Category Archives: Housing

Bad new for whoever wins: Financial crisis ahead


While Democrats are nursing hopes of control of one or both houses of Congress, victory might contain a poison pill that could redound to the Donald Trump and his fellow Republicans benefit two years down the road.

Make no mistakes. The warning signs are already quite clear, as embodied in this series of 10-year graphs we’ve assembled from the marvelous resources of the Federal Reserve Bank of St. Louis:

First up, housing prices are soaring again, already reaching well above the levels of the 2007-9 Great Recession [indicated by the shaded areas of the charts], a crash triggered by shady mortgage lending by the nation’s leading banks [click on the images to enlarge]:

And as housing prices rise, so does mortgage debt, which has also topped pre-Great Recession levels as the Trump Administration slashes protection passed under the Obama administration::

Credit card debt is also soaring:

Yet another form of debt is also rising as states and the federal government slash colleges and university  funding, sending tuition rates through the roof:

The next graphs is particularly ominous.

While Donald Trump claims that under his administration, unemployment levels have hit record lows.

But that’s only because soaring numbers of folks have simply given up and dropped out of the labor force:

For our final graph we look at the growing amount of U.S. debt held overseas, trillions of dollars that could explode in the face of Donald Trump’s self-declared trade wars:

And now, with this graphic introduction we turn to a very important documentary from VPRO Backlight, a creation of producer Marije Meerman for Dutch public television and a warning of dark times ahead:

Lessons from Lehman and the Coming Crash

Program notes:

Have we learned the Lessons from Lehman and could we have predicted the Coming Crash? Ten years ago, the crash on Wall Street took us by surprise when Lehman Brothers’ bank went bankrupt. The financial crisis that followed this crash on Wall Street was like a chain reaction; a pole dancer with her five mortgages turned out to be connected to the huge gap in the Greek national budget. Is it possible to predict the coming crash? What are the lessons learned from the collapse of Lehman Brothers? Can we predict the coming crash of Wall Street by looking back to the last 10 years and take a lesson from Lehman?

Sometimes, it is important to look back in order to predict what we might be heading for. Ten years ago, we were taken by surprise when Lehman Brothers’ investment bank went bankrupt. In the followinf months, banks needed saving. Millions of tax payers money was used. Worldwide, banks, villages, cities, and even countries went bankrupt or were hanging by a thread. Few, if any, bankers were convicted. Crypto currencies like bitcoins thrived on the growing suspicion towards banks and governments. Finally, central banks around the world set up buying asset purchasing programmes in order to create cash out of nothing. A strategy to pump money into the financial system, hoping to keep it afloat. What have we learned from this crash and its consequences? Over a period of ten years, VPRO Backlight reported on the snowballing financial crisis. It turned out that a journalist, a former banker and an economist had predicted the 2008 credit crash and are now warning against a new crash. We pay them another visit to find out what they had seen, where many others were blind.

If we look hard enough, can we see why we are now in the calm before the next crash?

With: Nomi Prins [author and former banker for Goldman Sachs and Lehman Brothers], Ann Petifor [economist] and Isabella Kaminska [journalist for the Financial Times] with cameos by Jim Rogers [super investor], Roger Ver [bitcoin-evangelist], Joris Luyendijk [journalist], and Yanis Varoufakis [former Greek Minister of Finance].

Greed, drought threaten America’s farmland


For generations, immigrants left their homes for a new land, and of homesteading farms on some of the millions of acres of virgin soil.

But now the land is under threat from giant agribusiness corporations, many of them owned by investment bankers, real estate developers, and, more ominously, by the threat of climate change, which is literally squeezing th last drops of water out of once-fertile soils.

While the first threat seeks to end the role of the smallholder, the latter two change the very nature of the land itself.

We come from a long line of farmers. The first Brennemans were political refugees, fleeing religious persecution in Europe in the 1600s in search of farmland in Pennsylvania, a colony founded by a religious dissident to provide a safe haven for other religious dissidents.

We know that small farmers care about their land, developing intimate relationships with each contour, learning which patches of soil bring the highest yields and which need special care, while investment bankers obsess only over the bottom line.

Many farmers agonize over the growing corporate control of their own land in an age when companies genetically alter the crops they plant by retaining ownership of the seeds themselves, barring farmers from doing what farmers have done for millennia — saving seeds from this year’s crop to grow next year’s harvest.

And then there are the patented chemicals made by those same corporations, chemicals needed to grow those same patented crops.

The investment funds move in

Like vultures, investment funds circle America’s wounded businesses and institutions, waiting for the opportunity to swoop in and harvest “troubled assets” everything from apartments and newspapers to — since the crash of 2008 — America’s farmland.

At the University of California, Santa Cruz, Assistant Professor of Environmental Studies Madeleine Fairbairn has been looking at the change of ownership of America’s farmland, as the university reported last year:

“We’re seeing growing interest in farmland acquisition, and we are seeing new investment vehicles being developed, but we have no idea what it means for small and mid-sized farmers,” said Fairbairn, who received a $150,000 grant from the U.S. Department of Agriculture to study “farmland financialization” in areas of peak agricultural production in California and Illinois.

Until about 2008, financial services companies looked askance at buying farmland, but today, they are snapping it up at an impressive pace: As an example, Fairbairn says TIAA, the leading retirement investor for the academic community, owned no agricultural land before about 2007; today, TIAA controls $8 billion worth of farmland globally, investing on behalf of itself as well as other institutional investors.

“We’re in the beginning stages of what could be a significant shift in land ownership,” said Fairbairn. “Pension funds have enormous resources because they manage money for so many individuals. This has potentially major implications, since access to affordable land is a cornerstone of American agriculture.”

A rural sociologist, Fairbairn has tracked the trend since it first emerged. She has attended agricultural investment conferences where “farmland funds” were pitched to potential investors, and witnessed the development of investment vehicles that cater to the phenomenon, including publicly traded real estate investment trusts (REITs) that first came on the U.S. market in 2013.

“Land ownership is a really important part of agriculture, but one that most people spend very little time thinking about,” said Fairbairn.

California and Illinois represent two poles of U.S. agriculture: California is dominated by high-value specialty crops and “permanent crops” like almonds and wine grapes; land is very expensive; and corporations already are major players. Illinois produces commodity row crops like corn and soybeans, and is home to more small, family-owned farms.

There’s another force at work too, and that’s overseas investors.

Consider, for example, the Saudi royals, who have been scooping up American soil, buying acreage to raise hay to feed the imperial horses.

But the extent of the land grab is much greater, as the Midwest Center for for Investigative Reporting revealed in a 22 June 2017 account:

[B]etween 2004 and 2014, the amount of agricultural land held by foreign investors doubled from 13.7 million acres to 27.3 million acres — an area roughly the size of Tennessee.

While representing only about two percent of total farmland, the value of the foreign-owned U.S. farmland soared from $17.4 billion (in today’s dollars) to $42.7 billion during that same time period, according to U.S. Department of Agriculture data.

Most of today’s foreign investment in agricultural land began to increase in 2005, according to the Midwest Center’s analysis.

Of the top foreign investors who own agricultural land, nine bought most of their land between 2004 and 2014, about $8.1 billion worth of farmland, the Midwest Center found.

The final threats: Destruction of the soil itself

Worse still are those threats that destroy the land itself.

Of the two, we’ll consider the less threat first — the destruction of land through development.

We begin with a map, depicting the amount of farmland lost to the bulldozer between 1992 and 2012, as revealed in Farms Under Threat: The State of America’s Farmland, a new report from the American Farmland Trust [click on the image to enlarge]:

Conversion of agricultural land to urban and low-density residential development between 1992 and 2012

The development of agricultural land is shown in relationship to the low-to-high continuum of productive, versatile, and resilient values for agricultural land. The conversion of agricultural land to urban and low-density residential uses between 1992 and 2012 is shown as high (dark brown-red, > 25% conversion within a 10-kilometer (6.2-mile) radius], moderate [light brown-red, 10–25% conversion] and low [tan, 5–10% conversion]. Urban areas are shown in gray.

From the report:

  • Our analysis, the most comprehensive ever undertaken of America’s agricultural lands, shows that nearly twice the area of farmland was lost than was previously known. Additional major findings, include:
  • Between 1992 and 2012, we lost nearly 31 million acres of land. That’s 175 acres an hour, or 3 acres every single minute
  • 11 million of those acres were among the best farmland in the nation—classified as the most productive, most versatile and most resilient land
  • Development disproportionately occurred on agricultural lands, with 62 percent of all development occurring on farmland
  • Expanding urban areas accounted for 59 percent of the loss. Low-density residential development, or the building of houses on one- to 20-acre parcels, accounted for 41 percent

And the temperature’s rising

The final threat up for consideration today is the long-term and destructive impacts of global warming on the soil itself.

As any farmer can attest, soil is more than just inert dirt. Each soil is a complex ecosystem, harboring microbes that process soil minerals, digest dead organic matter, and release carbon dioxide, methane, and other greenhouse gasses.

Crops favor specific soil types as well, requiring significant levels of fertilizers when planted in less-favorable soils. A considerable body of science reveals that changing water levels changes the microbial community, and the drier soils become, the fewer species of soil microbe can thrive, resulting in a collapse of soil biodiversity.

And now a new study reveals that drier soils also play a direct role in global warming, as starkly captures in these maps, with the upper maps reflecting the regions average temperature increases between 1965 and 2014 compared. to a 1902-1951 baseline period. The lower maps feature of projection of temperature rises for 2050-2099 compared to a 1951-2000 baseline [click on the image to enlarge]:

More from the University of California, Irvine:

Dry months are getting hotter in large parts of the United States, another sign that human-caused climate change is forcing people to encounter new extremes.

In a study published today in Science Advances  [open access], researchers at the University of California, Irvine report that temperatures during droughts have been rising faster than in average climates in recent decades, and they point to concurrent changes in atmospheric water vapor as a driver of the surge.

“Available soil moisture can remove surface heat through evaporation, but if the land is dry, there is no opportunity to transport it away, which increases the local temperature,” said lead author Felicia Chiang, a UCI graduate student in civil & environmental engineering. “Atmospheric conditions can influence soil, and we argue that they’re shaping the temperatures we experience during droughts.”

UCI’s research team analyzed observed temperature and precipitation data from the early and late 20th century and discovered that regions undergoing droughts warmed more than four times faster than areas in the southern and northeastern United States with average weather conditions. In addition, climate models showed a significant warming shift in Southern states between the late 20th century and early 21st century.

These changes point to a greater number of droughts and heat waves co-occurring. This can lead to such calamities as wildfires and loss of crop yields. Widespread conflagrations, spurred on by abnormally high summer temperatures, are currently burning around the world, including in parts of California, Scandinavia and Greece.

“Heat waves and droughts have significant impacts on their own, but when they occur simultaneously, their negative effects are greatly compounded,” said co-author Amir AghaKouchak, UCI associate professor of civil & environmental engineering and Earth system science. “Both phenomena, which are intensifying due to climate warming, are expected to have increasingly harmful consequences for agriculture, infrastructure and human health.”

He suggested that society has a responsibility to respond to the challenges presented by this new climate reality.

“The observed escalation in the number and intensity of wildfires is likely caused by the increase in frequency of hot droughts,” AghaKouchak said. “We need to bolster our resiliency against these threats to protect our population health, food supply and critical infrastructure.”

This study was partially supported by the National Oceanic & Atmospheric Administration.

Chart of the day: World environmental child deaths


From the World Health Organization’s Inheriting a Sustainable World: Atlas on Children’s Health and the Environment [open access], a graph of the leading environmental causes of childhood deaths worldwide [click on the image to enlarge]:

With the Trump Administration rapidly dismembering the Environmental Protection Agency, a new report reveals just why protecting the environmental saves lives, especially young ones.

From the World Health Organization:

More than 1 in 4 deaths of children under 5 years of age are attributable to unhealthy environments. Every year, environmental risks – such as indoor and outdoor air pollution, second-hand smoke, unsafe water, lack of sanitation, and inadequate hygiene – take the lives of 1.7 million children under 5 years, say two new WHO reports.

The first report, Inheriting a Sustainable World: Atlas on Children’s Health and the Environment [open access] reveals that a large portion of the most common causes of death among children aged 1 month to 5 years – diarrhoea, malaria and pneumonia – are preventable by interventions known to reduce environmental risks, such as access to safe water and clean cooking fuels.

“A polluted environment is a deadly one – particularly for young children,” says Dr Margaret Chan, WHO Director-General. “Their developing organs and immune systems, and smaller bodies and airways, make them especially vulnerable to dirty air and water.”

Harmful exposures can start in the mother’s womb and increase the risk of premature birth. Additionally, when infants and pre-schoolers are exposed to indoor and outdoor air pollution and second-hand smoke they have an increased risk of pneumonia in childhood, and a lifelong increased risk of chronic respiratory diseases, such as asthma. Exposure to air pollution may also increase their lifelong risk of heart disease, stroke and cancer.

Top 5 causes of death in children under 5 years linked to the environment

A companion report, Don’t pollute my future! The impact of the environment on children’s health, provides a comprehensive overview of the environment’s impact on children’s health, illustrating the scale of the challenge. Every year:

  • 570 000 children under 5 years die from respiratory infections, such as pneumonia, attributable to indoor and outdoor air pollution, and second-hand smoke.
  • 361 000 children under 5 years die due to diarrhoea, as a result of poor access to clean water, sanitation, and hygiene.
  • 270 000 children die during their first month of life from conditions, including prematurity, which could be prevented through access to clean water, sanitation, and hygiene in health facilities as well as reducing air pollution.
  • 200 000 deaths of children under 5 years from malaria could be prevented through environmental actions, such as reducing breeding sites of mosquitoes or covering drinking-water storage.
  • 200 000 children under 5 years die from unintentional injuries attributable to the environment, such as poisoning, falls, and drowning.

Ongoing and emerging environmental threats to children’s health

“A polluted environment results in a heavy toll on the health of our children,” says Dr Maria Neira, WHO Director, Department of Public Health, Environmental and Social Determinants of Health. “Investing in the removal of environmental risks to health, such as improving water quality or using cleaner fuels, will result in massive health benefits.”

For example, emerging environmental hazards, such as electronic and electrical waste (such as old mobile phones) that is improperly recycled, expose children to toxins which can lead to reduced intelligence, attention deficits, lung damage, and cancer. The generation of electronic and electrical waste is forecasted to increase by 19% between 2014 and 2018, to 50 million metric tonnes by 2018.

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Homeless in one of California’s richest cities


We started reporting in California back in 1967, just as hippies started flocking to California’s sunshine in hopes of, well, who knows what?

Many of them arrived in old Volkswagen vans and battered panel trucks, mobile homes for those with little money but high on hope [and a lot of other stuff, too].

We had moved to Oceanside, working for the late, lamented Blade-Tribune.

Every newsroom back then had police scanners, tuned to the frequencies of local police,m sheriff’s, and state law enforcement agencies, so we kept our ears attuned to code numbers for significant crimes as well as the occasional cop-to-cop banter.

We also had to learn another kind of code, the peculiar terms used by local cops to describe people, things, and activities. [One such term we learned a couple of jobs earlier was sail cat.]

In Oceanside, we started hearing a new term, creepy-crawler.

Which I soon learned meant hippie.

When parking becomes a matter class politics

Oceanside was booming, thanks to the Vietnam War, because the engine of the town’s economy was the adjacent Camp Pendleton, a veritable factory for turning out well-trained Marines to fight in the jungles of Southeast Asia.

You saw the occasional pickup truck with a camper or a trailer, even cars like the Nash Ambassador with a front seat that dropped back level with the back seat to form a very comfortable bed, as we know from personal experience.

Until the creepy-crawlers came, the occupants of those vehicles had either been tourists or folks visiting Marines at the base, people who in any case looked like everybody else and contributed to the local economy by spending on meals and other things.

Creepy-crawlers, on the other hand sucked money out, what with their panhandling and all — or so the reasoning went.

But even worse, they freaked out the straights and scared people off, what with their long hair, unshaven skin and those weird clothes, the beads, and all that pot and other weird shit they were taking.

Not exactly what you wanted in a town where to official motto was Tan Your Hide in Oceanside.

Like many other cities up and down the coast, California began enforcing new or rarely used parking ordinances, aimed at hippies while simultaneously also banning those who had once been tolerated, thanks to all those pesky civil liberties lawyers who were fighting against selective enforcement.

In other words, the unwillingly unemployed and the working classes were also victimized along with the creepy-crawlers.

Hippies are, for the most part, long gone, but the poor remain, today’s victims of laws drawn up in a different era.

How a Santa Barbara tackles the problem

A few years after we worked in Oceanside, we took an interim job in Los Angeles, where we I handled printing jobs for an NGO. We met a graphics designed who lived in Santa Barbara, a town to the north I’d only passed through on the Pacific Coast Highway.

What’s it like? I asked.

You know what they say about Santa Barbara, don’t you? she replied.

Allowing as how I didn’t, she responded: It’s the home of the very rich and the very poor, the newly wed and nearly dead.

Just as Oceanside was middle class, Santa Barbara was home of some of California’s richest, and remains so today. And in very few places do the rich exercise their control so openly, with the shameless assistance of the local newspaper.

And in Santa Barbara, laws against folks sleeping in their vehicles are strictly enforced.

From BillMoyers.com:

Homeless in the Shadow of Santa Barbara’s Mansions

From the accompanying report:

Twelve years ago, the Safe Parking program, run by the nonprofit New Beginnings Counseling Center, began offering a provisional solution. Its program places those sleeping in their vehicles into 20 private parking lots scattered around the city and provides bathroom facilities and some security. The parking lots are available only overnight and the cars must move by early morning. The group estimates they take 125 vehicles off the street every night and help more than 750 people a year.

The stories that Safe Parking’s clients tell me often involve a catastrophic financial loss precipitated by unemployment, domestic violence, injury or illness and the resulting medical bills. Most are working, although they have often lost secure, decently paid jobs and now struggle to make ends meet with multiple part-time jobs. A growing number of those forced to live out of their cars are families. All have been priced out of a brutal housing market.

Rents in Santa Barbara have skyrocketed in recent years — 20 percent in the last year alone — with one-bedrooms priced at $1,500 or sometimes significantly higher. The simple calculus of supply and demand is partly to blame. With a vacancy rate below 0.5 percent, a crisis figure, the housing market is at the mercy of landlords. Nor are there enough subsidized units to make up the shortfall for low-income renters — or plans to build sufficient numbers of new ones to meet the need, advocates say. “Santa Barbara’s housing market is broken and has been,” explains Chuck Flacks, executive director of the Central Coast Collaborative on Homelessness.

TrumpAscenscion™ sparks an Israeli land grab


Inspired by their new friend in Washington, the Israeli government decided to grab more Palestinian land.

And a direct beneficiary is a settlement backed by Trump’s choice for the Israeli ambassadorship.

From the Washington Post:

Israel approved the construction of 2,500 housing units in Jewish settlements in the West Bank on Tuesday, just two days after Prime Minister Benjamin Netanyahu spoke with President Trump.

Netanyahu and members of his right-wing government have bristled at the harsh condemnations of settlement growth by the Obama administration, which condemned the Jewish communities as “illegitimate” and “an obstacle to peace.”

Trump, however, has signaled more accommodating policies toward Israel and has called for moving the U.S. Embassy to Jerusalem, a city claimed as the capital of both Israel and a potential future Palestinian state. The Jewish settlements have grown to house more than 400,000 Jewish residents in the West Bank.

“We’re building — and will continue to build,” Netanyahu said following the announcement.

There was no initial reaction to the announcement by the Trump White House or the State Department.

>snip<

But the potential sites could carry deep political resonance in the United States. Jeremy Ben- Ami, head of the liberal Washington-based group J Street, noted that about 100 of the possible new units are in Beit El, a West Bank settlement supported by David Friedman, Trump’s selection to be the next U.S. ambassador to Israel.

UPDATE: More from the Guardian:

Israeli politicians have rushed to exploit what they see as a pro-Israel and pro-settlement US administration.

The announcement of 2,500 new housing units in the West Bank is one of the largest in years and marks a comprehensive rejection of December’s UN security council resolution, which described settlement building as a “flagrant violation” of international law and an obstacle to peace.

The decision, approved by the rightwing Israeli prime minister, Benjamin Netanyahu, and his defence minister, Avigdor Lieberman, seems certain to further increase tensions with Palestinians and the wider Middle East, already high over the Trump administration’s proposal to move the US embassy from Tel Aviv to Jerusalem.

Nabil Abu Rdainah, a spokesman for the Palestinian president, Mahmoud Abbas, said the move would have “consequences”. “The decision will hinder any attempt to restore security and stability; it will reinforce extremism and terrorism and will place obstacles in the path of any effort to start a peace process that will lead to security and peace,” he added.

Bubble alert: The housing bubble reinflates again


Cheap adjustable rate loans plus an insane derivates market brought the global economy crashing down nearly a decade ago, and now the housing market is reinflating, fueled in large part by more of those adjustable rate mortgages.

Those cheap loans triggered a massive housing price inflation, as loan officers signed off virtually all buyers, thanks to those robosigning machines [which are still very much in use].

And given that President-elect Trump has stocked his cabinet with Wall Street banksters, an Associated Press news story should send chills down our collective spine:

U.S. home prices rose again in October as buyers bidding for scarce properties drove prices higher.

The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index, released Tuesday, rose 5.1% in October from a year earlier after climbing 5% in September. Prices for the 20 cities are still 7.1% below their July 2006 peak.

The broader Case-Shiller national home price index was up 5.6% in October and has fully recovered from the financial crisis.

Prices rose 10.7% annually in Seattle, 10.3% in Portland and 8.3% in Denver. New York registered the smallest year-over-year gain: 1.7%. Los Angeles prices rose 5.7%.

From the Federal Reserve Bank of St. Louis, a look at the course of the housing bubble through the end of July:

blog-housing-homes
And it’s not just home prices that are soaring. Rents are rising dramatically as well, another bad sign of a developing crisis:

blog-housing-rents

Chart of the day: Renters lose financial ground


As home ownership rates fall, mortgage interest rates rise, and the housing bubble reinflates, America’s growing numbers of renters are falling behind, with all but the oldest and the wealthiest [often the same folks] losing financial ground.

From a new report on housing and household finances from the Pew Research Center:

blog-renters

Headline of the day II: Daily life in Trumplandia™


From the East Bay Express:

Oakland Landlord Evicts Tenant, Then Hangs Pro-Trump Billboard on Building

‘On Christmas Day I’m being evicted. Can you believe that?’

Economy: Spain’s Millennials live with parents


While Eurocrats have hailed Spain’s “recovery” from the Great Recession, lauding themselves for accomplishing a miracle with bailout loans from the International Monetary Fund, and European Central Bank, the reality is quite different.

The draconian austerity regime dictated by the by the financial oligarchs effectively destroyed the futures of millions of young Spaniards.

From El País:

For the first time in 12 years, less than 20% of people aged between 16 and 30 are living outside the family home. In the second quarter of 2016, the figure was 19.6%, a 4.84% increase on the period in 2015, says Spain’s Youth Council. It adds that of those who have managed to leave their parents, only 16.7% are living alone.

The official unemployment rate among the under-30s is 34.4%, but the reality is that only two out of every 10 under-24s is working, and more than 55% of them are on short-term contracts, while 60% are earning less than €1,000 a month.

Victor Reloba, of the Youth Council, says that while unemployment has fallen slightly, young people are unable to leave the family home because even if they are in work, they will likely be on zero-hours contracts, short-term contracts, or earning money from a number of different activities. “One in four young people is poor,” he explains.

Most under-30s who have managed to leave home are living in shared accommodation with two or more other people.

Headline of the day II: More Trumplandia troubles


From the Guardian:

Trump’s name to be removed from New York buildings to appeal to renters

  • Owner of Upper West Side ‘Trump Place’ buildings, developed by the businessman, aims for ‘more neutral building identity’
  • Donald Trump’s name will be permanently removed from a series of New York City buildings on Wednesday, in an apparent repudiation of his divisive presidential campaign
  • The name “Trump” has been displayed prominently on 140, 160 and 180 Trump Place, in Manhattan’s Upper West Side, for more than a decade. Trump developed the apartment buildings in the 1990s
  • But Equity Residential, which owns the building, told the Guardian that the Trump signage would be removed – and the actual street names changed – because it would make the apartments more appealing to renters

Equity Residential is a company we know well, having written extensively about the firm and its boss, Sam Zell, during our years at the Berkeley Daily Planet. and the subject of numerous of our reports.

Zell, who styles himself the Gravedancer for his ruthless business style, is the embodiment of the predatory capitalist type, buying up troubled companies, conducting mass layoffs, and looting their assets.

Our interest in Zell was sparked by two things: His buyout of Berkeley’s largest bloc of privately owned apartments and his brief ownership of the Los Angeles Times, Chicago Tribune, and the other newspapers owned by the Tribune Co.

His purchase, bankrolled by looting the company’s Employee Stock Ownership Plan [a pension plan bankrolled by company stock shares]. ended in bankruptcy and massive layoffs of some of California’s best journalists.

Here’s a classic Zell clip, show during a meeting with the staff of the Tribune Co.’s Orlando Sentinel, when he was explaining his plans for the paper in 2008. Notably, when a reporter questions his plans to cut back public service journalism, Zell responds with a “Fuck you.”

Literally:


Zell also bankrolled $100,000 of anti-Obama ads in the 2012 election, monies raised, in part, from the exorbitant rents paid by University of California students for his apartments near a campus which no longer builds affordable student housing.

Zell is a flamboyant character in many ways similar to Donald Trump. But that said, he was notably silent during this year’s presidential campaign, and his remarks about Trump during a Bloomberg interview last December — in which he reveals he turned down a Trump offer to become his partner — are interesting:

Billionaire Sam Zell: Donald Trump Asked Me to Be His Business Partner, and I Said No

Program notes:

Equity Group Investments Founder Sam Zell discusses his politics and outlook for the 2016 Presidential election.

Chart of the day II: Greek immiseration deepens


As the financial overlords of the International Monetary Fund, European Central Bank, and the European mandate ever deeper cuts in payrolls, healthcare,  and pensions, Greeks are cutting back still more on all but the basic essentials of life as costs paying more than ever for housing, hospitals and drugs, and now-privatized public transit systems.

In turn, Greeks have cut back on spending for education, fuel, and home appliances.

From the Hellenic Statistical Authority:

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Headline of the day II: He spies on you, but. . .


Facebook, the most popular social media platform in history, requires users to let the software spy on their most intimate habits.

But don’t you day try to do the same to the guy who runs it, because he’ll spend millions to stop you.

Irony, anyone?

From the London Daily Mail:

Palo Alto REJECTS Mark Zuckerberg’s bid to demolish neighboring homes and create a family compound after he spent $30m on properties next to his house

  • Facebook founder filed paperwork with the city of Palo Alto in May, stating his intentions to tear down and rebuild four neighboring homes
  • Architectural review board rejected the plans saying a giant compound will violate zoning codes and ideal land use 
  • Plans shows that Zuckerberg will tear down the four homes and rebuild them as smaller properties
  • Zuckerberg bought the four properties in 2013, after a developer threatened to build a house with views right into the billionaire’s bedroom

California history, marketed as a teardown home


There’s a house for sale in Pacific Palisades, one of the most exclusive communities in the Los Angeles area. It’s located at 1550 San Remo Drive, just a two-minute drive from the house at 1669 San Onofre Drive, where esnl interviewed Nancy Reagan in 1979 as her husband was running for president.

The home on San Remo is now up for sale and the asking price is a mere $14,995,000. Here’s how the broker, Coldwell Banker, describes the property [emphasis added]:

First time on the market in almost 65 years! Park-like grounds with lush forest solitude on almost a full FLAT ACRE on one of the most desired streets in the Pacific Palisades Riviera. Extreme privacy surrounded by mature trees and landscaping provides amazing serenity coupled with incredible city lights views. Create your dream estate or remodel and expand the existing home in the ultra-exclusive upper Riviera neighborhood. It’s like living in your own private reserve!

There’s only one thing missing from the enthusiastic sales pitch.

Unlike the Reagan’s home, which was a gift from General Electric, given to the future president in 1955 as a reward for Reagan’s role as a corporate shill after his cinematic career hit the skids, the home on San Remo was built and paid for by the labors of Thomas Mann, the Nobel Prize-winning author of some of the most important works of fiction of the 20th Century.

The artist in exile

Mann had fled Hitler’s Germany to take up residence in the United States, settling into his new home in the Palisades to do what he did best, write.

It was within these walls that he created what may be arguably his finest work, Doctor Faustus, a powerful novel encompassing the trends of the early 20th Century that gave rise to fascism.

As playwright and poet Sean O’Brien wrote in an essay on the novel for the Independent:

It is a novel of ideas of a kind rarely found in English, but sees thought and art as inseparable from character. It is in a sense the story of the early 20th century in the light of Fascism and modernism, yet neither history nor the individual is sacrificed to allegory.

Mann at work in his Pacific Palisades study. Mann at work in his Pacific Palisades study, via the Literaturarchiv und Bibliothek in Munich..

Mann at work in his Pacific Palisades study. Mann at work in his Pacific Palisades study, via the Literaturarchiv und Bibliothek in Munich..

The media take note

But now Coldwell Banker is peddling it as a teardown, valuable mainly for the land it occupies.

From today’s Los Angeles Times:

Although the language in the listing — “Create your dream estate or remodel and expand the existing home in the ultra-exclusive upper Riviera neighborhood” — hedges its bets a bit, Joyce Rey, the agent representing the seller, was more direct in a phone interview, saying she had a hard time imagining that any potential buyers would be interested in its history.

“The value is in the land,” she said. “The value is not really in the architecture, I would say.”

>snip<

The house is not one of L.A.’s official historic-cultural monuments, though it is listed as a “historic resource” in a larger inventory called SurveyLA. A new citywide ordinance requires that owners seeking to demolish houses older than 45 years provide notice to neighbors and the local city council office at least 30 days in advance. But in general there are limited protections for most residential buildings in Los Angeles, even those with notable architectural pedigrees.

Rey said the seller, whom she declined at least for the time being to identify, was not interested in opening the house to preservationists or journalists.

The home is notable in its own right, designed for Mann by fellow German emigre J.R. Davidson, one of the seminal figures in creating the L.A. style of architecture that resulted in some of the region’s most influential designs of the mid-20th Century.

He was first to create homes with floor to ceiling windows and sliding glass doors, features that would become virtually standard in California’s temperate climate.

Mann and his family outside their San Remo Drive home. Source.

Mann and his family outside their San Remo Drive home. Source.

Reaction from Germany comes fast and furious

Needless to say, the German cultural community is outraged. All of Mann’s European homes have been spared the wrecking ball and are revered as national landmarks, a designation which somehow was never sought for his home on the California coast.

Deutsche Welle reports:

Despite the home’s outward appearance, Jürgen Kaumkötter, curator of the recently founded Center for Persecuted Arts in Solingen#, says the villa should be saved at all costs. He’s gone so far as to demand that the German government buy the property in order to prevent the demolition of this historical house.

“The building could serve as a meeting ground for young writers,” Kaumkötter said, “perhaps in combination with the Villa Aurora (the former home of German-Jewish novelist and playwright Lion Feuchtwanger)” If Germany wants to have an international outlook, it should also provide some room for critical thinkers.

That view is echoed by Jürgen Serke, a Hamburg-based collector of art and literature and the author of “Die verbrannten Dichter” (“Burned poets”). He thinks German Culture Minister Monika Grütters should give the idea some thought; in his view, there is plenty of money to finance this proposal. He believes a demolition of the villa would be a great shame for Germany, with Mann being the most significant German author of the 20th century.

>snip<

The lawyer who purchased the house from the Mann couple when they returned to Europe in 1952 knew quite well that what he had bought was an important site for German culture and intellectual history. He marked the spot with a bronze plaque featuring a profile of Thomas Mann, explaining in English and German the significance of the home.

In Los Angeles, land in rich enclaves like the Palisades is often “worth: more than the homes occupying it, and some of the city’s greatest and most significant houses and other buildings have fallen to the wrecking ball.

To allow Mann’s home to follow that same tragic trajectory would nothing less than sinful.

California apartment rents go through the roof


We were hit with a recent rent increase that’s forcing us to give up Casa esnl in Berkeley. The rate was raised by 55 percent four our one-bedroom cottage, and we suspect the new tenants will pay even more.

Berkeley is located in the Oakland area, which reported the highest increase in rents in the U.S. last year, and the rate isn’t likely to decline next year, reports Freddie Mac in their just-released Multifamily Mid-Year Outlook 2016, which covers selected cities in the U.S.:

BLOG Rents
We’re moving to the Los Angeles area to be closer to two of our progeny, but rents are also soaring there, as the chart indicates.

The predicament we face is also confronting a lot of other Californians, as observed by the editorial cartoonist of the San Diego Union-Tribune:

Steve Breen: Better rub hardBLOG Apartments Breen

Massive wave of Greek home foreclosures nears


The supposedly radical government of Greek Prime Minister Alexis Tsipras swept into power in January 2015 on a promise to end the austerity and debt slavery imposed by the European Commission, the European Central Bank, and the International Monetary Fund.

But when push came to shove, Tsipras knuckled under, and yet more jobs were cut, more salaries lowered, more pensions slashed, health care reduced, and still more Greek national assets were sold off the sate the banksters of Northern Europe [read Germany].

And now, with austerity biting deeper, three-quarters of a million Greeks are about to lose their homes and businesses.

From To Vima:

About one and a half million tax payers may face foreclosures from tax authorities for debts over 500 euros. Half of them – 755,806 – are expected to face mandatory liquidation measures, namely property and bank accounts seized.

At the end of June the tax authorities announced that 4,003,372 have tax debts. The General Secretariat of Public Revenue may enforce mandatory liquidation measures on 1,492,088 of them, given that many debtors may either not have assets or may be bankrupt.

Tax debts amount to almost 90 billion euros, which is about half of the country’s gross domestic product. The new overdue debts generated in 2016 amount to 6.8 billion euros, with 5.956 billion euros being unpaid taxes. In June alone 1.2 billion euros worth of debts were generated, with 903 million euros being unpaid taxes.

Map of the day: Hours worked to pay apt. rent


From U.S. Uncut, the number of minimum wage working hours are needed to rent a one-bedroom apartment in each state:

BLOG Rent

Headline of the day: When hell freezes over


From the Guardian, a problem the departing esnl knows well:

Big tech asked to pay their ‘fair share’ in taxes to help San Francisco’s homeless

The tech boom has generated thousands of high-paying jobs and vast amounts of wealth. It’s also contributed to a spike in housing costs, a steady rise in evictions, a seismic shift in the identity of neighborhoods and an ever-widening gap between the city’s richest citizens and its poorest.

Major anti-gentrification riot erupts in Berlin


In a reverse of the currents of the mid-20th Century, American elites are flooding back to the globe’s cities, sending real estate prices soaring and depriving the folks who keep the cities running — the janitors, wait staff, kitchen help, home aides, and countless — and forcing them out into the suburbs once favored by the elites.

The dispossessed, angered at losing their homes, are beginning to take action.

A anti-gentrification protest in Berlin this weekend ended in a riot with scores of injured, both police and protesters.

We begin with a clip from euronews:

Police and protesters clash in Berlin neighbourhood


Program notes:

Around two thousand left wing extremists marched through the Freidrichshain neighbourhood of Berlin on Saturday in a day of tension with a similar number of police that hours later ended in clashes.

Paramedics ended up attending to both injured police officers and demonstrators as the day wore on. Demonstrators began setting off fireworks in the direction of the officers and throwing bottles and stones, while vandalizing police vehicles and breaking store windows.

The story from BBC News:

Police in Berlin say 123 officers were injured in clashes with leftist protesters over the redevelopment of a district in the east of the city.

About 3,500 protesters marched through Friedrichshain on Saturday. Some were masked and threw missiles, police said. The protest was the most violent in the past five years, they said.

Tensions have risen since moves began in June to evict squatters in the area. Friedrichshain has undergone rapid gentrification in recent years.

About 1,800 police were deployed at the protest, which began peacefully but escalated into violence. Eighty-six people were arrested, police said.

More from euronews:

The authorities have repeatedly tried to clear people from a squatted house on Rigaer Strasse, resulting in months of vehicles being set on fire, which police have mostly blamed on far-left extremists.

The leftists had made open calls for street violence in recent weeks to show their opposition to the round-the-clock surveillance on the Friedrichshain squat.

Berlin’s Mayor Michael Müller, a centre-left Social Democrat, has called for the residents of the Rigaer Strasse property and neighbours to sit down and talk through their differences.

The centre-right Christian Democrats, however accuses the city’s authorities of being too lenient.

Chart of the day: Material deprivation in Greece


From the Hellenic Statistical Authority:

BLOG Greece

Among the findings:

  • 47.5 % of the poor households declare incapacity to afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day, while the respective percentage of the non-poor households amounts to 1.8%.
  • 29.2% of the total households declare inability to keep their home adequately warm, while the share of the poor households is 50.8% and the share of the non-poor households is 23.7%.
  • 87.2% of the poor households and 44.5% of the non-poor households report difficulties in facing unexpected financial expenses of approximately 410 euro.

San Francisco Bay affordable housing collapses


Simply put, rental housing affordable by folks with average incomes is vanishing in the San Francisco Bay Area, and much of of the rest of California as well.

A new report from rental listing website Trulia spell out the grim reality, as indicated in this listing of the cities where the loss of affordable housing is highest in the U.S. [H/T to the East Bay Express]:

BLOG Housing