News: Real Estate, Risk, Economics. Nov. 15, 2015

Linking ≠ endorsement.

Table of Contents
(Click to sections below.)

1) Radical Policies Are About To Be Implemented As Chaos Erupts Across The Globe | King World News

2) The Mega-Danger of Mega-Deals: Monopolies Are Crushing US Workers and Consumers | The Fiscal Times

3) Why Republicans Still Love the Gold Standard – The New York Times

4) Hillary Clinton’s Mixed Record on Wall Street Belies Her Tough ‘Cut it Out’ Talk – ProPublica

5) The cruel game of musical chairs in the US labor market – Equitable Growth

6) Tenants Don’t Need To Carry Insurance (Maybe) — Retail Real Estate Law Ruminations

7) Renters & Credit Trends Part 1: Credit Check-in

8) Workforce Housing Apartment Building Nears Completion in Detroit’s New Center Area | MultifamilyBizcom

9) How coastal real estate is being impacted by climate change | Toronto Star

  1.    Radical Policies Are About To Be Implemented As Chaos Erupts Across The Globe | King World News

    The needless handwringing of this article is astounding to me.

    Monetizing the national debt, contrary to the view of this linked article, is a great idea that should have been done long ago. It should have been done via debt-free money (getting usury out of currency creation).

    Look, the only first-blush reasonable argument against that is that so many people live off fixed incomes from bond interest. That, however, could easily be replaced by a guaranteed livable income.

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  2.    The Mega-Danger of Mega-Deals: Monopolies Are Crushing U.S. Workers and Consumers | The Fiscal Times

    So, here’s a solid follow-up by David Dayen to an earlier one I posted here: real-estate-risk-economics-nov-12-2015/# 11121538

    … the Justice Department won’t intervene in a case seeking to reverse Obama’s own FCC rulings on municipal broadband, which allow communities to go outside the Internet provider oligopoly and provide access directly to their citizens. When DoJ sues to block a few extra landing slots for United at Newark Airport, what’s left unsaid is their relative passivity in watching United and American swallow up competitors.

    But behind this reticence to use the laws on the books to prevent market concentration is a lack of outside pressure clamoring for it. In other words, we’re the problem.

    We’ve seen periods like this before in America, and they only ended when citizens banded together, from the Granger movement to the Progressive era.

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  3.    Why Republicans Still Love the Gold Standard – The New York Times

    I wrote about why returning to the gold standard is a terrible idea here: real-estate-risk-economics-nov-13-2015-2  /#1113151

    This one is a follow-up to that one.

    Gold as currency has obvious problems. First, there is relatively little of it while there are more people and goods all the time. So in the long term, the gold standard exerts a downward pressure on prices as money becomes relatively tighter and its value increases. If prices continue to decline, people are less likely to spend their money. After all, if you believe that the price of, say, shirts will continue to drop, you’ll delay splurging on haberdashery.

    With enough time, the gold standard can create a deflationary spiral that brings an economy completely to a halt — which is what happened in the Great Depression. It was for this reason that Franklin D. Roosevelt abandoned the gold standard in the first days of his presidency, declaring that he would make the dollar into a “managed currency” the value of which policy makers might increase or decrease in response to economic need. In giving policy makers the power to regulate the money supply as they saw fit, Roosevelt created the expectation of a turn toward inflation, giving people reason to spend more money in the short term. (As Keynes observed, inflation causes problems, too, but at least it encourages spending, while the expectation of deflation can “inhibit the productive process altogether.”)

    This is why I called the gold standard a completely unnecessary constraint.

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  4.    Hillary Clinton’s Mixed Record on Wall Street Belies Her Tough ‘Cut it Out’ Talk – ProPublica

    This blog isn’t what one would typically consider “political,” per se, even though politics gets swept up in the topic matter because that’s the nature of politics and not because I’m pushing for any particular candidate(s).

    The point of this blog is really about mitigating and diminishing risks of all sorts. If this or that candidate happens to get press coverage for having weighed in on some risk area, that’s why he or she typically gets attention here.

    So, are candidates risks? The short answer is, as most people likely independently conclude, of course they are.

    The point of this particular linked article is to raise the question/issue of whether Hillary Clinton is a risk by virtue of her actions not having matched even her seemingly weak stances against the rampant Wall Street banking (investment and regular commercial at the time) deregulation and wild and reckless speculation that definitely caused the Great Recession.

    So, Ms. Clinton spoke against some bad practices but reportedly often didn’t back that talk with votes to match.

    Does her poor track record in that regard signal a propensity for tough talk but an unwillingness to fight and spend political capital to reduce economic and financial risks for the non-billionaire class?

    She may have changed. She says she will fight. Is the risk a good one?

    Of course, that question is not a horse-race question concerning whether any other Democrat, for instance, is “electable.” As my readers know, I believe economists and political scientists and others, including candidates, need to work much more on educating the masses rather than taking polls and using focus groups (groups not designed to find out how to better educate but rather to simply win an election on even bad policies just phrased this or that way).

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  5.    The cruel game of musical chairs in the U.S. labor market – Equitable Growth

    Marshall Steinbaum & Austin Clemens:

    … the U.S. labor market doesn’t lack for college-educated workers. Workers who have degrees are already taking jobs further and further down the job ladder. Encouraging or subsidizing higher education attainment will not solve the fundamental problem facing workers in the current job market: There are not enough jobs.

    What education will do is help people to learn to think and research, which hopefully, will lead more to press for the creation of a guaranteed livable income for all plus more jobs (as opposed to systemic unemployment so top execs can take more of the profits of the entire economy).

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  6.    Tenants Don’t Need To Carry Insurance (Maybe) — Retail Real Estate Law Ruminations

    Okay, so basically, there’s a great deal in this article with which I agree. I take some exception to the “additional insured” as useless notion and also with the idea that making claims against your own policy versus relying on being an additional insured on a tenant’s doesn’t end up helping you to keep your own premiums down (if that’s what’s being said by the article — a bit unclear); but, agreeing with much or most of it doesn’t negate the importance of requiring coverage concerning those without deep pockets or concerning whom you can’t really tell just how solid they really are financially anyway.

    Ira Meislik:

    OK, but if claims are made against my policy, won’t my premiums go up? And, if they do, wouldn’t I (the landlord) be better off trying to get at least one tenant’s insurance company take the hit? We argue: “No, your premium won’t go up.” If your property is claim-plagued, your rating may change, but that has little to do with whose carrier stepped forward to handle any particular claim. While not directly comparable, think about your automobile insurance. Do you think carriers analyze “who was a fault in the accident” when assessing you as an insurance risk?

    That seems to me to be the wrong way to look at it or a bad analogy. The question is whether someone else at fault has coverage to cover your loss.

    Your carrier cares about how much your carrier has had to, or might have to, shell out on your claims or the claims of others against your policy. Your claims history speaks.

    If your carrier never has to shell out because other carriers are always in front, rated highly enough, and where the limits are sufficient, your carrier is going to be happy with you versus if you’re making claims against your own policy for lack of such other carriers enforceably out in front.

    Anyway, a professional broker certainly should be able to try to convince an underwriter of it or find an underwriter who gets it.

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  7.    Renters & Credit Trends Part 1: Credit Check-in

    Property managers who are qualifying renters are best served by looking at credit scores and rental payment history data to determine best a prospect’s financial ability to meet rent obligations in full and on time.

    It’s a rule of thumb, so to speak. Individual circumstances should be taken into consideration. Many people suffer one-off economic or financial hits that won’t repeat. A wise landlord or manager can pick up a good tenant that other landlords and managers reject because those other landlords and managers don’t bother to check if the potential tenant still has a solid financial underpinning despite the blip on his or her credit report.

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  8.    Workforce Housing Apartment Building Nears Completion in Detroit’s New Center Area |

    I love these types of restoration projects, especially when they focus on affordable housing and turn out such a nice product for tenants.

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  9.    How coastal real estate is being impacted by climate change | Toronto Star

    … oceanographer John Englander, author of High Tide on Main Street, which warned of the coastal crisis a week before Hurricane Sandy wreaked havoc on New York and New Jersey shores.

    Englander expects that within a decade, perhaps as early as five years from now, awareness of sea level impacts on coastal real estate will spook the marketplace. Insurance premiums will spike, making mortgages unattainable for some. Property values will plunge, along with local tax revenues, making it harder for communities to adapt to new realities.

    “People think this is an environmental issue, but it’s not. It’s an economic issue,” he said. “The people who own lots of real estate and finance it, they haven’t really thought this through yet.”

    It’s both an environmental and economic issue.

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