Tip to Young Homebuyers: Rent (or be born in 1946)

How myopic is this quote – from a study by The Urban Institute, cited initially in the NYT and debunked here in Ecomonitor.com

“If a person delayed the purchase of a home to age 40 instead of buying at age 30, that might result in a $42,000 loss in home equity by the time she reaches 60, given trends in wealth accumulation over the past few decades.”

Trends in wealth accumulation over the past few decades were driven by Boomers.  Those days are gone.  The party is over. The good ship Aloha has sailed.

Ecomonitor provides some solid rationale for renting, not buying, a home.

via EconoMonitor : EconoMonitor » Bizarre New York Times Article on Lousy Finances of the Young Gives Undue Prominence to Housing as an Investment.

Afghanistan, Land of Opportunity? | LinkedIn

This is really interesting, in the same way Economist articles are interesting.  It’s not about Afghanistan at all.  It’s about how countries should develop policies for developing natural resources.  It’s by a McKinsey consultant so I know it’s biased by McKinsey’s interest in attracting future clients, but the recommendations it makes about government policy sound very logical.

The author also makes the point that “logical” doesn’t mean “easy”.

With one exception, the comments are uninformed and deal most with Afghanistan.  The one comment relevant to the original post addresses the “easy” aspect. Luke Gromen offers an interesting twist on the “the golden rule”.

“In a perfect world the steps you lay out are absolutely correct. However, it isn’t a perfect world. Men with guns, often of western descent, have tended to want to dictate price and terms of those commodities for the benefit of their own nations. Usually, the conversation has not been a negotiation, but rather an offer consisting simply of “the gold or the lead.”?

He elaborates with the example of Sadem Hussein who, to his everlasting chagrin, probably didn’t understand the question.

Afghanistan, Land of Opportunity? | LinkedIn.

Delphi told panel GM approved ignition switches below specifications | Reuters

I think I would like to meet the GM engineering team responsible for developing the specs for the torque on the ignition switches.  I imagine they lead pretty sheltered, narrow lives.  But perhaps the gravy days are over.
“According to one entry of the chronology in the memo, officials of Delphi, which supplied the ignition switches to the recalled GM cars, told committee investigators that GM had approved the part, even though sample testing of the ignition switch torque was below the original specifications set by the automaker.

via Delphi told panel GM approved ignition switches below specifications | Reuters.

Miami Beach: pumping storm water into the aquifer

This is part of an interview on PBS Nightly News.  The interview was generally positive, good for Miami Beach for getting rid of the storm water.  (The storm water sewers don’t drain into the ocean as reliably as it used to, now that the ocean often rises above the level of the sewers.)  I guess the ground water under southern Florida isn’t good for too much, but surely there is some potable water down there.  Otherwise where do the locals get their drinking water?  (Wal-Mart?)

Regulations in most other locations require strict isolation of surface water from ground water.  The damages ensuing from a contaminated aquifer are incalculable.

Maybe they pump the storm water underground in an attempt at remediation: reducing the number of sink holes on the surface that are caused by pumping fresh water out of the ground.  Still – it’s nuts to pump storm water underground.

KWAME HOLMAN: The Miami Beach Public Works Department is working on improvements now.

ERIC CARPENTER, Miami Beach Public Works Department: We have done our storm water management master plan that was adopted in 2012, and that had identified approximately $200 million worth of improvements that we needed to do over the next 20 years in order to keep pace with sea level rise and addressing flooding concerns within the city of Miami Beach.

KWAME HOLMAN: Some of that infrastructure includes pumps.

RICK SALTNICK, Senior Capital Projects Coordinator: Everything collects on the inlets on the streets and then runs through those white pipes down there. They’re PVC pipes. They then all drain via gravity to the storm water pump station, and then pumped out of the storm water pump station and injected into the ground 80 to 100 feet down.

We’re sizing these pumps to provide the proper level of service 20 years from now and at the sea level 20 years from now.

via South Florida considers investment against rising seas.

Toronto neighbourhoods ranked by new ‘equity score’ – The Globe and Mail

This is nuts….a new collective metric, “equity”, which is an index of a bunch of other indexes which are individually and collectively debatable among economists and sociologists till the cows come home.

  • economic opportunity,
  • social development,
  • health,
  • participation in decision-making, and
  • physical surroundings

via Toronto neighbourhoods ranked by new ‘equity score’ – The Globe and Mail.

Mohamed A. El-Erian offers six reasons why business investment has stalled, despite firms’ bulging cash reserves. – Project Syndicate

This guy is good.  All six reasons seem germane to me.
This one is provocative:

Third, while companies recognize that innovation is a key comparative advantage in today’s global economy, they are also humbled by its increasingly winner-take-all nature. Successful innovation today is a lot less about financing and much more about finding the “killer app.” As a result, many companies, less convinced that “normal” innovation yields big payoffs, end up investing less overall than they did before.

The implication, that “normal” corporate innovations requires less investment (and generate fewer new jobs) is a little scary.
I’m wondering… there must be “normal” types of innovations that are not of the “winner take all” variety….these would be innovations where all the players benefit as the total pie gets bigger.

Still wondering.

via Mohamed A. El-Erian offers six reasons why business investment has stalled, despite firms’ bulging cash reserves. – Project Syndicate.