News: Real Estate, Risk, Economics. Mar. 14, 2018

Linking ≠ endorsement. News: Real Estate, Risk, Economics. Mar. 14, 2018

Table of Contents
(Click to sections below.)

1) Merkel secures fourth term in power after SPD backs coalition deal

2) Fed Economists Say Bitcoin Can't Compete in World of Trust

3) Hurricane Harvey caused a flood of new apartment leases in Houston

4) China's State Bank Explains Why Their Infrastructure Grows And US Crumbles

5) The tyranny of algorithms is part of our lives: soon they could rate everything we do

6) OMB demolishes the GOP's deregulatory claims

7) Who Does S. 2155 Benefit? Recidivist Giant Banks that Received Trillions in Taxpayer Bailouts

8) A warm approach to the equinox

9) Cyril Ramaphosa relaunches neo-liberalism: After Jacob Zuma's firing, South Africa risks budget austerity

10) Blackstone's Jon Gray on interest rates

11) An FHA-Financed Duplex is an Ideal First Investment Property: Here's Why

12) US Considers Broad Curbs on Chinese Imports, Takeovers

13) California Spent $1.8B Fighting 2017 Wildfires

14) Chemical Industry Calls for $14B Gulf Coast Storm Barrier

15) Despite Upgrades, Thousands of Houston Homes Still at Risk for Flooding

16) Damage Reported After 4.2 Magnitude Earthquakes in Oklahoma

17) Wall Street Denied in Latest Rewrite of Senate Banking Bill

18) FEMA to End Short-Term Shelter Program for Florida Irma Victims

19) Construction Employment Growth Surges in February

20) THE EMPLOYMENT SITUATION -- FEBRUARY 2018

21) Vancouver declares 5% of homes empty and liable for new tax

22) 42% of Americans are at risk of retiring broke

23) Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

24) China will rely less on stimulus as it battles risks from debt, says its central bank

25) What I've Learned About Landlord Anonymity Over 15 Years in the Rental Industry

26) Teenagers Defeat Trump's Move to Kill Climate Change Lawsuit

27) The Real Engine of the Business Cycle

28) Home Depot to donate $50M to train construction workers, address severe shortage

29) The three mistakes of centrism

30) 313k Jobs Added? Nice Try But It's Fake News

31) Thomas Fazi and William Mitchell — The EU cannot be democratised — here's why

32) Applying smart building technology in multi-tenant properties

33) Ultimate Guide to Selecting a Target Real Estate Market

34) Emails Show Atmos Energy Investigated Leaks Before Deadly Dallas House Blast

35) 'Astonished' MPs told £817m has gone unspent in housing budget

36) America's inflation problem isn't high wages, it's high rent

37) This cheap 3D-printed home is a start for the 1 billion who lack shelter

38) Innovation as a Challenge to Regulation

  1.    Merkel secures fourth term in power after SPD backs coalition deal

    "We don't want to prescribe to other European states how they should develop," Scholz said in a recent interview with Der Spiegel. "Mistakes have certainly been made in that regard in the past. ....

    That sounds like he's against the neoliberal aspects of Germany's ordoliberalism. If he is, It will be a move in the right direction.

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  2.    Fed Economists Say Bitcoin Can't Compete in World of Trust

    ... we wonder whether a payment method designed to function where trust in institutions is completely absent can ever be as convenient as one where trust is required, but also already exists."

    I don't wonder. I decided that the very instant I first saw Bitcoin, back when it was below 25¢.

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  3.    Hurricane Harvey caused a flood of new apartment leases in Houston

    You can't understand the debate over Trump's planned tariffs on steel and aluminum unless you understand the American School of Economics versus the Paul Ryans of this world.

    We have more than 30,000 rental units under construction. Net apartment leasing in D-FW totaled more than 4,700 apartments in the fourth quarter.

    But the strong demand for apartments in North Texas last year couldn't compare with the flood of new leases in Houston.

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  4.    China's State Bank Explains Why Their Infrastructure Grows And US Crumbles

    The U.S. government could set up a national infrastructure bank that lends just as China's big public banks do, or the Federal Reserve could do qualitative easing for infrastructure as the People's Bank of China does. The main roadblock to those solutions seems to be political. They would kill the privatization cash cow of the vested interests calling the shots behind the scenes.

    Of course.

    That said, as I've pointed out many, many times, governmental borrowing is nonsensical in the first place. Just issue the money.

    "Monetary-and-Banking-Reform Platform for The United States of America": https://propertypak.com/monetary-and-ban king-reform-platform-for-the-united-stat es/

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  5.    The tyranny of algorithms is part of our lives: soon they could rate everything we do

    ... the biggest consequences will arrive in the field of insurance, where the collective pooling of risk is set to be supplanted by models that focus tightly on individuals. Thanks to connected devices, insurers could soon know how much television you watch, whether you always obey traffic signals, and how well your household plumbing works. Already, car insurance schemes offer lower premiums if people install tracking devices that monitor their driving habits; and health insurance companies such as the British firm Vitality offer deals based on access to data from fitness trackers. In the near future, as with Sesame Credit, people will presumably sign up for surveillance-based insurance in their droves because of such simple incentives, and those squeamish about privacy may simply have to pay more. Many people, of course, will simply be deemed impossible to protect.

    Actually, this is what insurance has been doing all along. The increased technology only gives underwriters and actuaries more data upon which to rate the risk. I'm confident that government in the US will preclude too much privacy invasion. The EU is already very privacy oriented. There are plenty of other factors to consider as well, such as a person's inability to alter certain risk factors. Typically, we try to legislate in ways to smooth out the things that are beyond the individual's ability to control in a reasonable manner. That's not to say that we can simply ignore the issues and let "nature" take its course. We must advocate for good policies and practices to protect everyone fairly and reasonably well. In many ways, I expect more data and improvements in analysis to aid us all in that task.

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  6.    OMB demolishes the GOP's deregulatory claims

    Okay, this article is decidedly anti-Trump and anti-GOP and uses less than professional terminology; however, it is exactly right concerning the overall issue of regulations especially environmental and the real reason deregulation is undertaken: redistribution of wealth upwards.

    ... the GOP is wrong about regulations as a general matter and wrong about Obama's regulations specifically. Those regulations had benefits far in excess of their costs, and they had no discernible effect on jobs or economic growth.
    OMB, more like OMG, amirite?

    OMB gathered data and analysis on "major" federal regulations (those with $100 million or more in economic impact) between 2006 and 2016, a period that includes all of Obama's administration, stopping just short of Trump's. The final tally, reported in 2001 dollars:

    Aggregate benefits: $219 to $695 billion
    Aggregate costs: $59 to $88 billion

    By even the most conservative estimate, the benefits of Obama's regulations wildly outweighed the costs.

    According to OMB — and to the federal agencies upon whose data OMB mostly relied — the core of the Trumpian case against Obama regulations, arguably the organizing principle of Trump's administration, is false.

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  7.    Who Does S. 2155 Benefit? Recidivist Giant Banks that Received Trillions in Taxpayer Bailouts

    It's not widely known, but many foreign banks received bailouts from American taxpayers during the financial crisis. This money was used to prop up banks on the brink of failure, as American taxpayers sacrificed so that, for example, German taxpayers didn't have to. S. 2155 will allow changes to the rules for the convenience and comfort of several huge foreign banks, under the guise of helping community banks in small town America.

    It wouldn't have been so bad bailing out foreign banks if there had been huge strings attached concerning strong ethics-rules, strong ethics-oversight, and strong ethics-enforcement; but such things are virtually impossible when insatiable greed for money, power, and control is the motivation behind providing commercial banking to begin with.

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  8.    A warm approach to the equinox News: Real Estate, Risk, Economics. Mar. 14, 2018

    As temperatures at the North Pole approached the melting point at the end of February, Arctic sea ice extent tracked at record low levels for this time of year. Extent was low on both the Atlantic and Pacific sides of the Arctic, with open water areas expanding rapidly in the Bering Sea during the latter half of the month. On the other side of the globe, Antarctic sea ice has reached its minimum extent for the year, the second lowest in the satellite record.

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  9.    Cyril Ramaphosa relaunches neo-liberalism: After Jacob Zuma's firing, South Africa risks budget austerity

    The leader of the South African Federation of Trade Unions, Zwelinzima Vavi, criticized Gigaba for leaving the main business tax at half its 1994 level: "Corporate taxes are not being touched and it's a full blown neo-liberal assault on the poor. This is being done in the mistaken belief that if the rich are spared they would then invest their money and that the poor will eventually benefit. It's the whole notion of a trickle down economy which has proven to be a disaster."

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  10.    Blackstone's Jon Gray on interest rates

    Good, pointed questions from Diana Olick (I think she cares about the lower class):

    Blackstone's Jon Gray on interest rates from CNBC.

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  11.    An FHA-Financed Duplex is an Ideal First Investment Property: Here's Why

    If you buy a duplex with an FHA loan, you can buy more houses, use rental income from the other side when you buy it and after two years of living there, you meet the owner occupied requirement and the two years' experience. If the rental income after you move out is 25% more than the mortgage, you will be in a much better position for buying the next one.

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  12.    U.S. Considers Broad Curbs on Chinese Imports, Takeovers

    When was the last time libertarian capitalists were right about trickle-down, austerity, tax cuts for the ultra-rich, the minimum wage, the environment, and the like? Yes, I can't remember either. Why not? The libertarians have always proved wrong in the end. Therefore, what makes you think they're right about tariffs? They aren't. They're looking out for themselves, not the general public, not the US economy as a whole, not even the global economy.

    Tariffs are not, repeat not, inherently counter-productive. In fact, if done correctly, they can be very productive in a mixed economy, such as we have.

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  13.    California Spent $1.8B Fighting 2017 Wildfires

    Anthropogenic Global Warming: Reduce and eliminate carbon burning now or pay more, vastly more, later (sometimes quite soon) for clearly making the wrong choice.

    The federal government will reimburse most of the costs ....

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  14.    Chemical Industry Calls for $14B Gulf Coast Storm Barrier

    The best of a set of very bad choices ...

    Chemical companies are pressing federal officials to spend billions of dollars on a coastal flood control system near Houston to protect petrochemical plants, oil refineries ....

    Spend federal dollars to protect an industry from the risks it causes. If we don't and if we haven't gotten out of those industries in time, the toxic releases could be extreme. Plus, the economy would still, foolishly, be dependent upon those industries.

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  15.    Despite Upgrades, Thousands of Houston Homes Still at Risk for Flooding

    ... completely protecting Houston against what's expected to be a growing natural threat is held back by the limitations of public funds and taxpayers' willingness to pay.

    That's what the plutocratic bankers want you to believe. It has zero to do with taxpayers' willingness but rather 100% to do with the commercial-banking industry's total control over our federal government. There would be all the money needed without borrowing, without interest payments, were it not for that industry's strangle hold on what is ostensibly the People's government.

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  16.    Damage Reported After 4.2 Magnitude Earthquakes in Oklahoma

    Homeowners and business owners also reported split walls and bricks falling down.

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  17.    Wall Street Denied in Latest Rewrite of Senate Banking Bill

    This is simply a FYI addition concerning this very fluid developing-legislation.

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  18.    FEMA to End Short-Term Shelter Program for Florida Irma Victims

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  19.    Construction Employment Growth Surges in February

    Back in 2009, when I could see the degree to which the federal government was unwilling to rise to the occasion, I wrote to colleagues that it would take until 2018 before we'd really move out of the Great Recession (recover). It appears I was fairly correct.

    ... construction was responsible for approximately one-fifth of net new job creation in February.

    However, the economic and financial moves that have been made by the Trump administration are designed to be fairly rapid to heat the economy but end in disaster unless checked in time via a rollback of increasing the wealth at the top.

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  20.    THE EMPLOYMENT SITUATION -- FEBRUARY 2018

    Highlights:

    The civilian labor force rose by 806,000 in February. The labor force participation rate increased by 0.3 percentage point over the month to 63.0 percent ....
    ...
    In February, construction employment increased by 61,000, with gains in specialty trade contractors (+38,000) and construction of buildings (+16,000). Construction has added 185,000 jobs over the past 4 months.
    ...
    Manufacturing added 31,000 jobs in February. Within the industry, employment rose in transportation equipment (+8,000), fabricated metal products (+6,000), machinery (+6,000), and primary metals (+4,000). Over the past year, manufacturing has added 224,000 jobs.
    ...
    The change in total nonfarm payroll employment for December was revised up from +160,000 to +175,000, and the change for January was revised up from +200,000 to +239,000. With these revisions, employment gains in December and January combined were 54,000 more than previously reported.

    People are working a bit more per week. They are making a tiny bit more per hour too. So, the report is quite good relative to how things have typically dragged during the recovery from the Great Recession. Keep in mind that the number could be revised down later.

    Regardless, the trouble is that people will be lulled by appearances that won't actually be solid predictors of sustainable recovery but rather point to inevitable recession due to the very moves designed (ostensibly) to grow the economy and on the Fed's part, keep it from overheating: a double whammy.

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  21.    Vancouver declares 5% of homes empty and liable for new tax

    Rent it out or be taxed more. Are you for that or not?

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  22.    42% of Americans are at risk of retiring broke News: Real Estate, Risk, Economics. Mar. 14, 2018

    The No. 1 reason most people cited for not stashing more away was because they didn't earn enough to save

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  23.    Statement on Potentially Unlawful Online Platforms for Trading Digital Assets

    Calling Bitcoin a true asset is beyond generous. To me, it's downright deception.

    Anyway, this is far from the last salvo that will be launched by the SEC and federal government. They've barely even begun.

    Why they dragged their feet for so long is quite sad. I consider it bad governing.

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  24.    China will rely less on stimulus as it battles risks from debt, says its central bank

    ... analysts believe Beijing will continue to keep the system well supplied with cash to avoid the risk of a sharp slowdown in economic growth, even as they continue to tighten the screws on financial regulations.

    I'm going to tell you exactly what I think that says. It says that China is simply going to try to avoid a taper tantrum both domestically and internationally. It also says that China is not, repeat, is not, going to eat America's lunch but is going to curb down before becoming dominant.

    India will rise, and may overtake China in fact in the not-too-distant future but will end up facing the same curve.

    The US will only do as well as it is led. If the US continues to exacerbate the artificially induced "business cycle," the US will not do nearly as well as otherwise.

    All of the above hinges upon the mentioned nations never wising up: never getting rid of governmental borrowing, never implementing full direct democracy from the bottom up.

    Add your comment. Including the article/link number will help.


  25.    What I've Learned About Landlord Anonymity Over 15 Years in the Rental Industry

    I'll pass it along to the owner ....

    It is my professional-insurance-broker position that if you engage in such levels of behavior, you are opening yourself up to huge liability issues. A good lawyer could make you look really, really bad (make you look like a liar and someone who cannot be trusted) in court and the tenant extremely sympathetic.

    I'm not suggesting that you have to light the path to your personal front door, so to speak; but the article is rather all or nothing where it could strike a much more balanced approach for the sake of those who don't want to paint a target on themselves by virtue of tactics almost always exclusively utilized in landlording by those out to take unfair and illegal advantage of tenants.

    I'm not for a moment suggesting that Brian Davis is doing that. I don't know Brian, and he may be an excellent landlord when it comes to being fair and legal with his tenants and really simply doesn't want nuisance interactions or worse.

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  26.    Teenagers Defeat Trump's Move to Kill Climate Change Lawsuit

    The group of mostly teenagers in Oregon alleged in a 2015 complaint that government policies have exacerbated global warming in violation of their rights -- and those of future generations -- under the U.S. Constitution.

    They claim that for more than 50 years, the office of the president and eight federal agencies promoted regulations to support the U.S. energy industry's proliferation of fossil fuels, accounting for a quarter of the world's carbon emissions. They asked the court to force the government to formulate a formal plan to change course.

    When it was shown that the tobacco industry had systematically hidden evidence linking tobacco use to lung cancer and other lung diseases, plus heart disease, etc., states' Attorney's General went after the industry and won.

    So, if the teenagers can't do the same regarding the carbon-fuel industry, then state AGs will have to step up and take their place.

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  27.    The Real Engine of the Business Cycle

    This is excellent work if for no other reason than it's asking the right questions. To elaborate, it is not asking whether but how much. The basic direction is absolutely correct. It's why I mentioned the business cycle earlier in this aggregation post.

    We actually need to get rid of the so-called business cycle, which I said earlier above is completely artificial (no law of economics at all), by getting rid of credit (loans, debts, interest payments) and replacing it all with democratically controlled and owned money.

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  28.    Home Depot to donate $50M to train construction workers, address severe shortage

    This is a very, very smart move.

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  29.    The three mistakes of centrism

    Simon Wren-Lewis:

    A government of centrists will only take us back to where we were before all this kicked off in 2010. We need to do better than go back to the normal that gave us austerity and Brexit. We need a radical government that can begin the process of reforming our economy so that it works for all working people, that can tackle extreme inequality at the top and reform the press so that it is not a mouthpiece for a wealthy few. A government led from the left are our only real hope of achieving that. Centrists will be an important voice during that government, but they must not stop us ensuring the likes of austerity and Brexit will not happen again.

    Okay, but democracy is key, not technocrats. If you emphasize democracy, you can remain in the EU while forcing it to become democratic, and I don't mean just slightly more representationally democratic but vastly more directly democratic.

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  30.    313k Jobs Added? Nice Try But It's Fake News

    This article is a scathing attack on the Census Bureau and Bureau of Labor Statistics. Is it correct?

    ... 365k of the alleged jobs were part-time, which means the labor market lost 52k full-time jobs.

    That's just one claim. Here's what's being ignored: hours worked and average wages. The difference between part-time and full-time employment does matter in terms of benefits and other factors, but we can't simply ignore wholesale the aggregate data. So, yes, the BLS report can easily be overstated in terms of overall improvement in the economy. However, the premise of the article is that nothing about the stats or report should be trusted. I don't go that far.

    As for the housing industry and home builders, I don't dispute the thrust of the article. However, multifamily commercial has been booming on account of the problems described. Of course, we know that multifamily has been targeted at higher incomes due to land, material, and labor costs and shortages.

    It remains to be seen what the Trump tax cuts really will do, though I'm not optimistic if they stay in place more than two years. I really think they were a mistake and are already causing harm by setting things up for a crash.

    If those cuts are fixed/repaired/rolled back in time, will the government turn in time to subsidizing lower-and-middle-income housing, single-family and multifamily?

    Add your comment. Including the article/link number will help.


  31.    Thomas Fazi and William Mitchell — The EU cannot be democratised — here's why

    To all anti-Brexiters , to all Remainers, what's your answer to the following? That the "EU can be 'democratised' and reformed in a progressive direction is a pious illusion."

    I happen to believe the EU must be displaced with European democracy. I was always opposed to the EU's anti-democracy plan and then actual setup/establishment.

    It's true that unless the individual governments agree to a democratizing treaty, the EU can't be changed. What to do? Can the grassroots within the nations force the reform?

    There are nationalists in many EU nations who wouldn't want it. I say that those who want it should leave the EU and rejoin as a New EU, a democratic EU.

    Add your comment. Including the article/link number will help.


  32.    Applying smart building technology in multi-tenant properties

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  33.    Ultimate Guide to Selecting a Target Real Estate Market

    This is a good start; however, I would definitely add risks such as environmental, climatic, and criminal. General infrastructure is important too. What plans does government have for the area? How's the transportation sector both public and private? How much landlord competition is there? Has the area peaked or is it just starting out or just beginning to make a comeback that will be sustainable?

    Add your comment. Including the article/link number will help.


  34.    Emails Show Atmos Energy Investigated Leaks Before Deadly Dallas House Blast

    Atmos discovered at least 28 gas leaks in the neighborhood, according to the emails.

    What happened? What caused so many? The article suggests some possibilities, but that's quite a few leaks for one neighborhood all at once.

    Add your comment. Including the article/link number will help.


  35.    'Astonished' MPs told £817m has gone unspent in housing budget

    "It is simply astonishing and unacceptable that there is so little urgency being shown."

    The Tories are unfathomably callous.

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  36.    America's inflation problem isn't high wages, it's high rent

    Shelter prices are rising rapidly because the supply of housing isn't keeping up with the demand. Sure, we could bring supply and demand back in closer alignment by quashing demand, but the better solution would be to increase the supply of apartments and homes.

    If the Fed raises interest rates further to cool demand, it would also cool the supply of new housing, which is quite sensitive to interest rates, as Dean Baker points out. That puts the Fed in a bind, because raising interest rates now would increase, not decrease, the pace of shelter inflation.

    Add your comment. Including the article/link number will help.


  37.    This cheap 3D-printed home is a start for the 1 billion who lack shelter News: Real Estate, Risk, Economics. Mar. 14, 2018

    You knew it was coming.

    It's almost cliché that tech innovations happen in the high-end, for-profit segment long before they filter down to the masses, where innovation could serve the greatest social good. ICON and New Story are challenging that premise.

    It's only the tip of the iceberg.

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  38.    Innovation as a Challenge to Regulation

    Are you just knee-jerk anti-regulation? What if everyone selling insurance were unlicensed? That would mean no required study and proof of understanding, no required courses on professional ethics, no continuing education, no license to be pulled in the event of breaking regulations pursuant to statutory law. Would you like to go to the hospital and have just anyone perform surgery on you? Maybe it would be someone who wouldn't know your stomach from your spleen.

    Don't be anti-regulation. Be for good regulation. Don't be anti-government. Be for good government. Otherwise, be prepared for anarchy, very, very darkside anarchy.

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