Linking ≠ endorsement.
⇧ China’s Latest Default Foretold in Creditors Calling CFO Nonstop – Bloomberg Business
Shanshui, reeling from China’s economic slowdown and a shareholder campaign to oust Zhang, said it will fail to pay 2 billion yuan ($314 million) of bonds due on Nov. 12, making it at least the sixth Chinese company to default in the local note market this year. Analysts predict it won’t be the last as President Xi Jinping’s government shows an increased willingness to allow corporate failures amid a drive to reduce overcapacity in industries including raw-materials and real estate.
⇧ UPDATE 2-Germany takes aim at ECB policy | Reuters
The German government’s panel of economic advisers said on Wednesday the European Central Bank’s low interest rates were creating substantial risks, and Finance Minister Wolfgang Schaeuble warned of a “moral hazard” from loose monetary policy.
Wolfgang Schaeuble is heading up the plutocracy-protection plan.
Yes, if monetary policy is too loose, it does create moral hazards; however, Schaeuble’s solution is simply to tighten, with no concern for the plight of the poor and unemployed scattered about Europe and the US.
Where are his recommendations for fiscal stimulus? I don’t see any.
⇧ ‘Our rage will be relentless’: Syriza faces mass strike in Greece | World news | The Guardian
This is what Wolfgang Schaeuble and his plutocracy-protection plan just doesn’t get.
“In this country a graduate starts off in the public sector with a salary of €775 a month, or €9,300 a year, and we are being told that wages will be frozen for the next decade and that every tax imaginable will be increased. How will people make ends meet? It has got to the point where a social explosion is inevitable and it will come sooner rather than later.”
There’s no sense of urgency coming out of Germany other than concerning the influx of immigrants, also caused by the plutocrats global drive for complete domination and total undermining of democracy.
⇧ Six Problems with the GOP Debate on Financial Reform – Roosevelt Institute
Excellent article by Mike Konczal:
1. Nobody Wants to Be a SIFI
2. Capital Is Up
3. The GSE Big Lie [my favorite]
Read it. If you get all your “news” and talking and thinking points from the Republican candidates and their circles, you’ll learn more than a thing or two about what’s really going on.
⇧ China’s coal bubble: 155 coal-fired power plants in the pipeline despite overcapacity
Is the anti-democratic Chinese leadership really this inept?
China has given the green light to more than 150 coal power plants so far this year despite falling coal consumption, flatlining production and existing overcapacity.
And green goals, etc.
⇧ Why US unemployment is not done falling | VOX, CEPR’s Policy Portal
In a recent paper (Barnichon and Figura 2015), we argue that the record low of 3.8% was not only due to the booming labour market of the late 1990s, but also to a secular decline in desire to work among non-participants (individuals outside the labour force). Without the decline in desire to work, unemployment would have been closer to 4.3%. And today, desire to work is close to its April 2000 level, placing substantial downward pressure on the unemployment rate. While the unemployment rate remains elevated relative to April 2000, this is because some areas of the labour market, in particular the job-finding rate, has yet to fully recover from the 2008-2009 recession. But as recovery in the labour market continues, we think that the unemployment rate has substantial room to fall below 5%.
Our estimates imply that changes in the provision of (i) welfare insurance and (ii) social insurance (mainly disability) explain a large share of the decline in the share of ‘want a job’ non-participants.
More work needs to be done on this line of research. Now that they’ve started receiving disability, they don’t want to give it up to return to work. How much fraud is involved? How many people have become disabled due to the downturn’s negative-health impacts, etc.?
⇧ Why the TPP Is Too Flawed for a ‘Yes’ Vote in Congress | Jeffrey Sachs
Would Jeffrey Sachs have made a good negotiator for the US concerning this “deal”? Why wasn’t the US negotiating team on the same page with Jeffery? Why isn’t the US administration for what’s best across-the-board versus what’s supposedly best for the major international corporations?
The TPP should be judged on whether it guarantees global economic well-being, not whether it gives advantages to the United States to the detriment of other countries. The ultimate goal of economic policy should be to raise the well-being of all parts of society, including the poor and middle class. Agreements that help the rich at the expense of the poor, capital at the expense of labor, or particular sectors at the expense of consumers should be viewed with skepticism.
Congress should vote “no” on the current TPP, while simultaneously endorsing its trade provisions as well as continuing the work with our counterparts on the other chapters. The current drafts on investor rights, the environment, labor and intellectual property make extravagant concessions to powerful corporate interests while leaving important social and environmental commitments vague and generally unenforceable. Globalization is indeed so important for our common good that it’s of overriding significance to get it right.
⇧ Fed can’t be paralyzed by weak spots, Lacker says – MarketWatch
Jeffrey Lacker, President, Richmond Federal Reserve Bank:
… if we hope to hold inflation in check, we cannot be paralyzed by patches of lingering weakness, which could persist well into the recovery,” Lacker said …
… back in 2009. It’s a very good thing that we didn’t listen to him back then and do what he wanted: tighten. He wasn’t right then, and he still isn’t.
⇧ Business: Washington Post Business Page, Business News
In my immediately preceding post, I covered the issue of antitrust and consolidation ( https://propertypak.com/2015/11/12/news- real-estate-risk-economics-nov-12-2015/# 11121538 ). Here’s the same issue but in the health insurance sector.
… the deals would shrink the ranks of the biggest health insurers to three from five, potentially reducing options for private Medicare policies and coverage purchased by employers for their workers.
Aetna said in an e-mail that combining with Humana would “offer consumers more choices and greater access to higher quality, more affordable care. Our proposed transaction is primarily about the Medicare marketplace, where there is robust competition and choice.”
⇧ Contractor Indicted For Using Phony Documents To Win Gov’t Contracts
Speaking of my immediately preceding post, I also addressed the issue of construction-contractor bonds ( https://propertypak.com/2015/11/12/news- real-estate-risk-economics-nov-12-2015/# 11121519 ). Well, here’s some more info for you on what to watch out for.
With any bid, contractors are also required to obtain surety bonds from a third-party insurer, which will generally cover payments for labor and material costs. (Surety bonds typically cost the contractor between 0.5 and 2 percent of the contract’s total amount, and help to guarantee completion of the project).
Roy is facing allegations that he had no such insurance and instead forged the signatures of relevant sureties, witnesses and public notaries in order to ensure bid eligibility.
⇧ Is the Economy Overheating? Here’s Why It’s So Hard to Say – The New York Times
Historically, an unemployment rate of 5 percent would be thought to be close to the natural rate. But with hundreds of thousands of part-timers still unable to find full-time work, it is hard to believe the labor market is close to overheating. Add in the millions of jobless people who aren’t officially counted as unemployed because they aren’t looking hard enough for work, and it looks as if the economy could employ more workers without fueling inflation. Special factors like this muddy the precision of the Phillips curve framework, and this is why sophisticated statistical analyses suggest that the margin of error around estimates of the natural rate might be plus or minus 1.5 percent. That’s an extraordinary degree of uncertainty.
I think the “natural rate” right now is 3% or lower, probably lower.
⇧ Massachusetts Regulator Says Real Estate Affiliate Faked Proxy Votes – The New York Times
The investigation indicates RCS employees fabricated numerous shareholder proxy votes in a number of American Realty Capital entities ….
⇧ Calpers sells $3 billion of real-estate holdings to Blackstone unit – MarketWatch
Calpers has been unwinding its relationships with real estate, private-equity and other external funds that manage its money, part of a broader effort to simplify its portfolio and reduce fees.
⇧ Editorial: Abusive real estate practices still evade legal microscope | Dallas Morning News
Sometimes it is astounding just how far scams get.
Fonteno and his associates built a real estate empire primarily by identifying empty houses in southern Dallas and registering legally dubious adverse-possession, or squatter’s rights, claims on them. Fonteno solicited primarily poor, uneducated clients — often non-English speakers — who believed they were legitimately purchasing houses. His companies issued mortgages and collected payments, but the clients were unaware that Fonteno’s companies had no right to sell the properties.
⇧ Canada a friendly home for illicit cash, corrupt real estate buys, report says
While Transparency International doesn’t single out any Canadian cities, the Berlin-based corruption watchdog makes clear that lax standards in Canada and other countries — China and the U.S. also rank in the basement with Canada in TI’s assesment — open the door to billions in “hot” money pouring into major cities like Vancouver, according to TI’s Canadian spokesman.
Canada and Turkey are the only two G20 countries that don’t require their own financial institutions to determine whether their clients are high-ranking foreign government officials.