Random Economic Posts

[LFC]

Big business's purchase of the Republican Party is about to pay off bigly as the Fifth Circuit Court moves to neuter the SEC. TPM views this as another move to kill the federal regulatory system, something that the most toxic slice of capitalism has been slobbering over for decades.

A Fifth Circuit Court of Appeals panel handed down a ruling this week that would significantly change how the U.S. Securities and Exchange Commission (SEC) prosecutes cases.

It would force the agency to litigate certain cases in federal courts rather than through its internal adjudication process. That could slow down the trial process, would involve a jury with significantly less expertise in this area of law and raises the possibility that cases will draw conservative, anti-regulation judges hostile to the SEC.

But more important than the court’s move to curtail this aspect of SEC power — which has incurred some good-faith arguments against it — is one of the ways in which the panel did it. The Fifth Circuit took the opportunity to fire a shot across the bow of the administrative state with an argument experts widely agree is dubious at best.

It came in the form of an invocation of “nondelegation,” a theory that has largely lain dormant since the 1930s, when it was deployed against FDR’s New Deal. It holds that Congress cannot outsource its legislative power to other entities, and is an idea that has been resurrected by the anti-agency, anti-regulation movement on the right.

If that part of the decision stands and is disseminated through other court rulings, it would throw a major aspect of how federal agencies enforce regulations into doubt, and could completely overwhelm the federal judiciary with cases formerly left to the agencies to adjudicate themselves.

“It’s clickbait,” Jed Shugerman, a professor at Fordham University’s School of Law, told TPM. “They added on that second part about nondelegation to get more attention from libertarians and Federalist Society conservatives. It’s a bit of a hobby horse for Gorsuch, so maybe they were even trying to get the attention of the Supreme Court.”

[Bact PhD]

Is it my imagination, or is this a VERY sneaky way to circumvent the rules put in place since 2008?
www.wsj.com/articles/the-airbnb-of-wall-street-wants-to-free-up-trapped-bank-capital-11653256576

(In full due to paywall)

Wall Street banks are running out of room to keep the markets humming. The sharing economy could hold the solution.  

That is the idea behind Capitolis Inc., a startup backed by some of the biggest names on Wall Street and Silicon Valley. In the same way Airbnb turned vacant homes into vacation rentals, Capitolis is turning the unused capital of investing giants like BlackRock Inc. into assets that banks can use to facilitate all kinds of transactions.

Banks play a vital role in the markets, serving as the middleman between buyers and sellers of securities and lending money to businesses. Regulators require them to set aside capital for each of those transactions, creating a buffer meant to shield depositors from losses. 

New regulations imposed after the 2008 financial crisis forced banks to grow those capital buffers. Banks took it even further, locking up trillions of dollars that once flowed through the financial system. They became safer but less able to take in all comers, especially in times of market chaos. 

Enter Capitolis: It matches investments from asset managers, pension funds and money-market funds with the transactions banks facilitate and underwrite. The firm has raised some $60 billion from investors for the banks to use in the past two years and reduced trillions of dollars in trading positions, said Gil Mandelzis, its founder and chief executive.

JPMorgan Chase & Co. and Citigroup Inc., two of the biggest players in global markets, use Capitolis to free up their traders to work with more clients. The two banks are also Capitolis investors, alongside venture-capital firms Sequoia Capital and Andreessen Horowitz. A March funding round valued the startup at $1.6 billion. 

Mr. Mandelzis’s new idea resembles an old one: Banks have long sliced up and sold their big corporate loans to other banks and investors. Capitolis figured out how to use this syndication concept to turn all kinds of banking products—foreign-exchange swaps and lines of credit, to name a few—into a kind of fixed-income security or loan they can sell to investors. 

For example, Citigroup owns a basket of equities tied to its clients’ trades. Capitolis, using investor money, essentially mirrors Citigroup’s trades—entering into a derivative contract to take the risk off the bank’s balance sheet. Citigroup is freed up to do more trading, and the investors get a fixed payout. 

Capitolis’s plan to outsource banks’ capital needs, while still in its infancy, has the potential to reshape their role in the market and the broader economy. Divorcing the capital required for transactions from the process of executing them could allow banks to serve more customers—businesses and consumers alike—without taking on so much risk that they could blow up the financial system. The goal, the company’s founders say, is a market better able to absorb big spikes in trading volume and loan demand. 

“When it’s all over, we will have uncoupled capital from the underwriting equation,” said Mr. Mandelzis. “We’re going to look back and wonder how they used to do it when it was bundled.”

Not everyone agrees the banks have retrenched much or that it is a problem if they do. A host of market players—high-frequency traders and nonbank lenders among them—have sprung up to take on the business banks now turn away.

But there is evidence that banks’ capital-hoarding is exacerbating market disruptions. That happened in September 2019, when a cash shortfall caused borrowing costs to spike in a key short-term lending market. It happened again in March 2020, when banks were unable to steady the suddenly volatile market for supersafe U.S. government bonds. Both times, the Federal Reserve had to intervene. 

“Before 2008, no one was thinking about the balance sheet,” said Tom Glocer, Capitolis’s co-founder and chairman. “Now it drives all the decisions.”

Capitolis was born on the tennis court, where Mr. Mandelzis—a one-time bar owner in his native Israel who had become a banker and entrepreneur—had a regular game with Mr. Glocer, a Morgan Stanley director and former CEO of Thomson Reuters. 

Between serves, the two men discussed the growing disconnect in finance. Investors and asset managers were flush with cash and looking for new ways to invest it. Banks were turning away potential customers for lack of capital.

Mr. Mandelzis was one of those customers. At the time, he was the CEO of EBS BrokerTec, a fixed-income trading platform whose parent company had bought his first startup. BrokerTec needed a line of credit to cover unexpected margin calls in rough market conditions.

Banks used to hand out these lines of credit to businesses like the lollipops they give to retail customers. But after the financial crisis, regulators made banks hold capital against even undrawn credit lines. Banks, in turn, reserved these once ubiquitous perks for the biggest or most lucrative customers. Everyone else had to pay big or go without. 

Mr. Mandelzis said he told BrokerTec’s board a credit line would be expensive but worth it; after all, a credit line could mean the difference of life or death in a crisis. He went to 15 banks. No one would even give him a quote.

An audiobook about the platform economy that birthed Uber and Airbnb provided the inspiration: What if, he asked Mr. Glocer, the same thing was done with capital markets? Along with a third partner, Igor Teleshevsky, they launched Capitolis in 2017. 

State Street Corp. was an early customer. The custody bank called on Capitolis in 2018, worried the Fed’s stress test was going to force it to hold more capital against its growing foreign-exchange trading operation, said Tobias Krause, who oversees risk and financial resources for State Street’s markets division. Capitolis found investors to take over the risk after the trades, helping the unit double its trading volume in the past five years.

State Street invested in Capitolis, and Mr. Krause joined its board.
“It helps us free up capital which we can deploy elsewhere,” he said. 

[LFC]

This is an interesting lawsuit.

A kosher certification group sued JetBlue Airways Corp in New Jersey federal court Thursday, alleging JetBlue unlawfully used its trademarks to advertise food it had not certified.

According to the lawsuit tmsnrt.rs/3I20QHn, New York-based JetBlue sells an artichoke snack that it says is certified by Kof-K Kosher Supervision without the group's consent.

Kof-K has never certified any of JetBlue's products as kosher or given the airline permission to use its trademarks, according to the lawsuit.

A JetBlue spokeperson said Friday that the airline was investigating the claims. An attorney for Kof-K declined to comment.

[andydp]

Jun 24, 2022 20:05:35 GMT LFC said:

This is an interesting lawsuit.

A kosher certification group sued JetBlue Airways Corp in New Jersey federal court Thursday, alleging JetBlue unlawfully used its trademarks to advertise food it had not certified.

According to the lawsuit tmsnrt.rs/3I20QHn, New York-based JetBlue in sells an artichoke snack that it says is certified by Kof-K Kosher Supervision without the group's consent.

Kof-K has never certified any of JetBlue's products as kosher or given the airline permission to use its trademarks, according to the lawsuit.

A JetBlue spokeperson said Friday that the airline was investigating the claims. An attorney for Kof-K declined to comment.

It’s well known in flying circles if you ask for a Kosher meal you get individually prepared food vs mass produced airline pap. I decided to go that route after I saw a Rabbi get a fantastic meal while I got some melted thing.

[LFC]

We are in need of a house cleaner so my wife went onto Angie's List. She just spoke to the person actually doing the work and for a $200+ cleaning they would receive $60, roughly $12/hr minus their drive costs. Before that she had tried Thumbtack and the person from there told us a similar story though not quite as awful. Welcome to the gig economy where a 50-50 split would be considered big money. It's beyond disgusting.

[LFC]

Managers are participating in The Great Resignation as well. Companies that relied on a buyers' employment market and treated people like shit are going to end up with a change in employee quality. That's OK. They'll just offshore and contract out everything, I'm sure.

The so-called Great Resignation is going strong, and it’s not just for working stiffs anymore. Increasingly, managers are also leaving their jobs for greener pastures.

Data shows that managers are leaving their jobs at elevated levels, and that even though resignation rates for workers overall have declined from their peak, lots of people are still quitting their jobs. The breadth of quits could exacerbate an already tight labor market as quits in one area precipitate quits in another, and this cycle could ensure that the Great Resignation — also known as the Great Reshuffling or Great Reconsideration — won’t stop anytime soon.

Data on management departures comes from a number of sources. People analytics provider Visier found that resignation rates among managers went from 3.8 percent in the first half of 2021 to 5 percent in the first half of 2022, which represents a much bigger jump than for non-managers. Gusto, which provides payroll, benefits, and human resource management software, found quit rates among managers remained at the same peak level in June as they were last year, while those for non-managers have declined. LinkedIn found that the rate of people leaving their jobs at the director level has been growing much faster than at those at the entry level this year. The departure of bosses was also evident on job platform ZipRecruiter, which said job postings for managerial positions are growing at a faster rate than job listings at large, and currently make up 12 percent of job postings, up from 10 percent in June of last year.

To be clear, levels of quits remain high across job types and levels. Data released by the Bureau of Labor Statistics this week shows that 2.8 percent of employed people quit their jobs in May. That’s slightly lower than the peak of 3 percent last winter but still very high. In general, looking for a different job has become a bit of a national pastime. The number of people using top job search apps is at an all-time high, according to app marketing intelligence company Apptopia. Lower-paid workers always make up the majority of the workforce and a majority of the quits. As fallout from the pandemic as well as existing trends like an aging workforce continue, however, the composition of the resignations has shifted to include more tenured, higher-paid workers, and, increasingly, those in management roles.

“Resignation rates are creeping up and into ranks where it isn’t a foregone conclusion,” Joseph Fuller, a professor of management practice at Harvard Business School, who leads its Managing the Future of Work initiative, told Recode. “These are higher-paid workers who presumably have invested a lot in educational credentials, training or building their career at a company. They’re managers, and they’re leaving pretty good circumstances — that should be worrisome to companies.”

Their departures greatly affect the people who work for them and the companies they work for, both of which rely on managers to stabilize things in times of uncertainty. If managers are leaving, their companies’ CEOs will, at least for a while, have to make do without them.

“It’s like the military leaning on the non-commissioned junior officers,” Fuller said. “If all of a sudden the sergeants and generals quit, it doesn’t matter what the general’s big vision is for winning the war, someone has to be down there taking the beaches.”

But at a larger scale, high numbers of bosses quitting could usher even more quits among the rank-and-file workers as well as other managers, making the phenomena of the Great Resignation last even longer.

[LFC]

Uber was blatant about breaking laws to push into other cities and countries. The leaked documents show they were very clear among themselves about that fact.

A leaked trove of confidential files has revealed the inside story of how the tech giant Uber flouted laws, duped police, exploited violence against drivers and secretly lobbied governments during its aggressive global expansion.

The unprecedented leak to the Guardian of more than 124,000 documents – known as the Uber files – lays bare the ethically questionable practices that fuelled the company’s transformation into one of Silicon Valley’s most famous exports.

The leak spans a five-year period when Uber was run by its co-founder Travis Kalanick, who tried to force the cab-hailing service into cities around the world, even if that meant breaching laws and taxi regulations.

During the fierce global backlash, the data shows how Uber tried to shore up support by discreetly courting prime ministers, presidents, billionaires, oligarchs and media barons.

Leaked messages suggest Uber executives were at the same time under no illusions about the company’s law-breaking, with one executive joking they had become “pirates” and another conceding: “We’re just fucking illegal.”

The cache of files, which span 2013 to 2017, includes more than 83,000 emails, iMessages and WhatsApp messages, including often frank and unvarnished communications between Kalanick and his top team of executives.

In one exchange, Kalanick dismissed concerns from other executives that sending Uber drivers to a protest in France put them at risk of violence from angry opponents in the taxi industry. “I think it’s worth it,” he shot back. “Violence guarantee success.”

In a statement, Kalanick’s spokesperson said he “never suggested that Uber should take advantage of violence at the expense of driver safety” and any suggestion he was involved in such activity would be completely false.

The leak also contains texts between Kalanick and Emmanuel Macron, who secretly helped the company in France when he was economy minister, allowing Uber frequent and direct access to him and his staff.

Macron, the French president, appears to have gone to extraordinary lengths to help Uber, even telling the company he had brokered a secret “deal” with its opponents in the French cabinet.

Privately, Uber executives expressed barely disguised disdain for other elected officials who were less receptive to the company’s business model.

[AnBr]

[LFC]

This is what you get when you privatize basic utilities. It's in Florida, of course.

Florida’s largest utility company funneled money to a news website, which it then used to defend the utility’s positions and attack critics, two bombshell reports find. Leaked documents reviewed by both the Orlando Sentinel and the Miami Herald paint a portrait of how Florida Power and Light (FPL) executives used consultants and shell companies to get pro-utility articles and hits against its political enemies published on a local Florida news website, the Capitolist.

The documents reviewed by both news outlets show that the editor of the Capitolist, Brian Burgess, who once worked as the communications director for Florida’s former Republican Gov. Rick Scott, gets his paycheck (a cool $12,000 a month—so that’s how you make journalism profitable!) entirely from shell companies controlled by FPL’s consultants. The utility made sure it got what it paid for: The outlets report that FPL consultants were able to “pre-screen” articles published on the Capitolist, with the ability to both order articles written on certain topics and change details down to the headlines and content of the pieces. The Capitolist never disclosed its financial relationship with FPL either in its stories or on its website.

[LFC]

An encampment for homeless people. On an island. Without access to food. Or transportation. Or sewage treatment. And where is this utopia being planned for? Why in Rick DeSatanist's Floriduh, of course!

On Thursday night, it seemed there was no more exclusive place to be in Miami than the District 7 town hall Zoom chat room.

As local officials, scientists, and advocates spoke during the one-hour conversation, Miamians were furiously typing their thoughts on what has quickly become the biggest topic of conversation in the area: the under-the-radar approval to pursue a pilot program for a homeless encampment in Virginia Key.

“This will be a bigger mistake than the Metro Rail system,” one commenter posted in the chat to over 200 residents at 7:10 p.m.

While the full effects of the niche insult can only be enjoyed by anyone who has suffered through Miami’s illogical two-line rail system, it speaks volumes about the public sentiment around the plan to erect up to 100 “tiny homes” on a historic barrier island with a stained racial history. The encampment plan has spurred outrage from every type of Miamian: environmentalists who are worried about destroying the island’s already endangered ecosystem, outdoor enthusiasts concerned about ruined recreational activities, and homeless advocates sounding the alarm about the lack of infrastructure in the area off Rickenbacker Causeway, which could leave relocated people without transportation, sewerage systems, and even access to food.

Residents and local officials canvassed by The Daily Beast have also expressed outrage at the idea of placing people who experience homelessness on an isolated island that is only home to a magnet public high school and a wastewater treatment plant. The encampment will also be notably set up near several outdoor recreational areas about two miles from the closest bus stop—and six miles from a grocery store.

[Bact PhD]

Aug 8, 2022 21:08:03 GMT LFC said:

An encampment for homeless people. On an island. Without access to food. Or transportation. Or sewage treatment. And where is this utopia being planned for? Why in Rick DeSatanist's Floriduh, of course!

On Thursday night, it seemed there was no more exclusive place to be in Miami than the District 7 town hall Zoom chat room.

As local officials, scientists, and advocates spoke during the one-hour conversation, Miamians were furiously typing their thoughts on what has quickly become the biggest topic of conversation in the area: the under-the-radar approval to pursue a pilot program for a homeless encampment in Virginia Key.

“This will be a bigger mistake than the Metro Rail system,” one commenter posted in the chat to over 200 residents at 7:10 p.m.

While the full effects of the niche insult can only be enjoyed by anyone who has suffered through Miami’s illogical two-line rail system, it speaks volumes about the public sentiment around the plan to erect up to 100 “tiny homes” on a historic barrier island with a stained racial history. The encampment plan has spurred outrage from every type of Miamian: environmentalists who are worried about destroying the island’s already endangered ecosystem, outdoor enthusiasts concerned about ruined recreational activities, and homeless advocates sounding the alarm about the lack of infrastructure in the area off Rickenbacker Causeway, which could leave relocated people without transportation, sewerage systems, and even access to food.

Residents and local officials canvassed by The Daily Beast have also expressed outrage at the idea of placing people who experience homelessness on an isolated island that is only home to a magnet public high school and a wastewater treatment plant. The encampment will also be notably set up near several outdoor recreational areas about two miles from the closest bus stop—and six miles from a grocery store.

When I went to the Miami paper’s website to dig a bit deeper into the origins of the scheme (Heretofore, I thought Mayor Suarez, at least, was relatively sane), I came across the updated story—they’re walking it back, for now:

www.miamiherald.com/news/local/community/miami-dade/article264286751.html#storylink=cpy

Miami’s proposal to place up to 100 tiny homes on Virginia Key for people experiencing homelessness, which led to opposition from the county and a weekend protest, will be put on hold for now.

Mayor Francis Suarez and Commissioner Joe Carollo, who sponsored the concept, announced Monday afternoon that the city plans to hold off on pursuing a “transition zone” on the island’s northeastern shore for at least 6 months.

Suarez and Carollo agreed to ask the City Commission to pause the effort while the city works with Miami-Dade County officials on three key issues. They said the city wants the county to help make more shelter beds available, identify alternative sites for temporary housing facilities and stop releasing homeless people from jail within Miami city limits.

[LFC]

At least one Florida politician is pulling out the race card card to defend against criticism of a pretty bad idea.

With a deeply controversial plan to erect a pilot homeless encampment on a remote barrier island in Miami on the ropes, its chief proponent is accusing opponents of “playing the race card” in an ugly new chapter in a local controversy gone haywire.

During a Monday afternoon press conference, Miami Mayor Frances Suarez announced the city’s intention to hold off on pursuing a pilot program to build dozens of “tiny homes” on Virginia Key for at least six months. The “transition zone” program moved forward in a 3-2 vote earlier this month and promptly spurred a furious outcry from every type of Miamian—from environmentalists worried about destroying the island’s ecosystem to advocates for the homeless concerned about the lack of infrastructure in the area off Rickenbacker Causeway to wealthy residents of nearby posh enclaves like Fisher Island.

But before it was the site of a tug-of-war between almost every constituency in Miami, Virginia Key was a Black beach at the height of Jim Crow-era segregation.

On Monday, backer City Commissioner Joe Carollo agreed to pause the pilot program while the city works with Miami-Dade County officials to update the plan. But the Republican wasted no time going after his critics. Calling opponents “elitists” who have strayed into ‘not in my backyard’ (NIMBY)-style rhetoric, Carollo accused some critics of playing the “race card” in light of Virginia Key’s racial history.

“What does this have to do with the historical Black beach?” Carollo said in response to a question at the press conference. “That’s a mile and a half away, the place that we’re looking at. It’s got nothing to do with the historical Black beach, and those that are using that as the final straw to throw at us, they should be ashamed of themselves.”

[andydp]

Had a look at my TSP balance while updating my profile.

I was pleasantly surprised to see the fund had gained several thousand with the recent "bullish" performance of the stock market.  If this keeps up, I'll be getting back to pre "Corvette Fund" status, namely the interest is paying for it.  I have to hope the market stays positive.  

[Bact PhD]

This could go tangentially either here or in the “Housing” thread or in the “climate change” thread. I couldn’t make up my mind, so “Random” it is.

The situation outlined in Coastal Louisiana (which has been losing something like a football field’s worth of wetlands every DAY for the last three decades — I recall hearing that statistic when I lived in the state 30 years ago) isn’t terribly different than what’s been going on here in Flori-DUH WRT state-backed insurers of last resort, insurers going belly-up/jacking up rates mercilessly/canceling policies left and right. And, Louisiana being Louisiana, you can’t ignore the contribution of good old-fashioned corruption.

www.nbcnews.com/news/us-news/louisiana-homeowners-insurance-crisis-hurricanes-rcna46746

Tens of thousands of people are scrambling for homeowners insurance in Louisiana at the peak of hurricane season after recent storms drove their carriers out of business. The crisis has sent insurance prices soaring and stoked fears that the Gulf Coast will grow too expensive to inhabit as climate change fuels more destructive weather.

[snip]

The slow-moving meltdown of the homeowners insurance market, which has a tangle of causes and no clear solution, has left many Louisiana residents with a difficult choice: pay more for insurance, reduce their coverage, or go without it entirely.

“Where do you turn?” asked Amanda deVilleneuve, 34, a teacher in Slidell. She and her husband, an oil worker, have two young children and thousands of dollars in debt from the Covid-19 economic downturn. Since Hurricane Ida damaged their roof beyond repair a year ago, her insurance company raised her premium so high that it was cheaper to buy a policy from a state-run carrier of last resort, Louisiana Citizens Property Insurance Corp. They now pay $4,600 a year, up from $2,400, deVilleneuve said.

[LFC]

Sept 17, 2022 14:28:27 GMT Bact PhD said:

The situation outlined in Coastal Louisiana (which has been losing something like a football field’s worth of wetlands every DAY for the last three decades — I recall hearing that statistic when I lived in the state 30 years ago) isn’t terribly different than what’s been going on here in Flori-DUH WRT state-backed insurers of last resort, insurers going belly-up/jacking up rates mercilessly/canceling policies left and right. And, Louisiana being Louisiana, you can’t ignore the contribution of good old-fashioned corruption.

Good thing this is a place brimming with states' rights, low regulation, small federal government politicians. No way they're going to put their collective hand out and beg for the rest of us taxpayers to make their state affordable to live in, right? Right? RIGHT? Is this thing on?

The amazing thing is that the actual flood portion of the insurance is completely federal (and needs to go up in price). The additional costs of damage are all the other stuff.

[LFC]

This is interesting and, of course, overdue.

Congress Failed To Pass Paid Family Leave. Now It Could Be On The Ballot
After paid family leave was slashed from Democrats' reconciliation package, activists ramped up pressure on the states. In many, the issue will be on the ballot in upcoming elections.

So just how far back is America ... yet again?

The United States, Papua New Guinea, and a few island countries in the Pacific Ocean are the only countries in the United Nations that do not require employers to provide paid time off for new parents.

Gawd, we suck.

[goldenvalley]

Sept 20, 2022 18:58:02 GMT LFC said:

This is interesting and, of course, overdue.

Congress Failed To Pass Paid Family Leave. Now It Could Be On The Ballot
After paid family leave was slashed from Democrats' reconciliation package, activists ramped up pressure on the states. In many, the issue will be on the ballot in upcoming elections.

So just how far back is America ... yet again?

The United States, Papua New Guinea, and a few island countries in the Pacific Ocean are the only countries in the United Nations that do not require employers to provide paid time off for new parents.

Gawd, we suck.

We do. Even in CA which has 8 week paid family leave supplemented by the possibility of pregnancy disability leave which requires a doctor to say the woman needs it, you get about 12-16 weeks of paid leave in some form...but only at about 60-70% of regular pay.  And the paperwork mess can trip people up...2 applications to fill out...one requires doctors to fill out forms too.  Ridiculous.  And really, no one is healed and recovered from child birth at 16 weeks.

[LFC]

It's not like we weren't warned ... and warned and warned and warned and warned and warned and warned and ...

A recent estimate from Corelogic, a property data provider, found that over a million homes in Florida’s Gulf could be at risk from Ian. The state’s insurance industry could lose anywhere from $20 billion to $40 billion from the damages, according to insurance analyst Artemis.

The Florida insurance industry was already in a bad place before this storm. Several private insurance companies shut down this year, and more than 12 have closed since 2020, Quartz reported. This has pushed property owners to the state-owned insurer, Citizens, as their last repost, NBC News reported. The average premium in the state is now over $4,000, compared to the U.S. average of $1,544. 30 insurance companies in Florida are on a state regulator’s watch list because of their shaky finances. Depending on the severity of property damage from the storm, it could be harder for people to collect on their insurance claims, according to NBC News.

Denise Rappmund, a senior analyst and vice president in Moody’s Public Project, explained that some of the property insurance challenges in Florida come from state laws. The state has seen a lot of roofing scams and a large amount of fraudulent damage claims, reports NBC News.

“There are two primary reasons, one of which is the environmental risk exposure,” Rappmund told Earther. “But another one is the legal business environment… for all litigated property insurance claims nationally, Florida accounts for three-quarters of those.”

Because the state insurer has taken on hundreds of thousands of customers in the last two years, extreme weather would make it harder to pay out to everyone. Some customers may not receive adequate coverage for the type of damage that has been caused by the storm. Most private and state insurance primarily cover wind damage, according to the Orlando Sentinel. And though the storm has caused wind damage, many homes have also been flooded.

I'd just like to point out that the roof issue is decades old. I read an interview with a local Dade County homebuilder after Hurricane Andrew in 1992, 30 f***ing years ago. He had built over 200 homes in the area and all survived. When asked what his secret was he basically said, "I build to code and don't pay off inspectors." So many of the homes destroyed had tile roofs just slapped on. Once they got hit with hurricane force winds they tore right off leaving the plywood / flakeboard exposed and ready to be ripped up. Welcome to the miracle of light-handed regulation.

[Bact PhD]

Sept 30, 2022 20:43:06 GMT LFC said:

It's not like we weren't warned ... and warned and warned and warned and warned and warned and warned and ...

A recent estimate from Corelogic, a property data provider, found that over a million homes in Florida’s Gulf could be at risk from Ian. The state’s insurance industry could lose anywhere from $20 billion to $40 billion from the damages, according to insurance analyst Artemis.

The Florida insurance industry was already in a bad place before this storm. Several private insurance companies shut down this year, and more than 12 have closed since 2020, Quartz reported. This has pushed property owners to the state-owned insurer, Citizens, as their last repost, NBC News reported. The average premium in the state is now over $4,000, compared to the U.S. average of $1,544. 30 insurance companies in Florida are on a state regulator’s watch list because of their shaky finances. Depending on the severity of property damage from the storm, it could be harder for people to collect on their insurance claims, according to NBC News.

Denise Rappmund, a senior analyst and vice president in Moody’s Public Project, explained that some of the property insurance challenges in Florida come from state laws. The state has seen a lot of roofing scams and a large amount of fraudulent damage claims, reports NBC News.

“There are two primary reasons, one of which is the environmental risk exposure,” Rappmund told Earther. “But another one is the legal business environment… for all litigated property insurance claims nationally, Florida accounts for three-quarters of those.”

Because the state insurer has taken on hundreds of thousands of customers in the last two years, extreme weather would make it harder to pay out to everyone. Some customers may not receive adequate coverage for the type of damage that has been caused by the storm. Most private and state insurance primarily cover wind damage, according to the Orlando Sentinel. And though the storm has caused wind damage, many homes have also been flooded.

I'd just like to point out that the roof issue is decades old. I read an interview with a local Dade County homebuilder after Hurricane Andrew in 1992, 30 f***ing years ago. He had built over 200 homes in the area and all survived. When asked what his secret was he basically said, "I build to code and don't pay off inspectors." So many of the homes destroyed had tile roofs just slapped on. Once they got hit with hurricane force winds they tore right off leaving the plywood / flakeboard exposed and ready to be ripped up. Welcome to the miracle of light-handed regulation.

(Bold mine)
(Imagine Gomer Pyle’s voice)Well golllleeee, who knew?!??
Yeah, the corruption in that industry, ESPECIALLY in Flori-DUH, is LEGENDARY. Shortly after Andrew struck, one of the other things investigators found was that in some developments the model, and maybe a couple of other houses, were built to code, got inspected, and passed. The rest, however, were put up with a slap and a bang with nary a look. Guess which houses survived the storm more or less intact and which looked like a bomb dropped on them?

I am DREADING the next homeowners insurance bill. Being inland, our bill isn’t through the roof (so to speak)…YET. The complaints on NextDoor concerning the jump in premiums/cancellation of coverage are numerous in recent months. I would be lying if I didn’t admit property insurance costs going forward is influencing my thoughts about staying in Flori-DUH long-term. If we get pushed onto Citizens (state-backed insurer of last resort), that may be the deal-breaker for us.

[goldenvalley]

Sept 30, 2022 22:43:09 GMT Bact PhD said:

I am DREADING the next homeowners insurance bill. Being inland, our bill isn’t through the roof (so to speak)…YET. The complaints on NextDoor concerning the jump in premiums/cancellation of coverage are numerous in recent months. I would be lying if I didn’t admit property insurance costs going forward is influencing my thoughts about staying in Flori-DUH long-term. If we get pushed onto Citizens (state-backed insurer of last resort), that may be the deal-breaker for us.

The same conversations are going on in Western states that have had catastrophic wildfire. 

[LFC]

This is pretty much what we've discussed here over and over again.

[andydp]

Oct 12, 2022 16:48:24 GMT LFC said:

This is pretty much what we've discussed here over and over again.

Wasn't California proposing a tax on employers who have employees on Food Stamps and Medicaid ?

[goldenvalley]

I don't remember a tax on employers in CA but that just means I don't remember.  What has happened though was a bill was signed into law that raised minimum wage for franchise restaurant workers perhaps up to $22/hour...depending on the findings of something or other newly created study group.  The fast food industry immediately took out a petition for referendum on it which stops any enforcement of it at least while citizen signatures in support of it are being gathered.  If the requisite number is reached it will go on the ballot in 2024.  

[AnBr]

Oct 12, 2022 18:03:41 GMT andydp said:

Oct 12, 2022 16:48:24 GMT LFC said:

This is pretty much what we've discussed here over and over again.

Wasn't California proposing a tax on employers who have employees on Food Stamps and Medicaid ?

Sounds like a good idea. Make it cost them more to chisel their workers than to simply pay them a living wage. Of course a UBI and divorcing healthcare from employment works, too. True universal healthcare would do the latter. Make it so that workers can say "screw you" and be able to quit any job that does not pay enough and or treat their workers well.

[andydp]

(Copied from the baseball thread.)

There may be a correlation between Phillies winning WS and recessions.

No, a Phillies World Series win won’t lead to a recession (we think)

Is the Phillies World Series appearance a potential economic indicator? At a glance, the evidence for an oft-cited superstition is compelling.

www.inquirer.com/opinion/commentary/philadelphia-phillies-world-series-win-recession-20221026.html