Linking ≠ endorsement.
⇧ Volcker Rebukes Bernanke and Yellen
This article, by R. Christopher Whalen, characteristically gets it totally wrong.
The GSEs for buying mortgages were not the drivers of the housing bubble that popped. The Wall Street banks were. The GSEs got in quite late and were duped by bad data (lies) fed into their systems by those same mortgage granters and sellers. It was the unregulated financialization/securitization of mortgages that caused the collapse.
As for Yellen, she inherited the mess and was duty-bound to support the commercial banking industry while she simultaneously actually gave a damn about the unemployed, something the liquidators never seem to do.
Yes, the Fed is a goofy institution, but laissez-faire is even goofier.
⇧ Officials Develop Multi-Prong Approach to Protect Texas From Hurricanes
… even if approved, the proposal could take more than 20 years before becoming a reality.
A final version of the report is not set to be completed until 2021, when it will be presented to Congress. If Congress decides to fund the project, the design process could take two to five years, followed by construction, which could take another 10 to 15 years.
If we had gone green when we should have (1970s), we wouldn’t be facing these massive global-warming problems right now. Here we are, though, about to spend tens and tens of billions to protect the industry that’s making global warming only worse. It’s insane.
⇧ New Jersey Cities Damaged by Sandy Plan Flood Walls
Construction should start in the third quarter of 2019 and hopefully be completed by 2022.
⇧ Missouri Landfill Operator Sues for Help with EPA Cleanup
… north St. Louis County residents and heirs who claimed exposure to radioactive waste caused cancers and deaths.
The mistakes we make come back to haunt us. That’s what’s happen with global warming. What other things have we allowed to go on that should never have even started? I think of plastics and toxic chemicals and a host of other things escaping into the open environment. How about you, what things come to your mind that have polluted things and made everything worse in general?
⇧ Church Pastor Sentenced to Three Years in Prison for Setting Fire to His Apartment in Insurance Scam
… causing the fire to burn and causing extensive damage to his unit and the surrounding apartments.
The apartment complex includes 94 units, and the residents included small children and elderly individuals, who were home at the time of the fire and forced to evacuate.
He’s fortunate nobody died.
⇧ Could ADUs help solve LA’s homelessness crisis?
Under the program, which is expected to launch in spring, participating homeowners would receive up to $30,000 worth of assistance constructing an ADU on their property. Rather than a direct loan or stipend, the money would come in the form of tax breaks or reduced permitting fees.
In return, owners must agree to rent the new structure to a homeless resident who will be supplied for two years with rental assistance and case management through the county’s homeless services authority.
⇧ Class Action Lawsuit Allege Electric Scooters Are Dangerous
My consistent readers know I was pointing out it was only a matter of time before the scooter Wild West would be reined in. It’s beginning and none too soon for me.
I’m posting this link here because landlords need to think about the rules for their investment properties concerning such scooters. Landlords of apartment complexes should think twice before allowing scooter riding on apartment walks and in apartment parking and driving areas. Scooters shouldn’t be left where tenants and visitors might trip over them.
⇧ Big brands pledge to turn tide on global plastic waste
It’s a start.
⇧ DON’T Base Your Buying Decisions on Cash-on-Cash Returns Alone
… if you buy an investment property in a lower quality neighborhood, that will likely produce a higher cash-on-cash return than a property located in a higher quality neighborhood. This makes practical sense since a property in a lower quality neighborhood carries with it a higher investment risk and therefore demands a higher return. At the same time, the quality of the neighborhood determines its appreciation rate as well as the turnover rate. Therefore, when you buy a property because it satisfies your cash-on-cash return threshold, you’re also making the decision to accept a lower appreciation rate and higher turnover, which account for the majority of your total returns on the property.
⇧ Evidence Mounts Raising the Minimum Wage Does Not Cost Jobs
The increase in service industry jobs since Seattle enacted a $15 minimum wage is another nail in the coffin of the big business argument that raising it reduces employment.
Add your comment. Including the article/link number will help.
⇧ Economic reality — a virulent virus afflicting mainstream economics
Mainstream economists love to depict heterodox economists’ views on the use of mathematics as coming from sadly misinformed and misguided people who dislike and do not understand much of it. This is really a gross misapprehension. We do not misunderstand the crucial issues at stake — and many of us have spent decades on using mathematics and statistics in our research and teaching. To be careful and cautious is not the same as to dislike. Quite the contrary. We know the crucial issues all too well — and are not satisfied with the validity and philosophical underpinning of the assumptions made for applying mathematical methods in economics.
We have to demand more of a justification than rather watered-down versions of ‘anything goes’ when it comes to the main postulates on which mainstream economics is founded. If one proposes ‘efficient markets’ or ‘rational expectations’ one also has to support their underlying assumptions. As a rule, none is given, which makes it rather puzzling how things like ‘efficient markets’ and ‘rational expectations’ have become the standard modelling assumption made in much of modern macroeconomics.
⇧ China factory growth weakest in over two years, slump in export orders deepens
“All the numbers from China’s PMI release today confirm a broad-based decline in economic activity,” said Raymond Yeung, chief economist for China at ANZ in a client note, adding that conditions for the private sector is “much worse” than headline data suggested.
Xi will blink, be driven out, or both. Real democracy is the hope for China. China doesn’t need a dictator or to become a plutocracy pretending to be a democracy. It needs transparency and for the People to have a real and equal say.
⇧ What billionaires want: the secret influence of America’s 100 richest
Our new, systematic study of the 100 wealthiest Americans indicates that Buffett, Gates, Bloomberg et al are not at all typical. Most of the wealthiest US billionaires — who are much less visible and less reported on — more closely resemble Charles Koch. They are extremely conservative on economic issues. Obsessed with cutting taxes, especially estate taxes — which apply only to the wealthiest Americans. Opposed to government regulation of the environment or big banks. Unenthusiastic about government programs to help with jobs, incomes, healthcare, or retirement pensions — programs supported by large majorities of Americans. Tempted to cut deficits and shrink government by cutting or privatizing guaranteed social security benefits.
This is why we live in a plutocracy and not a democracy. The rich who want more and more for themselves and don’t care about who gets left behind, literally and quietly purchase the votes of those who are ostensibly the representatives of the People. Your tenants are typically those left-behind people. They find it more and more and more difficult to make the rent because they are saddled with student and other debts and wages and salaries that are simply not keeping up because most of the profits continue to be more and more consolidated at the top. It’s not a good economic plan for the nation. It’s actually backwards.
⇧ Competitive Edge: Protecting the “competitive process”—the evolution of antitrust enforcement in the United States
This matters to you because you, if you’re the typical income-property investor, don’t need, or want, a would-be monopoly with vastly deeper pockets gobbling up all the decent real-estate investments out there leaving you with nothing but crumbs if even those.
⇧ Fraud News: Arson Scheme, Fraudulent Storm Claims, Fake COIs
⇧ Weather, Wildfire Claims an Increasing Share of Home Insurance Losses
⇧ Trump, Xi upbeat on U.S.-China trade; U.S. targets more Chinese firms
… unfair corporate subsidies ….
Subsidies should never have anything to do with it. If a country is subsidizing its enterprises, then the response is to subsidize one’s own enterprises. The US needs to ramp up subsidies in many areas where the so-called “free market” hasn’t, won’t, or can’t make up the difference. Housing is just one such example.
Why should Chinese construction corporations have an even playing field in the US building US housing? What would be the point, the benefit?
There is an issue of dumping subsidized products on another country only to have the price drop, the local companies be driven out of business, and then the foreign companies jack prices back up. All of that can be handled via tariffs against the dumped products.
It should be up to the individual countries how to handle subsidies vis-a-vis international trade. There should not be a one-size-fits-all international rule opening all nations to all trade simply because that trade is not subsidized. There are perfectly legitimate reasons for a given nation to want a domestic production capacity even though it might be cheaper to buy foreign-made goods.
As just one example among many, localization has many environmental benefits depending upon the particular product and cradle-to-grave nature of that product.
⇧ U.S. Employment Costs Rise More Than Forecast as Pay Jumps
Would it last if the Fed were to do nothing? The Fed seems to think so but on what evidence?
⇧ China signals big shift in economic course due to US trade war headwinds
Ding Shuang, chief China economist at Standard Chartered, said Beijing was ready to take a pro-growth stance in setting policy.
“Now the priority is to boost infrastructure investment, to cut taxes, and to ease monetary and credit policies … all will be implemented very quickly,” Ding said.
He said deleveraging, a catchphrase that was once at the centre of China’s economic policy mix, was no longer the priority.
Here’s the deal. China is not suffering deflation but a severe weakening of the currency. That makes Chinese goods cheaper in the US, but it increases internal price inflation.
The policies outlined by the Chinese Communist Party are counter-productive for the domestic economy and the push to make China a service-oriented domestic economy. In other words, the Party still doesn’t know what it’s doing.
George Magnus’s prescription isn’t the right one either. His plan would only increase income and wealth inequality. The average Chinese person is already looking upon that inequality as a huge problem. There could be even more civil unrest leading to outright civil war/revolution.
China should democratize its economy and forget about neoclassical-capitalist economics.
At the direction of Governor Scott, Insurance Commissioner David Altmaier issued an Emergency Order suspending and activating certain insurance rules and statutes for the health, safety, and welfare of Florida’s policyholders.
⇧ Home flippers are fleeing the market as their profits shrink
⇧ 7 Ways to Organize & Structure a Real Estate Syndication
This is a short article: an overview.
⇧ THE EMPLOYMENT SITUATION — OCTOBER 2018
This jobs report shows that more people return to the job market as more jobs become available and that currently, there is only very modest price-inflation pressure above the 2% rate targeted by the Fed.
What we don’t know from this report is the extent to which raises in the minimum wage on the state level is accounting for wage increases in terms of the aggregate number shown in the report.
Pressure to increase the minimum wage is not natural pressure due to decreasing labor slack. Calls for increasing the minimum wage can occur regardless of the number of people there are who would enter the job market were wages to rise and, therefore, aren’t directly Phillips Curve related.
The Phillips Curve is the plotted rate representing the hypothetical pressure on price increases due to firms having to pay higher wages and salaries due to fewer available workers due to lower unemployment.
The Phillips Curve model has not yet been updated sufficiently to reflect new factors or variables to account for less price inflation in the face of lowered unemployment. Causation is still there but vastly weaker for a whole host of reasons beyond the scope of this link lede of mine.
Total nonfarm payroll employment rose by 250,000 in October, and the unemployment rate
was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job
gains occurred in health care, in manufacturing, in construction, and in transportation
⇧ Strong jobs report continues positive trend that began in 2010
I’m far from alone. I wrote my assessment above before reading anybody else’s.
… until nominal wages are rising by at least 3.5 percent—and for a sustained period—there is no threat that price inflation will begin to significantly exceed the Federal Reserve’s 2 percent inflation target and the Fed should act accordingly by letting the economy continue to strengthen. While today’s numbers are a significant improvement, it will take stronger and sustained wage growth for workers to begin to reap the benefits of economic growth—and to achieve a genuine recovery from the Great Recession.
This is all the more important for workers and their families who still have much to gain from a genuine full employment economy.
⇧ U.S. Added 250,000 Jobs in October; Unemployment at 3.7%
Some analysts saw warnings of inflation, but others said the pay increase should not bother policymakers at the Federal Reserve. “I don’t think it’s something the Fed should worry about,” Ms. Girard said. “Productivity growth is picking up, and workers should earn more. It doesn’t mean companies have to pass on higher wage costs to consumers. They can afford to pay them more.”
… missing workers will never rejoin the labor force — some have reached retirement age, others have seen their skills lose value, and a number are too disabled to work.
Some will come out of retirement if jobs pay enough. Companies will offer more training and retraining if workers become harder to find. Still others opted for disability payments even though they’d still work if pay were good enough.
⇧ China’s Growing Clout Triggers Economic Arms Race With Old Order
Critics say the likes of the AIIB are merely window dressing for China’s spider’s web of lending channels that lack transparency, are effectively an arm of the Communist Party and leave mostly poorer nation’s saddled with debt.
They especially warn about the Belt and Road Initiative, a project aimed at building hundreds of billions worth of infrastructure around the world and even written into the constitution — a vivid illustration of just how invested President Xi Jinping is to the project.
Pushback is starting to happen. …
“The tide of public and government opinion has turned sharply on China, and electorates are asking whether China’s net effect on world commerce has been positive or negative,” Anne Stevenson-Yang, co-founder of J Capital Research, who has a quarter century of experience in China and previously worked at the U.S.-China Business Council, wrote in a recent note.
⇧ Trump’s War on the Fed
According to Timothy Canova, professor of law and public finance at Nova Southeastern University, the Fed is not a neutral arbiter. It might be independent of oversight by politicians, but Fed “independence” has really come to mean a central bank that has been captured by very large banking interests. This has not always been the case. During the period coming out of the Great Depression, the Fed as a practical matter was not independent, but took its marching orders from the White House and the Treasury; and that period, says Canova, was the most successful in American economic history.
The Fed’s justification for raising interest rates despite admittedly low inflation is that we are nearing “full employment,” which will drive up prices because labor costs will go up. But wages have not gone up. Why? Because in a globalized world, the availability of cheap labor abroad keeps American wages low, even if most people are working (which is questionable today, despite official statistics).
Higher interest rates do not serve consumers, homebuyers, businesses or governments. They serve the banks that dominate the policy-setting FOMC. The president’s critiques of the Fed, however controversial, have opened the door to a much-needed discourse on whether the fate of the economy should be in the hands of unelected bureaucrats marching to the drums of Wall Street.
I’m for abolishing the Fed, have been for close to two decades now. I don’t like monetarism at all. The money supply should not be regulated via interest rates, as there should be no interest rates in the first place, as there should be no lending at profit.
“Monetary-and-Banking-Reform Platform for The United States of America”: Here
⇧ Renters are struggling more than homeowners: Survey
Landlords are smart to go to bat for their tenants when it comes to them getting a fair deal in the overall economy. Tenants on a more solid footing are in general better tenants to have. You know that.
⇧ Columbia, Kentucky Man Sentenced to 30 Years for Arson and Insurance Fraud
Columbia/Adair County Fire Department Assistant Chief Charles Sparks died fighting the fire.
⇧ Hurricane Florence Damage in North Carolina Reaches $17B
… Florence has caused more damage than Matthew and Floyd combined.