Linking ≠ endorsement.
⇧ Urban Gardening Ideas [and Insurance]
Most landlords are happy that tenants actually want to improve the property, but it’s a good idea to get your container garden OK-ed before you start planting.
What’s your policy? Do you have rules in place on the subject?
As a landlord, the most important considerations for you are probably liability/safety and then cleanliness and infestations.
You might require your tenants to carry renters liability insurance first and for your Gardening Policy/Rules to state that the tenant will be solely liable and be required to carry liability coverage covering the tenant’s gardening.
You’d need to be informed of changes in such coverage. The insurance carrier and the insurance broker for the tenant don’t have to provide a notice unless required in the insurance policy. If the landlord is named as an “additional interest” in the policy, then notice is required.
As a landlord, you may not want to be named as an “additional insured” on the tenant’s policy because you want to be able to allow your carrier to make a claim on your tenant’s policy in the event the tenant causes a loss. Also, simply being an “additional insured” will not require that you receive a notice of cancellation unless the policy itself requires it.
This area is a moving target, and different jurisdictions (typically states) have different laws and regulations. Before you act, get the most recent and thorough info concerning your area.
⇧ Seattle real estate developer Ted Schroth in jail for poisoning trees – Puget Sound Business Journal
Don’t try this at home (or anywhere else).
Ted Schroth, a Seattle-area real estate developer, is in jail in Wenatchee for poisoning 123 trees on a property that another Seattle-area real estate developer owns, a Chelan County jail official confirmed Monday.
Schroth, 47, had been scheduled to appear in court Tuesday, but last month he pleaded guilty to a reduced charge of second-degree malicious mischief. He was sentenced to 45 days in jail and ordered to pay $156,413 restitution to the owner of the Lake Chelan property where the trees were poisoned.
⇧ Some perspective on how real estate dwarfs the rest of the asset universe – MarketWatch
The total value of all developed real estate on the planet reached a whopping $217 trillion in 2015, according to a new report released on Monday by U.K.-based real estate adviser Savills.
⇧ Northern Colorado real estate market: Hot and hotter – Loveland Reporter-Herald
Because of the rising cost of scarce land inside Fort Collins and Loveland, plus labor, permits and water fees, “the price (builders) can deliver is not what the market wants.”
⇧ U.S. East Coast Winter Storm | ALERT™ :: Event Summary
The storm is responsible for at least 15 deaths. The accumulation of heavy, wet, snow has caused roof buckling in several states; large or long-span roofs that are flat or have a low pitch are particularly vulnerable. Roof collapses were reported in the Philadelphia metropolitan area, York County and other areas of Pennsylvania, as well as in Maryland, Virginia, New Jersey, Kentucky, and elsewhere. Some of the buildings that were damaged by roof collapses include a grocery store in New Jersey, a bowling center in Virginia, and other buildings with large roofs that are flat or have a low pitch.
The snow accumulation has also increased the risk of ice damming, as snow melts on the roofs of homes and refreezes. This has caused damage due to water leakage under roof shingles and over flashing, and has blocked gutters and drainage pipes. The weight of the dams can cause cracks and deformation in the wall/roof interface, allowing water to infiltrate ceilings and walls.
Flood damage has been reported in several residential and commercial buildings in Ocean City and other areas of Cape May. Damage is also reported in many areas of Long Beach Island. In several coastal areas, from Delaware to New Jersey, coastal flooding exceeded the levels seen during Hurricane Sandy in 2012. Streets in Ocean City, New Jersey, were flooded with three feet of standing water.
⇧ One year on, Syriza has sold its soul for power | Costas Lapavitsas | Opinion | The Guardian
This article is wrong.
Tsipras had campaigned for a rejection but when the result came in he realised that in practice, it meant exiting the euro, for which his government had made no serious preparations. To be sure there were back-of-the-envelope “plans” for a parallel currency, or a parallel banking system, but such amateurish ideas were of no use at one minute to midnight.
First of all, the parallel currency would not have required Greece to exit. Tsipras knew that. Secondly, it was far from amateurish. It would have worked. There was nothing amazing about it. It was basic accounting is all.
⇧ China’s Migrants Go Home — And Stay There – Bloomberg View
… China is on the cusp of a long-term trend of reverse migration back to the countryside. This week, the National Bureau of Statistics reported that the migrant population dropped by 5.68 million in 2015 — its first decline in about three decades.
This year, rural per-capita income is expected to exceed 10,000 yuan for the first time, surpassing urban income growth for the fifth straight year.
It will be difficult to fill all those empty apartment buildings if this keeps up, but good.
I hope they farm organically.
⇧ Budget Deficit Losing Importance as Public Priority | Pew Research Center
As Barack Obama begins his final year in office, the goal of reducing the budget deficit, which the public once ranked among the most pressing objectives for his administration, has continued its recent decline in perceived importance.
Overall, 56% say that reducing the budget deficit should be a top priority for the president and Congress in 2016, down from 64% who said this last year. The emphasis given to the budget deficit peaked in 2013, the first year of Obama’s second term, when 72% called it a top priority. At that time, the deficit ranked behind only improving the job situation and the economy on the public’s to-do list. Today, reducing the budget deficit ranks ninth in priority out of 18 policy areas tested in the survey.
What we don’t learn from this poll is how much the public has learned about how money is created, the relative size of the deficit versus GDP, the impact of governmental borrowing while interest rates (bonds) are so historically low, and the positive impact of governmental spending (the multiplier) especially while the private sector still has so much deleveraging to go after the Great Recession crash.
⇧ Banks’ Influence on Congressional “Reforms” of the Fed
Community banks operating in the interests of their shareholders should not – and don’t – fully internalize these taxpayer costs.
⇧ Opec pleads for Russian alliance to smash oil speculators – Telegraph
Mr Norrish said the oil market faces powerful headwinds. US shale has emerged as a swing producer and will crank up output “quite quickly” once prices rebound.
Global climate accords have changed the rules of the game and electric vehicles are breaking onto the scene.
⇧ Macro and Other Market Musings: The Balance Sheet Recession That Never Happened: Australia
… why did Australia’s balance sheet recession never happen? The answer is that the Reserve Bank of Australia (RBA), unlike the Fed, got out in front of the 2008 crisis. It cut rates early and signaled an expansionary future path for monetary policy. It also helped that the policy rate in Australia was at 7.25 percent when it began to cut interest rates. This meant the central bank could do a lot of interest rate cutting before hitting the zero lower bound (ZLB). So between being more aggressive than the Fed and having more room to work, the RBA staved off the Great Recession.
This experience in Australia speaks to why the balance sheet recession view miss the deeper, more important problem behind depressions: the ZLB.
Okay, but what they did was prop up a real-estate bubble. In addition, the reason the US had a recession was due to hugely insufficient fiscal stimulus.
⇧ The State of Apartment Supply and Demand – YouTube
Alan Pollack, chairman of Providence Management Company, LLC, explains why apartment living is the popular choice for so many Millennials and Baby Boomers—and why there probably aren’t enough apartments to meet this demand.
I think he’s right about supply and current and coming demand.
⇧ HUD sends La. $234M for flooding
Heading in the right direction:
NEW ORLEANS — In a nod to the threat Louisiana faces from flooding, the federal government is sending $233.8 million in grants to Louisiana to relocate a coastal American-Indian village, prevent damage from hurricanes and make a suburban slice of New Orleans better at handling stormwaters.
⇧ Mississippi hit by snowstorm and two tornadoes | Times Free Press
Both tornadoes damaged homes in the area, uprooted trees and downed power lines.
⇧ President approves disaster declaration for Missouri – Maryville Daily Forum: State News
The unusual winter flooding, prompted by three straight days of torrential rains, left 16 people dead and significantly damaged nearly 1,000 homes in eastern and southern Missouri.
⇧ Massive snowstorm brings flooding to East Coast
A string of resort towns was temporarily isolated Saturday morning by floodwater that inundated homes and restaurants.
⇧ Employee Wellness Programs Not So Voluntary Anymore – Bloomberg Business
“Employers will have to wait and see what happens,” said Steve Wojcik, vice president of public policy at the National Business Group on Health, a nonprofit that represents large employers.
⇧ Kingsport Times-News: Hawkins man accused of burning Baileyton residence a day before it was to be auctioned
A Mount Carmel man has been charged with arson and insurance fraud, among other offenses, for allegedly setting his residence in Baileyton on fire a year ago, one day before the house was to be auctioned by the bank.
I wonder what hard evidence there is, if any. The answer should come out in future coverage.
⇧ Review of the RSA report on Universal Basic Income
… Citizen’s Income would offer the ‘power to create’, and then sets four tests for the idea to pass:
- Does the system accord with a widespread set of moral precepts?
- Is it broadly fiscally achievable within the parameters of existing taxation and expenditure?
- Is it distributionally just when compared to the current system?
- Will greater individual (and civic) freedom and creativity be realized? (p. 18)
“Is it broadly fiscally achievable within the parameters of existing taxation and expenditure?”
That’s irrelevant unless the question is asked in order to stimulate the formulation of a new fiscal system.
⇧ Americans are trapped in a ‘cycle of financial insecurity’ – MarketWatch
Nearly seven years after the Great Recession, millions of Americans are stuck in a financial rut.
Home ownership rates are at an historic low, renters are burdened by rising rents and — even though unemployment has fallen considerably in recent years — the percentage of underemployed Americans is twice those who are unemployed, according to the “2016 Assets & Opportunity Scorecard” released Monday by the Corporation for Enterprise Development, a nonprofit group in Washington, D.C. focused on expanding opportunity for low-income households.
⇧ Housing Economists See Job Gains Offsetting Stock-Market Pains – Real Time Economics – WSJ
Economists are betting the U.S. housing market will take its cues from the labor market this year rather than unsettled financial markets.
A global economic slowdown could also help ensure mortgage rates remain low despite the recent decision by the Federal Reserve to raise short-term interest rates—another boost to the housing market. Messrs. Crowe and Nothaft both said they expect rates for a 30-year fixed-rate mortgage to go no higher than 4.5% by the end of the year. Mr. Crowe said he expects them to reach 5.3% by 2017.
They’ve been thinking that for years and years now. They must think the Fed will raise rates four times this year. I don’t see it (yet anyway).
⇧ How To Buy Real Estate With Leverage In A 401(k) Plan – Forbes
When an IRA buys real estate that is leveraged with mortgage financing, it creates Unrelated Debt Financed Income (UDFI), a type of UBTI on which taxes must be paid. However, with a 401(k) plan, you can use leverage without being subject to the UDFI rules and UBTI tax. This exemption under IRC 514(d)(9) provides significant tax advantages for using a 401(k) plan versus an IRA to purchase real estate. In order to take advantage of the exemption under 514(c)(9), the loan must be a bona fide nonrecourse loan and the loan must be used to acquire real estate. A nonrecourse loan is [a] type of loan that is secured by collateral, which is usually property.
There is one catch. Your 401(k) plan documents must allow for the purchase of real estate, which is not always the case, especially with 401(k) plans that cover many employees. However, if you are self-employed or have a business that has no full-time employees other than yourself or a spouse, a solo 401(k) plan could provide a solution. The solo 401(k) plan, also known as an Individual 401(k) plan, is an IRS approved type of qualified retirement plan. The solo 401(k) plan is not a new type of plan. It is a traditional 401(k) plan covering only one employee allowing it to bypass the complex ERISA regulations, which is the reason it is so popular for real estate and other alternative asset investments.
⇧ Scientists Warn Against Economic Disruption from Climate Change
The WMO says that the fifteen of the 16 hottest years on record have all been this century, with 2015 being significantly warmer than the record-level temperatures seen in 2014. Underlining the long-term trend, 2011-15 is the warmest five-year period on record.
The news comes as Asia is experiencing unusually cold weather and the United States a major blizzard, a sobering reminder that climate change is about extreme impacts from all kinds of weather as the weather systems we have taken for granted for so long shift into more chaotic patterns under the influence of the greenhouse effect.
⇧ Why one builder thinks cheaper homes work
Express launched in early 2014, touting no-option, no-frills homes in exchange for prices between $120,000 and $150,000.
It was a smart move, very consistent with my urging companies to build affordable housing even though the numbers aren’t supposed to work.
⇧ ‘Too Big to Fail’ Banks Thriving a Few Years After Financial Crisis – The New York Times
William D. Cohan:
… despite the endless complaining about how difficult Washington has made things for bankers, we have entered a new Golden Age of Wall Street, where competition is minimal, profits will continue to be high (as long as the economy continues its rebound) and regulation, while present as never before, can be “managed” as just another cost of doing business.
Given that the 2008 financial crisis started because Wall Street banks packaged shoddy mortgages on a withering number of American homes and then sold them as securities around the globe, this is a particularly surprising and unexpected outcome.
⇧ APNewsBreak: $1 billion insured losses in California fires
The $1 billion does not include uninsured losses nor does it include damage to public roads and utilities.
For that, global insurance company Aon Benfield estimated last year that the two fires did nearly $2 billion in economic damage, including business interruption.
⇧ Texas Led Nation in Catastrophic Losses in 2015
Tornadoes, hailstorms and fires took their toll on Texas last year with insured losses well over $3 billion ….
The numbers don’t include flood losses, which were in the hundreds of millions of dollars ….
Texas had 466,250 claims from catastrophic weather events ….
⇧ U.S. blizzard to cause multi-billion dollar losses: report | Reuters
Massive blizzards that paralyzed much of the U.S. East Coast in the past few days are likely to cause “multi-billion” dollar economic losses ….
… a similar storm system in January 1996 caused an estimated economic loss of $4.6 billion and insured loss of $920 million in current dollar terms.
⇧ Hundreds of lots sit empty in N. Mpls. amid frenzy of demand – StarTribune.com
In Minneapolis, demand for housing has never been more intense. Agents are begging people to put homes up for sale. The teardown-and-rebuild phenomenon is spreading from the wealthy southwest corner east to the Mississippi River and toward downtown.
But on the city’s North Side, there are hundreds of empty lots — some for as little as $1,700 — with few takers.
It’s a situation, years in the making, that drags down the wealth and economic potential of homeowners in the area, distorts property value elsewhere in the city and is an obstacle to reversing population loss.
… with prices on the rise and demand outpacing supply, the trend is moving into less-expensive neighborhoods. In the Nokomis area last year, the number of teardowns nearly doubled.
⇧ A Lesson for 2016: Upton’s Sinclair’s 1934 End Poverty in California (EPIC) Gubernatorial Campaign | naked capitalism
… before you pooh pooh Upton Sinclair’s ideas as pie-in-the-sky, remember that the worker-owned Mondragon cooperative has an admirable record of financial results and innovation, and is a major reason the Basque has suffered much less than the rest of Spain in its crisis.
“We say to the voters: There are half a million persons in our state out of work. They cannot be permitted to starve. These persons can never again find work while the present system endures. They are being supported by public charities, and the burden of that is driving the state to bankruptcy and the taxpayers to ruin. There is no solution to this problem except to put these unemployed at productive labor, to make them self-sustaining, to let them produce what they are going to consume and so take them off the backs of the taxpayers.
“That is the simple proposition. There can be no valid objection to it. But the whole power of vested privilege rises up against it. Why is this? The answer is because they are afraid of the precedent. They are afraid the plan will succeed, and show the unemployed how to produce for use instead of for profit. It will put into the minds of the unemployed the idea of getting access to land and machinery by the political method, by the use of their ballots. And once they get access to good land and modern machinery they will produce so much, they will make such comfort and plenty for themselves, that they will never again be content to support the parasites of Wall Street.”
82 years ahead of his time? No, we’re just 82 years behind (at least).
The most important element is democracy: full, rather-direct democracy where the people decide, not the elitists, not the plutocrats, not the oppressors, who want more for themselves and don’t care how little the rest has nor how hard the rest has to work or struggle or needlessly suffer because of the indefensibly brutal ideology of selfishness and greed.
⇧ Wall Street Declares War on Bernie Sanders – New Economic PerspectivesNew Economic Perspectives
William K. Black:
Why do the Wall Street billionaires hate Bernie? Paul Krugman, unintentionally, provided the key in his most recent attack on Bernie. Krugman claimed that the key to what he claimed was President Obama’s success was not “breaking” “Wall Street’s power” over our economy and democracy. To Krugman and Hillary’s horror, however, Democratic voters, like the median U.S. voter, understand that breaking the paramount power of the Wall Street billionaires over our economy and its political power that has caused us to descend into crony capitalism is essential to take back our Nation.
⇧ The Varoufakis Effect? by Yanis Varoufakis – Project Syndicate
So, what caused the huge drop in business confidence during my tenure? Was it my policy proposals — jointly authored with Jeff Sachs (with input from Norman Lamont, a former Tory Chancellor of the Exchequer in the United Kingdom, Harvard’s Larry Summers, and James K. Galbraith of the University of Texas) — that were responsible? Or was it the Troika’s explicit threat of bank closures (which were actually imposed when we dared to put our creditors’ ultimatum to the Greek people in a referendum last July)? In other words, was it the “Varoufakis effect” or the “Troika effect”?
Thankfully, there are diligent analysts, like Mohamed El-Erian, to whom sensible investors can turn. And their verdict is clear: Greece’s downturn in 2015 was due to the “Troika effect.”
Yes, political risk in Europe is clear and present. But it emanates from the Troika’s unwillingness to reform itself and to rethink its failed policies.
The real Varoufakis Effect will come in the form of DiEM.
⇧ Martin Wolf on China capital controls | FT World – YouTube
FT chief economics commentator Martin Wolf on whether China should tighten its capital controls to stem huge outflows of money, and the challenges posed by market turmoil and its slowing economy.
Integration into the status quo global economy? I think the global system will undergo a radical reformation instead away from corporatocracy/plutocracy because those don’t seem sustainable and China will come to see it (likely already has but so far the leadership has been afraid to admit it openly).
⇧ Head of China’s statistics bureau investigated for corruption | World news | The Guardian
There is only very scant info so far, much too little to do more than wildly speculate: scapegoating, etc.
⇧ China accuses George Soros of ‘declaring war’ on yuan | Business | The Guardian
China’s official Xinhua news agency on Wednesday said that Soros had predicted economic troubles for China “several times in the past”.
“Either the short-sellers haven’t done their homework or … they are intentionally trying to create panic to snap profits,” it said.
We shall see. I disagree with George Soros about plenty of things I won’t go into here, but I think the extremely controversial Soros has been right all along about China’s prospects, as for the most part, he’s seen the same things I have about China.