutting the cash rate to the lowest point in a long time, the RBA has simply furthered the Ponzi scheme running rampant in Sydney and Melbourne, which dominates Australia’s housing market in terms of size and value.
The housing market is sure to follow the path of the mining industry. Policymakers believed the mining boom would last for decades, boosting the economy. With the mining sector now collapsing, the public will inevitably realise rising housing prices cannot last forever. The imposition of grossly inefficient neoliberal financial economics has plagued many nations recently with asset bubbles — Australia is no different.
⇧ Facing Down Secular Stagnation in China by Andrew Sheng and Xiao Geng – Project Syndicate
… issues are not technical, but political, as vested interests prefer to maintain bureaucratic control. But, with President Xi Jinping’s anti-corruption drive chipping away at the culture of personal gain among Chinese officials, now is the time to press ahead with structural reforms, not back away from them.
Xi Jinping has made absolutely clear that he isn’t the least bit interested in the Party ceding power to market forces as defined in Western terms. Making the system work the way Sheng and Geng suggest would mean undermining the Party further than it has been undermined already.
Of course and as I’ve been saying quite frequently recently, there is no real solution for the Party. China must transform to the extent that the Party as we know it completely disappears.
⇧ Icy Reception to a Backyard Party – The New York Times
My roommate and I recently moved into a first-floor apartment with a small backyard area. More than once, while I have been entertaining guests in the backyard, my fourth-floor neighbor has complained about noise in his own way — by dumping ice water on my guests and me from his fire escape. I entertain guests only on weekends, and all these incidents have occurred before 10 p.m. I haven’t met my neighbor or received a noise complaint in person; he just dumps water on us until we’re forced to retreat indoors. Is there anything I can do about this apart from confronting him about his rude, unacceptable behavior?
Hell’s Kitchen, Manhattan
⇧ Merkel dubbed cowardly on Greece by Germany’s biggest newspaper | News | ekathimerini.com
Germany’s top-selling newspaper called Chancellor Angela Merkel a coward on its front page for staying silent during a parliamentary debate on Greece’s bailout and celebrated lawmakers who voted against it.
Fourty-four percent of Germans oppose further aid to Greece and 52 percent are in favor, according to an Infratest poll for ARD televsion taken July 13, the day Tsipras accepted conditions by other euro-area leaders, including Merkel, for a third bailout. Keeping Greece in the euro was favored by 62 percent, while 32 percent said the currency union would be better off without Greece, according to the poll. The poll has a margin of error of as many as 3.3 percentage points.
It’s not difficult to figure out the economic ideology of those who control Bild.
⇧ The Euro Needs More Than Just One (German) Economic Policy Tool To Work – Social Europe
The aim is to dispose of the mixed or social market economy of Europe, especially in Germany with its large-scale co-operative elements and extensive use of Mitbestimmung. The TTIP could be a first step and the recent offensive in Italy against the cooperative model of credit is probably a sign of this. The conjunction of those neoliberal (but only for labour markets) reforms set out in the notorious “ECB letter” to the Berlusconi government by both Trichet and Draghi with the IMF-inspired deflationary stagnation, directly imposed upon and followed obediently by the successor governments of Monti, Letta and Renzi, by German domestic policy, represents a deadly mix of economic policy inflicted upon European peoples. Always remembering that perennially antisocial policies cannot but require authoritarian governance structures and more embedded media.
Guido Calogero, the philosopher of liberal socialism [mixed economy: https://en.wikipedia.org/wiki/Liberal_so cialism%5D, also warned: “Without eliminating the imbalances of economic power there is never true political freedom, and, without the guarantee of political freedom, there is no possibility of knowing if economic justice is real or illusory.”
Let us be clear: inevitable cohabitation with the German elephant — which will not change its policy course — requires several economic policy instruments, not just one that depresses economic conditions and eradicates labour rights, to be on hand.
⇧ Low Oil Prices Could Break The “Fragile Five” Producing Nations | OilPrice.com
Persistently low oil prices have already inflicted economic pain on oil-producing countries. But with crude sticking near six-year lows, the risk of political turmoil is starting to rise.
There are several countries in which the risks are the greatest — Algeria, Iraq, Libya, Nigeria, and Venezuela — and RBC Capital Markets has labeled them the “Fragile Five.”
… Saudi Arabia has a market share strategy that it is pursuing, and there are no signs that it will reconsider. That could spell trouble for much more fragile oil-producing countries around the world.
That’s the idea.
⇧ Public Debt and the Long-Run Neutral Real Interest Rate | Federal Reserve Bank of Minneapolis
Narayana Kocherlakota, President, Federal Reserve Bank of Minneapolis:
There has been a significant decline in the long-run neutral real interest rate in the United States over the past few years. This decline in the long-run neutral real interest rate increases the future likelihood that the FOMC will be unable to achieve its objectives because of financial instability or because of a binding lower bound on the nominal interest rate. Plausible economic models imply that the fiscal authority can mitigate this problem by issuing more public debt, although such issuance is not without cost. It is, of course, the province of the fiscal authority to determine whether those costs are worth the benefits that I’ve emphasized today.
“… such issuance is not without cost.” If done correctly, there need be zero cost and only gain.
⇧ Currency Wars and the Threat of Deflation | Al Jazeera America
This article, by David Cay Johnston, is all correct. However, governmental spending directly into the economy via debt-free/bond-free currency can exactly offset deflation.
⇧ Productivity paradox deepens Fed’s rate-rise dilemma – FT.com
… productivity numbers should rise sharply. The problem, however, is that it could take several years. Until then, better keep watching the productivity numbers — if nothing else, because they show that central banking is an art, not a science; especially when the time comes to change course.
I disagree. It is purely science. Productivity measurements should not lead monetary or fiscal decisions. Only inflation and deflation should matter. We should have full employment with a guaranteed income and then simply meter the money supply for currency stability. The currency should be zero-debt and a public utility. There should be no credit creation by private enterprise: no loans, no debts, no interest payments by anyone to anyone for anything, ever.
⇧ The Age of Homes in All 50 States | Zillow Blog
Knowing when the largest share of homes was built isn’t just a fun piece of trivia. It also provides a window into the character of real estate in your state.
All other things being equal, newer homes purchased for investment can be less costly to operate.
When a property last underwent an extensive remodeling and maintenance upgrade is a very important question for the bottom line.
⇧ July Was Earth’s Warmest Month in Records Going Back to 1880 – Bloomberg Business
The continually rising temperatures seen since the start of the 21st century should dispel any idea that there has been a hiatus in global warming, Jessica Blunden, a climatologist at the center, said in a conference call with reporters.
“There isn’t a pause,” Blunden said. “Temperatures have been increasing. There really, truly isn’t a pause.”
I have never understood global-warming deniers except for those truly unscrupulous ones who’ve been paid to deny it. Anyway, I truly hope the masses of deniers will finally snap out of it so we can have the popular strength to force needed change on the system. We must stop the over-accumulation of carbon in the atmosphere.
⇧ Western Fires Drain Firefighting Resources – US News
Here’s just one of the many reasons we need to stop anthropogenic global warming.
The situation is so urgent that the National Interagency Fire Center in Boise this week called in 200 active-duty military troops to help contain roughly 95 wildfires. It’s the first time since 2006 that the agency has mobilized soldiers for fire-suppression.
Just reading the article is exhausting. Just imagine what the firefighters are going through.
What are we going to do year after year? Sure, El Nino should help in the Southern states, but that won’t last.
⇧ At Least 36 Homes Destroyed by Oregon Wildfire
The Grant County Sheriff’s Office says at least 36 homes have been destroyed by an Eastern Oregon wildfire, 10 more than previously reported.
If you want to see a full-resolution image: https://www.insurancejournal.com/app/upl oads/2014/06/wildfire.jpg
⇧ St. Marys man arrested after probe into arson fire – The Bradford Era: News – St. Marys man arrested after probe into arson fire: News
RIDGWAY —Authorities have deemed the cause of a 2013 fire in St. Marys [Pennsylvania] as arson.
⇧ Syriza Dissenters Form New Party in Greece – The New York Times
Twenty-five Syriza lawmakers announced the formation of a party, Popular Unity, in a letter to Parliament on Friday, declaring that they intended to “remain true to our pre-election promises.” They were referring to the general elections in January, which brought Syriza to power on a pledge that it would roll back years of austerity measures, a promise Mr. Tsipras went back on.
Popular Unity will be led by a former energy minister, Panagiotis Lafazanis, the leader of Syriza’s radical Left Platform faction, with which about 40 of Syriza’s lawmakers were loosely aligned.
I back the Left Platform over Syriza, though I need to hear more. I’ve followed some of the Left Platform’s statements over the months, but I’ve never heard any of them speak directly to a new debt-free currency and banking as a national utility.
My question would be the degree to which Popular Unity is interested in democracy v. a dictatorship of the proletariat. Of course, I oppose any such dictatorship.
⇧ Why Real Estate Could Be a Better Investment Than Stocks – US News
This article has some good detail, but it left out a great deal as well.
⇧ Austin real estate market experiences another record-breaking month – CultureMap Austin
Yet another record-breaking month of Austin home sales is in the books.
⇧ Six Chicago Real Estate Dynasties – Commercial Real Estate
I’ve linked to “New York City” this way. So, here’s Chicago’s version.
Over the past century, these six Chicago real estate families have produced a beloved president, a winner of three Stanley Cups and changed the face of Chicago.
⇧ Home Prices in These Midwestern Cities Are Outperforming New York – Bloomberg Business
The fastest-growing states for technology jobs in the first half of the year were Minnesota, Utah, Nebraska and Michigan, according to the Bureau of Labor Statistics.
⇧ Electric Vehicle Charging at Apartments – Google Search
Do you have charging in place or just a plan? Perhaps you’ve not considered it yet.
⇧ Study finds big gap between home prices and what buyers can afford – L.A. Biz
… C.A.R. President Chris Kutzkey. “While housing is affordable in some regions of the state, California lacks an adequate supply and mix of affordable housing in locations where the majority of the state’s workforce resides.”
⇧ 9 Orlando attorneys reveal which new real estate laws are creating a major impact – Orlando Business Journal
We asked local law firms: What new real estate-related laws are creating a major impact on your clients?
Here’s what they had to say:
⇧ Do I Need an LLC for Real Estate & How Does It Affect Taxes?
This is a good article because it starts with the basics in a very clear manner and doesn’t try to answer every possible question but definitely encourages you to do your research.
When it comes to legal entities, oftentimes you need to look at both the tax and legal sides of things.
⇧ Fairy Tales – The New York Times
Why did freshwater macroeconomists refuse to learn from the lessons of the Volcker recession and recovery, which clearly refuted their approach and supported some kind of Keynesian view on monetary policy?
⇧ Record capital flight from China as industrial slump drags on – Telegraph
Capital flight for the first three weeks of August is already close to $100bn, despite draconian use of anti-terrorism and money-laundering laws to curb illicit flows.
It is unclear where China’s political system is now heading. The country is gripped by an anonymous article published in the state newspapers warning that the reform process faces “unimaginably fierce resistance”
The botched handling of the Shanghai equity crash has raised serious doubts about the competence of the Chinese leadership. The conclave report urged “drastic and pragmatic reform” of the state-owned enterprises, fiscal policies, finance, and the judicial system.
There is little doubt that the party committed grave policy errors over the winter months, culminating in the so-called “fiscal cliff” as a botched reform of local government finance caused spending to collapse. The question is whether the worst is over as the authorities launch another stop-go cycle.
How could it be over?
⇧ Oregon Wildfire That Destroyed 36 Homes Billed as Nation’s Top Priority
A fire in remote eastern Oregon that destroyed 36 homes and was threatening 500 more on Wednesday was declared the nation’s top priority for resources.
⇧ EU Seeking to Cut Minimum Risk Weighting on Simple Securitizations
First there’s a crash. Then they tighten regulations, bolting the door after the horse is out of the barn. After a bit, they lower the standards again, leaving the door open for another horse to simply disappear: another crash.
The European Commission is seeking to cut the minimum risk weight on securitizations that qualify as simple and transparent to 10 percent to help jump-start the bloc’s capital markets.
It is ever so. When will they ever learn, or don’t they want to? There’s money to be made from crashes, right?
⇧ New Hole Opens Up at Site of Fatal 2013 Florida Sinkhole
Residents were painfully reminded of the tragedy that befell their quiet neighborhood two years ago. TV news trucks and reporters’ cars clogged the narrow street. And folks said the fact that the ground opened again made them nervous.
A typical commercial property insurance definition: “Sinkhole collapse means the sudden sinking or collapse of land into underground empty spaces created by the action of water on limestone or dolomite. This cause of loss does not include: (1) The cost of filling sinkholes; or (2) Sinking or collapse of land into manmade underground cavities.”
⇧ Environmental Economics: Water pricing, “free” markets and climate change
A plea to the water authority (i.e., government) to price water more rationally is a plea for policy reform (the term Matt uses earlier) towards a better use of incentives. Free markets only exist when there is no government regulation of buyers and sellers, no taxes, no subsidies and no nothing.
⇧ 28-Story Hollywood Palladium Tower Project Hit With Anti-Density Challenges – Neighbor Beefs – Curbed LA
The plans to turn a restored (and, ideally, landmarked) Hollywood Palladium into the centerpiece for a big new development with two towers up to 28 stories tall and filled with residences, retail, and maybe a hotel (like Hollywood doesn’t have enough of those in the works) might have hit a far-too-common-in-Hollywood roadblock. Park Labrea News/Beverly Press reports that both the AIDS Healthcare Foundation and Kilroy Realty Corp. (developers of the nearby Columbia Square project and the Academy Square project on De Longpre) are appealing the project for being all-around too big for the neighborhood.
In their appeal to the project, Kilroy says that the proposed two-tower development is out of step with the community and too dense.
Dense is anti-sprawl.
⇧ Better Building Benchmarking = More Energy Savings | Sustainable Cities Collective
Building energy benchmarking is gaining momentum internationally, with more than 60 building rating systems in 41 countries worldwide. Data and information available today can allow owners and managers to determine the relative performance of their buildings. More importantly, through smart outreach and policy, data on energy use can motivate action on the ground.
⇧ American economy blues: Everything you need to worry about – Fortune
Jobs, oil, corporate profit margins: A list of all the things that should be keeping you up at night.
May I have your attention please?
I bring you terrible news.
Oil prices have plunged to the point where it hasn’t been this cheap to fill up your gas tank in over a decade. Businesses that count energy as an input cost will be forced to figure out what to do with the excess capital they’re not spending on fuel.
Before fracking, we all knew that lower fuel costs was generally great for construction and employment. Then the Saudis decided to tackle the frackers. Well, technological advancements in fracking since then have hit the Saudis at their knees. The question is now one of environmentalism, including air and groundwater pollution and fracking-caused earthquakes. What next?
⇧ 10 Currencies That May Follow Tenge in Tumble Triggered by China – Bloomberg Business
… Kazakhstan abandoned control of its exchange rate revealed a sense of urgency among policy makers: they had tried a managed depreciation just a day earlier. The escalation signaled to investors that it has become too costly for developing nations to defend their currencies. Vietnam also devalued the dong, while freely traded currencies such the South African rand and Turkey’s lira extended losses.
Here’s a look at the currencies that are among those most at risk from this conflux of global developments:
⇧ 77-Month Low for August’s Early Caixin Manufacturing PMI
A recovery can be expected amid a continued loose monetary environment and stronger fiscal stimulus, and because construction will start for many infrastructure projects approved earlier this year, the report said. The recent devaluation of the yuan caused by a new way to calculate the daily fixing rate can also help by encouraging exports, it said.
⇧ Asian capital controls are a real risk once again | Considered View | Breakingviews
The risk isn’t immediate, but for the first time in 17 years it’s quite real.
⇧ Crisis in Brazil – YouTube
Monica de Bolle reviews the factors behind the economic turmoil in Brazil, the political corruption scandals, and President Rousseff’s reform agenda.
Fiscal consolidation in a deep recession? That’s exactly backwards. Public banking, per se, is not one of Brazil’s problems. “The expansion of public banks’ balance sheets allowed policymakers to counter financial instability by sharply expanding credit growth when private sector (domestic and foreign) banks reduced bank lending,” wrote Felipe Rezende (“Why Does Brazil’s Banking Sector Need Public Banks? What Should BNDES Do?”: https://www.levyinstitute.org/pubs/wp_82 5.pdf). Corruption is the problem.
⇧ The New Weiss Index Forecasts Alarming Home Price Trends – YouTube
Ilyce Glink has done some good shows before, but this one really strikes me as the most important and useful one I’ve seen of her’s.
The new Weiss Index is the only home price index specifically designed to predict home price trends before they happen, and some of its recent forecasts are alarming.
In addition to predicting trends in home prices up to a year in advance, what sets the Weiss Index apart from other home price indices is that it digs into the granular level of home price data to make relatively reliable predictions about the future movements of home prices on a house-by-house basis. On today’s episode of Big Money Real Estate, I interview Allan Weiss, founder and CEO of Weiss Analytics, which launched the new Weiss Index for home prices. He’ll go into detail about the principles underlying the Weiss Index and what interesting – and potentially alarming – trends he’s seeing in the data already.
⇧ Homes For Sale By Owner – Search, Buy, Sell – Owners.com Real Estate
Here’s the Weiss mapping tool mentioned in the video above.
⇧ Smoke blankets parts of Washington state as firefighters guard town from flames | Reuters
At least 70 large wildfires have been raging…through several bone-dry Western states, including Oregon, Idaho, California and Montana, the National Interagency Fire Center in Boise reported.
More than 100 homes and dozens of outbuildings have been lost from those fires.
⇧ Warning Issued for Summerland Beach – Public News – Santa Barbara Edhat
What a shame:
Beginning immediately, Summerland Beach is closed to the public to prevent adverse health effects and protect the public’s health. The decision to close the beach at this time was due to the volume of oil on the beach and sand, the nature of the oil (more liquid and mixed in the water and across sand as opposed to solid tar balls which are more easily avoidable) and intermittent strong petroleum odors at a level that may cause health effects.
The beach has apparently been reopened since this report.
⇧ Land Bank tries to make bad properties wanted properties
The best widely accepted solution?
Known officially as the Muskingum County Land Reutilization Corp., but more colloquially referred to as the land bank, this county and city partnership aims to solve the problem by wiping away all back taxes on blighted properties before transferring ownership to a new buyer, often at a severely discounted rate.
⇧ Playing the Chinese Trump Card | Thoughts from the Frontline Investment Newsletter | Mauldin Economics
Okay, I read John Mauldin on a regular basis and often with quite mixed emotions. He’s a libertarian leaner with a practical/progressive side. So, I’d say he’s a mixed-economy guy who leans to the market side of things. He does understand and doesn’t dismiss fiscal stimulus. What he does is become quite bearish on government quite quickly.
All of that said, this is one of the best articles I’ve seen from him in many, many months. I’d say I’m on board with it a good 99%. However, that doesn’t mean I endorse John’s ideology that doesn’t show through in the article.
Taking questions at an event in Michigan that day, Donald Trump had this to say:
I think you have to do something to rein in China. They devalued their currency today. They’re making it absolutely impossible for the United States to compete, and nobody does anything. China has no respect for President Obama whatsoever, whatsoever.
Well, you have to take strong action. How can we compete? They continuously cut their currency. They devalue their currency. And I have been saying this for years. They have been doing this for years. This isn’t just starting. This was the largest devaluation they have had in two decades. They make it impossible for our businesses, our companies to compete.
They think we’re run by a bunch of idiots. And what’s going on with China is unbelievable, the largest devaluation in two decades. It’s honestly — great question — it’s a disgrace.”
Before you dismiss this as nonsense, remember that it comes from a Wharton School graduate.
Still not impressed? You’re right; it is indeed nonsense. Trump and all those who prattle on about Chinese currency manipulation have the economic comprehension of a parakeet. Is Trump really so clueless?
I didn’t quote that bit for political reasons but because John goes on to explain exactly why it’s true The Donald is wrong and far from a lone on it.
⇧ Judges Nixing Keystone XL South Cases Had Tar Sands-Related Oil Investments | DeSmogBlog
On August 4, the U.S. Appeals Court for the 10th Circuit shot down the Sierra Club’s petition for rehearing motion for the southern leg of TransCanada’s Keystone XL tar sands export pipeline. The decision effectively writes the final chapter of a years-long legal battle in federal courts.
But one of the three judges who made the ruling, Bobby Ray Baldock — a Ronald Reagan nominee — has tens of thousands of dollars invested in royalties for oil companies with a major stake in tar sands production in Alberta. And his fellow Reagan nominee in the Western District of Oklahoma predecessor case, David Russell, also has skin in the oil investments game.
The disclosures raise questions concerning legal objectivity, or potential lack thereof, for the Judges. …
The U.S. Courts seemingly oppose this type of conduct. But as a 2014 investigation published by the Center for Public Intregity explained, it is far from unprecedented, and Judges seldom recuse themselves nor face punishment.
A judge should disqualify himself or herself, explains 28 U.S. Code § 455, when “He knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding”
“…Judges seldom recuse themselves….” That’s bad.
⇧ Thomas Piketty: New thoughts on capital in the twenty-first century | TED Talk | TED.com
French economist Thomas Piketty caused a sensation in early 2014 with his book on a simple, brutal formula explaining economic inequality: r > g (meaning that return on capital is generally higher than economic growth). Here, he talks through the massive data set that led him to conclude: Economic inequality is not new, but it is getting worse, with radical possible impacts.
⇧ Dealing with Greek debt needs a radical rethink — lessons from Japan
… the Japanese government debt is partially the creation of accounting. A significant chunk of Japanese government debt is owed to itself. If you account for the amount of debt owed to other parts of the government, the debt to GDP ratio falls to 140%.
The second distinguishing factor of Japanese debt is that it is largely owed to Japanese investors. About 90% of debt is held by Japanese residents.
1. When debt is owned by foreigners, they are often more keen on appropriating assets and enforcing harsh austerity policies that they don’t have to live with.
2. You can cut debt by creating growth rather than just implementing austerity. Japan has showed that traditional Keynesian policies can create growth, which raises tax receipts and can be used to pay down debt.
3. Having control over your monetary policy is important. As the eurozone controls how much money is created, individual countries can’t print their way out of debt.
4. Building a strong industrial and public sector base for ongoing wealth creation is vital. This means building companies which offer genuinely excellent products and services and ensuring an effective and well-run public sector.
5. Maintaining legitimacy with your creditors seems to be of the utmost importance. Although many of Yanis Varoufakis’s detractors now admit that the former finance minister’s analysis of the dynamics behind the Greek debt crisis were broadly correct, they also clearly loathe the man. This might not be the best negotiating position when asking for some leniency from debtors.
I think #5 is completely wrong in Yanis’s case. The Germans wouldn’t have altered their position one bit based upon the personality approach of the Greek Finance Minister. It’s not Yanis that they hate. It’s his truth-telling about their very self-centered and shortsighted ideology (and that’s putting it mildly).
⇧ Wealth and income distribution: New theories needed for a new era | VOX, CEPR’s Policy Portal
Growth theories traditionally focus on the Kaldor-Kuznets stylised facts. Ravi Kanbur and Nobelist Joe Stiglitz argue that these no longer hold; new theory is needed. The new models need to drop competitive marginal productivity theories of factor returns in favour of rent-generating mechanism and wealth inequality by focusing on the ‘rules of the game.’ They also must model interactions among physical, financial, and human capital that influence the level and evolution of inequality. A third key component will be to capture mechanisms that transmit inequality from generation to generation.
One counter argument is that what matters is not inequality of ‘outcome’ but inequality of ‘opportunity’. According to this argument, so long as the prospects are the same for all children, the inequality of income across parents should not matter ethically. What we should aim for is equality of opportunity, not income equality. However, when income inequality across parents translates into inequality of prospects across children, even starting in the womb, then the distinction between opportunity and income begins to fade and the case for progressive taxation is not undermined by the ‘equality of opportunity’ objective (Kanbur and Wagstaff 2015).
⇧ All in the (Multi)Family: Single-Family Builders Expand Apartment Plans | Multifamily Executive Magazine
Already, Toll has 17 multifamily projects (with 6,596 units) from Washington, D.C., to Boston, with a value of $2.2 billion, in various stages of development. But there’s more to come.
Toll isn’t alone among single-family firms. Lennar Corp., the second-largest builder on the BUILDER 100, began building apartments during the recession. Its offshoot, Lennar Multifamily Communities, is now the fifth-largest multifamily builder in the country, with 4,565 units.
Many private builders, too, around the country have long maintained a stake in rentals. Fayetteville, N.C.—based Caviness and Cates Communities, for instance, builds 400 homes a year for sale and also rents out apartments in the 85 multifamily buildings it has constructed since 1998. Others, like Irvine, Calif.—based MBK Homes jumped into the mix after the recession in 2008.
“We are actually providers of shelter,” MBK president Tim Kane told MFE in 2012. “Apartments are a large component of shelter.”
⇧ [Here’s your ordoliberlism:] German Wage Repression: Getting to the Roots of the Eurozone Crisis – TripleCrisis
Great article by John Miller:
Adopting the euro as its sole currency, in January 2002, was no panacea. For the next two years, Germany’s economy continued to stagnate. But converting to the euro—whose value was more or less an average of that of the stronger and weaker former currencies of the member countries—soon did improve Germany’s competitive position internationally. German exports, no longer valued in strong deutschmarks, but in weaker euros, became cheaper to buyers in other countries. At the same time, the exports of countries that used to have weaker currencies, such as the Greek drachma and the Spanish peseta, became more expensive. That alone transformed Germany’s current account deficit into a surplus.
… German wage repression is an essential component of the euro crisis. Heiner Flassbeck, the German economist and longtime critic of wage repression, and Costas Lapavistas, the Greek economist best known for his work on financialization, put it best in their recent book Against the Troika: Crisis and Austerity in the Eurozone: “Germany has operated a policy of ‘beggar-thy-neighbor’ but only after ‘beggaring its own people’ by essentially freezing wages. This is the secret of German success during the last fifteen years.”
While Germany’s huge exports across Europe and elsewhere created German jobs and lowered the country’s unemployment rate, the German economy never grew robustly. Wage repression subsidized exports, but it sapped domestic spending. And, held back by this chronic lack of domestic demand, Germany’s economic growth was far from impressive, before or after the Great Recession. From 2002 to 2008, the German economy grew more slowly than the eurozone average, and over the last five years has failed to match even the sluggish growth rates posted by the U.S. economic recovery. With low wage growth, consumption stagnated. German corporations hoarded their profits and private investment relative to GDP fell almost conti nuously from 2000 on. The same was true for German public investment, held back by the eurozone budgetary constraints.
… Putting an end to the austerity measures imposed on Greece and the other struggling eurozone economies would boost their demand as well. In fact, it would also better serve the interests of Germany and the profit-making class, by helping to stabilize a system from which they have benefited so greatly at the expense of much of the region’s population.
Still, raising the wages of German workers to match productivity gains is, as Bernanke recognizes, surely a step in the right direction. Raising U.S. wages to match productivity gains would help defuse U.S. wage repression and boost economic growth here as well.
⇧ Positive Factors Combine to Generate Strong Consumption-led Growth in the U.S. Economy
COMMERCIAL REAL ESTATE
• Foreign direct investment increased more than 25 percent to $49 billion in 2014, up from $38 billion in 2013
• Canada is the most active, averaging $10 billion per year but up to $16 billion in 2014
• Mid-year 2015 CMBS volume hit almost $54.5 billion, a significant increase over mid-year 2014 total of $40.8 billion
• Apartment prices are up 10 percent year-over-year and 21 percent above the 2007 high
• The hotel industry is posting record-high occupancy levels with projections of 65.1 percent for 2015, the highest level since 1984, representing a 2.6 percent increase in lodging demand
⇧ Centerton Residential Insurance Rates To Drop Following Purchase Of New Fire Trucks | Fort Smith/Fayetteville News | 5newsonline KFSM 5NEWS
Residential insurance rates are based off of Insurance Service Office (ISO) ratings.
And ISO rating is set based off the city’s availability of services in emergency situations.
A rating of one is the best, with the rating of 10 being the worst. Lower ratings translate into lower insurance rates.
“The city went from an ISO six [rating,] to an ISO three,” said Keith Higginbotham, a volunteer fire fighter and city council member.
⇧ Judge tosses lawsuit against Whidbey real estate companies over jet noise disclosures – Whidbey News-Times
A judge threw out a lawsuit against two Whidbey real-estate companies over noise disclosures related to aircraft noise Friday afternoon.
“We were victorious,” said Eric Mitten, broker and owner with Windermere Real Estate. “The judge ruled that the disclosure was adequate to put buyers on notice that there was aircraft noise.”
Real estate companies had been providing buyers with a one-paragraph disclosure, which comes from a 1993 ordinance regarding the sound-proofing of building in noise zones. But a different ordinance, adopted in 1992, includes much more details for a separate disclosure, including a pronouncement that “noise generated by a single flyover of a military jet may exceed 100 DBA,” the lawsuit states.
⇧ Finland considers basic income to reform welfare system – BBC News
I’ve said before that I favor a guaranteed income. This is a good idea on Finland’s part. Let’s hope they don’t cut the experiment off too soon. It would take time for people to adjust and to start seeking jobs and start businesses, etc.
⇧ Jeremy Corbyn wins economists’ backing for anti-austerity policies | Politics | The Guardian
In the letter to which David Blanchflower, a former member of the Bank of England’s monetary policy committee is a signatory, the economists write: “The accusation is widely made that Jeremy Corbyn and his supporters have moved to the extreme left on economic policy. But this is not supported by the candidate’s statements or policies. His opposition to austerity is actually mainstream economics, even backed by the conservative IMF. …”
“His opposition to austerity is actually mainstream economics….” That’s a fact.
⇧ Softer winds, new trucks buoy fire crews fighting deadly U.S. Northwest blazes | Reuters
Overall, there were 24 large wildfires or clusters of fires burning across Washington state and Oregon on Sunday, among the nearly 70 blazes raging in Idaho, California and Montana, the National Interagency Fire Center in Boise reported.
President Barack Obama has signed a federal declaration of emergency for Washington state, and authorities have called in reinforcements from abroad.
As of Sunday, the fires in Washington alone have blackened more than 590,000 acres (238,800 hectares) and destroyed more than 200 homes, according to Governor Jay Inslee’s office.
⇧ Federal audit takes aim at money-laundering real estate transactions in Vancouver area
Specific money laundering risks in Canadian real estate, according to the independent report obtained by The Province, include buyer concealment loopholes involving lawyers and legal trust funds, a “high number of cash transactions” and a lack of “quality or ethics infrastructure,” and “disengagement” with compliance rules.
…figures represent a fraction of the illicit money from China believed to be pouring into B.C. to be laundered in real estate, in the wake of an aggressive Chinese Communist Party anti-corruption campaign.
… Lawyers are shielded from Fintrac reporting laws.
Fintrac’s website instructions state that if a realtor has a reasonable suspicion that questionable money is involved in a deal, it doesn’t matter if the realtor handles any money, how much the deal is for, or if the realtor receives a commission — the deal must be reported.
⇧ Wilkes-Barre landlord cites inability to access his properties as the reason for severe roach infestation – Times Leader – timesleader.com
WILKES-BARRE [Pennsylvania] — Chris Spinucci said he tried to be a good landlord.
Nevertheless, as of Aug. 18, Wilkes-Barre city deemed his properties at 59 and 61 Bradford uninhabitable.
⇧ Tax bills, fines pile up on properties as Douglas Bruce heads to probation hearing
This is a long article but interesting how Douglas Bruce is represented: skirting the law and getting into trouble but not being very penalized.
Douglas Bruce could face more jail time if his probation is revoked Aug. 31 based on Denver Adult Probation Department complaints that he hasn’t reported financial dealings as required.
But the department may not know the half of it.
Since Bruce was put on six years’ probation in 2012, the author of the Taxpayer’s Bill of Rights (TABOR) has bought at least 24 out-of-state properties on which he has racked up about $63,000 in delinquent property taxes, liens and fines, The Gazette has found. He also owes an additional $17,700 in taxes, liens and fines on property he bought before he was jailed.
⇧ Fed index shows wide disparity in city home prices – Crain’s Detroit Business
Travel along the Woodward corridor and along the Detroit riverfront, and it’s easy to see the infusion of hundreds of millions of dollars in economic development.
Not as easily visually trackable in those two areas are the large increases in average home sale prices, driven in part by new development and renewed interest from investors, during the past 10 years.
But while average home sale prices have nearly doubled on and around Woodward Avenue stretching from Jefferson Avenue north to Eight Mile Road — and have increased nearly two-thirds near the east Detroit riverfront — large pockets of the city have seen significant declines in home sale values during the same period.
⇧ Seattle homebuyers weighing value of parking spots
“What we’re seeing is definitely people prefer to have a condo if they’re going to live in city … with parking … but it’s less of a factor than it has been,” Krigsman said. “We’re getting a lot of new arrivals from San Francisco, New York, Hong Kong … other cities where [cars have] historically been seen as a liability rather than an asset.”
⇧ Nobody Could Have Predicted, Interest Rates Edition – The New York Times
Paul Krugman gets it wrong this time.
“For sure, nobody saw negative rates coming….”
Well, that makes me a nobody. However, I’m not alone. Although it is true there are very few of us out there.
⇧ Sober Look: A healthy dose of risk aversion returns to US equity markets
I’m going to put up two in a row by Walter Kurtz here because he’s been doing an exceptionally great job of showing why the Fed would be nuts to raise the overnight rate next month or even in the foreseeable future.
[Read Walter’s post.]
⇧ Sober Look: 6 reasons the FOMC is unlikely to move in September
The biggest argument for a rate hike is the expectation of increasing wage pressures. US labor markets continue to improve and at some point – the argument goes – wage growth will accelerate. However, we haven’t seen much evidence for wage pressures thus far, as average hourly earnings continue to grow by about 2% per year (nominal). With the recent dollar strength, US corporations will speed up shifting production abroad – especially Mexico, limiting wage growth in the United States.
Moreover, rising rental costs are squeezing US households – many of whom can not keep up with the increasingly more expensive shelter (chart below). The FOMC has to ask itself whether a rate hike will help the situation. The answer may be just the opposite: higher rates may put more upward pressure on rents as the cost of financing rental propensities increases.
⇧ The Fed looks set to make a dangerous mistake | Lawrence H. Summers
Larry Summers nails it:
I doubt that, if rates were now 4 per cent, there would be much pressure to raise them. That pressure comes from a sense that the economy has substantially normalised during six years of recovery, and so the extraordinary stimulus of zero interest rates should be withdrawn. There has been much talk of “headwinds” that require low interest rates now but this will abate before long, allowing for normal growth and normal interest rates.
Whatever merit this view had a few years ago, it is much less plausible as we approach the seventh anniversary of the collapse of Lehman Brothers. It is no longer easy to think of economic conditions that can plausibly be seen as temporary headwinds. Fiscal drag is over. Banks are well capitalised. Corporations are flush with cash. Household balance sheets are substantially repaired.
Much more plausible is the view that, for reasons rooted in technological and demographic change and reinforced by greater regulation of the financial sector, the global economy has difficulty generating demand for all that can be produced. This is the “secular stagnation” diagnosis….
He sure isn’t the Larry Summers who pushed neoliberalism years back, not that I agree with him on everything he says. See here: “Bernanke-Summers Debate II: Savings Glut, Investment Shortfall, Or Monty Python? — Forbes”: https://propertypak.com/2015/04/11/news- real-estate-risk-economics-apr-11-2015/# 04111519
⇧ Larry Summers: The Fed Looks Set to Make a…
Another Argument for Waiting to Raise Rates: Interest Rate Smoothing Should Be a Thing of the Past
In addition to Larry Summers’ arguments for holding off on raising rates, I have a conceptually quite distinct argument: the Fed can afford to wait to raise rates, because it can always raise rates very fast if it needs to later on.
Absolutely! My readers know that I’ve been saying that all along. Smoothing makes zero sense especially in the face of so much deflationary pressure out there.
⇧ The Yuan Devaluation and the End of China’s Economic Miracle | Foreign Affairs
Very pessimistic but with good reason:
It is often said that China will get old before it gets rich; it is perhaps equally true that the Chinese economy will get liberalized before it gets taxed. Liberalization without taxation will push the Chinese government into the familiar Third World pattern of perpetual fiscal crisis. A Chinese state that raises money primarily through regressive taxes and struggles to meet its welfare obligations will look a lot like the rest of the Third World that China supposedly left behind years ago. A declining yuan is only a prelude to this kind of crisis, not a final act.
⇧ Taking Corbynomics Seriously by Robert Skidelsky – Project Syndicate
The following language by Robert Skidelsky is what I would term not user friendly:
Unorthodox QE (“monetization two”) avoids this problem [taxation], because the central bank’s borrowing will not be repaid; central-bank assets net out against government liabilities. That is why it should not be excluded a priori.
Why call it “borrowing” at all? It’s a British thing. It keeps the economists working too. However, what we need is plain language so the masses will get it and force it through.
⇧ FHFA Adopts Final Rule on 2015-2017 Housing Goals for Fannie Mae and Freddie Mac | Federal Housing Finance Agency
The final rule sets identical benchmarks for both Enterprises in all categories and establishes goals for the first time, for rental units affordable to low-income families in small (5- to 50-unit) multifamily properties.
FHFA’s final rule establishes the following goals for multifamily properties:
Multifamily low-income goal for both Enterprises at 300,000 units for each of the three years 2015-2017, up from the proposed 250,000 units each year for Fannie Mae and up from the 210,000, 220,000 and 230,000 units proposed for Freddie Mac in the three years. This goal represents an increase of 50,000 units for Fannie Mae and 100,000 for Freddie Mac from the 2014 benchmark;
Very low-income multifamily housing subgoal for Fannie Mae at 60,000 units for each of the three years 2015-2017, the same as the proposed 60,000 units for each of the three years. Freddie Mac’s very low-income subgoal levels are also set at 60,000 units for each of the three years, up from the proposed goals of 43,000 units, 46,000 units and 50,000 units, respectively, and an increase of 20,000 for Freddie Mac from the 2014 benchmark;
Establish a new low-income housing subgoal for Enterprise purchases of mortgages on small (5- to 50-unit) multifamily properties. Fannie Mae’s goal is 6,000 units in 2015, 8,000 units in 2016 and 10,000 units in 2017, down from the proposed goals of 20,000 units, 25,000 units and 30,000 units, respectively. Freddie Mac’s goal is also 6,000 units in 2015, 8,000 units in 2016 and 10,000 units in 2017, up from the proposed goals of 5,000 in 2015, and down from the proposed goals of 10,000 units in 2016 and 15,000 in 2017.
⇧ Draghi’s Post-Holiday Inbox Stuffed With Trouble for Policy – Bloomberg Business
The euro area’s monetary-policy makers aren’t getting to slumber through the dog days of August.
⇧ From Venezuela to Iraq to Russia, Oil Price Drops Raise Fears of Unrest – The New York Times
… lower oil prices stimulate economies of consuming countries, a protracted decline carries many unanticipated consequences — starting with the economic weakness in developing countries that buy increasing amounts of goods from the United States and others in the industrialized world.
“The hemorrhaging of government budgets reliant on oil will force dramatic cuts in spending or dangerous increases in borrowing, if not both,” Mr. Goldwyn said. “The countries without significant foreign exchange reserves are most at risk, and they include Nigeria, Angola, Algeria, Venezuela and Iraq. …”
⇧ Yellen Faces Greenspan Oasis Warning as She Weighs Rate Rise – Bloomberg Business
Rich Miller and Steve Matthews:
… the turmoil this time has not gotten that bad. There’s been little or no talk in the markets of financial stresses in the U.S. Big U.S. banks, in particular, are well fortified against market turmoil, having passed Fed stress tests earlier this year that posed a scenario of equity prices falling about 60 percent over the space of a little more than a year.
And while emerging markets are suffering, they’re still in better shape than they were in 1997-98, when a number of them had to turn to the International Monetary Fund for assistance, Paul Ashworth, chief U.S. economist at Capital Economics in Toronto, said in a report Monday to clients.
The article states that the “housing market is strengthening,” but is that really true? I don’t think so (though cheaper fuel will help with construction costs, etc.).
Anyway, I don’t see a Fed rate hike and have never seen one since they hit the “ZLB,” which really wasn’t a ZLB because they can always go negative, as I said repeatedly (as a nobody: see above).
⇧ 4 reasons Bay Area developers are souring on this real estate boom – San Francisco Business Times
Developer pro formas that I’ve reviewed usually estimate that residential buildings, including affordable ones, cost $600,000 to $800,000 per unit to build.
“The biggest challenge for us is the cost to produce housing. Part of me wants to shut down our shop for six months (and just manage what we already built). Everything’s too expensive,” said Eric Tao, president of developer AGI Capital.
⇧ Property Brokers Falter as Real Estate Boom Seen Cooling – Bloomberg Business
Commercial-property brokerages, the stars among U.S. real estate stocks this year, are losing luster as the booming market for deals shows signs of cooling.
… “This is a natural maturing of the real estate cycle.”
“We’re in the middle of an extra-inning game and we’ve got a ways to go,” Robert Sulentic, president and CEO of Los Angeles-based CBRE, said in a telephone interview. “I don’t ever remember being at this point in the cycle and seeing so little space being built.”
“Momentum is solid,” Dyer said. “People are behaving and managing in a more careful way than they were in the last cycle.”
⇧ Can Cambridge and Somerville slow gentrification amid sky-high home prices? – Real estate news – Boston.com
In Somerville, a Sustainable Neighborhoods Working Group has been meeting over the last few months to discuss ways of heading off a wave of gentrification in Somerville.
The group is exploring ways Somerville might be able to offer financial assistance to low-income home buyers. Another idea being explored is allowing smaller—and less expensive—homes and condos to be built.
Cambridge wants to triple the current linkage fee on new commercial buildings—of $4.58 per square foot — to $12. The millions raised by the move would help pay for ongoing subsidies for roughly 1,100 affordable units across the city.
⇧ China’s market Leninism turns dangerous for the world – Telegraph
The economies in Europe and the US are lacklustre but recovering gradually. China may, in reality, be on the cusp of another upward mini-cycle, the latest in a string of stop-go episodes.
What is clear is that the world is no longer willing to give the economic benefit of the doubt to Chinese leaders. The pretensions of market Leninism have been shattered by one policy blunder after another over the past year.
Global markets have swung almost overnight from a mystical faith in the competence of the Communist Party to near revulsion, doubting everything until proven. From now on, Beijing is on probation.
“The economies in Europe and the US are lacklustre but recovering gradually. China may, in reality, be on the cusp of another upward mini-cycle….” Well, they’ve been on probation with me for years now (decades actually). Frankly, they’ve been attempting to do the impossible. That’s why I’ve always said that if they pull it off, it will be a real miracle. The writing on the wall says that they don’t know what they’re doing, haven’t known, and aren’t seeming to learn quickly enough and to change quickly enough to head off economic and financial disaster. I do hope they’ll get it and change. I won’t be holding my breath.
⇧ New FEMA Maps for Central Texas Expand Flood Plains
Future construction would be governed by a raised base flood elevation, the minimum height for the first floor of any new building. Building anything lower could lead to higher insurance premiums.
⇧ REFILE-SPECIAL REPORT-U.S. banks moved billions in trades beyond CFTC’s reach | Reuters
This is a huge moral-hazard issue and a huge article to cover the topic.
… the big American banks are still on the hook for swaps they’re parking offshore with subsidiaries.
So, if they were to crash, would the American people be stuck bailing them out again? Would the American people put up with it? When do these gamblers have to cover their own losses by themselves rather than by dragging the average American down the hole with them, even those Americans who are rather conservative and not prone to gambling?
⇧ Study Predicts More Wildlife Deaths and Bigger Wildfires if Drought Lasts
California’s fresh-water habitats and forests, along with their wildlife, have experienced the most severe impacts of the drought so far ….
⇧ Weather Technology Trends and Their Impact on Insurance – Insurance Journal TV
In this interview with Denise Johnson, Ben Zimmerman, director of innovation & strategy at WSI, a technology subsidiary of the Weather Channel, explains how real time weather data can prepare insurers and policyholders before a storm.Powered by InsuranceJournal.tv
⇧ The Great Emerging-Market Bubble by Bill Emmott – Project Syndicate
Half right: Bill Emmott:
Something has gone badly wrong in the emerging economies that were supposed to be shaping, even dominating, the future of the world. The search for culprits is under way: commodity prices, fracking, US interest rates, El Nino, China, these and others lead the field. But the answer is simpler and more traditional. It is politics.
… the main determinants of an emerging-economy’s ability actually to emerge, sustainably, are politics, policy and all that is meant by the institutions of governance. More precisely, although countries can ride waves of growth and exploit commodity cycles despite having dysfunctional political institutions, the real test comes when times turn less favorable and a country needs to change course.
… It is not a question of whether democracy or authoritarianism is best. The bottom line is that unless emerging economies can ensure that they remain flexible and adaptable, they will not continue to “emerge.” And the determinant of that flexibility and ability to adapt lies in political institutions and their willingness to challenge interest groups, mediate social conflicts, and maintain the rule of law. It’s the politics, stupid.
“It is not a question of whether democracy or authoritarianism is best.” Bill Emmott says that it’s the ruler’s “willingness to challenge interest groups, mediate social conflicts, and maintain the rule of law” that matters. Well Bill, the fact is that real democracy can do all of that where no “authoritarian” regime can over the long run. That’s politics, but I’ll leave off the “stupid.”
⇧ Final Risk-Based Capital Rules Add More Complexity to Multifamily AD&C Loans | NAHB Now | The News Blog of the National Association of Home Builders
Sufficient skin in the game is required to keep projects from going underwater on debt during any downturn.
… the new rules contain provisions specific to a new category of AD&C loans called High Volatility Commercial Real Estate (HVCRE) loans.
As of Jan. 1, banks are required to evaluate all AD&C loans, in portfolio and new originations, and classify any that do not meet certain underwriting criteria as HVCRE loans. HVCRE loans generally include commercial real estate projects with a loan-to-value greater than 80% and borrower-contributed capital of less than 15% of the project’s “as completed” value.
All loans classified as HVCRE loans require a capital charge of 150% or 50% higher than the capital charge for other commercial real estate loans.
⇧ Why the U.S. has a long-term edge over China – MarketWatch
I think this article may also be half right while I certainly agree with the following paragraph by Paul Brandus.
Here’s where Beijing’s rigid control of ideas and information will really begin to crimp future growth. The creative spark, the openness that encourages the sharing of ideas and information is so much more difficult when a citizenry is afraid to speak, to challenge conventional wisdom or take on authority itself. The BBC noted in 2013 that China’s police state includes 2 million government employees who monitor the Internet. This is not the sign of a confident government — but a fearful one.
Where I think Paul may be wrong concerns our supposed “excessive regulations.” That’s the language of a “free marketeer” who usually doesn’t differentiate between good and bad regulations but simply hates them all. Hopefully, Paul isn’t a laissez-faire advocate.
Anyway, the quoted paragraph speaks to the openness inherent in the real democracy of which I spoke concerning the immediately preceding link.
⇧ A Sprawl of Ghost Homes in Aging Tokyo Suburbs – The New York Times
… ghost homes are the most visible sign of human retreat in a country where the population peaked a half-decade ago and is forecast to fall by a third over the next 50 years. The demographic pressure has weighed on the Japanese economy, as a smaller work force struggles to support a growing proportion of the old, and has prompted intense debate over long-term proposals to boost immigration or encourage women to have more children.
… The young workers of the postwar years are now retirees, and few people, their children included, want to take over their homes. “Their kids are in modern high-rises in central Tokyo,” Mr. Makino said. “To them, the family home is a burden, not an asset.”
… the public has shown no appetite for mass immigration. …
… homes in Japan were built to last only about 30 years, when they were then expected to be torn down and rebuilt. Building quality is improving, but the market for secondhand homes remains tiny. Developers are still building more than 800,000 new homes and condominiums a year, despite the glut of vacancies.
“In the high-growth era, everyone was happy with this arrangement,” Mr. Yoneyama said. But in 20 years, he calculated, more than one-quarter of Japanese houses could be empty. “Now the tables are turned. The population is declining and no one wants to live in these old houses.”
⇧ China cuts rates to stem crisis, but doubts grow on foreign reserve buffer – Telegraph
The Chicago Fed’s national activity index turned positive in July and is now strongest so far this year, pointing to robust expansion over coming months. World trade volumes rose 2pc in June after contracting earlier this year, according to the latest CPB survey in the Netherlands.
… Several of the big global banks and investment funds have issued calls this week arguing that the violent equity sell-off in August is a buying opportunity.
Goldman Sachs said the collapse in commodity prices has been widely misread as a sign of impending economic slump when in reality it is due to surging supply, and is therefore benign.
We had a bad winter and a West-coast-ports strike. Trade data for June is too old to use to judge what’s happening right now. It’s almost September. Big investment funds always seek to psych up the markets if things haven’t completely crashed yet. Finally, the Goldman Sachs info doesn’t differentiate there between inventories and “supply.” Oil inventories are huge. They’re running out of room. Refining can’t keep pace.
Still, it may not be as bad as it looks; but, it could be worse too.
⇧ Stock volatility could further weaken housing demand
Consumer confidence in housing has been on the rise all year, thanks to increasing home values and a strengthening job market. That confidence, however, may be taking a hard hit from swings in the U.S. stock market, volatility in overseas economies and uncertainty over interest rates.
“A one quarter-point increase in the fed funds rate won’t derail housing. However, if the Fed were to quickly follow that initial move with one or two more rate increases, housing and home prices might suffer,” noted Blitzer.
Smart buyers are waiting to see a drop in mortgage rates because they wisely think 1) the Fed won’t raise the rate soon and 2) treasury yields will fall because treasurys are seen as a safe haven.
⇧ International – A Question of Identity
Dennis J. Snower, economist, and President, Kiel Institute for the World Economy:
The Americans are outraged at the suggestion that Greece might be asked to leave the Eurozone, since they cannot imagine treating an American state in this way. They don’t realize that many EU citizens still view the inhabitants of other countries in the same way as the Americans view the Canadians and Mexicans. Americans would not tolerate fiscal transfers to Canada and Mexico, and many may not find it inconceivable that Canada or Mexico might leave NAFTA under some circumstances. American commentators are incredulous of the political stalemate that imposes austerity on impoverished Greeks, but they show more understanding for the political stalemate among Democrats and Republicans that perpetuate inequalities among Americans. The former is betrayal, whereas the latter is a family quarrel.
… The German economists are undoubtedly right when they retort that if Greek national debts were written off without conditions requiring fiscal prudence and structural reforms to encourage competitiveness, then Greece’s corruption and inefficiency could continue to be bankrolled indefinitely by its creditors. …
The debtor and creditor countries don’t trust one another. Mistrust generally leads to failures of cooperation, and sometimes also to confrontation and conflict. One major reason for the creation of the European Union was to make such conflict unthinkable. It would be a tragedy indeed if the current economic difficulties would lead to renewed antagonisms.
As we descend steadily further into the cycle of confrontations and recriminations in Europe, it is now clear that the time is come for the European Union to create a vision that will make its peoples willing to make sacrifices for one another for the sake of a common goal. This would not mean abandoning current national, regional, religious and cultural allegiances. Rather, it would simply enable Eur opeans to gain a European identity in addition to the ones they are already proud of.
The article starts out on the wrong foot (misunderstanding/underestimating Paul Krugman, Joseph Stiglitz, Thomas Piketty, Jeffrey Sachs, Dani Rodrick, Heiner Flassbeck, and Simon Wren-Lewis) but ends with exactly the right attitude.
The named economists know full well that the various European nations mentioned in the article aren’t as states in the US are to each other. The economists are calling upon Germany in particular to lead the way extremely quickly in the creation of the needed European spirit exceeding the American (US) spirit in America.
Certain Americans would definitely more than “tolerate fiscal transfers to Canada and Mexico” had NAFTA been based upon, among other things, the spirit that brought the EU into existence (foremost to prevent any more wars in Europe, which is mentioned in the article). NAFTA wasn’t based upon that type and level of spirit at all!
Also, the Germans unfairly benefitted from the euro’s creation. That’s very well documented.
All of the economists’ statements are based upon hard macroeconomic data. They are calling for a rapid and radical ideological enlightenment in Europe, especially Germany, so European policies and practices will be in line with that hard macroeconomic data. That would lead to vastly greater prosperity for the whole of Europe and, frankly, the world, not that we couldn’t do even better.
⇧ Increase in Sinkholes Leaves West Virginia City Struggling
Officials in Huntington, W. Va., are scrambling to deal with an increase in sinkholes across the city.
The city maintains 320 miles of sewer lines ranging in age from 50 to 100 years old or more, Leek said.
⇧ New Jersey Firefighters Urge Lawmakers to Adopt Tougher Fire Codes
Firefighter associations want changes to the state Uniform Construction Code to limit wood-frame construction to three floors and 20,000 square feet per floor. They also want to require more sprinklers and masonry fire walls between buildings.
Would that be stringent enough? It would depend on the sprinkler-system type, configuration, pressure, and maintenance, etc. It’s a start.
⇧ Can you say bubble? N.Y. landlords cashing out early – The Globe and Mail
If there’s more money to be made by dropping completing a large construction project, are the new buyers making a mistake and the sellers cashing out while the getting is still good for this real-estate cycle?
Manhattan property owners are cashing out ahead of schedule.
With New York real estate values and rents surging, owners of commercial properties acquired as recently as a year ago are already seeking buyers. In the case of one midtown site, the developer scrapped construction plans to sell an empty plot of land.
⇧ Economic Recovery? Why Eurozone Under-performance Continues
This is exactly what I’ve been saying.
Thank you, John Weeks. Spot on, as the Brits say:
… With its inflexible commitment to fiscal austerity the German government has ruled out EU-level policies that would make regional demand the driver of expansion. Member governments find themselves constrained in doing so by direct pressure, their own ideologies and/or the EU fiscal rules (for example, the “Six Pack”).
The strategy for eurozone and EU-recovery coming out of Berlin and EU institutions (especially the ECB) is very low inflation, wage restraint and “structural reforms” (reductions in labor rights and bargaining) to increase export competitiveness. When global trade growth is sluggish this strategy for export competitiveness becomes tantamount to mercantilism, because substantial increases in exports by one country or region require declines elsewhere. This represents the road to currency wars, trade restrictions and conflict as governments seek to foster their parochial economic interests.
There is another route to sustained recovery. Keynes famously proposed a set of rules for the international economy that would require governments of countries with current account surpluses to adjust rather than the deficit countries adjusting. Within Europe this would change fundamentally the growth strategy, requiring a substantial fiscal expansion by the German government.
We find no major country in the world better placed to embark on an active fiscal policy. The two standard constraints on fiscal expansion, the budget balance and the trade account, are not binding for Germany. In 2014 the trade surplus hit a record high of €215 billion and the public sector recorded an overall fiscal surplus.
In a world of rational economic policies the European Union would lead global recovery thanks to a bold macr o policy by a farsighted German government. This would signal the assertion of Europe as a cooperative global economic power and win approval throughout the world economy, not least from the United States.
⇧ A property crisis: interview with Thomas Piketty | New Philosopher
What’s interesting about inequality is that nobody at the top claims “OK, I am rich, this is bad, it’s bad for the poor.” People have a more sophisticated view, including the winners at the very top who will say, “Yes, I am rich, there is a lot of inequality, but this is in the interest of the poor.” Sometimes there are a lot of bad looks with that kind of claim, but it’s interesting that in modern democracies people have to behave as if there are common values, as if inequalities must be in the common interest. The question is: Is it in the common interest or not? I think by and large it’s just a difficult problem. My claim is not that I know for sure what would be the right policy, my claim is that by looking beyond our own national experience, by looking at the experience of other countries and other historical periods, we can all learn and get a better sense of which policies are in accordance with our basic values. This may be seen as an idealistic view of politics, and of course sometimes people are just trying to defend their interests, but I think politics is more than this and things can change more quickly than some people seem to believe.
… What I know for sure is that there is no reason to believe that natural market forces can keep distribution in reasonable proportions, whatever that is. I really think we need strong democratic institutions, and strong transparency about income and wealth, in order to keep things under control.
He so not the wild-eyed Bolshevik.
⇧ Political Risks May Foil Economic Reform in China – The New York Times
There is scant evidence from history that an authoritarian, undemocratic regime like China’s could actually pull off the kind of transformation that it is being called on to make.
“On average, autocratic nations grow faster than democratic ones up to around where China is now,” said David Dollar, a former China hand at the World Bank and emissary to China at the Treasury Department who is now at the Brookings Institution. “But successful cases democratize at around this level of income per capita.”
Here’s how that sounds in Beijing: Further economic change will inevitably lead to political instability — not exactly the strongest incentive for government reform.
… The changes China needs today will require enriching — and empowering — its own citizens. Perhaps that’s why despite repeated pledges from top Chinese authorities to reform and “rebalance” its lopsided economy, not much has happened. As the I.M.F. report noted, in most areas China’s progress “has just succeeded in slowing the pace at which vulnerabilities rise.”
That’s exactly been my point for years now.
I’m gratified that the focus is now on democratization.
How well the Chinese democratize is exactly how well they’ll do economically, financially, societally, etc. ….
A one-party dictatorship by the Chinese Communist Party can never create the best economy, let alone one that will even begin to rival powerful democracies.
Now, let’s make sure our democracy becomes real itself. It certainly hasn’t been truly real in my lifetime.
⇧ A Former Tibetan Monk Is Being Accused of Defrauding Chinese Real Estate Investors – Bloomberg Business
Lobsang Dargey arrived in the U.S. in 1997 and set to work spinning a classic immigrant success story. The former Tibetan monk wasn’t fluent in English and didn’t have much money, but managed to work his way up from handyman to successful Seattle-area real estate developer. Now, it seems, Dargey’s assent from humble Buddhist to red-blooded capitalist is complete. Because he’s been accused of securities fraud.
⇧ Scott Wizig Agrees to Rehab Baltimore Properties | Houston Press
Houston Absentee Landlord Hall of Famer Scott Wizig has agreed to demolish or repair more than 50 dilapidated Baltimore homes a judge had ordered him to fix a year ago.
⇧ Two charged with selling homes they don’t own in real estate scam case – WXYZ.com
Bernard Hardrick and a 29-year-old woman are accused of using phony Quit Claim Deeds to scam people out of money. Police say they convinced buyers into signing purchase agreements for homes they did not own.
⇧ Sewage Spill Closes Honolulu’s Waikiki Beach – NBC News
Public health officials warned beachgoers to stay out of the water along Honolulu’s famed Waikiki Beach at least through Wednesday after a 500,000-gallon sewage spill triggered by heavy rain sent wastewater streaming over the tourist spot.
⇧ Drivers spurn some in-vehicle technology advancements, J.D. Power says
Distraction is the issue.
Insurance companies have a stake in this as well, as they want to avoid accidents caused by distracted driving. And expensive technology can translate to expensive repairs.
“While some technologies, such as lane-departure warning, are making vehicles safer, the insurance industry is very concerned about the driver-distraction hazards caused by some of the other technologies,” said Chip Lackey, senior director of the insurance practice at J.D. Power.
⇧ UPDATE 3-Ten automakers are sued in U.S. over ‘deadly’ keyless ignitions | Reuters
Ten of the world’s biggest automakers were sued on Wednesday by U.S. consumers who claim they concealed the risks of carbon monoxide poisoning in more than 5 million vehicles equipped with keyless ignitions, leading to 13 deaths.
According to the complaint filed in Los Angeles federal court, carbon monoxide is emitted when drivers leave their vehicles running after taking their electronic key fobs with them, under the mistaken belief that the engines will shut off.
⇧ Cuban agriculture threatened by worst drought in 115 years – Xinhua | English.news.cn
Cuba’s agriculture is being threatened by the worst drought to hit the Caribbean in over a century ….
… forecasters agree that the current drought has largely been created by the combined impacts of climate change and the El Niño/Southern Oscillation (ENSO).
⇧ Latin American Herald Tribune – Colombia May Lose Billions Every Year Due to Climate Change
Colombia can lose annually up to $1.2 billion per year until 2100 unless it implements actions to mitigate the effects of climate change in five key sectors, said the director of the National Planning Department, or DNP, Simon Gaviria, during a presentation of ‘Financial innovation models’ Monday.
⇧ Jury Awards Montana Woman $1.75M for Damaged Home
The complaint, filed in 2008, claims that Oakland and Treasure State installed a sump pump and drain system in Ova’s home that caused the home’s foundation to sink.
⇧ Washington Wildfire Largest in State’s History
The massive fire burning in north-central Washington is now the largest in state history.
The Okanogan Complex of wildfires has surpassed last year’s Carlton Complex blazes, fire spokesman Rick Isaacson said Monday morning.
⇧ California Commissioner Applauds Supreme Court Decision Against Hartford
Fluor transferred its insurance coverage to another company and a liability claim was later filed. The court upheld the existing consumer protections long-codified in insurance code section 520 and required the insurer to meet its coverage obligations regardless of the transfer.
I haven’t yet researched the details of this case but am wondering, among other things (such as claims-made v. occurrence provisions), what the policy said about the transferability of the policy.
⇧ How a Chinese slowdown will hit global growth
Prior to China integrating with the world economy, the US was the biggest and sole engine of global growth as it accounted for nearly a quarter of world GDP, based on market exchange rates. So, it’s the rapid growth of China, which rose from accounting for a mere 2% of world GDP in 1995 to around 15% now, that helped the world economy grow so quickly in the 2000s.
As China slows from the nearly 10% growth rate that it clocked in the first three decades of its reform period, which began in 1979, to what is thought to be a more sustainable 7% or so, the world economy is likely to slow with it. The main areas where the impact will be felt would include not only commodities, but also consumer goods, including luxury goods.
7%? She’s always so optimistic concerning China, ignoring here China’s severe lack of transparency. I suggest 3-4% if they’re fortunate, very fortunate. Also, other nations will be targets for globalized employers as Chinese labor continues to become more expensive.
Furthermore, world GDP will increase faster than the global population.
⇧ What Germany can learn from LBJ — POLITICO
LBJ would not have patronized or sneered at Yanis Varoufakis, Schäuble’s former Greek counterpart. That Schäuble did just serves to show that the German finance minister, despite his long experience in politics, still has some lessons to learn. True leaders just don’t retort in kind.
For all their obsessing about Greece, Germans need to properly consider larger issues as well. This may still be somewhat unfamiliar territory for them, given that their leadership role in Europe is still a new-ish thing.
This is not all poor Wolfgang Schäuble’s fault — far from it. All I can say, as a friend of Germany (and of the Greek people), as well as someone who does not want the U.K. to quit Europe, is that I am very worried.
I find no language emanating from Berlin that is reassuring.
And yet, reassuring others in moments of crisis, and showing at least a modicum of magnanimity toward those in serious trouble, is precisely what a leading nation must do.
I don’t think Germany’s leadership is as naive as suggested. They are calculating and have erred with neoliberalism. Are they a true social democracy? I can’t see defending that notion.
LBJ, however, certainly became out of touch with the changing times.
⇧ China Is Pushing On A String Ensemble – The Automatic Earth
Raúl Ilargi Meijer:
Look, it’s very clear where I stand on China; I’ve written a lot about it. And not just recently. Nicole Foss, who fully shares my views on the topic, reminded me the other day of a piece I wrote in July 2012, named Meet China’s New Leader : Pon Zi. China has been a giant lying debt bubble for years. Much if not most of its growth ‘miracle’ was nothing but a huge credit expansion, with an outsize role for the shadow banking system.
A lot of this has remained underreported in western media, probably because its reporters were afraid, for one reason or another, to shatter the global illusion that the western financial fiasco could be saved from utter mayhem by a country producing largely trinkets. Even today I read a Bloomberg article that claims China’s Q1 GDP growth was 7%. You’re not helping, boys, other than to keep a dream alive that has long been exposed as false.
… bubbles always burst. However, in this instance, the entire world will be swept out to sea with it. More money-printing, even if Beijing would attempt it, no longer does any good, because the Politburo and central bank aura’s of infallibility and omnipotence have been pierced and debunked. …
… you know what China bought those foreign reserves with in the first place? With freshly printed monopoly money. Which is the same source from which the Vinny the Kneecapper shadow loans originated that every second grandma signed up to in order to purchase ghost apartments and shares of unproductive companies.
And that leads to another issue I’ve touched upon countless times: I can’t see how China can NOT descend into severe civil unrest. …
… you can’t magically turn into a consumer-based economy by blowing bubbles first in property and then in stocks, and hope people’s profits in both will make them spend. Because the whole endeavor was based from the get-go on huge increases in debt, the just as predictable outcome is, and will be even much more, that people count their losses and spend much less in the local economy. While those with remaining spending power purchase property in the US, Britain, Australia. And go live there too, where they feel safe(r).
I largely agree and have all along.
⇧ What Should China Do? by Michael J. Boskin – Project Syndicate
Michael J. Boskin:
The Chinese government’s heavy-handed efforts to contain recent stock-market volatility — the latest move prohibits short selling and sales by major shareholders — have seriously damaged its credibility. But China’s policy failures should come as no surprise. Policymakers there are far from the first to mismanage financial markets, currencies, and trade. Many European governments, for example, suffered humiliating losses defending currencies that were misaligned in the early 1990s.
Nowhere are the problems with this approach more apparent than in the attempt to plan urbanization, which entailed the construction of large new cities — complete with modern infrastructure and plentiful housing — that have yet to be occupied. In a sense, these “ghost cities” resemble the Russian empire’s Potemkin villages, built to create an impressive illusion for the passing Czarina; but China’s ghost cities are real and were presumably meant to do more than flatter the country’s leaders.
… As the slowdown threatens to impede job creation, undermining the prospects of the millions of people moving to China’s cities each year in search of a more prosperous life, the Chinese Communist Party will struggle to maintain the legitimacy of its political monopoly. (More broadly, the weight of China’s problems, together with Russia’s collapse and Venezuela’s 60% inflation, has strained the belief of some that state capitalism trumps market economies.)
The problem I have with this article by Michael J. Boskin is that he didn’t differentiate between democratic v. authoritarian market economies. A truly democratic economy is the way to go. People should decide their economy via one person, one vote rather than voting with their yuans. Of course, there must be fully informed consent of such self-governed people.
⇧ Medical Office Properties Command Investor Attention | Medical Office content from National Real Estate Investor
The Affordable Care Act (ACA) has had an impact throughout the health care industry. The new rules and millions of additional patients have pushed many doctors into larger practices, which are now moving into more off-campus properties.
More demand has led to more development. Marcus & Millichap estimates that construction completions this year will hit 8.8 million sq. ft., significantly higher than the 7.1 million sq. ft. delivered in 2014. The vacancy rate in the MOB sector is currently at 9.7 percent, representing a drop of 20 basis points over the past 12 months. “Deliveries are still way below where they need to be, given the number of new insureds in the system,” Smelter says.
⇧ Top Cities for Multifamily Rentals | Commercial Property Executive
… the renter population increased by double-digit percentages in nine of the country’s largest metros between the study years of 2006 and 2013 ….
… increased inventory was not enough to meet ever-growing demand, sending vacancy rates down and tightening rental markets. Vacancy rates tumbled in cities such as Boston and San Francisco, which by 2013 were competing with New York City for the title of tightest rental market among America’s biggest cities.
⇧ EB-5 Immigrant Investment Program Keeps Growing – YouTube
Justin Gardinier, managing director & head of the EB-5 group at Greystone, gives MHN the rundown on the state of the immigrant investor program. Gardinier joined Greystone in June, when the venerable finance shop launched its full-service EB-5 finance group.
⇧ China’s interest rate cut in 60 seconds | FT World – YouTube
After the historic decline in China’s stock market, the People’s Bank of China cut interest rates and relaxed the reserve requirements for banks. The FT’s Ben Bland explains why.
⇧ Tsipras softens stand on Greek debt relief before election | Reuters
This report is many weeks behind the times. We’ve known for a long time now that Tsipras stopped pushing for debt write-downs.
Outgoing Prime Minister Alexis Tsipras … made no mention of writing off any debt – a campaign promise when he was elected in January that Germany, the biggest contributor to Greece’s three bailouts since 2010, opposes.
With Greece facing financial collapse and an exit from the euro zone, Tsipras caved in to the zone and IMF earlier this month by accepting their demands for yet more austerity and painful economic reforms – the very policies he had promised to reverse when he won power.
Tsipras has long argued Greece cannot repay all its debt and needs part of it canceled to return to long-term economic growth after a depression, a view shared by many mainstream economists and possibly even the International Monetary Fund.
But on Wednesday he appeared to change tack on debt write-offs, raising only the scenario of “an elongation of maturities and a lowering of the interest rates”.
Still, the article is right that he caved in (even though he’s tried to spin it otherwise).
⇧ Secretary of State, City of Jackson to auction tax forfeited properties | WJTV.com
All sales are subject to the approval of the Governor. … No more than 160 acres may be purchased by one person within one year. The Secretary of State reserves the right to reject any and all bids.
One wonders the basis upon which the Governor and/or Sec. of State may disapprove a sale or reject a bid.
⇧ First the Miners, now the Banks, and then comes…Property? – Australia: Boom to Bust Blog
Lindsay David on Australia:
If our housing market looks like a bubble, smells like a bubble, quacks like a bubble and you have every stakeholder denying the bubble, it’s a bubble. And society will unfortunately be the biggest loser caught with its pants down when the housing market has the mother of all corrections. The debate on the risk of the mining sector taking a hit was too late. We are only starting to really get friction on the debate on the safety of our banking system. Unfortunately the whisker of debate that is happening today and over the last twelve months about the housing market conditions is simply a whisker. But a whisker is a lot compared to early 2014. And expect the voices in sum continue to grow. And remember with housing bubbles, when they burst there is no such thing as a soft landing.
My readers know that I’ve been pointing for a long time to Australia as being in a bubble. It’s simply gotten worse and worse.
Also, the only thing wrong with Steve Keen’s earlier analysis was that he thought it would pop sooner.
⇧ Real estate company shuts down open houses after realtor targeted by gang threat | KFOR.com
A real estate company immediately shut down all open houses across Iowa after one of its agents received a threat.
Last year, real estate agent Beverly Carter’s body was found in a shallow grave after she went missing after showing a home.
In 2011, 27-year-old Ashley Okland was killed while showing a home in Iowa. A few years earlier, in 2006, Sarah Anne Walker was stabbed 27 times inside a model home in Texas.
⇧ County to auction off tax-foreclosed properties
The Calhoun County Treasurer’s office will auction off 242 tax-foreclosed properties next week.
The auction is at noon Sept. 3. It will be held at the Kool Family Community Center, formerly known as Burnham Brook, 200 W. Michigan Ave.
⇧ ‘Big Pink’ sold in massive Portland real estate deal
One of Portland’s iconic downtown office buildings — certainly its most recognizable — has a new majority owner in the form of a massive real estate investment trust.
LaSalle Income & Growth Fund V has sold its majority stake in the U.S. Bancorp Tower to an LLC owned almost entirely by TPF Equity REIT Operating Partnership LP. The real estate investment trust is in turn owned indirectly by the UBS Trumbull Property Fund, which is associated with UBS Global Real Estate, an institutional real estate manager headquartered in Connecticut.
⇧ Blackstone Real Estate | Jonathan Gray | Stephen Schwarzman
This is a long article. You may be familiar with much that it points out, but I found some interesting information new to me.
With nearly $92 billion in assets under management¹, it is the world’s largest real estate investment manager and America’s biggest private landlord. It racked up average annual net returns of 18 percent over the past two decades, making its youthful head, Jonathan Gray, a cult-like figure whose every utterance is dissected in the media.
⇧ Water Files — To-Do List: Reducing consumption is great, but you can do more | The Sacramento Bee
There are all kinds of things you can do to save water. Many are free and easy and can make a big difference …
Conserving water is always a good idea — but it becomes critical during a drought. California has ordered all residents to cut their water use by 25 percent, on average, compared to 2013. According to the U.S. Geological Survey, Californians in 2010 consumed 108 gallons of water per person per day, on average. This is on the high side compared to other states. The national average is 88 gallons per day. Only about 20 percent of California’s “developed” water supply is consumed in urban areas. The rest is used by agriculture. Even so, there are all kinds of things you can do to save water. Many are free and easy and can make a big difference.
See the extensive list in the article.