News: Real Estate, Risk, Economics. Nov. 19, 2018

Linking ≠ endorsement. News: Real Estate, Risk, Economics. Nov. 19, 2018

Table of Contents
(Click to sections below.)

1) Smoke From the Northern California Wildfire is Making Air Unhealthy in the Bay Area, Sacramento

2) Oil drops again after Trump tweets against production cuts

3) Tariffs are having a negative impact for only about 9 percent of companies, earnings calls show

4) City officials conduct one of the largest Airbnb raids at Far West Side condo building

5) 'They Thought a No Vote Was For Rent Control' ~ What Happened to Prop 10?

6) This one isn't about making money, but you should read it for ideas

7) Foundation and Empire

8) [Economics] "We are facing a systemic crisis in Europe" - Part I - Yanis Varoufakis | DiEM25

9) Ryan Zinke Says California Wildfires Are Getting Worse But Won't Mention 'Climate Change'

10) 'Green New Deal' Gains Momentum, But Few Progressive Caucus Democrats Pledge Support

11) China's Bike-Sharing Disaster (Video)

12) Camp Fire's Missing Person List Climbs To 1,011 As Statewide Death Toll Rises To 74

13) Toxic Bay Area air quality is among worst in world right now (Video)

14) DC Council gives final approval to Airbnb regulations

15) Tax relief for victims of November 8 wildfires in California

16) A look at the rental housing markets in Amazon's new HQ locations

17) Occupancy is Tight, Especially in Class C Product

18) The epitaph for Tory austerity has been written, and it's damning

19) This company is the 'WeWork' of housing rentals (Video)

20) This building material could have saved California houses from wildfires, but it's not widely used in the US

21) Work Requirements for Cash Assistance Fueled Rise in Deep Poverty

22) Governments of fools?

23) Helping David Take On Goliath

24) The EU will never be truly great if the current approach of Germany continues

25) California's DIY firefighters battle alone as the richest hire private teams

26) Bubble Trouble: Seattle-Bellevue Metro Housing Market Goes South

27) Alexandria Ocasio-Cortez's Green New Deal shows the radical choice facing the Democrats

28) President Trump is just plain wrong about the California wildfires

29) Man gets 30 years for deadly arson scam that killed 12-year-old

30) Researchers Raise Concerns About Texas Coastal Barrier Plan

31) How Insurance Industry Might React to 'New Normal' of California's Historic Wildfires

32) California Issues Emergency Declaration to Allow Out-of-State Adjusters to Help with Fire Claims

  1.    Smoke From the Northern California Wildfire is Making Air Unhealthy in the Bay Area, Sacramento

    Too much CO2 is the biggest cause by far. Overgrowth is secondary by a long shot. We've had overgrowth for decades and decades. Global warming has been ramping up while forest and brush management has improved in general. We used to do nothing about overgrowth. We're still making CO2 worse.

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  2.    Oil drops again after Trump tweets against production cuts

    What's his game?

    If oil prices go higher, US frackers will bring more rigs on line and make more money. The US will be more oil independent. However, if prices go higher, more people will opt for electric vehicles. etc., which will cut the demand for oil regardless of what happens to oil prices afterwards. Also, if oil prices go higher while electric hasn't ramped up to match the demand, the economy will suffer somewhat in a direct sense (however, the environment will be better off and cheaper to handle), and he will be blamed for a weakening economy.

    What interest is he putting first?

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  3.    Tariffs are having a negative impact for only about 9 percent of companies, earnings calls show

    Most companies citing tariff issues have been saying they are offsetting them with higher prices or by shifting suppliers.

    The findings stand in contrast with a recent report from the Federal Reserve, which noted a high level of concern from its business contacts around the country.

    In its so-called Beige Book report, which chronicles business conditions in the central bank's 12 districts, the Fed mentioned "tariffs" 45 times.

    "Manufacturers reported raising prices of finished goods out of necessity as costs of raw materials such as metals rose, which they attributed to tariffs," the report said. "Construction contract prices increased to cover rising costs of labor and materials. Retailers and wholesalers in some Districts raised selling prices as they continued to see increased costs in transportation and also worried about impending cost increases resulting from tariffs."

    What about those companies that are being immediately helped, and what about the overall longterm benefits for the economy?

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  4.    City officials conduct one of the largest Airbnb raids at Far West Side condo building

    This is good for landlords who follow the rules.

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  5.    'They Thought a No Vote Was For Rent Control' ~ What Happened to Prop 10?

    If you were anywhere near a room with a TV on in the months leading up to the election you probably saw the No on 10 ads repeated constantly. Usually featuring an older person, or a middle aged veteran looking straight into the camera and saying "Prop 10 has no protections for renters, seniors, or veterans," the ads warned that the passage of Prop 10 would "drive up rents and make housing less affordable."

    Another ad featured someone identified as a "California renter and mom" saying that "Prop 10 has no protections for renters." Prop 10 only promised to repeal Costa-Hawkins, allowing municipalities to devise their own rent control policies, or not.

    The advertising was threatening the very problem the proposition was trying to resolve.

    I'm for democracy. I oppose deceptive advertising regardless of where I come down on a political issue. It's a landlord's prerogative to be for or against rent controls. It is blatantly wrong for extremely deep-pocketed landlords to pay for advertising that is obviously designed to trick voters. All's fair in politics is not true. There are legitimate arguments for and against rent controls. If you oppose rent controls, there are vastly better ways to handle it rather than false advertising. Work with governments to bring forth affordable rentals for everyone at a truly decent and reasonable profit margin for putting forth the work throughout the life cycle of the rental project.

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  6.    This one isn't about making money, but you should read it for ideas

    I think this is so much better than doing nothing.

    Austin's Fix for Homelessness: Tiny Houses, and Lots of Neighbors

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  7.    Foundation and Empire News: Real Estate, Risk, Economics. Nov. 19, 2018

    For the past 20 years, however, we have had a series of wealth bubbles — first the Dot-Com bubble, then the Housing Bubble, and today the Financial Asset Bubble — that have made us richer than our economy grows. Each of these bubbles was intentionally "blown" by the Fed through monetary policy. That's the tried and true method of creating a wealth bubble in the modern age of fiat money — you artificially lower the cost of money to encourage borrowing and leverage, which in turn pulls future growth into the present. It's a neat trick so long as you can keep it going.

    But that's the problem, of course. The Fed can't keep it going, not if it wants to satisfy its raison d'etre, which is to keep inflation bottled up, particularly wage inflation. Once wage inflation starts to pick up, the Fed ALWAYS stops blowing bubbles. Why? Because the Fed, like every central bank, was created to support Capital in its eternal war with Labor. It's in the name. They are bankers. I know that sounds all Marxist and conspiratorial and all that, but it's really not. It's very straightforward. It's Alexander Hamilton, not Karl Marx.

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  8.    [Economics] "We are facing a systemic crisis in Europe" - Part I - Yanis Varoufakis | DiEM25

    "We are facing a systemic crisis in Europe and the one thing we have not done is deal with it systematically. So DiEM25 has decided to do that which the European Commission, the European Parliament, our governments have not done." - DiEM25 co-founder, Yanis Varoufakis.

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  9.    Ryan Zinke Says California Wildfires Are Getting Worse But Won't Mention 'Climate Change'

    Cigarette smoking doesn't cause cancer. Coal, oil, and gas burning doesn't cause global warming, doesn't cause wildfires, doesn't destroy property, doesn't kill people. How many more lies do you want to hear?

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  10.    'Green New Deal' Gains Momentum, But Few Progressive Caucus Democrats Pledge Support

    It's difficult to overstate the speed with which the Green New Deal has surged from the fringes of a long-stagnant climate debate into the mainstream. But the policy faces daunting obstacles. Democrats' long-standing obsession with balanced budgets is at odds with a plan to spend trillions on clean-energy research and building weatherization retrofits and infrastructure for renewable electricity ? especially when Republican tax cuts are ballooning the national deficit.

    Democratic Party leaders are considering a rule that would require a supermajority to raise income taxes ? all but crippling any expensive, big-ticket legislation like a Green New Deal ....

    The longer we wait, the worse things will be and the more it will cost us to fix them if we even will be able to by then.

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


  11.    China's Bike-Sharing Disaster (Video)

    For those of you who've felt my call for docking bikes is a bad idea:

    Chinese bike-sharing companies compete by flooding the market, and the consequences are stacking up!

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  12.    Camp Fire's Missing Person List Climbs To 1,011 As Statewide Death Toll Rises To 74

    I'm trying to include this story without inundating readers. It's such a tragedy and is being covered a great deal in general in the mainstream media that I know the vast majority know quite a bit about it, especially those living in California.

    We really, really, really need to turn global warming around. We either start sequestering like crazy or stop burning carbon almost totally or both and soon, very soon.

    Even if we can sequester as much CO2 as we pump into the atmosphere, there're still all the other negatives associated with the carbon-fuel cycle to consider. We need to sequester regardless, but we should strive mightily for 100% non-carbon-fuel energy at the same time.

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  13.    Toxic Bay Area air quality is among worst in world right now (Video)

    Schools across the Bay Area in California are closed due to bad air quality.

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  14.    D.C. Council gives final approval to Airbnb regulations

    The legislation bans property owners from renting out any homes other than their primary residences for fewer than 30 days at a time, commonly done through platforms such as Airbnb and VRBO. It also restricts to 90 the total number of days a year that a host may rent out their primary residence when they are away.
    ...
    ... the legislation also features a "hardship exemption" to the annual cap on so-called "vacation rentals" for hosts who can demonstrate that their jobs or family medical situations require them to leave the District for more than 90 days a year.

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  15.    Tax relief for victims of November 8 wildfires in California

    Victims of Wildfires that took place beginning on Nov. 8, 2018 in California may qualify for tax relief from the Internal Revenue Service.
    ...
    The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.
    ...
    Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684, Casualties and Thefts and its Instructions.

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  16.    A look at the rental housing markets in Amazon's new HQ locations

    Since November 2017, the average monthly rent for apartments in Crystal City has increased by 5% to $2,387, while the average monthly rent for apartments in Long Island City has increased by 5.1% to $3,458.
    RENTCafé?? estimates Long Island City and its surrounding region of Queens are anticipating the development of 15,400 and 33,900 apartments in the coming years, respectively, while Crystal City and its surrounding region of Arlington are anticipating the development of 3,100 and 14,700 apartments in the coming years, respectively.
    ...
    ... it's still too early to tell the exact impact that Amazon's headquarters will have on its winning cities ....

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  17.    Occupancy is Tight, Especially in Class C Product

    ... big rent growth during the current cycle, which began in 2010, allows for increasingly fewer households to afford the rates charged at middle- and top-tier product lines ....

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  18.    The epitaph for Tory austerity has been written, and it's damning

    The government, Alston says, is "determinedly in a state of denial" over the national collapse that has been caused by its defining policy of austerity. Whitehall cuts have "gutted" local councils and the legal-aid system. Residents of the fifth-richest country in the world have testified to his team about how a lack of money has driven them to starvation, contemplating suicide or selling sex for shelter.

    Over the past few days, Britain has been exposed to the world as possessing an arrogant and incompetent ruling elite, Westminster as a palace of courtiers more focused on their own tacky careers than the country they are meant to be governing. But because Alston has seen what damage this vainglorious ruling class has done to the poorest, the picture he paints of our government takes on much deeper shades of condemnation.

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  19.    This company is the 'WeWork' of housing rentals (Video)

    This is an interesting concept, but risk analysis is definitely the issue.

    Kulveer Taggar of Zeus Living and Alexis Ohanian, Reddit and Initalized Capital co-founder and Zeus Living investor, join 'Squawk Box' to discuss how the company is transforming the housing rental marketplace.

    This company is the 'WeWork' of housing rentals from CNBC.

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  20.    This building material could have saved California houses from wildfires, but it's not widely used in the US

    "An RSG 3-D panel building will have at least a two-hour fire rating, which means you can apply open flame to the walls for at least two hours with no combustion whatsoever."

    Don't forget fire-rated doors, windows, and roofing.

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


  21.    Work Requirements for Cash Assistance Fueled Rise in Deep Poverty

    The largest federally funded study of work-requirement pilot programs for cash assistance recipients in the 1990s examined 11 programs — local forerunners of the work requirements in the 1996 welfare law that created TANF. Most of them raised employment rates somewhat in the short term. Yet, not all recipients found work and many families were cut off the program or had their benefits reduced due to work-related sanctions. As a result, deep poverty rates rose by a statistically significant amount in six of the 11 programs — and didn't fall significantly in any — relative to randomly assigned control groups.

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  22.    Governments of fools?

    Why do I call the period after 2010 in the US and UK neoliberal overreach, as opposed to straight neoliberalism in the 1980s? After all there are some similarities in the UK between the two periods. Both Osborne and Thatcher started their terms in government with economic experiments that went against received economic wisdom. Both tried austerity (a fiscal contraction in a recession). I don't want to minimise the harm Thatcher did to parts of the country, but her austerity was temporary [2] and the monetarist experiment was quickly abandoned, with the result that the recovery was only delayed by a year or two and the economy in aggregate eventually recovered in the true sense of the term. In contrast the slow recovery in the UK, US and Europe since 2010 seems to have had permanent and large negative effects. An interesting question is how much this difference between the two periods in the UK reflects different degrees of control over the media.

    But the main reason I call what happened after 2010 overreach is that the neoliberalism of both Reagan and Thatcher was in many ways popular, and so there was less need to dress policies up as something they were not. In 2010 there was no popular demand for a reduction in the size of the state, so it required a form of subterfuge: what I call deficit deceit.

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  23.    Helping David Take On Goliath

    Speaking of sequestering carbon to slow and reverse global warming:

    "Roundup kills microbial life in the soil, the very microorganisms necessary to sequester carbon," says Alexis Baden-Mayer with the Organic Consumers Association.

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  24.    The EU will never be truly great if the current approach of Germany continues

    Germany and France have apparently struck a deal on a common budget for the EU countries that use the shared euro currency, something Macron pushed for. German Finance Minister Olaf Scholz told the dpa news agency the proposal was to be presented to European finance ministers Monday.

    The size of the budget — mentioned by French Finance Minister Bruno Le Maire as 20 to 25 billion euros — is far short of Macron's idea. The amount is only 0.2 percent of the eurozone economy, less than the several percentage points of gross domestic product originally mentioned by Macron.

    The compromise underscores German reluctance to sign off on anything seen as transferring taxpayer money from richer countries like Germany to more fiscally shaky ones such as Italy or Greece.

    If Germany continues to hold out this way, the EU will not only not significantly strengthen economically, it will disintegrate.

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  25.    California's DIY firefighters battle alone as the richest hire private teams

    In areas where some residents felt the need to put their lives on the line, celebrities and affluent homeowners filled the gap with private firefighters to protect their mansions from burning.

    In an article published last spring, NBC highlighted that the insurance giant AIG offers wealthy homeowners access to their Wildfire Protection Unit, certified through authorities to respond to fires that threaten million-dollar homes.

    TMZ reported this week that Kim Kardashian and Kanye West hired private firefighters to protect their $50m mansion in the hills of Calabasas. It narrowly survived the fire, but critics began wondering if the destruction-fueled "new normal" meant the affluent, yet again, could save themselves while others suffered.

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  26.    Bubble Trouble: Seattle-Bellevue Metro Housing Market Goes South

    I wonder how much impact Amazon's plans and actions have had to do with it all.

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  27.    Alexandria Ocasio-Cortez's Green New Deal shows the radical choice facing the Democrats

    This article is a bit more "political" than I typically post here. I'm posting it not to discuss or introduce any sort of horse race concerning the Democratic Party internally or versus Trump or the Republican Party but to highlight the importance of taking radical steps to fix the CO2 problem, and it most certainly is a huge and growing problem.

    I totally agree that fixing the problem would actually be an economic boon.

    I've also seen the supposed political arguments against this. Those arguments are the same, old, worn-out arguments used to block progressive programs.

    As you may already know, I don't think tax increases are at all necessary to fix CO2, but that's another post. As for there not being enough unemployed people to do the needed work, if that's true (and I don't think it is), we'll just have to automate more quickly.

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  28.    President Trump is just plain wrong about the California wildfires

    One reason that scientists know that management isn't to blame is that some areas now burning had fires in 2005 and 2008, so they aren't "fuel-choked closed-canopy forests," Dennison said.
    ...
    The dean of the University of Michigan's environmental school, Jonathan Overpeck, said Western fires are getting bigger and more severe. He said it "is much less due to bad management and is instead the result of our baking of our forests, woodlands and grasslands with ever-worsening climate change."

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  29.    Man gets 30 years for deadly arson scam that killed 12-year-old

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  30.    Researchers Raise Concerns About Texas Coastal Barrier Plan

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  31.    How Insurance Industry Might React to 'New Normal' of California's Historic Wildfires

    Folkman believes the back-to-back severe wildfire seasons will make insurers even more cautious about writing in California's higher risk areas, particularly around the wildland urban interface, and he thinks the nature of underwriting in wildfire prone areas will change dramatically.

    And I think he's right about that even if we tackle the CO2 issue immediately.

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  32.    California Issues Emergency Declaration to Allow Out-of-State Adjusters to Help with Fire Claims

    Jones directed the California Department of Insurance to issue a formal notice to insurers, licensed public adjusters and admitted carriers to make sure all claims adjusters assigned to wildfire claims, including those not licensed in California but working under a California licensed adjuster, are properly trained on the California Unfair Practices Act, Fair Claims Settlement Practices Regulations, and all laws relating to property and casualty insurance claims handling.

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