Linking ≠ endorsement.
⇧ Massive Sinkhole Nearly Swallows Home In Pennsylvania – CBS Philly
⇧ A $90 Billion Debt Wave Shows Cracks in U.S. Property Boom – Bloomberg
… delinquency rate for commercial mortgages that have been packaged into bonds is forecast to climb by as much as 2.4 percentage points to 5.75 percent in 2017, reversing several years of declines, as property owners struggle with maturing loans, according to Fitch Ratings. That sets the stage for bondholder losses.
⇧ How to Prevent Tagalong Boyfriends & Other Pesky Freeloaders in Your Rentals
… anyone who spends five or more nights/month at the property must be screened and sign a lease like everyone else.
What do you think?
⇧ 31 Houses Damaged or Destroyed by Tornadoes in Louisiana
Officials say nobody was seriously hurt.
⇧ Mississippi Tornado Damaged At Least 1,100 Homes
⇧ The New Democrats’ Addiction to Austerity Will Not Die – New Economic PerspectivesNew Economic Perspectives
William K. Black:
… New Democrats are far more consistent proponents of inflicting austerity on Americans, particularly the working class, than are Republicans — and that is a travesty. The NYT op ed was written after Trump’s election driven by the wholesale rejection of the New Democrats’ agenda by the white working class. The New Democrats have learned nothing from that defeat. They continue to push the message of Wall Street and the wealth — the infliction of self-destructive austerity — as their defining mantra. They continue down the disastrous path that Tom Frank has been warning them about for over a decade. (Yes, I know that Trump will continue to betray the white working class.) We desperately need a “Washington” and a political party in which no official buys the Wall Street dogmas favoring austerity. Austerity is to economics as bleeding a patient is to medicine. Among the last things that “Washington” needs is to have “more” Wall Street sycophants pushing austerity “than it does today.”
And no, “cuts to government spending” are not “almost certainly” essential in the “long-term.” Growth is what is essential, and austerity is the great enemy of American growth. Clinton’s “growth” was not the product of austerity and it was not real. It was the product of the two largest bubbles in history. The U.S. had far higher deficits relative to GDP in and after World War II. Does anyone think austerity was the proper answer to Hitler, the attack on Pearl Harbor, or the Great Depression?
⇧ Introducing ‘The Triangle’, Seattle’s new ‘Jungle’
Lifting the bottom lifts everybody.
⇧ Austerity economics has just been smashed. By the IMF.
Of course what makes this surprising, and what may make some progressives unenthusiastic [not I] about welcoming this, is also what makes it so powerful: an institution that has been, for far too long, a defender of the free market story and the Washington Consensus — the idea that liberalizing trade, privatizing everything possible and cutting down public spending was a one-size-fits-all solution to any government in trouble — has now refuted it.
They actually did that earlier, but this report puts tons of frosting on the cake.
⇧ Low Income Housing Tax Credit | Affordable Housing NYC | HUD
The big problem with any system built on tax credits, of course, is that if tax rates ever drop, so does the value of the credits, making them worth much less to investors.
President Donald Trump and his Treasury Secretary nominee Steven Mnuchin are calling for corporate taxes to drop big league, from 35 percent all the way down to 15 percent. House Republicans have called for big cut too—they proposed a rate of 20 percent in June.
So, as the article states, the suggestion is to issue more credits. Why not index the credits or grandfather them so their rates remain even if tax rates generally are reduced?
⇧ A Conversation with Toby & Tom Bozzuto – YouTube
I’m impressed by the environmentalism and interest in affordable housing, etc.
Yardi Matrix’s Jeff Adler sat down with the leaders of the Bozzuto Group to talk capital markets, company strategy and more.
Add your comment. Including the article/link number will help.
⇧ A Brief Chat With Elon Musk About Climate Change, Rex Tillerson, and Donald Trump [Update]
Balancing “wild-eyed” environmental radicalism & solid practicality: Elon Musk on Climate Change, Tillerson, & Trump
I’m favorably impressed with Elon Musk. I’m sure we’ll all be learning more about what makes him tick, as he’s young, dynamic, and has huge plans that will make a likewise huge difference for the better, at least environmentally speaking.
I’m very glad he took the bull by the horns and blazed the electric-car path in such a successful manner.
He seems very bright and careful with his choice of words. I’d be cautious jumping to conclusions about what he means before he fleshes out his full vision on whatever topic is being addressed.
With a guy like this, it’s a good idea to listen and ask the right questions to pick his brain and to stimulate the thought processes on both sides.
⇧ How Efficiency Is Wiping Out the Middle Class – The New York Times
This article doesn’t mention the guaranteed living income. Amazing.
There is no option. Struggling to even plan to “employ” everyone to give them a living income is a complete waste of effort.
Even though it could be done, it wouldn’t be better than freeing people up from having to work for money.
⇧ China’s crackdown on capital outflows sending shudders through global property markets, Property News & Top Stories – The Straits Times
Well, I thought this would come sooner. I think the tightening will only continue until the Chinese People “throw the bums out”: get rid of the totalitarian dictatorship of Xi and his Chinese Communist Party.
Xi says “Western democracy” doesn’t work. Tell it to the Scandinavian countries. Their governments aren’t perfect, but they’re vastly better than China’s.
⇧ Top Challenge for Builders is Labor Cost/Availability | Eye On Housing
Let’s be clear. Just because builders (some) call something a “problem” doesn’t mean we should get rid of it. Relaxing environmental regulations or building codes, etc., could be highly counter-productive for society. Proceed with the utmost caution.
⇧ Donald Trump Targets CFPB, Which Returned $11.8 Billion to Consumers | Fortune.com
The Consumer Financial Protection Bureau has been vastly better than not. How could those against it guarantee strong or stronger consumer protection without it or by altering it? Simply doing away with it while putting something weaker in its place would not be good for the economy.
⇧ Why China’s ‘Creative’ Way to Fight Capital Outflows Won’t Be Sustainable – Bloomberg
This will play into Trump’s hands labeling China a manipulator.
⇧ Ransomware Hijacks Hotel Smart Keys to Lock Guests Out of their Rooms
⇧ Trump Adm. Moves to Reduce Chances for Real Estate Meltdown
I believe in affordable-housing subsidies (for renting and/or buying) if we are to have a mixed economy at all. I do not believe lax lending standards are a help to borrowers in the aggregate and in the long run.
In the end, these government subsidies create more demand than one would actually have with a free market in lending. This higher demand, of course, causes more homes to be built, and more loans to be made, than would otherwise be the case. Since this increased demand comes from more marginal borrowers, the end result is predictable: more defaults.
⇧ mainly macro: The UK’s 1976 IMF crisis in the light of modern theory
… extract from the famous Callaghan speech to the party conference that Peter Jay helped draft.
“We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you with all candour that that option no longer exists, and so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step”
As a piece of text it only makes sense to modern ears if there is a missing sentence: that we failed to raise taxes and cut spending in a boom. Far from a denunciation of Keynesian countercyclical fiscal policy, it was an admission that politicians could not be trusted with operating such a policy, essentially because they imagined they could beat the Phillips curve using direct controls on prices and incomes. The fact that fiscal rather than (government controlled) interest rate policy was being used as the countercyclical instrument here was incidental.
Reading this book also confirmed to me how misleading the Friedman (1977) story of the Great Inflation was, at least applied to the UK. These were not policymakers trying the exploit a permanent inflation output trade-off, but policymakers trying to escape the discipline of any kind of Phillips curve. They were also policymakers who had not fully adjusted to a floating rate world, and the IMF crisis was superficially a failed attempt to manage the exchange rate. More fundamentally It was also a reaction by the markets to a government that was not doing enough to bring down an inflation rate that was way too high. The IMF loan was useful both as a means of paying back existing foreign currency loans, but also a means of getting fiscal policy and therefore demand to the level required to reduce inflation.
⇧ Want to know how society’s doing? Forget GDP — try these alternatives | Mark Rice-Oxley | Opinion | The Guardian
Stock market indices have long been decoupled from what is happening in the real world. All they reflect is the performance of big private pension pots belonging to the haves (in Britain only 58% of people have private pensions and the majority of those really very small), and how big the bonuses of a few thousand money men (yes, mostly men) will be this year.
As for GDP, has there ever been an acronym as spellbindingly dismal as this? GDP goes up if you sit in traffic for an hour with the engine ticking over. It doesn’t if you stay at home, caring for a sick child. GDP has soared in China over the past 20 years. Now its people wear masks in the street to filter the smog. GDP can’t measure the things that are really important to us — our health, relationships, environment — but can and does measure when industries strip-mine the Earth to make gimcrack that nobody wants but which people buy anyway, and then throw away.
Read the article.
⇧ Dani Rodrik’s weblog: What did NAFTA really do?
… those high school dropouts who worked in industries protected by tariffs prior to NAFTA experienced reductions in wage growth by as much as 17 percentage points relative to wage growth in unaffected industries. I don’t think anyone can argue that a 17 percentage drop is small. As McLaren and Hakobyan emphasize, these losses were then propagated throughout the localities in which these workers lived.
So here is the overall picture that these academic studies paint for the U.S.: NAFTA produced large changes in trade volumes, tiny efficiency gains overall, and some very significant impacts on adversely affected communities.
… Let me just say that the great expectations the country’s policy makers had for NAFTA have not been fulfilled. …
So is Trump deluded on NAFTA’s overall impact on manufacturing jobs? Absolutely, yes.
Was he able to capitalize on the very real losses that this and other trade agreements produced in certain parts of the country in a way that Democrats were unable to? Again, yes.
⇧ Beware of Hard-Money Advocates Filling Fed Positions – Bloomberg View
… Although “hard money” advocates would have little impact on policy right away, their rule-based tenets have the potential to pull forward and worsen the next recession, and weaken the subsequent recovery. …
… their focus on high rates first, economy second would lead them to delay looser policy in response to a recession or crisis that could trigger a recession. Third, they would be too quick to tighten policy after a recession has concluded. And fourth, they may underestimate the international forces holding down rates and thus not recognize the potential drag on the economy from higher borrowing costs. Given the importance of dollar financing across borders, excessively high U.S. rates could trigger a global financial crisis.
⇧ Wildfires in Central Oklahoma Destroy Homes, Damage Structures
⇧ Massachusetts Worker Blamed for Accidental Fire Damaging 18 Buildings
The fire displaced more than 100 residents but no one was killed or seriously injured.
⇧ The Michaels Organization Celebrates Revitalization of Philadelphia’s Courtyard at Riverview Apartments | MultifamilyBiz com
⇧ Middletown man’s electronic heart monitor leads to his arrest
This is amazing detective work.
⇧ Trump treasury pick Mnuchin misled Senate on foreclosures, Ohio cases show – News – The Columbus Dispatch – Columbus, OH
We know that Presidents are typically allowed their nominees; however, in this case, it was a mistake to have ever nominated him. We don’t say that from an “ideological” standpoint but rather because we stand for good government where robo signing is completely and always disallowed.
Steve Mnuchin, former chairman and chief executive officer of OneWest Bank, known for its aggressive foreclosure practices, flatly denied in testimony before the Senate Finance Committee that OneWest used “robo-signing” on mortgage documents.
But records show the bank utilized the questionable practice in Ohio.
“The guy is just lying. There’s no other way to say it,” said Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio.
⇧ Merkel Pushes Back at Trump Team’s Accusations on German Trade – Bloomberg
On this issue, Trump and Navarro are clearly correct and Merkel and Schaeuble clearly wrong. Interestingly, Trump and Navarro are echoing leftist positions regarding Germany. Good!
⇧ Why the system of rail privatisation in the UK has been a disaster | British Politics and Policy at LSE
This is why Jeremy Corbyn has called for the re-nationalization of the rail system in Britain. It’s also why I was opposed to the privatization in the first place. It’s also something the “libertarians” would rather you not read.
… the initial vision offered by privatisers of a transparent and democratically accountable set of privatised markets has turned out, in reality, to be something very different ….
⇧ Post Keynesian Dynamic Stochastic General Equilibrium Theory — Roger E. A. Farmer
If you are young enough to have not yet been corrupted by establishment elites of either subspecies, I urge you to think hard about joining me in establishing Post-Keynesian DSGE theory as the future of macroeconomics.
So, if you know there is no such equilibrium, you’re corrupted?
⇧ San Francisco Deems Sinking 58-Story Millennium Tower Safe to Occupy
The 58-story downtown building has settled about 16 inches into landfill and is tilting about 2 inches.
⇧ Second person arrested in connection to insurance fraud – News – The Daily News – Jacksonville, NC
… Grice Jr. told the insurance company the fire happened on Oct. 21, 2015, but the photos he submitted were taken on Nov. 21, 2005.
⇧ California Storms Reveal Sea Level Rise Damage to Roads, Cities
“That will be the wake-up call, when … the water hits the tailpipe.”
⇧ Four Hurdles That Could Block Republicans’ Tax-Cut Ambitions – Bloomberg
“It’s clearly a giveaway to big-money special interests and the very wealthy, at the expense of everybody else,” Senator Chris Van Hollen, a Maryland Democrat, said of Republicans’ plans. “If this is another trickle-down tax package where the theory is that tax cuts for millionaires and billionaires are going to lift everybody up, that’s going to be a nonstarter.”
That’s true, but the Trump people are going to couch everything in new terms. They’re going to seek to add in new twists, such as vastly more public-private partnerships for infrastructure rebuilding and new development. I’m not saying that will work to truly boost the economy the way the Trump people will sell it, but there won’t be the same knowledge among incumbent Democrats to counter the arguments. There are counter and very good ones, but those incumbents have a bad habit of never searching out alternative economists who know those counters inside and out. Trump will also lean on the idea of repatriating dollars he says are stuck overseas do to tax rates in the US. What Trump won’t do unless absolutely forced (and the GOP won’t force him) is tie spending strings to any such repatriations such as that X% must be expended on infrastructure projects or what have you. Hence, the money could go toward stock buybacks and other such nonsense in terms of true economic growth.
⇧ Job Growth in U.S. Metros Spurs Continued Apartment Boom for 2017 – The Registry
Entering the seventh straight year of growth in the U.S. economy, researchers at Marcus & Millichap offer their clients a promising investment outlook for the nation’s 2017 multifamily housing market. This favorable forecast is tempered by an added qualification that the new political landscape marked by anticipated sweeping shifts in far-reaching economic policy warrants sustained vigilance.
I think their economic-growth projections are too rosy in the short run. Otherwise, the article is basically on the right path.
⇧ Blackstone takes its single-family rental bet public as sector soars
“We have a great product, the industry is finally getting recognized for what it’s doing, and we are driving the right margins. You see our core margins are about 62 percent right now, very competitive with multifamily. Top-line growth is competitive with multifamily and quite frankly, when you look at our fundamentals, it’s a very attractive time for investors and that’s why you see us come to the public market,” said John Bartling, president and CEO of Invitation Homes ….”
We will continue watching this sector to see how it all pans out. We had always figured it would work but how well is what we wanted to know and still do.
⇧ FRB: Press Release–Federal Reserve issues FOMC statement–February 1, 2017
No change at the Fed. I would have been shocked if they had raised the rate. It may be quite some time before we see another.
⇧ These cities are the most and least affordable for renters
As with all real estate, though, rents are local, and some unexpected markets are heating up, while some hot ones are cooling off.
⇧ 2017 NMHC Annual Meeting: Market Talk with Jeanette Rice of CBRE – YouTube
At the 2017 NMHC Annual Meeting in San Diego, we sat down with Jeanette Rice, Americas Head of Multifamily Research for CBRE, to discuss opportunities for growth in Multifamily for 2017, how the interest rate hike is changing the market and what people in the industry should be keeping track of in the coming months.
Add your comment. Including the article/link number will help.
⇧ Democratic Party Policies Actually Hurt the Working Class
I agree with this article by Dean Baker.
⇧ Research Shows California Homeowners Lack Understanding of Retrofitting
For home inspectors, the study indicated that more training and practice were needed in calculating a house’s seismic hazard score.
⇧ Philadelphia Building Owner, Charity Liable for Deadly Building Collapse
Don’t take demo work lightly. It can be deadly.
Two unqualified demolition contractors are serving long prison terms ….
⇧ SMB Zero-Day Affects Several Windows Versions, Including Windows 10
There’s no fix for this issue, but Microsoft will release a patch with the next Patch Tuesday updates, on February 14. US-CERT recommends that sysadmins block “outbound SMB connections (TCP ports 139 and 445 along with UDP ports 137 and 138) from the local network to the WAN,” which will block users from connecting to Internet-based SMB servers. This limits the zero-day’s effect to rogue SMB servers hosted on the same network, a less likely exploitation scenario.
⇧ Yellen Eyes Commercial Real-Estate Froth as Fed Weighs ’17 Risks – Bloomberg
Frankly, I don’t see it. The market is doing the self-correcting thing. It isn’t huge, because it doesn’t have to be. Plus, there’s some mixing of apples and oranges here. Commercial and residential-commercial must be separated out for analysis. Residential rent rates versus income and job growth is what will matter for the developers and investors with deeper cash pockets and patience (lots of patience).
The Fed has spent way too much effort on paranoia about inflation and not nearly enough effort on solid jobs-creation. The recovery has been way too slow because of it.
Of course, the economics illiterate deficit-hawks in Congress certainly didn’t help.
⇧ Workers are losing out as monopolies corner the market – CapX
Robert Colvile :
Thomas Piketty has argued that it is part of an ineluctable law, by which returns on inherited wealth tend to exceed those on earned income. Others have argued that it is a result of offshoring, as work shifts to cheaper labourers in China and elsewhere, driving down wages (although this has recently been challenged). Others talked about automation, or digital technologies. Still others argued that the surge had been driven, in America at least, by an increase in housing costs.
Now a new contender has entered the lists. As Bloomberg reports, two new papers argue that the reason labour is getting less and less of the pie is that monopolies are back.
“… new contender …”? Sorry, but this is very, very old news. We’ve know about this for more decades than I am old, many more decades.
Nevertheless, anti-trust and the reasons for it definitely need to be at the fore. We do not need, nor should we want, neofeudalism in the form ff capitalist monopolies.
If you’re wondering where the current dumbing down began, see here: https://en.wikipedia.org/wiki/Robert_Bork#Antitrust_scholar
That’s what we are about reversing.
⇧ IRS, States and Tax Industry Renew Alert about Form W-2 Scam Targeting Payroll, Human Resource Departments
The Internal Revenue Service, state tax agencies and the tax industry today renewed their warning about an email scam that uses a corporate officer’s name to request employee Forms W-2 from company payroll or human resources departments.
⇧ Indiana man already serving life found guilty in murder-for-hire – NY Daily News
We reported on this arsonist/criminal before, but this is an update.
⇧ Employment Situation Summary
So, this is finally definitively better, not that we can’t do vastly better:
In January, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged ….
After accounting for the annual adjustments to the population controls, the civilian labor force increased by 584,000 in January, and the labor force participation rate rose by 0.2 percentage point to 62.9 percent. Total employment, as measured by the household survey, was up by 457,000 over the month, and the employment-population ratio edged up to 59.9 percent. (See table A-1. For additional information about the effects of the population adjustments, see table C.)
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed ….
In January, 1.8 million persons were marginally attached to the labor force, down by 337,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)
Among the marginally attached, there were 532,000 discouraged workers in January, little changed from a year earlier. …
Total nonfarm payroll employment rose by 227,000 in January. Employment increased in retail trade, construction, and financial activities.
The real trick will be to not slide backwards; however, with productivity gains coming so much from continuing automation, we’ll have no choice but to issue living wages to everyone. We should already be doing it in my view, but it will likely take a great deal of needless pain and suffering before the elitists finally see the light.
⇧ Job Growth on Stable Course as Employment Rate Rises | Jobs Bytes | Data Bytes | Publications | The Center for Economic and Policy Research
This is not throwing cold water on the Report but rather simply discussing it in light of reality.
⇧ America’s Problem with Student Loans Is Much Bigger Than Anybody Realized
This article starts out fine, but then it shifts into some anarcho-capitalist fantasy.
Student loans are a nightmare, but the solution isn’t not going to college but rather forgiving all current student loans and making college completely free to all who actually get the grades.
⇧ How We the People Were Screwed by Obama’s Bogus “Recovery”
Neither Yellen nor McConnell can allow Trump to kickstart the economy, because stronger growth puts upward pressure on wages which lifts inflation and pushes up interest rates. Higher rates are the death knell for cheap money which is the secret ingredient that keeps the nation’s wealth flowing upwards to the glorious 1 percent. That’s the whole deal in a nutshell.
That’s how it used to be. Mike needs to catch up via continuing education.
What’s missing from Mike’s analysis is that Trump plans for the 1% to not only go right on making the money but actually make more via Trump’s public-private partnership (privatization schemes by another name). He may have a hard time selling Yellen on it, but McConnell will do what the richest of the rich outside banking tell him to do. As for Yellen, Trump can replace her if she doesn’t go along.
Can Trump convince the non-banking rich? What will the banksters do if he does? What will Trump do for them? What will they ask of him?
⇧ Arrests made in 1993 Westlake District apartment fire that killed 10 | abc7.com
⇧ LA Times – Trump’s rollback of the investment conflict-of-interest rule is a direct attack on middle-class savings
Trump’s action prompts us to ask again which Americans he represents as president: the middle- and working-class Americans he claimed to be standing up for, or the bankers who were surrounding him Friday when he announced the fiduciary rule delay and plans to roll back the Dodd-Frank law, which put a leash on those same bankers after they crashed the economy in 2008?
It will be interesting to see what Trump comes up with. He said during his campaign that he thinks Glass-Steagall should be put back in place. Of course, we’d need a Glass-Steagall for this century.
This is a distraction from the true story of why we had an economic meltdown. It was the lack of proper regulation and enforcement that allowed Wall Street to fund the meltdown brought on by mortgage companies and the securitization of mortgages properly termed toxic!
The Mercatus Center is a libertarian endeavor funded by the likes of the Koch brothers. The main interest of those behind this “Center” is to allow capitalists to create monopolies of wealth, power, and control resulting in wage slavery and worse.
⇧ Presidential Memorandum on Fiduciary Duty Rule | whitehouse.gov
This move runs diametrically opposed to all of the ethics training I’ve had to undergo to obtain and to renew my broker’s licenses.
I do not agree with the thrust of this Memorandum. Disclosure and transparency concerning compensation and deals is better for the People and the economy. Complaining against that only serves the interest of those who want cover for shady practices. The lack of transparency only serves to undermine our industry and give us all bad reputations for even being a part of the industry.
⇧ No More Tax Secrets as Authorities Share Panama Papers’ Data | Bloomberg BNA
They are up against some very serious and sophisticated foes, but let’s hope they win.
⇧ United States Full Time Employment | 1968-2017 | Data | Chart | Calendar
What we don’t have here is “as a percentage of the population” or “as filtered demographically,” meaning the aged and infirmed, etc., factored out.
⇧ Feds subpoena Michigan Homeowner Assistance Nonprofit Housing Corp.
Although the two subpoenas came from SIGTARP — the federal agency investigating Detroit’s demolition program — officials say the subpoenas are unrelated to the city’s program.
⇧ Varoufakis Calls on PM Tspiras to Ditch Bailout Restructuring | GreekReporter.com
I definitely agree with Yanis Varoufakis here.
⇧ Everyone Is Suddenly Worried About This U.S. Mortgage-Bond Whale – Bloomberg
I know it’s an unprofessional term, but the Fed’s seeming plan here is nothing short of goofy. The goofiest part is the idea of giving the Fed room to tighten later by tightening now. If you tighten now, there won’t be any heated economy to tighten later. Tightening now would be extremely premature and shortsighted and only designed to give the top executives at the banks a larger compensation package they don’t deserve. The banks will make more on interest at the negative expense of the economy as a whole.
⇧ Europe’s Political Economy: Schäuble’s Disastrous Trans-Atlantic Tactics
This is an interesting take. I’m on board with it about 90%. I take exception to this:
Ironically, in this respect the Trumpites actually seem to have a more conventional understanding of the geoeconomics of the Euro than Schäuble. One of the defining characteristics of the Trumpites is that they are locked in the 1980s. They believe that the Euro is an invention by the Germans to pursue higher exports by stealth. But if that were the kind of tactic that Schaeuble were pursuing, he would answer his American critics by denying that Germany’s imbalance is at all relevant. He would take cover behind the Euro. And he would say that what matters from the US point of view is not its imbalance with Germany but its trade deficit with the Eurozone as a whole. This is tiny (c. $ 100 bn), especially when the size of the two economic blocs is considered. Indeed, if the germans were the stealth mercantilists that we generally take them to be, they would be asking Washington to stop counting the German trade surplus at all. The Eurozone balance is the only thing that should matter.
Trump’s people wouldn’t care whether Schäuble would say that or not. Trump’s administration is looking at Germany and won’t stop regardless of whether Schäuble tries to change the focus or not. Trump’s people are using valid leftist arguments against Germany but for the sake of creating a difficult position for Schäuble when it comes time for hard bargaining.
⇧ Fire Destroys North Carolina Apartment Building
Investigators determined the fire started in the kitchen of one of the units, and was ruled accidental.
Accidental doesn’t rule out gross carelessness. Educating your tenants about how to avoid kitchen and other fires is a good practice.
⇧ Explosion at Georgia Home Kills 1, Damages Neighboring Houses
It sure sounds like a natural-gas explosion, but we will wait for more news on this. Let’s hope it wasn’t foul play.
⇧ Fire Destroys Most of New Jersey Luxury Apartment Complex Near Completion
⇧ Getting staff to take security seriously – Computer Business Review
If you use a computer or any digital device …
⇧ Real Estate Market Downturn | Pension Funds CRE Investment
Big institutions have begun selling off commercial real estate — another sign that the market is weakening amid rising interest rates and a surge in new supply.
As far as I’m concerned, everything is up in the air because it’s difficult to determine how long it will take for Trump’s team to see the light concerning their mistaken approaches to economic development. Trump is way too supply-side yet.
⇧ KBRA: This should be the focus of Trump’s regulatory reform | HousingWire
What’s your take on this?
Liquidity is important, but banks can borrow from the Fed in a pinch if they’re solvent (hence capital). Also, it wasn’t just liquidity that was the issue but the toxic nature of the underlying mortgages. It was practically nonexistent due diligence (nonexistent lending standards) at many mortgage originators funded by Wall Street that caused the crisis.
⇧ 2017 ushers in record low extent | Arctic Sea Ice News and Analysis
Record low daily Arctic ice extents continued through most of January 2017, a pattern that started last October. Extent during late January remained low in the Kara, Barents and Bering Seas. Southern Hemisphere extent also tracked at record low levels for January; globally, sea ice cover remains at record low levels.
And to think El Nino is over.
⇧ United States IBD/TIPP Economic Optimism Index | 2001-2017 | Data | Chart
The IBD/TIPP Economic Optimism Index rose to 56.4 in February of 2017 from 55.6 in January. It is the highest figure since October of 2004 ….
⇧ ‘People Have Had Enough of Experts,’ by Sheila Dow
Okay, this article is a bit longer than I think it should have been and it’s a bit jargon-loaded for the lay reader, but it’s a solid article and deserves credit for attempting to go right at the issue.
When the economic Great Recession was just beginning to be built on terrible lending standards, I was mortified that Alan Greenspan could have talked about irrational exuberance concerning the dot-com bubble but not say exactly the same thing about the terrible lending standards for mortgages.
I saw the mainstream economists saying all is well. I thought to myself, don’t they see the historical pattern showing through? Don’t they see that the US economy is being set up for a huge crash?
I don’t think it is that simple. My view is that plenty of people knew full well that a bubble was being blown up but were simply planning to exit in time with all their gains. Of course, some even bet on the crash.
Regardless, economic history is vastly more important than mathematical models that don’t take into account that very history. Merge them, and you’ll have my attention and respect. Base them on equilibrium, and you’ll hear me say there’s no such thing, ever.
Is technocracy the right path? Absolutely not! Democracy is the one and only right path economically. The People will find out soon enough within a real democracy what it is they need to learn about economics to make the economy work best. The economy won’t fall apart during that learning curve either.
⇧ Examining Changes in Labor Force Participation – Federal Reserve Bank of Atlanta
The opportunities available in the labor market affect an individual’s decision to enter or leave the labor force. For example, it can affect when a person chooses to retire, enroll in college, apply for disability insurance, or stay home to care for family instead of looking for employment.
That’s exactly why I was saying all along that if the economy were to be improved in time via fiscal stimulus, many people who dropped out of the labor market would get right back in, including the older folks, many of whom were hit hard by the recession.