Bitcoin no longer worth the mining cost, JPMorgan says

If a dystopian future is indeed ahead, investors and companies may want to have more of a plan than merely mining cryptocurrencies.

On average, the cost of creating a Bitcoin amounted to $4,060 globally in the fourth quarter, more than the value of Bitcoin, now trading for less than $3,600, according to John Normand, head of cross-asset strategy at JPMorgan Chase, who on Thursday released in a wide-ranging report on cryptocurrencies. In other words, the cost of mining Bitcoin is far outstripping what miners can fetch on the market.

“Prices had declined to a point where mining became uneconomical for some miners, who have responded by turning their mining rigs off,” Norland noted.

That’s not to say the equation doesn’t make sense for some, with Chinese miners able to pay far less — about $2,400 for each Bitcoin — by making deals with electricity producers such as aluminum smelters with surplus power, the analysts found.

“The drop in Bitcoin prices from around $6,500 throughout much of October to below $4,000 now has increasingly pushed margins further and further negative for just about every region except low-cost Chinese miners,” wrote the analysts, who noted their cost projections could be tilted high because of iffy data and conservative assumptions.

The negative margins will likely lead to more producers heading for the exits, a scenario that could push prices down for those who remain, because they would garner a bigger stake of Bitcoins for the same level of energy consumption. If only low-cost Chinese miners stay in the game, the marginal costs could fall to less than $1,260 for each Bitcoin, the analysts wrote.

At the same time, wild price swings make cryptocurrencies a less than ideal way of setting aside value, said Normand.

“We have long been skeptical of cryptocurrencies’ value in most environments other than a dystopian one, characterized by a loss of faith in all major assets (dollar, euro, yen, gold) and in the payments system,” he wrote. “Developments over the past year have not altered our reservations about these assets’ role in global portfolios, even if their novelty value can remain high indefinitely.”

Hackers access data on thousands of home loans

NEW YORK – Jan. 24, 2019 – An estimated tens of thousands of loans and mortgages have had private data compromised online, according to an investigation from a security researcher and TechCrunch. The sensitive information that was found mostly dated back to 2008 and included loans from banks like Wells Fargo and Citigroup, among others.

The banks are reportedly in the process of trying to identify the customers affected and inform them of any possible account hacking.

“These documents contained highly sensitive data, such as Social Security numbers, names, phones, addresses, credit history and other details which are usually part of a mortgage or credit report,” security researcher Bob Diachenko, who discovered the breach, wrote on his blog, “This information would be a gold mine for cyber criminals who would have everything they need to steal identities, file false tax returns, get loans or credit cards.”

Consumers are urged to change the passwords on their financial accounts.

The database that was hacked was not password protected, but in the data theft of that open database, hackers may have gained access to personal information that that they could then use to access a borrower’s other accounts that were password protected.

Source: “Fraud Alert: Your Mortgage Info Could Be at Risk,” USA Today (Jan. 23, 2019) and “Document Management Company Left Credit Reports Online,” (Jan. 23, 2019)

Trying to avoid real estate attorneys? Do this By Gary M. Singer

Jan. 21, 2019 – Another year has gone by, and every year at this time I like to give some general advice on how to avoid needing the services of your local real estate attorney.

Here are the steps to take when dealing with the majority of legal issues concerning your home. I call these my “Four Pen Rules”

  1. The first rule is always read what you are signing. Read the contract, proposal, invoice, or whatever you are presented. If you do not understand what you see, ask questions and keep asking until you do understand. However, remember, it is the document that binds you, not their explanation of it, so if you are being told something that does not match what you were asked to sign, don’t put pen to paper.

  2. The second rule is one of my all-time favorites: If you can say it, you can sign it. Get it in writing because, as a rule, verbal agreements are worth the paper they are written on. Verbal agreements are difficult to enforce, and because everyone’s memory works differently, are more likely to lead to a problem. It is easy to avoid the issues to begin with by getting it in writing.

  3. The third rule is to document everything when a dispute occurs. Because nobody is more the 3 feet from their smartphone anymore, this is easy. Take photos and videos. Write down, or type in, notes while it is still fresh in your mind. Emailing these to yourself is a great way to prove the timing of these records should that ever become an issue. If the dispute turns into a lawsuit, your attorney will thank you for making their job so much easier.

  4. The final “pen” rule is a bit of a hybrid. When a problem does occur, try to talk it out with your neighbor. Whether it is branches over the fence line or debris blowing on your lawn, a polite conversation will resolve the vast majority of concerns. Here is where the pen part comes in: After you and your neighbor agree to a fix, send your neighbor a short and friendly note or email setting out what was agreed and asking for any corrections. If you receive corrections in reply, then you have avoided a misunderstanding and inevitable disappointment. If there is no reply, then your neighbor agreed to the fix.

About the writer: Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He practices real estate, business litigation and contract law from his office in Sunrise, Fla. He is the chairman of the Real Estate Section of the Broward County Bar Association and is a co-host of the weekly radio show Legal News and Review. He frequently consults on general real estate matters and trends in Florida with various companies across the nation.

Shutdown could impact HUD rent subsidies after Jan.

WASHINGTON – Jan. 10, 2019 – Desiree Trail was diagnosed with post-traumatic stress disorder in 2001 after surviving a multiple sexual assaults, getting clean after a drug addiction and weaving in and out of homelessness. The 48-year-old single mother says it took years before she was able to gain access to affordable housing in 2015 under the Section 811 program for people with disabilities.

Since then, Trail has lived in a two-bedroom apartment in Stafford, Virginia, with her nine-year-old daughter. But now she is worried she will lose her home thanks to the government shutdown triggered by a fight over funding for a wall on the Mexican border.

With the partial shutdown nearing three weeks, federal agencies such as the U.S. Department of Housing and Urban Development (HUD) have furloughed the majority of their staff. This shutdown is now the second-longest in U.S. history and NBC News reported that more than 1,000 federal contracts with private landlords providing housing have expired in those weeks.

When that news broke, Trail panicked.

“I called my rental office this morning and they haven’t heard anything. I called Senator [Tim] Kaine’s office in [Washington] D.C. and Richmond but unfortunately most of the calls I’ve made, the voicemails are full or the phone systems are down because of the mass influx of calls, so this causes a lot of stress,” she said.

Right now, through various social services, Trail has a monthly income of just over $1,000. Some of that goes to her son in Richmond, $200 is spent on groceries for her small family while another $250 goes towards rent and utilities. Average rent in the area for her apartment is at least $1,300, she estimates, higher than her monthly income. Not much is left over, she says, so if she’s kicked out of her HUD-subsidized housing, she’ll be homeless because she can’t afford a motel.

Because of her disabilities, ranging from fibromyalgia and PTSD to neuropathy, she can’t work.

“This is very triggering,” she began, referring to a letter, first published by the Washington Post, sent to landlords by HUD officials asking them not to evict tenants after they realized funding for multi-family programs were not renewed before the government closed at the end of December.

“At one time I was homeless,” she said. Before she had her daughter, she spent nearly 15 years sleeping in motel rooms and on couches. And before that, she spent her childhood in foster care.

Trail doesn’t want her daughter to experience even one night in a motel room, explaining why the potential of losing her affordable housing hit her especially hard. “This puts single mothers into a position where they’re very vulnerable,” she continued, her voice rising. “A lot of us are being held emotionally hostage.”

According to a statement posted on the National Low Income Housing Coalition’s website, HUD has been in contact with the organization, stating “that while resources for project-based assistance are sufficient for January, funding becomes more uncertain if the shutdown lasts beyond this month.”

Diane Yentel, the NLIHC president and CEO, told the Guardian that the shutdown was a threat to America’s most vulnerable people.

“The vast majority are deeply poor seniors, people with disabilities and families with children. Already, as a result of the shutdown, HUD cannot cover the costs for subsidized homes housing an estimated 70,000 low-income seniors and people with disabilities. Owners of these properties are being asked to cover the costs in the meantime, but the longer the shutdown continues the less likely they will be able to do so,” she said in a statement.

The Guardian contacted HUD by telephone and email and received no response.

Some landlords are saying they will step into the gap. Heather Goff, whose family owns approximately 200 HUD housing units in Tuscaloosa, Alabama, told the Guardian no one will be evicted from any of their properties. Their reasoning is threefold: first, her grandparents acquired the properties in the mid-70s so most are owned outright. Second, she says, their properties are Section 8 housing, meaning the tenants pay 30 percent, Section 8 vouchers pick up a large chunk and HUD pays for whatever is left over.

Finally, if someone isn’t able to cover rent, the Goff family pays because “some of our tenants we’ve had for decades and are really a part of our extended family,” she said. “We will do what it takes to keep our [people] housed.”

But not all low-income tenants are as secure as Goff’s. Many are speaking out on social media weeks after the viral hashtag #shutdownstories was used to inform the public of the real-world impact of a long-term government shutdown affecting more than 800,000 employees.

Twitter user Suzn worried about her elderly mother in public housing, lamenting: “I’m very concerned about my 93-[year-old] mother. She lives in HUD approved housing for seniors. She submitted all paperwork to recertify as low income. HUD shut down & can’t do whatever is needed to mediate with landlord. Will she be a casualty of shutdown? Too close to home.”

Copyright © 2019, Khushbu Shah. All rights reserved.

What can condo boards consider closed-door ‘personnel issues’?

STUART, Fla. – Jan. 8, 2019 – Question: Our HOA board called a private board meeting for ‘Personnel Issues.’ The meeting was held to discuss an email a director sent by mistake to the general manager. The email had some satirical comments about a board member’s decision.

The board voted to ask the director to resign for ethics reasons, and if they did not resign to remove them from their officer position. Is this a meeting that can be legally closed?

They also had private board meetings which were called to discuss a vendor contract but had it without an attorney present. The way I read the Sunshine laws that is also not a legal meeting. When I asked the board president about the meetings, he said their attorney said they were legal because they were contract negotiations. Your opinion? – R.L., Port St. Lucie

Answer: Thank you for your questions. The law applicable the Homeowners Associations is Section 720.303, Florida Statutes which provides that:

“Notwithstanding any other law, meetings between the board or a committee and the association’s attorney to discuss proposed or pending litigation or meetings of the board held for the purpose of discussing personnel matters are not required to be open to the members other than directors.” The law for condominiums is identical.

A meeting of the board to discuss the actions or communications of a director or officer as you have described is not a personnel matter in my opinion. An officer or director of the association is not the association’s “personnel.”

If the meeting was about comments made about the general manager, then it could be considered a personnel matter, but that would mean it involved something about the general manager who is the association’s employee, i.e. personnel. You indicated the purpose of the meeting was to discuss comments made to the GM about the board – not about the GM. This does not qualify in my opinion as a personnel matter that would allow the meeting to be closed to members.

Meetings to discuss negotiations about the vendor contract when the association’s legal counsel was not present are also not meetings that can be closed to the members. Even if the association attorney was present at the meeting, it likely should not have been closed because the purpose of the meeting was not to discuss “proposed or pending litigation” as required by the law below.

Boards often want to hold closed meetings to discuss matters that they otherwise do not want to publicize, sometimes for good reason such as negotiation of contract terms when there are several service bidders, but neither of the two exceptions apply for this purpose.

Question: Can the association require a $25 processing fee for approving rentals? – C.G., Palm City

Answer: Condominium and cooperative associations can only charge a fee in connection with a rental application if 1) The governing documents require the Association to approve rentals or leases and 2) The governing documents expressly provide that a fee can be charged.

Further, if the fee is authorized, the law provides that it cannot be greater than $100 per applicant with each adult deemed to be a separate applicant. However, spouses are deemed to be a single applicant. The HOA law does not address these issues, but in my opinion, the authority to charge a rental application fee must be found in the governing documents.

Richard D. DeBoest II, Esq., is co-founder and shareholder of the Law firm Goede, Adamczyk, DeBoest & Cross, PLLC. The information provided herein is for informational purposes only and should not be construed as legal advice.

The publication of this article does not create an attorney-client relationship between the reader and Goede, Adamczyk, DeBoest & Cross, PLLC or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.

Editor’s note: Attorneys at Goede, Adamczyk, DeBoest & Cross, PLLC., respond to questions about Florida community association law. The firm represents community associations throughout Florida and focuses on condominium and homeowner association law, real estate law, litigation, estate planning and business law

What will cause the next recession? Not what you think

NEW YORK – Jan. 9, 2019 – Over the past 40 years, the U.S. economy has experienced four recessions. Among the four, only the extended downturn of 1979-1982 had a conventional cause. The U.S. Federal Reserve thought that inflation was too high, so it hit the economy on the head with the brick of interest-rate hikes. As a result, workers moderated their demands for wage increases, and firms cut back on planned price increases.

The other three recessions were each caused by derangements in financial markets. After the savings-and-loan crisis of 1991-1992 came the bursting of the dot-com bubble in 2000-2002, followed by the collapse of the subprime mortgage market in 2007, which triggered the global financial crisis the following year.

As of early January 2019, inflation expectations appear to be well anchored at 2 percent per year, and the Phillips curve – reflecting the relationship between unemployment and inflation – remains unusually flat.

Production and employment excesses or deficiencies from potential-output or natural-rate trends have not had a significant effect on prices and wages. At the same time, the gap between short and long-term interest rates on safe assets, represented by the so-called yield curve, is unusually small, and short-term nominal interest rates are unusually low.

As a general rule of thumb, an inverted yield curve – when the yields on long-term bonds are lower than those on short-term bonds – is considered a strong predictor of a recession.

Moreover, after the recent stock-market turmoil, forecasts based on John Campbell and Robert J. Shiller’s cyclically adjusted price-earnings (CAPE) ratio put long-run real (inflation-adjusted) buy-and-hold stock returns at around 4 percent per year, which is still higher than the average over the past four decades.

These background indicators are now at the forefront of investors’ minds as they decide whether and when to hedge against the next recession. And one can infer from today’s macroeconomic big picture that the next recession most likely will not be due to a sudden shift by the Fed from a growth-nurturing to an inflation-fighting policy.

Given that visible inflationary pressures probably will not build up by much over the next half-decade, it is more likely that something else will trigger the next downturn.

Specifically, the culprit will probably be a sudden, sharp “flight to safety” following the revelation of a fundamental weakness in financial markets. That, after all, is the pattern that has been generating downturns since at least 1825, when England’s canal-stock boom collapsed.

Needless to say, the particular nature and form of the next financial shock will be unanticipated. Investors, speculators, and financial institutions are generally hedged against the foreseeable shocks, but there will always be other contingencies that have been missed.

For example, the death blow to the global economy in 2008-2009 came not from the collapse of the mid-2000s housing bubble, but from the concentration of ownership in mortgage-backed securities.

Likewise, the stubbornly long downturn of the early 1990s was not directly due to the deflation of the late-1980s commercial real-estate bubble. Rather, it was the result of failed regulatory oversight, which allowed insolvent savings and loan associations to continue speculating in financial markets.

Similarly, it was not the deflation of the dot-com bubble, but rather the magnitude of overstated earnings in the tech and communications sector that triggered the recession in the early 2000s.

At any rate, today’s near-inverted yield curve, low nominal and real bond yields, and equity values all suggest that U.S. financial markets have begun to price in the likelihood of a recession. Assuming that business investment committees are thinking like investors and speculators, all it will take now to bring on a recession is an event that triggers a retrenchment of investment spending.

© 2019 Muscat Media Group Provided by SyndiGate Media Inc. (, J. Bradford DeLong