News: Real Estate, Risk, Economics. Apr. 10, 2018

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Table of Contents
(Click to sections below.)

1) Swiss referendum may change the way money is created in the economy

2) THE EMPLOYMENT SITUATION — MARCH 2018

3) The Bayer-Monsanto Merger Is Bad News for the Planet

4) Man pleads guilty in insurance fraud case

5) Wyoming County Man Pleads Guilty to Insurance Fraud by Arson

6) Exxon Loses Bid to Stop States from Probing If It Lied About Climate Change

7) Lawsuits over Arkema Chemical Disaster in Texas Add Up

8) California Mudslide Claims Top $421M

9) City Council Approves Changes to Houston’s Floodplain Regulations

10) The US needs to relieve the constraints to faster noninflationary growth

11) Alarmed conservationists call for urgent action to fix ‘America’s wildlife crisis’

12) Collapse of Cryptocurrencies in Q1: Even the Biggest Crashed 67% to 88%

13) Two degrees no longer seen as global warming guardrail: studies

14) Sweden’s central bank governor has called for public control over its payment system

15) World’s Most Wanted Bank Whistleblower Was Just Arrested, for the Worst Possible Reason

16) Tax Trouble For Certain Bitcoin Traders

17) HSBC tax evasion whistleblower released after being detained on Swiss extradition request

18) Police rolling out technology which allows them to raid victims phones without a warrant

19) Some Seattle recycling heads to landfills amid new rules from China

20) Story From a CPA: The Time an Investor Paid a $96k Tax Bill He Shouldn’t Have by Amanda Han | BiggerPockets com

21) 13 Items to Check When Performing Due Diligence on Multifamily Properties by Sterling White | BiggerPockets com

22) Intro to Multifamily Underwriting: 5 Steps to Calculate Effective Gross Income (EGI) by Ben Leybovich | BiggerPockets com

23) Trade War or Not, China Risks a ‘Minsky Moment’: Putting Trump’s tariffs in perspective, by Marshall Auerback

24) Confidential Shell Oil Report Prompts Lawsuit: They Knew About Climate Change Decades Ago

25) Those Shiny New Apartments Aren’t What Millennials Need

26) Privatization of public education

27) White House’s Navarro criticizes Fed interest-rate forecast

28) The anatomy of construction corruption: How bribery and overbilling schemes have become commonplace in the world of real estate’s middlemen

29) County to request millions in federal housing funds

30) Revitalization efforts proving good for Akron real estate

31) MANIFESTO of MeRA25 — the new party set up by DiEM25 in Greece to revive the spirit of the Greek Spring

32) FEMA Chief Says Puerto Rico Needs $50 Billion to Rebuild

33) Minot, North Dakota, Shelves Flood Resilience Project

34) $1.2B in Federal Flood Control Funds Going to Louisiana

35) No Sprinklers in Trump Tower Deadly Fire

  1.    Swiss referendum may change the way money is created in the economy

    It has been a really long, slow haul, and we’ve barely started to gain any traction.

    The most important thing is that Switzerland’s direct democracy goes way beyond just being able to put this to a vote. It is extensive enough that the people could vote locally as to what to fund with the new money. If they do it right, if they target real productivity to the proper degree, they’ll have the best economic system short of Heaven.

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


  2.    THE EMPLOYMENT SITUATION — MARCH 2018

    Total nonfarm payroll employment edged up by 103,000 in March, and the unemployment rate was unchanged at 4.1 percent. Employment increased in manufacturing, health care, and mining.

    Over the year, average hourly earnings have increased by 71 cents, or 2.7 percent.

    … revisions, employment gains in January and February combined were 50,000 less than previously reported.

    Overall, that’s not very good. Wages are just slightly above price inflation. It’s not much pressure, especially when combined with the low number of new jobs.

    Keep in mind the instability caused by fear of the trade war with China. I don’t fear it, as the US has a huge trade deficit, which means China has a great deal more to lose and can’t win a trade war fought correctly. However, many people don’t seem to realize that or don’t want to for purely political reasons. Also, keep in mind that construction is a leading indicator and construction employment fell by 15K.

    In light of this, the Fed would be foolish to continue tightening under the silly notion that they, the Fed, need room to cut when another recession hits. They’ll cause the recession.

    How long is it going to take them to figure that out?

    Perhaps they have a different, unspoken, agenda, such as higher bank profits regardless of the harm to the general economy and low-paid workers in particular.

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


  3.    The Bayer-Monsanto Merger Is Bad News for the Planet

    This may not strike you as an appropriate link for this blog to post, but it goes right to the heart of risk management. The issues discussed cut across all sectors. If they are not properly addressed, and they haven’t been, there will be catastrophic consequences impacting everyone (rich or poor).

    Ellen Brown deserves a lot of credit for putting the entire thing into the proper historical context. Unfortunately, as she makes quite clear, there are those who put making money for themselves above all else (above you and yours). They’ll more than risk everything for short-term gain loaded with negatives that far outweigh that very self-centered gain.

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


  4.    Man pleads guilty in insurance fraud case

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


  5.    Wyoming County Man Pleads Guilty to Insurance Fraud by Arson

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


  6.    Exxon Loses Bid to Stop States from Probing If It Lied About Climate Change

    I agree with the court’s decision, even though Exxon’s insurance coverage may be on the hook. The reason for my position is 1) I believe human-caused global warming is real 2) many energy companies knew the scientific arguments 3) such companies that secretly agreed with the science that AGW is real and would get worse if carbon-fuel burning were not curtailed should be on the hook for losses suffered and to be suffered and 4) a suit that prevails in that regard would hasten the day that carbon-fuel burning would be completely stopped, as should have happened decades ago.

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


  7.    Lawsuits over Arkema Chemical Disaster in Texas Add Up

    … the floods submerged much of the chemical manufacturing plant. It was seven feet of that water, swampy and brown and by some accounts carrying an oily chemical sheen, that caused the plant’s refrigerated containers to fail; it was the resulting high temperature that caused the chemicals to degrade; and it was those hot chemicals that ruptured their containers and caused a series of chemical fires over most of the following week.

    Those chemicals, the Crosby plaintiffs say in their lawsuits, contaminated the surrounding community’s air and water, causing the respiratory problems, pneumonia, headaches, nausea and dizziness that still plague some neighbors and first responders.

    Nobody should wish this on Texas, but it should be stated that proper regulation and proper enforcement is absolutely required. The anti-regulation, libertarian-capitalist (capitalist near-anarchy) is behind the terrible lack of risk management that sickened all sorts of people, people who risk their lives saving people, people we need to protect, people who are more important than CEO and shareholder money.

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


  8.    California Mudslide Claims Top $421M

    … efficient proximate cause ….

    What was the initial trigger? If it hadn’t been for the fires, the mudslides (excluded as a covered risk of loss) wouldn’t have happened. They are, therefore, a covered risk for this loss event.

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


  9.    City Council Approves Changes to Houston’s Floodplain Regulations

    It’s very difficult to justify anyone even questioning the changes. The changes will likely prove inadequate if we don’t clamp down vigorously on AGW.

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


  10.    The US needs to relieve the constraints to faster noninflationary growth

    So, this is a worthy article/link. The trade war, if handled properly, will decrease labor slack in the US, which will put upward pressure on wages, price inflation, and interest rates. The trick will be avoiding overly tightening rates at the Fed.

    We still don’t really know what consumers will do. The tax cuts for them will phase out if not renewed. Higher wages will allow for more purchasing.

    Then what will the climate do? Will it wreak havoc at a rate too great to keep up with? Repairs are economically stimulatory but only if repairs can keep up.

    I don’t even want to speculate about a world war, not on these pages.

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


  11.    Alarmed conservationists call for urgent action to fix ‘America’s wildlife crisis’

    To do anything truly meaningful about this would require a huge change of heart on the part of those who typically call themselves “conservatives.” We’d have to reverse global warming, end all plastics pollution, and convert entirely to organic farming (and I mean the real kind, not the industrial type that’s just a division of a non-organic company).

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


  12.    Collapse of Cryptocurrencies in Q1: Even the Biggest Crashed 67% to 88%

    I am not the least bit sorry that I warned people very publicly right from the start, when Bitcoin was 25 US ¢.

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


  13.    Two degrees no longer seen as global warming guardrail: studies

    This article is optimistic.

    If US President Donald John Trump is successful in ramping up carbon burning and does nothing to turn around from that, he’ll go down as the dumbest President in US history.

    He is putting money before common sense. He’s listening to and is, at best, mesmerized by those who don’t care that they are ruining the planet. They just want money and what it will buy them while they are still alive.

    Well, with the current mixed economy we have, money will buy longevity. They’ll be living through the nightmare they created or taking their own lives or be leaving the planet or constructing high-tech bubbles on Earth just as if they were living in space forever.

    That is not a good outcome.

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


  14.    Sweden’s central bank governor has called for public control over its payment system

    The Riksbank governor, Stefan Ingves, called for new legislation to secure public control over the payments system, arguing that being able to make and receive payments is a “collective good” like defence, the courts, or public statistics.

    Exactly.

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


  15.    World’s Most Wanted Bank Whistleblower Was Just Arrested, for the Worst Possible Reason

    Did someone say that banksters don’t run the world?

    Look, as far as I’m concerned, that bank should have been shut down.

    Hervé Falciani is a hero, not a criminal. The international community should protect him. If he’s taken and put in prison, the international community should instantly go in and release him and then try, convict, and sentence those who took him, tried him, and imprisoned him.

    Too tough? Hardly.

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


  16.    Tax Trouble For Certain Bitcoin Traders

    Did anyone think I was exaggerating just what a bad idea it always was to get into cryptocurrencies?

    I said from the very start that the IRS would want its cut. People ignored me.

    I’m not glad about it at all. It makes me rather sad.

    If I were in politics, I’d move that all such crypto be completely banned and that all people who suffered a loss over it be granted full tax-amnesty. If I were the President, I’d pardon them on condition that all such crypto is banned immediately.

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


  17.    HSBC tax evasion whistleblower released after being detained on Swiss extradition request

    Good news …

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


  18.    Police rolling out technology which allows them to raid victims phones without a warrant

    Police forces across country [England/UK] have been quietly rolling out technology which allows them to download the entire contents of victim’s phone without a warrant.

    At least 26 forces now use technology which allows them to to extract location data, conversations on encrypted apps, call logs, emails, text messages, photographs, passwords and internet searches among other information.

    People carry private medical, attorney-client, banking, and all sorts of other data that ought not be attainable without a solidly obtained, detailed warrant because even the “good guys” can have rogues within who are ready to abuse, steal, and exploit for clearly criminal and evil purposes.

    It’s self-evident we need computer technology to all be open-source and directly democratically developed and controlled.

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


  19.    Some Seattle recycling heads to landfills amid new rules from China

    England was hit hard by this first. It’s now rippling from everywhere. Let’s hope the landfill people are smart enough to bury the recyclables in separate designated plots so they may easily be uncovered to yet be properly recycled.

    It would be beneficial were they placed in lined plots and then covered with waterproof covering.

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


  20.    Story From a CPA: The Time an Investor Paid a $96k Tax Bill He Shouldn’t Have by Amanda Han | BiggerPockets com

    Moral of the story: thorough research.

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


  21.    13 Items to Check When Performing Due Diligence on Multifamily Properties by Sterling White | BiggerPockets com

    Don’t stop here. Keep building your own list.

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


  22.    Intro to Multifamily Underwriting: 5 Steps to Calculate Effective Gross Income (EGI) by Ben Leybovich | BiggerPockets com

    If you want to cut to the chase, see: “Step 2: Economic Losses.” That’s the meat.

    I’ll tell you that starting there and then using actual losses is where you go to create and update your sinking fund, your set-asides, your cushion, your cash-on-hand, your capital fund, etc.

    With the right equity in the property going in (to avoid possibly being underwater later) and with the proper amount of capital for standard losses, you’ll be going a long way in avoiding being wiped out in a crash.

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


  23.    Trade War or Not, China Risks a ‘Minsky Moment’: Putting Trump’s tariffs in perspective, by Marshall Auerback

    This is an interesting article. I don’t entirely agree with it but do agree with much of it and it’s general thrust, at least from the US mixed-economy perspective.

    The thing it leaves out is China’s endless capacity for creating money. China is also so dictatorial, it could write off everything and simply start over whenever Xi would want to give the command. Of course, Xi wouldn’t have the foggiest notion of what that would do and, therefore, (likely) wouldn’t try it. For one, if he were to try it and do it right so it would work, he’d be ruining all “market economics” based upon interest. He be exposing it for what it is. He’d be isolating China in an instant by doing so, as the rest of the private-bank-dominated world would want to stop the revelation from sinking in such that the People of the world would catch on to the fact that such banks are not only not needed but are unwanted for being the inherent economic leeches they are (who actually set up the global economic system for that very reason: to leech).

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


  24.    Confidential Shell Oil Report Prompts Lawsuit: They Knew About Climate Change Decades Ago

    This is a huge deal. Insurance companies are going to come down on both sides of this depending upon whom those companies insured and still insure.

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


  25.    Those Shiny New Apartments Aren’t What Millennials Need

    The problems are manifold. The tax cuts will fade unless renewed. Inequality is still rising. Student debts are not improving quickly enough. Automation will replace more and more jobs. Global warming will continue increasing.

    We can handle these issues if we are willing. Nothing I’ve mentioned is not fixable. It will, however, take huge change in mindsets. People are going to have to be more flexible than ever. They’re going to have to be more than willing to admit they’ve been completely wrong on many fronts.

    “Those Shiny New Apartments” aren’t affordable enough is the problem. We’re going to have to subsidize ourselves. That means passing laws to give ourselves the money needed. That means overthrowing the current banking system. There’s your issue of issues.

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


  26.    Privatization of public education

    Increasingly, public higher education in the United States is public in name only.

    And the privatization of the public educational system is costing the American working-class dearly.

    We went exactly backwards. Privatizing public education was dumber than words can express. The better educated our children are, the better the entire economy does. Therefore, all of the high fees to students and their families has been like a bullet in the head of our national economy. We will all suffer more on account of it.

    When will the shortsighted and greedy be permanently removed from office?

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


  27.    White House’s Navarro criticizes Fed interest-rate forecast

    Navarro said the economy is experiencing a rerun of the late 1990s, when then-Fed Chairman Alan Greenspan was able to hold off hiking interest rates because of faster productivity growth.

    True, but deregulation caught up with all of it in the form of the consequent Great Recession.

    Also, will the rich really invest in productivity increases rather than nonproductive rent seeking?

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


  28.    The anatomy of construction corruption: How bribery and overbilling schemes have become commonplace in the world of real estate’s middlemen

    Wow, this is painful to read. How can people think government is corrupt while never mentioning private-sector corruption?

    Reading this is like reading that gangsters are in charge.

    Is it overstated? Is the criticism against the banking industry overstated? I don’t think so.

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


  29.    County to request millions in federal housing funds

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


  30.    Revitalization efforts proving good for Akron real estate

    If you spot developments early, you can get in early: buy low.

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


  31.    MANIFESTO of MeRA25 — the new party set up by DiEM25 in Greece to revive the spirit of the Greek Spring

    This is Yanis Varoufakis proclaiming what Alexis Tsipras proclaimed but unlike Tsipras, meaning it. “While (A) would be mutually advantageous, there is no guarantee that Europe’s political establishment will act in the interests of a majority of Europeans. From Greece’s perspective, however, the implementation of the SEVEN POLICIES is our best strategy whatever ‘official’ Europe’s response might be (see next section).” What that says is that Plan B is now Plan A and will be implemented whether the greedy bankers of Europe and their political cronies like it or not.

    Yanis hasn’t abandoned his view that were those bankers and their cronies to make the wrong choice (not accepting Greece on Greece’s more than fair and honest terms), the fascists would take over and dismantle the EU and end the euro.

    Yanis rightly hates that idea. He wants Europe to be united in a truly democratic manner. The trouble is that the bankers never wanted that and still do not.

    The only problem I see with Yanis’s plan is that it’s not radical enough even if the Seven Policies are exercised and whether or not the rest of Europe accepts that with Greece remaining in the EU and eurozone or not. The current private-banking system must be overthrown across the whole of Europe and completely replaced by democracy as direct as practicality of function, not ideology, will allow.

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


  32.    FEMA Chief Says Puerto Rico Needs $50 Billion to Rebuild

    I have no comment on this one because the data needed to make an appropriate determination is not readily handy and I am not an investigative journalist with the time and resources and pay to undertake ferreting out that data enough.

    I will say that Puerto Rico should either be completely independent or a full state of the US.

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


  33.    Minot, North Dakota, Shelves Flood Resilience Project

    “The worst thing you want to do is try to inject ourselves, using federal funds, into a market that’s soft right now.”

    If they lack needed affordable housing, then that statement makes no sense unless the object is to protect values rather than house people.

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


  34.    $1.2B in Federal Flood Control Funds Going to Louisiana

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


  35.    No Sprinklers in Trump Tower Deadly Fire

    … fire safety advocates pushed for a requirement that older apartment buildings be retrofitted with sprinklers when New York City passed a law requiring them in new residential highrises in 1999, but officials in the administration of then-mayor Rudy Giuliani said that would be too expensive.

    Too expensive for whom? If the government mandates something, it should subsidize it if it is that expensive. The subsidies should be based upon ability to pay.

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

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