Real estate, cybersecurity and other risks, economics, & more: links & commentary for May 10, 2019

The Trouble with Argentina’s Economy

When the current government, led by President Mauricio Macri, took office in December 2015, it said that its economic policies would attract foreign direct investment and lead to sustained increases in productivity. The currency crisis that erupted in April 2018 underscored the failure of its policy approach.

In response, the government turned to the International Monetary Fund, secured a $57 billion stand-by loan – the largest in the IMF’s history – and agreed on a new approach to address the country’s macroeconomic imbalances. But the terms of the loan agreement have kept changing as investors remained nervous.

Private lending can be a good — if risky — way to invest in real estate

… this can be risky investing, but you can drastically reduce the risk if you know what you’re doing; and, lending money to a flipper is (typically) much less work, risk and stress than buying a property yourself. Another benefit is that the flipper usually brings money to the deal, which gives the lender more cushion.

The State of the American Debt Slaves, Q1 2019
… these debt slaves [student-loan borrowers] now owe $4 trillion that they must pay interest and principal on for all times to come. And inflation won’t help them because rising inflation will cause these rates to rise, and our debt slaves will just have to work that much harder to deal with their debts.

Ten Years Later—Did QE Work?

Our paper reveals that the impact of QE1—an increase in commercial banks’ mortgage refinancing activity—had effects on local consumption and employment in the nontradable goods sector, but no overall employment effects. In contrast, QE3-driven increases in commercial and industrial lending and home mortgage originations translated into sizable growth in overall employment. The main results are best illustrated in the chart below, which plots the average growth of employment in two sets of counties: those whose banks had high MBS exposure and those whose banks had low MBS exposure. While there is virtually no differential effect after QE1 and QE2, there is a substantial difference after QE3.

Miami’s housing affordability crisis is dire. A new report reveals possible solutions.

Trump Administration Floating Changes to Poverty Measure That Would Reduce or Eliminate Assistance to Millions of Lower-Income Americans

The Trump Administration yesterday floated a proposal to use a lower measure of inflation when adjusting the poverty line each year. Consistent with other policies the Administration has pursued, this policy would over time cut or take away entirely food assistance, health, and other forms of basic assistance from millions of people who struggle to put food on the table, keep a roof over their heads, and see a doctor when they need to. The reductions in assistance that this proposal would produce stand in stark contrast to the Administration’s 2017 tax law, which conferred large new benefits on the highest-income households.

If the poverty line is altered in this fashion, fewer individuals and families will qualify over time for various forms of assistance, including many who work hard but are paid low wages. That’s because using a lower measure of inflation like the chained CPI to adjust the poverty line each year would make the eligibility thresholds for various programs that serve people in need lower and lower over time, compared with what the thresholds otherwise would be. This, in turn, would lower the income eligibility limits for programs like SNAP (formerly known as food stamps) and Medicaid, which are tied to the federal poverty line.

… the Department of Education says that more than 1 million school children were homeless in the 2016-2017 school year, and the Department of Agriculture (USDA) says that 15 million households faced food insecurity in 2017, meaning that they experienced difficulty affording food.

… Labor Department data show that costs for rental housing, which low-income people rely on disproportionately, have been rising faster than the overall CPI.

The Trump administration suggests that the plan would force people to try harder to find and hold jobs. However, wages are so pathetically low. More people fighting for them would keep them low, too low. It would not lift people or give them the dignity claimed by the wealthy. There are vastly better ways to help people to work than slashing existing benefits so the rich can keep paying slave wages.

I read a great deal of international business and economics news, and the analysis (in the video below) by Richard Vague is very good. His point about R&D has been an issue of mine for decades. We used to really emphasize it. We used to give major tax breaks exactly for it. Ever since we stopped, we’ve been sliding down.

Instead of imposing additional tariffs, which will hurt the Chinese and U.S. economies, the U.S. should have its own research and development strategy, says Richard Vague, author of The Next Economic Disaster.

I don’t agree with no tariffs against China. However, my reasons for tariffs has to do with the total lack of democracy in China, not simply “trade” issues.

Affected Nebraska Residents Get Bad News About Dam Failure

State law limits the power district’s liability to $1 million per individual court-proven claim per occurrence and $5 million, total, for all such claims, Domina said. Knox County, which was one of four counties affected, already estimates that it suffered more than $17 million in damages.

Hackers Selling Access and Source Code From Antivirus Companies

Yelisey Bogulsavskiy, AdvIntel’s director of security research, told BleepingComputer that Fxmsp reportedly compromised the Active Directory (AD) of at least one company and established persistence through an external Remote Desktop Protocol (RDP) server.

AD is the most critical part of a Windows network, as the server is responsible for authenticating and authorizing all users and computers on the network; it is also where security policies are defined for all the systems it manages.

This tactic has been used by the Carbanak gang against banks across the world. It was discovered by Kaspersky threat researchers at a bank in Russia.

Android Q Hardens Security, Adds Better Encryption

Minnesota lawmakers weigh tighter safety rules for toxic mine waste storage

Brazil’s National Mining Agency, for example, has banned construction of new “upstream” tailings dams following the collapse of the Brumadinho tailings dam at the Córrego do Feijão iron ore mine in January. The giant mudflow killed at least 200 people.

Upstream tailings dams are the most common type of dam — and the type planned by PolyMet Mining in its proposed mine.

The International Council of Mining & Metals in London reacted to the Brazilian catastrophe by launching an independent review of standards for managing tailings dams.

Minnesota needs to engage in that conversation, Maccabee said.

“For computer security, would we take a playbook that was written in 1993?” she said.

The proposed rule changes are modeled on similar reforms Montana lawmakers passed in 2015. That industry-led effort was a response to the disastrous collapse of the Mount Polley tailings dam in British Columbia in 2014, which spilled more than 20 million tons of mining waste into streams and lakes.

The panel that reviewed that dam failure recommended a shift to storing mining waste in a safer dry or drained form, instead of wet tailings.

So called “dry stack” or drained tailings storage is more expensive.

Wolters Kluwer takes services offline after malware attack

Great Lakes Water Levels at ‘Precipice of a Disaster’ With Flooding Occurring or Imminent in New York, Ohio and Michigan

It’s a remarkable turnaround from early this decade, when lake levels were slumping and some hit record lows.

“These events are quite consistent with what scientists have been expecting with long-term climate change patterns,” Drew Gronewold of the University of Michigan’s School for Environment and Sustainability told the AP. “The challenge is that it’s very hard to forecast when those extremes are going to occur and when the transition between them might occur.”

The central U.S. has been the target of numerous heavy rain events this spring, which have filled Great Lakes tributary waters and churned up big waves that are eroding shorelines, Guy Meadows, director of the Great Lakes Research Center at Michigan Technological University, told the AP.

Possible Tornado Tears Roof from Arkansas Apartment Complex

Pine Bluff Police Chief Kelvin Sergeant said there was extensive damage to buildings, and four injuries at the apartment.

Flash Flooding in Texas Leaves 1 Dead in Austin

In the West Texas town of Merkel, about 15 miles (25 kilometers) west of Abilene, Police Chief Phillip Conklin told KTXS-TV of Abilene that seven people were rescued Wednesday from floodwaters. Three were rescued from an apartment complex, two from flood-stranded vehicles and a couple from their home.

14 Counties Added to Emergency Declaration in Oklahoma

… the counties have experienced flooding, severe storms, tornadoes and straight-line winds over the past week.

It’s not possible for China to win a tariff war with the US.

Chinese companies brace for tariff hike: ‘If the tariffs rise to 25%, then we’re done for’

UN: Plastic waste pact approved with US among few holdouts

The framework “is historic in the sense that it is legally binding,” Payet said. “They (the countries) have managed to use an existing international instrument to put in place those measures.”

The agreement is likely to lead to customs agents being on the lookout for electronic or other types of potentially hazardous waste more than before.

“There is going to be a transparent and traceable system for export and import of plastic waste,” Payet said.

Now that’s good news!