News: Real Estate, Risk, Economics. May 29, 2018

Linking ≠ endorsement. News: Real Estate, Risk, Economics. May 29, 2018

Table of Contents
(Click to sections below.)

1) Is Your Home's Electricity Safe? 5 Things to Check

2) Positive Money's digital cash proposals find support in new Bank of England research

3) How SF loses affordable housing almost as fast as it gets built

4) From Luxury Hotels to Affordable Housing: The Development on Tap for Mount Vernon Triangle/Chinatown

5) MMT isn't MMT enough

6) The 'suprasecular' stagnation | VOX, CEPR's Policy Portal

7) Army of attorneys spar over Keystone pipeline in Great Falls court

8) Central banks should consider offering accounts to everyone

9) Opinion: US manufacturing is now the key to economic growth

10) Southeast Asia braces for emerging-market capital flight

11) Fed's Neel Kashkari: Heart of Our Financial System Is More Radioactive Than Ever Before - TheStreet

12) Corporate tax rates and economic growth since 1947

13) No Work Requirements for the Richest 1 Percent — Most of Their Tax Cuts Are for Unearned Income

14) 50 years after the Poor People's Campaign, poverty persists because of a stingy safety net and a dysfunctional labor market

15) How Two House Democrats Defended Helping the GOP Weaken Dodd-Frank Financial Regulations

16) Average CEO Makes 339 Times More Than their Average Worker

17) Humans just 0.01% of all life but have destroyed 83% of wild mammals — study

18) History shows Federal Reserve rate hikes always create 'a meaningful crisis somewhere'

19) This is the End of the Euro?

20) Multifamily Real Estate: How to Raise Funds for Your Deals

21) How My Investor Friend Grew a Student Housing Empire Using Private Money

22) How I Went From 6 to 37 Units With One Acquisition Using Hard Money Financing

23) 8 Problems I Look for When Shopping for Rental Properties

24) Neo- and Other Liberalisms

25) Airbnb's unwelcome guests

26) Blackstone, BlackRock or a Public Bank? Putting California's Funds to Work

27) Fed relying on biased data that makes 'B-minus economy' look like an 'A+" : James Bianco

28) The most expensive city in the world may build 100-square foot 'tube homes' to alleviate its escalating housing crisis

29) The Places in the US Where Disaster Strikes Again and Again - The New York Times

30) The Guardian view on Corbynomics: more creativity please

31) New Wind Farm Activity In Missouri Shows How States Can Leapfrog Over Natural Gas

32) SEE IT: More than 100 FDNY firefighters wage daring battle against raging Chelsea apartment blaze

33) 'No words to describe the devastation' after Ellicott City flooding in Maryland

34) With his choice of prime minister, Italy's president has gifted the far right

35) Brussels-Rome war: EU holds back Italy's anti-euro tide for now

36) Professor Says Window to Prevent Dangerous Impacts from Climate Change Closing Fast

37) Allianz to Back Off Insuring Coal Operations as it Expands Climate Strategy

38) California Organized Investment Network Launches High Impact Service for Insurers

39) Florida Arson Ring Busted

40) How media amnesia has trapped us in a neoliberal groundhog day

  1.    Is Your Home's Electricity Safe? 5 Things to Check

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  2.    Positive Money's digital cash proposals find support in new Bank of England research

    I've been putting forth this idea publicly since 2011. Since then, I've learned that the idea in various forms has been around in the non-cyber version since at least Knut Wicksell (1851-1926). I haven't seen anyone putting forth the cyber or digital version before I did (so far).

    I take things much farther than does Positive 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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  3.    How SF loses affordable housing almost as fast as it gets built

    We can't solve the homeless crisis until we solve the eviction crisis. And keeping people in their homes is far, far cheaper than helping them get off the streets.

    Bad landlords give landlording a bad name.

    To solve the eviction crisis, subsidize.

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  4.    From Luxury Hotels to Affordable Housing: The Development on Tap for Mount Vernon Triangle/Chinatown

    In our updated look at the status of the residential development pipeline in neighborhoods around the DC area, UrbanTurf heads to the Mount Vernon Triangle and Chinatown neighborhoods this week.

    In case you missed them, here are the other neighborhoods we have covered thus far: ....

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  5.    MMT isn't MMT enough

    Gotta go with Steve Keen on this.

    I like Bill Mitchell, but as with all MMTers at the top, several of whom I've interacted with directly, he can be too tied down by MMT dogma. To Bill's credit, he spoke openly before any other top MMTer about employing one bank rather than multiple commercial banks. I wish he had been in the MMT-debate group I was so that he could have set the MMTers there straight and in line with what I was proposing to them that was summarily rejected but is now gaining steam.

    I try to employ more connotations of terms so that I can speak more easily across economic schools of thought and debate or defend any of them as needed.

    The nice thing about someone like Steve Keen debating the MMTers is that Steve is a Ph.D. academic economist and head of his university's economics department. They can't ignore him quite so easily. Of course, they really should have fleshed things out with me because the whole movement would have been at least a decade ahead of where it is right now. And I mean politically.

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  6.    The 'suprasecular' stagnation | VOX, CEPR's Policy Portal

    ... even if cyclical forces could now stabilise nominal Treasury rates beyond 3%, central bankers may find that before they have fully returned to normalised balance sheets, 'suprasecular' real rate trends will have caught up to them once more. Negative real rates could become a more frequent phenomenon, and indeed constitute a 'new normal'.

    Unless we throw the whole system out.

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  7.    Army of attorneys spar over Keystone pipeline in Great Falls court

    Mostly, at one table, you have people trying to save the planet from the greedy. At the other table, you have people who want to make money now and to hell with the planet later because they think they'll all be dead by the time the piper must be paid.

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  8.    Central banks should consider offering accounts to everyone

    Well, people are trying mightily to tap dance around my idea for one bank through which all transactions run with that bank being a public bank resulting in the US Treasury, not Federal Reserve, being the US Bank (central, only, and noncommercial, as in no loans, no interest throughout the entire economy). The money supply would be 100% fiscally controlled with the government being 100% democratically controlled via the highest degree of workable pure democracy. The supply would be matched to real-economy productivity, which step would totally control inflation while giving the maximum boost to democratically desired developments in any economic sectors the voters want to boost (increase supply to meet democratically decided demand). Radical? It's as radical as anything I've ever seen, but what's wrong with that?

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  9.    Opinion: U.S. manufacturing is now the key to economic growth

    ... to maintain a growing domestic economy there is a final step. These companies must repatriate foreign dollars into the U.S. economy in ways that reach the American consumer. This can come in many forms, including further increasing capital and infrastructure investment, continuing education for their workforce, or increasing wages. Alternatively, a key misstep would be to use this revenue to increase executive compensation or roll out more stock buybacks.

    The tax reform can prove to be very positive for U.S. businesses, but it doesn't inherently improve the position of the U.S. consumer and very much limits the ability for the government to bail out Americans in a weak economy. To avoid a grim situation, it will be essential that manufacturers take advantage of the conditions that are leading to more opportunities to sell abroad, and in turn, invest those dollars back into the U.S. economy.

    The US is headed toward a recession, as I've been saying for many months, if it doesn't change course. If the recession is contagious and global, the US dollar will be a safe haven again, though perhaps not as much as in previous such recessions, the dollar will strengthen just as foreign countries will be less able to afford importing from the US. The US will have to fiscally stimulate rather than go the Fed QE route. That stimulation ought to be in the form of helicopter money to the poor, who will need it the most and spend it boosting demand for US goods and services.

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  10.    Southeast Asia braces for emerging-market capital flight

    As American rates climb higher, currency depreciation could spread across emerging economies, putting even relatively healthy countries in a financial bind.

    Yep.

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  11.    Fed's Neel Kashkari: Heart of Our Financial System Is More Radioactive Than Ever Before - TheStreet

    Smartest person at the Fed right now, hands down:

    TheStreet: Are regulators sowing the seeds of the next Great Recession?

    Kashkari: That is absolutely true. Human history is full of examples of financial crises, and we repeat the same mistakes we have made in the past because we forget the lessons. It has only been 10 years and we are already forgetting how devastating the last financial crisis was. We are already convincing ourselves that everything is fine again and we can relax some of the rules and we will be fine in the future. And the fact is that we are going to repeat these same mistakes again.

    It's a question of when, not if.

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  12.    Corporate tax rates and economic growth since 1947

    This is from 2013. You'd think it's ancient history, but we've known about this for decades.

    ... no evidence that either the statutory top corporate tax rate or the effective marginal tax rate on capital income is correlated with real GDP growth.

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  13.    No Work Requirements for the Richest 1 Percent — Most of Their Tax Cuts Are for Unearned Income

    ... huge corporate tax cuts mainly reward people for owning stock, not for working.

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  14.    50 years after the Poor People's Campaign, poverty persists because of a stingy safety net and a dysfunctional labor market

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  15.    How Two House Democrats Defended Helping the GOP Weaken Dodd-Frank Financial Regulations

    So far, all Trump has done on the domestic economic front is follow in Bill Clinton's footsteps only worse, which will end in the same results, only worse if he keeps it up: major recessions.

    Look, Dodd-Frank was too weak. We needed to reinstall Glass-Steagall and more, something Trump was actually talking about on the campaign trail. How times change once someone gets into office.

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  16.    Average CEO Makes 339 Times More Than their Average Worker

    It is amazing that more people don't realize just how counter-productive these pay gaps are.

    The Dodd-Frank Act of 2010 requires companies to report the CEO-Worker pay ratios; Sarah Anderson of the Institute for Policy Studies analyzes the data.

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  17.    Humans just 0.01% of all life but have destroyed 83% of wild mammals — study

    Amazing but not surprising ... good reason to be a vegan ...

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  18.    History shows Federal Reserve rate hikes always create 'a meaningful crisis somewhere'

    Going back in history, the 2004-6 Fed tightening looked benign but the US housing collapse set off contagion and a near collapse of the global financial system dwarfing all post-war crises. The late 1990s Fed stop/start tightening included the Asia crisis, LTCM and Russia collapse, and when tightening resumed, the pop of the equity bubble. The early 1993-4 tightening phase included bond market turmoil and the Mexican crisis. The late 1980s tightening ushered along the S&L crisis. Greenspan's first fumbled tightening in 1987 helped trigger Black Monday, before the Fed eased and 'the Greenspan put' took off in earnest. The early 80s included the LDC/Latam debt crisis and Conti Illinois collapse. The 1970s stagflation tightening was when the Fed was behind 'the curve' and where inflation masked a prolonged decline in real asset prices.

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  19.    This is the End of the Euro?

    No, the euro, per se, has never been the problem. The problem has always been insufficient democratic integration. When New York does well but Mississippi doesn't, New York can't simply treat Mississippi the way Germany has treated Greece. It's that simple, and New York is not worse off for it. If anything, the US is still not integrated enough.

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  20.    Multifamily Real Estate: How to Raise Funds for Your Deals

    I got started using real estate crowdfunding method on the single family side. This means raising smaller amounts of capital from a larger number of investors. It can work really well. It provides great liquidity, lower risk, and leverage for all involved. It is a swift way to invest for those with capital, as well as those who want to earn while learning from the experts.

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  21.    How My Investor Friend Grew a Student Housing Empire Using Private Money News: Real Estate, Risk, Economics. May 29, 2018

    As you can see, a lot can be accomplished just from having the ability to raise private money the right way. My buddy always put his investors first, as he can see that none of this would have been possible without them.

    So, guess what happened after he paid back all the private money with the lower rate commercial financing? You guessed it—he has even more capital at his disposal as his track record and reputation have continued to grow.

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  22.    How I Went From 6 to 37 Units With One Acquisition Using Hard Money Financing

    If a lender offers terms drastically better than what others are offering, it's probably too good to be true. Choose a more certain option.
    Get contractor quotes before taking your renovation estimate to the bank—unless you are very experienced and you're doing the work yourself. Banks will want proper documentation.
    Don't rely on a single lender to finance the deal unless you've dealt with them before.
    Many mortgage brokers will tell you they can close a deal like this, but only some of them can—and it will take time.
    Communicate well, and be available. When a bank asks for something, they need it as soon as possible in order to avoid slowing down the deal. Stay in touch with the bank and your broker to ensure you stay on the same page.

    May I add, don't be lazy, remain flexible, and have a built in cushion, all of which the author of the article. Jamie Turner, apparently knows well.

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  23.    8 Problems I Look for When Shopping for Rental Properties

    These are good points. Make sure you're safety conscious during the entire process.

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  24.    Neo- and Other Liberalisms

    There are other reasons to think that Hayek went too far in his opposition to progressive tax rates. First, he assumed that earned income accurately measures the value of the incremental contribution to social output. But Hayek overlooked that much of earned income reflects either rents that are unnecessary to call forth the efforts required to earn that income, in which case increasing the marginal tax rate on such earnings does not diminish effort and output. We also know as a result of a classic 1971 paper by Jack Hirshleifer that earned incomes often do not correspond to net social output. For example, incomes earned by stock and commodity traders reflect only in part incremental contributions to social output; they also reflect losses incurred by other traders. So resources devoted to acquiring information with which to make better predictions of future prices add less to output than those resources are worth, implying a net reduction in total output. Insofar as earned incomes reflect not incremental contributions to social output but income transfers from other individuals, raising taxes on those incomes can actually increase aggregate output.

    So the economic case for reducing marginal tax rates is not necessarily more compelling than the philosophical case, and the economic arguments certainly seem less compelling than they did some three decades ago when Bill Bradley, in his youthful neoliberal enthusiasm, argued eloquently for drastically reducing marginal rates while broadening the tax base. ...
    ...
    Perhaps the greatest effect of reducing marginal income tax rates has been sociological. I conjecture that, as a consequence of reduced marginal income tax rates, the social status and prestige of people earning high incomes has risen, as has the social acceptability of conspicuous — even brazen — public displays of wealth. The presumption that those who have earned high incomes and amassed great fortunes are morally deserving of those fo rtunes, and therefore entitled to deference and respect on account of their wealth alone, a presumption that Hayek himself warned against, seems to be much more widely held now than it was forty or fifty years ago. Others may take a different view, but I find this shift towards increased respect and admiration for the wealthy, curiously combined with a supposedly populist political environment, to be decidedly unedifying.

    I must say that I never considered Bradley's plan to be neoliberal.

    Neoliberalism doesn't now mean what Hayek and Friedman once pushed. I don't think either of them really held to their original Austrian positions but rather move more in Mises direction (though I'm no expert on the Austrian School at its peak.

    Certainly economic neoliberalism has taken on a meaning of libertarian capitalism with a very dominant corporatist-globalist superimposition to the extent of supranational cronyism.

    Purist libertarian-capitalists are technically still anti-globalism and anti-cronyism.

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  25.    Airbnb's unwelcome guests

    I don't think this is the way to help people make enough money to live decently. To me, it has all the problems of an Uber.

    I understand the motivation to use libertarian tactics to get rich quickly before regulations are put into place, but I really think governments allowed an under-regulated environment to run wild.

    Did he deal with the issue of illegal rentals on the platform? I didn't hear it. If I were a neighbor living in a long-term rental or living in my own owned home, I'd not appreciate that.

    I don't think the report was unfair.

    If you're making money via Airbnb, I do hope you're doing so in a way that does not ruin the living experience for others in the neighborhood.

    Airbnb's unwelcome guests from CNBC.

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  26.    Blackstone, BlackRock or a Public Bank? Putting California's Funds to Work

    Blackstone is notorious for buying up distressed properties after the housing market collapsed. It is now the largest owner of single-family rental homes in the US. Its rental practices have drawn fire from tenant advocates in San Francisco and elsewhere, who have called it a Wall Street absentee slumlord that charges excessive rents, contributing to the affordable housing crisis; and pension funds largely contributed the money for Blackstone's purchases.

    BlackRock, an offshoot of Blackstone, now has $6 trillion in assets under management, making it larger than the world's largest bank (which is in China). Die Zeit journalist Heike Buchter, who has written a book in German on it, calls BlackRock the "most powerful institution in the financial system" and "the most powerful company in the world" — the "secret power."

    Blackstone and BlackRock do what they are allowed to do by government to make as much money as they can. That's our current system. We need to change the system so that what's legal is also only what's good for the whole. Naturally, the idea would not be to impoverish Blackstone's or BlackRock's executives or investors but lift the bottom so that nobody is in poverty.

    In old-school corporate responsibility, entities such as Blackstone and BlackRock would be fully on board with lifting the bottom to make the entire economy that much stronger.

    Who's put it to them to get on board now? Who's to say they wouldn't if enough lawmakers were on board and if it were put to them in the right way?

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  27.    Fed relying on biased data that makes 'B-minus economy' look like an 'A+" : James Bianco

    The Fed calls it "inflation expectations," which the Fed believes causes people to either slow or increase their buying/saving habits. If the people think things are going to go well, they spend, which keeps the economy growing. The thing is, the Fed is operating on an old understanding of just how quickly the people realize that things aren't as rosy as they thought. The Internet has sped everything up.

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  28.    The most expensive city in the world may build 100-square foot 'tube homes' to alleviate its escalating housing crisis

    Beats a cage ...

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  29.    The Places in the U.S. Where Disaster Strikes Again and Again - The New York Times

    In the last 16 years, most of the damages caused by catastrophes like wildfires and hurricanes have been concentrated in just a few areas.

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  30.    The Guardian view on Corbynomics: more creativity please

    The Guardian rightly aims for a more democratic economy.

    ... constrain Big Finance by creating a national investment bank and a network of regional public banks.

    The problem is that Corbyn plans to use bond issues to fund the banking system. That's the biggest mistake he can make. The central bank of England can create money without any bonds being issued. Corbyn should be aiming to use that bond-free, debt-free method to fund all banking owned by the government.

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  31.    New Wind Farm Activity In Missouri Shows How States Can Leapfrog Over Natural Gas

    Good news ...

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  32.    SEE IT: More than 100 FDNY firefighters wage daring battle against raging Chelsea apartment blaze News: Real Estate, Risk, Economics. May 29, 2018

    Fortunately, there were only minor injuries.

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  33.    'No words to describe the devastation' after Ellicott City flooding in Maryland

    How can we have a thousand-year storm twice in two years.

    Welcome to global warming caused by humanity burning way too much carbon-based fuel.

    Yes, flooding happened before AGW, but humanities burning of carbon has made matters much worse than they would have been even with more sophisticated, evolving flood-mitigation efforts.

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  34.    With his choice of prime minister, Italy's president has gifted the far right

    Yanis Varoufakis:

    While it is true that Italy is in serious need of reforms, those who blame the stagnation on domestic inefficiencies and corruption must explain why Italy grew so fast throughout the postwar period until it entered the eurozone. Was its government and polity more efficient and virtuous in the 1970s and 1980s? Hardly.

    The singular reason for Italy's woes is its membership of a terribly designed monetary union, the eurozone, in which the Italian economy cannot breathe and which consecutive German governments refuse to reform.
    ...
    ... there is no thinking economist anywhere in the world who does not share concern about the eurozone's faulty architecture. No prudent finance minister would neglect to develop a plan for euro exit. Indeed, I have it on good authority that the German finance ministry, the European Central Bank and every major bank and corporation have plans in place for the possible exit from the eurozone of Italy, even of Germany. Is Mattarella telling us that the Italian finance minister is banned from thinking of such a plan?

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  35.    Brussels-Rome war: EU holds back Italy's anti-euro tide for now

    Steve Keen:

    The Maastricht Treaty's pact to limit government debt to 60 percent of GDP and government deficits to three percent appeared as "sound finance" to its drafters, but was really a decision to hand over money creation to private banks.

    The Maastricht limits on government spending and debt were also farcical: Italy's government debt when the euro came into being was more than twice the Maastricht limit. The fact that Italy was allowed in under these rules shows that the euro project was driven far more by politics and naive economics than it was by financial imperatives.
    ...
    ...As the rebel British economist Wynne Godley stated back in 1992 when the Treaty was signed:
    "If a country or region has no power to devalue, and if it is not the beneficiary of a system of fiscal equalization, then there is nothing to stop it suffering a process of cumulative and terminal decline leading, in the end, to emigration as the only alternative to poverty or starvation." (Wynne Godley, 'Maastricht and All That' London Review of Books, October 1992)
    Emigration, poverty, or starvation? There is a fourth alternative: leaving the euro. Brussels has blocked this for today, but the odds of it happening in the near future have risen dramatically thanks to Mattarella's veto of Savona.

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  36.    Professor Says Window to Prevent Dangerous Impacts from Climate Change Closing Fast

    "As extreme events become more frequent, insurers that ignore climate change will not put away enough money to cover their claims," Jason Thistlethwaite, a climate change economist at the University of Waterloo, said in a statement. "To re-coup those losses, they'll have to raise rates or pull coverage from high risk areas. When this shift happens, thousands of people will lose coverage or it will be unaffordable."

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  37.    Allianz to Back Off Insuring Coal Operations as it Expands Climate Strategy

    Heffa Schuecking ... stated: "The coal industry is the number one driver of climate change, and building new coal plants is incompatible with the goals of the Paris Agreement. We welcome Allianz's move as an important step towards making the coal industry uninsurable and uninvestable."
    ...
    "The insurance industry is uniquely placed to support the transition away from coal, and four global insurers have now decided to shift away from coal," said Peter Bosshard .... "We call on Munich Re, Generali, AIG and other climate laggards in the industry to also stop insuring and investing in coal projects."

    I agree the insurance industry should take the lead in ending AGW.

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  38.    California Organized Investment Network Launches High Impact Service for Insurers

    California Insurance Commissioner Dave Jones continues to impress.

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  39.    Florida Arson Ring Busted

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  40.    How media amnesia has trapped us in a neoliberal groundhog day

    ... what's good for business is good for everyone. If businesses are handed more resources, freed from regulation and handed tax breaks, they will be encouraged to invest in the economy, creating jobs and growth. The rich are therefore 'job creators' and 'wealth creators'.

    This is despite the fact that these policies have an impressive fail rate. Business investment and productivity growth remain low, as corporations spend the savings not on training and innovation but on share buy-backs and shareholder dividends.

    That's exactly right, but the article's author, Laura Basu, doesn't appear to know that the whole thing from start to finish was, and remains, intentional. There's no amnesia involved at all. What's involved is a scam. The media is owned and controlled by those who created the scam. That's why the media doesn't chime in against it. They'd all be fired and replaced by other sellouts. It's not complicated. It's not cynical to say it either. It's just a statement of fact. It's so routine that it's not shocking at all but completely expected.

    The only way to break it is via alternative media. The only way to do that is via organizing in a manner that doesn't depend upon the current corporations controlling what's disseminated. Policies truly for the People will be censored by the gatekeepers, such as Google, Facebook, Twitter, and the like. Therefore, alternatives that can't be bought must be created and used by those interested in replacing the system with one that's finally for the People.

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