ISSUE # 63

CIC Info Bytes 04/13/23

CIC Info Bytes are frequent, succinct updates providing educational and engagement opportunities that help your community thrive!  Please forward and share this newsletter with your peers, neighbors and colleagues so they can connect and join.  Our goal is to curate content that provides a robust basis for contextual understanding to support practical takeaways for you and your association.  Please consider following us on Twitter and Reddit. 

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A Man Called Otto

• If you haven't seen it, you should take two hours and watch A Man Called Otto. Tom Hanks plays a grumpy old man who lives in a townhouse that's part of an HOA. Not only does the film highlight some of the trials and tribulations of common interest community living (including management company nonsense), but it helps explain what often gets forgotten: we're all human and we all have life stories that run much deeper than our outward appearances. 

Municipal $upport for Condo Owners Facing Special Assessments

• In reaction to the fallout from Florida Senate Bills 2-D and 4-D signed into law in May 2022, Miami has decided to ‘bail out’ condo owners in the form of interest free 40-year loans (capped at $50,000) to owners earning less than 140% of the area median income. 

Lupe del Pino recently paid $258,000 for a two-bedroom condo unit with a balcony in North Miami Beach.  The condo board is borrowing $7.5 million to restore the concrete of the structure and make other improvements. Ms. del Pino’s share amounted to more than $23,000.  Fortunately, she qualified for an interest-free loan under a new Miami-Dade County program, which she will pay at $48.55 a-month over 40 years, once the renovations are complete.

Four months into the program, the $9 million in funds that had been set aside for the program has been exhausted. Some 32 residents have received loans and 12 more loans are committed pending closing. In addition, 90 others have been approved or are in the process of being approved. The Miami-Dade County mayor said she is already working to expand the program, which is funded by a fee that is charged under Florida State law on the sale of commercial real estate in Miami-Dade County.  Miami Offers Interest-Free Loans to Condo Owners — Deborah Acosta | WSJ | April 4, 2023

Florida Consumer Insurance Advocate

Too Familiar

• A Redditor posted Considering buying a condo in a high rising building which 60yrs old.  The property under (previous) consideration turns out to be Marine Towers East located directly adjacent to Marine Towers West that experienced a parking garage collapse in December 2021 approximately six months after Surfside.  The regular assessment for the condominium unit in question is $512 with an ongoing monthly $675 special assessment.  

  • Are you interested in some lakeshore property?  There are 15 condos for sale in these two buildings.  Good luck!

Lakewood examining building codes after Marine Towers West parking garage collapse — John Benson | Cleveland.com | January 24, 2022

Neighborly Much?

• The rate of formal volunteering through organizations dropped by seven percentage points, from 30 percent in 2019 to 23.2 percent in 2021, during the COVID-19 pandemic.

• Miami came in last in the “informal helping” category, with only 35.5% of residents lending a hand to those nearby. 

• An estimated 23.2 percent of Americans or more than 60.7 million people formally volunteered with organizations between September 2020 and 2021. In total, these volunteers served an estimated 4.1 billion hours with an economic value of $122.9 billion.

• The rate of Americans informally helping others remained stable between 2019 and 2021. Nearly 51 percent of Americans or 124.7 million people informally helped their neighbors between September 2020 and 2021.

Miami the least neighborly city in US, according to new survey — Angela Barbuti | New York Post | April 8, 2023

Miami Metro Area Volunteering and Civic Life | 2021 Civic Engagement and Volunteering Data — AmeriCorps and the U.S. Census Bureau

View the CIC Volunteer Involvement Survey

Environment

ALARMING: Carbon dioxide levels rose by more than two parts per million (ppm) for the 11th consecutive year: the highest sustained rate of CO2 increases since monitoring began 65 years ago. Before 2013, scientists had never recorded three consecutive years of such high CO2 growth.

Atmospheric CO2 is now 50% higher than pre-industrial levels.

The 2022 methane rise was the fourth-largest since records began in 1983, following record growth in 2021 and 2022, and now stands at an average of 1,912 parts per billion (ppb). Methane is a potent greenhouse gas less abundant than CO2 but which warms the Earth’s atmosphere much faster, and today is responsible for about 25% of the heat trapped by all greenhouse gases.

Greenhouse gas emissions rose at ‘alarming’ rate last year — Nina Lakhani | The Guardian | April 6, 2023

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After months of fruitless negotiations between the states that depend on the shrinking Colorado River, the Biden administration on Tuesday proposed to put aside legal precedent and save what’s left of the river by evenly cutting water allotments [by 25%], reducing the water delivered to California, Arizona and Nevada by as much as one-quarter.

Biden Administration Proposes Evenly Cutting Water Allotments From Colorado River — Christopher Flavelle | NYT | April 11, 2023

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Kal Penn explores the palm oil industry, how industrial agriculture damages the environment and the ways food could be grown more sustainably.

Getting Warmer with Kal Penn: Learning from Nature — Kal Penn | Bloomberg | April 5, 2023

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A BETTER GLOW: A group of major companies have signed a voluntary agreement with industry organizations to "significantly improve the energy efficiency of TVs" sold in North America.

The first phase is believed to result in savings of an estimated 58 TWh once fully realized, and believed to save consumers more than $2.4 billion annually in electricity bills. It should reduce CO2 emissions by over 10 million metric tons per year, they said.

LG, Google, Sony & others sign agreement to improve energy efficiency of TVs — Rasmus Larsen | flatpanelshd| April 5, 2023

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Chemicals that were banned after they punched a hole in Earth’s ozone layer are still building up at an alarming rate in our atmosphere, according to research published in the journal Nature Geoscience. The chemicals were once widely used in air conditioning and refrigeration but were supposed to be phased out globally by 2010.

Chemicals banned from air conditioners and refrigerators are making a comeback… — Justine Calma | The Verge | April 3, 2023

• NEW FRONTIER: deep sea mining.  Should we mine the ocean floor?

These deep-sea “potatoes” could be the future of mining for renewable energy — Casey Crownhart | MIT Technology Review | April 6, 2023

New 'Liquid Trees' Divide the Internet — Jess Thomson| Newsweek | April 3, 2023

The hottest new climate technology is bricks — Casey Crownhart | MIT Technology Review | April 10, 2023

🏠HOUSING🏡

New York home sellers spend an average of three and a half hours researching brokers — less time than they spend searching for vacation destinations…

How to Find the Right Broker for Selling Your Home — Ronda Kaysen | The New York Times | April 8, 2023

Keeping Investors Out

• Mobile home park cooperatives are being scooped up by investors residents.

The push to promote resident ownership comes as parks have become a favorite target of investment banks, hedge funds and other deep-pocketed investors.  Nearly a third of mobile home parks in the U.S. have been bought by such investors since 2015, lured by reliable cash flow and high returns from raising rents at nearly double the general rental market rate, McCarthy said.

Park residents often own their home but rarely the land beneath it. So if a landlord raises rent, residents can be evicted or forced to sell their home. If a park is sold to be redeveloped, mobile homes that can’t be moved are demolished.

Residents are buying their mobile home parks—and preserving one of the last affordable housing options for low-income Americans

— Claire Rush and The Associated Press | Fortune | April 8, 2023

Many residents of the Paradise Cove Mobile Park aren’t worried about lot rent.

Inside America’s Most Expensive Trailer Park, Where Mobile Homes Sell for Millions — Katherine Clark | WSJ | April 12, 2023

Homelessness

• You can learn more about homelessness in King County and Seattle here.

When an Orange County Supreme Court judge voided Newburgh’s good-cause eviction law last year, she said there was a “direct conflict” between the local measure — which limited rent increases and constrained a landlord’s powers of eviction — and state law, where such protections do not exist. This was the same legal reasoning that brought down good cause in Albany last summer (which an appellate court upheld this March) and in Poughkeepsie earlier this month. A lawyer representing one of the landlords in the Newburgh case put the court’s view plainly: “Newburgh just doesn’t have the power to draw a circle around Newburgh and say, ‘Those state laws won’t apply here.’ It’s really that simple.”

Good-Cause Eviction Keeps Dying in Court — Clio Chang | Curbed | March 30, 2023

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The U.S. Department of Housing and Urban Development relies on annual counts, taken by a veritable army of volunteers, over the course of a single night in a community. And according to a recent report HUD released, the number counted last year was 25,211 unhoused Washingtonians. That’s a 10% increase from just two years earlier.

It’s a staggering number, but here’s the thing: It’s probably a huge undercount. Many believe HUD’s Point in Time Count misses a lot of people.

In fact, the state’s Department of Commerce says that more than 53,000 people experienced homelessness just in King County in 2022.

Trying to count unhoused people in WA is 'like nailing water to the wall,' experts say

— Libby Denkmann and Noel Gasca | KUOW | March 29, 2023

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The numbers are staggering: The city of Seattle has spent nearly $1 billion on homelessness in more than a decade, and the number of unsheltered people continues to rise.

Seattle spent nearly $1 billion on homelessness, but number of unsheltered grew — Chris Daniels | KOMO News | April 3, 2023

Housing Affordability

• Washington State looks to be moving forward with middle housing.  Middle housing = covenants and condominiums.  Prior coverage.

HB1110: WA Senate passes bill allowing duplexes, fourplexes in single-family zones — David Gutman | The Seattle Times | April 11, 2023

The housing crisis isn't limited to New York — cities and states across the country are grappling with an increasingly dire shortage of homes and sharply rising rent and mortgage costs. Wealthier, lower density suburbs — even those with left-leaning politics — are often opposed to increasing housing in their communities.

Critics say it's a top-down approach that doesn't give local communities enough control. Some argue increasing density would overcrowd schools, burden infrastructure, and reduce tree canopy. Proponents say it's the only way to begin to meet demand and create more affordable housing options.

The mayor of a rich New York suburb says wealthy communities 'are losing their minds' over Gov. Kathy Hochul's plan to increase housing

— Eliza Relman | Insider | April 12, 2023

• Is it rude to STAIR?

To the unfamiliar, single-stair is exactly what it sounds like. Most multifamily buildings in US cities are required to have two forms of egress, which is to say, two stairwells that can be used as exits in case of a fire. This more often than not forces architects to design buildings around what’s called a double-loaded corridor—a long central hallway with apartments on either side, rather like the hallways found in hotels. Not only is this an inefficient use of space per unit; it also keeps architects from being able to create more flexible and interesting floor plans—part of why so much new multifamily housing looks the same...

Single-Stair Layouts Are Not Going to Fix the Housing Crisis — Kate Wagner | The Nation | March 31, 2023

• A boomer bonanza where cash is king and millennials struggle to afford housing.

Between 2010 and 2019, homebuilders started roughly 21,000 single-family homes per 1 million people each year, barely half as much as they were building in each of the three decades prior.

Boomers Are Buying up Homes, Blocking Millennials From Housing Market — James Rodriguez | Business Insider | April 5, 2023

New Privately-Owned Housing Unit Starts (Construction) - FRED from St. Louis Fed

• “This is the year of disappointment,” said Jonathan J. Miller, the president of Miller Samuel Real Estate Appraisers and Consultants. “The sellers aren’t going to get their 2021 prices, and buyers aren’t going to get a substantial savings on the price. Everyone is in the same boat.”

Buying or Selling a Home? Welcome to the Year of Disappointment — Ronda Kaysen | The New York Times | April 7, 2023

The first half of 2022 saw national home prices jump 10.7% in just six months. The latter half of 2022 then saw national home prices fall 4.5%. That speaks to the 180 degree shift the U.S. housing market went through last year as the Federal Reserve's inflation fight set off the first housing correction in over a decade.

However, through the first few months of 2023 that housing correction has lost a great deal of steam as markets across the South, Northeast, and Midwest once again begin to post month-over-month home price increases. As the housing market entered the new year it got a boost from its seasonally strong spring period, and from the slight affordability improvement from mortgage rates falling back under 6.5% and national home prices falling some late last year.

That raises the question: Is this the home price bottom or simply a head fake?  It depends on who you ask...

Housing market analysts issue starkly different home price forecasts… — Lance Lamberg Kaysen | Fortune republished by MSN | April 9, 2023

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There’s trouble brewing as we covered six weeks ago: DeltaTerra Capital's research suggests that 20% of U.S. homes have "meaningful exposure" to a mispricing issue because of flood risk. If realized, he warned the fallout could resemble the extraordinary correction seen during the global financial crisis.

"We think of this repricing issue as maybe a quarter of the size and magnitude of the [global financial crisis] in aggregate, but of course very, very damaging within those exposed communities," Burt said.

His comments come at a time when the housing market is currently experiencing a major fundamental shift because of higher mortgage rates and as global central banks keep up the fight against inflation by hiking interest rates.

In turn, Burt says some cracks are starting to appear in the terms of the cost of insurance. He noted the recovery in Florida from Hurricane Ian was an issue he's watching closely, particularly because this storm surge exposed a flood insurance nightmare for homeowners.

A hidden time bomb? A 'Big Short' investor sees financial disaster brewing in housing markets

— Sam Meredith | CNBC | April 6, 2023

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Last year saw a historically large rate shock, with the Fed hiking massively to fight inflation.

Of course, one part of the economy that's very directly exposed to rates is the housing market. The rate on a typical 30-year mortgage started 2022 at 3.3%. It ended the year over 6.6% and today it's around 6.75%.

With rates having moved up so much, so fast, it stood to reason that the housing market was facing some kind of imminent doom.  Yet so far that hasn't materialized. At all. And in fact, just yesterday we got the latest reading on home prices from Black Knight, indicating that prices rose modestly in February. Below is the key price chart (a full slide deck is here)...

— Joe Weisenthal | Bloomberg 5 Things to Start Your Day | 04/04/23

Built Environment

• Deep soil mixing helps prevent skyscrapers from sinking.  Builders are mixing a super-strong slurry called “soilcrete” that is three times stronger than regular soil.

VIDEO: How This Construction Technique Prevents Skyscrapers From Sinking —  Wall Street Journal | April 11, 2023

• More detail about why urban water is in jeopardy.  View prior H2O coverage.

Swimming pools of the rich driving city water crises, study says —  Damian Carrington | The Guardian | April 10, 2023

Urban water crises driven by elites’ unsustainable consumption

—  Elisa Savelli, Maurizio Mazzoleni, Giuliano Di Baldassarre, Hannah Cloke & Maria Rusca | Nature Sustainability | April 10, 2023

• Major urban areas are stuck in doom loops.

A Few Comments on Commercial Real Estate — Bill McBride | Calculated Risk | April 10, 2023

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Almost $1.5 trillion of US commercial real estate debt comes due for repayment before the end of 2025. The big question facing those borrowers is who’s going to lend to them?  A $1.5 Trillion Wall of Debt is Looming for US Commercial Properties —  Neil Callanan | Bloomberg | April 8, 2023

The recent drop in building sales follows a stretch of record-setting transactions that peaked in late 2021, when the multifamily sector was a top performer in commercial real estate. Cash-rich investors had a strong appetite for apartment buildings. Their top choices were in Sunbelt cities such as Dallas, Phoenix and Tampa, Fla., where rental housing is largely unregulated and rents were rising 20% or more annually until last year.

Now that landlords can’t raise rents as before, they are trying to maintain the value of their properties in other ways, said Trevor Koskovich, president of multifamily at the Northmarq brokerage firm. That includes cutting costs, making repairs and working harder to keep their current tenants from leaving. When rents were growing at blistering speed, “it was OK to be less discerning in your operations,” Mr. Koskovich said.

But there is one type of sale most everyone expects more of: forced sales. A number of investors bought buildings in recent years with short-term, floating-rate debt. Because of rising interest rates, those loans cost a lot more to pay down than they did when building owners first borrowed the money.

The remaining balance of many floating-rate loans will come due this year, and borrowers whose buildings aren’t bringing in enough cash every month might have to sell their buildings to pay off their debts.  Apartment-Building Sales Drop 74%, the Most in 14 Years —  Will Parker | WSJ | April 4, 2023

Turmoil in commercial property markets is starting to spread beyond urban offices and aging shopping malls to rental apartments. The multifamily sector has long been considered a relatively safe investment, especially when home prices rose so much during the pandemic and forced many home shoppers to keep renting.

Landlords have benefited from surging apartment rents and cheap debt in recent years, which pushed property values to record highs. Investors paid high prices for the buildings in part because they were betting on a continued rise in rents. They also considered apartments a safer bet during a recession because people always need a place to live.

Real-estate analytics firm Green Street estimates that apartment-building values are down more than 20% from their peak. Meanwhile, rent growth is slowing, meaning some buildings with sizable, floating-rate mortgages no longer generate enough profits to make debt payments.

Houston Apartment Owner Loses 3,200 Units to Foreclosure as Multifamily Feels the Heat

—  Will Parket and Konrad Putzier | WSJ | April 11, 2023

Crash Worse Than 2008 Crisis Predicted for Commercial Real Estate —  Katherine Fung | Newsweek | April 5, 2023

…something 'worse than in the Great Financial Crisis' for commercial real estate — Alena Botros | Fortune | April 4, 2023

San Francisco's Feeling the Pain of the Banking Crisis, Big Tech Layoffs — Biz Carson, Karen Breslau and John Gittelsohn | Bloomberg| April 2, 2023

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“It’s really a challenge on all fronts,” said Jake McKinstry, managing partner at apartment builder Spectrum Development Solutions.  The result? “A lot of deals just aren’t penciling [out],” said Robert Meunier, senior loan officer at Bellevue Capital Group.

“Places like Seattle, San Francisco, Washington [and] New York, have all struggled with the remote work, hybrid work environment” reducing demand for offices, Buschbom said. “We already had these problems” before bank failures, but banking turmoil represents a “stress multiplier.”  

Landlord and developer Morris Groberman typically relies on renovation loans to buy older buildings, rehab them and raise the rents. But, he says, those loans began to dry up even before recent bank failures.  “We’re just pedaling along very, very slowly,” he said. “The amount of cash I need to build right now is stupid.”  

Seattle’s commercial real estate market slows as bank challenges pile up — Heidi Groover | The Seattle Times| April 9, 2023

The share of office building loans considered “criticized” spiked to 25.5% in the last quarter of 2022, from about 3.5% in the previous quarter, according to the real estate data firm Trepp, which analyzes data provided by banks. Criticized loans are those “getting the most scrutiny or being monitored the most closely from the bank,” said Stephen Buschbom, research director at Trepp.

The city is seeking teams that must include a downtown building or property owner working with a design or development firm to turn offices into residential spaces.

City competition calls for ideas to convert downtown Seattle's empty offices into housing

— Natalie Swaby | KING5 News | April 4, 2023

Energy Updates

• View past coverage of this HOT topic:  1,  2, 3, 4, 5, 6, and 7.

Two of the country’s largest utility companies are weighing potential sales of parts of their natural-gas pipeline networks as efforts to phase out in-home gas use accelerate.

Utilities Pursue Pipeline Sales as Natural-Gas Bans Catch On — Katherine Blunt, Laura Cooper and Jimmy Vielkind | WSJ | April 6, 2023

The technological and regulatory requirements will be immense…

The electric grid is about to be transformed — Hal Hodson | The Economist republished by Yahoo! Finance | April 5, 2023

VIEW Energy Consumption in the United States

• Transmission Troubles: Why America's outdated energy grid is a climate problem

Why it's so hard to build new electrical transmission lines in the U.S.

Why a U.S. national electric grid would be great for the climate — and is nearly impossible

Wind and solar power generators wait in yearslong lines to put clean electricity on the grid, then face huge interconnection fees they can't afford

— Catherine Clifford | CNBC | April 6, 2023

Also see CIC Info Bytes’ Renewal struggles Getting to the Grid from March 2nd 2023 

The Cost of Net Zero

• The cost of electricity from power plants outfitted with carbon capture devices is at least 1.5 to 2 times more expensive than other alternatives, according to a new report from the nonprofit Institute for Energy Economics and Financial Analysis (IEEFA). It’s much more affordable to turn to renewable energy like solar and wind instead.

Carbon capture will probably make electricity more expensive — Justine Calma | The Verge | March 30, 2023

• Our take: Elon Musk underestimates the challenges to reach “net zero” emissions.

Converting the world to entirely clean energy will require investment of $10 trillion over 20 years, but relying on fossil fuels will cost even more at $14 trillion, Tesla said in its Master Plan Part 3.

While the $10 trillion investment cost of a cleaner world is high, Musk argues that’s just a fraction of the $100 trillion global economy and entirely feasible when spread out over two decades.

  Musk Puts $14 Trillion Price Tag on Sticking by Fossil Fuels — Dan Murtaugh and Martin Ritchie | Bloomberg | April 5, 2023

Geothermal Heat Pumps — Clean Energy 101 — Dan Murtaugh and Martin Ritchie | CleanTechnica | April 5, 2023

We covered district heating in our last issue.

With inflation stubbornly high, 58% of Americans are living paycheck to paycheck

— Jessica Dickler | CNBC | April 11, 2023

The Next Shoe to Drop

• When it comes to the global economy, two questions bubble to the surface these days: When will central banks end their rate-hiking campaigns, and what other drama might unfold before they do?  — Victoria Cavaliere | Bloomberg Weekend Reading | 04/08/23

• A thing that keeps popping up over and over again is how the big macro themes of the 2020s so far are almost like the perfect reverse mirror image of the 2010s.  

— Joe Weisenthal | Bloomberg 5 Things to Start Your Day | 04/10/23

Odd Lots Podcast: What Commercial Real Estate Stress Means for Banks and Bond Funds

Inflation and Monetary Policy

• A key measure of US inflation showed hints of moderating in March, but likely not by enough to dissuade the Federal Reserve from raising interest rates again next month.

The core consumer price index — which excludes food and energy and is closely watched by the Fed — rose 0.4% from the prior month following a 0.5% gain, in line with economists’ estimates. Yet key measures of housing costs posted the smallest monthly increases in about a year and grocery prices dropped, the report from the Bureau of Labor Statistics showed.

US Core Inflation Slows Only a Bit, Keeping Fed on Track to Hike — Reade Pickert | Bloomberg | 04/12/23

• Divided Fed:  As for the Fed’s response to inflation, policymakers are divided. New York Fed President John Williams said on Tuesday that officials still have more work to do to bring down prices, echoing remarks from his colleagues in recent days. Yet his Chicago Fed counterpart Austan Goolsbee, who votes on monetary policy decisions this year, called for “prudence and patience” in assessing the economic impact of tighter credit conditions. “We should gather further data and be careful about raising rates too aggressively until we see how much work the headwinds are doing for us in getting down inflation,” Goolsbee said in prepared remarks at an event hosted by the Economic Club of Chicago. — Kristine Aquino | Bloomberg 5 Things to Start Your Day | 04/12/23

• …The Personal Consumption Expenditures Index (PCE) is the FOMC’s preferred inflation gauge.  While still decreasing from highs not seen since the early 80’s, 5% PCE is still well above the FOMC’s 2% target.  There are more and more calls for Fed policy to remain hawkish – and even target US short-term rates above their current 5% level – through the remainder of 2023.  Of course, we’re all still waiting for the housing slowdown to show up in real economic measures.

US Bureau of Economic Analysis

Trimmed Mean PCE Inflation Rate

Federal Reserve Chair Jerome Powell and his colleagues faced their closest call on interest rates in years. It wasn’t until the clock was ticking down two days before their scheduled decision last month that senior leaders settled on a plan to lift them by a quarter percentage point.

That was down to the wire in Fed time. Rate-setting meetings are usually tightly choreographed and devoid of suspense. The big decisions happen in the week leading up to the gathering and not during the two days of elaborate presentations and discussion around the boardroom table. Fed leaders like to avoid surprises so they can fine-tune their public message.  Latest Fed Increase Came Down to the Wire. 'That Was a Rough Weekend.' — Nick Timiraos | WSJ | April 6, 2023

El-Erian has previously said that the central bank's rapid tightening and mischaracterization of inflation as transitory were "two big mistakes that [he thinks] are going to go down in the history books."   He also recently warned that the Fed is once again juggling a complicated "trilemma" of problems, which are inflation, growth and financial stability. Only that this time, there's no "first best policy response" the central bank can take amid the banking turmoil.

Mohamed El-Erian once again warns of the 'biggest Fed policy mistake in several decades' — Zinya Salfiti | Business Insider | April 3, 2023

Cashing In

• PLEASE don’t trade convenience for yield!  If your association is holding cash, keep it invested wisely.  Something’s wrong if you’re earning less than 4% on your deposits.

US Bank Deposits and Lending Both Dropped Last Week Amid Turmoil — Imani Moise | WSJ | April 6, 2023

Robo adviser Betterment LLC has doubled the amount of Federal Deposit Insurance Corp. coverage it offers to customers to $2 million and rival Wealthfront also upped its coverage by $1 million to $3 million. Robinhood Markets Inc. said it could provide customers with up to $1.5 million in insured deposits. They are all also offering returns of at least 4% on certain accounts.

As banks seek deposits from more sources, brokerages like Betterment and Wealthfront are receiving better terms from those institutions, and customers stand to benefit. Fidelity Investments said that a customer could have up to $5 million of cash covered by FDIC insurance.

Brokerages aren’t insured by FDIC, but they can offer coverage to customers through cash sweep programs. These programs are offered in most brokerage accounts. They sweep balances not held in stocks or another invested asset into partner banks. Each of those partner banks provides up to $250,000 in FDIC insurance. So more banks means more insurance for the customer.  Why Brokerage Accounts Are So Generous Right Now — Imani Moise | WSJ | April 6, 2023

Over 4.5% yield just to have your cash stashed in a money market fund.

DOLLAR$ & SEN$E: Are you Investing, Gambling, or Guessing?

DON’T FORGET the NUMBERS: Stock market indices have handily beat principal guaranteed securities (CDs, Treasuries, Money Market Funds) pretty much forever. 🎗🎗🎗

“One thing that gets lost in all the buzz around inflation and I bonds is that they are not a path to wealth,” he said, pointing to the limits on how much investors can buy and the likelihood that they’ll underperform stocks as inflation cools. “This big-picture perspective is important when ascertaining whether I bonds are a good fit for your portfolio.”  I Bonds Lose Their Luster With Yield Set to Plunge Below 4% — Charlie Wells and Claire Ballentine | Bloomberg | April 12, 2023

Cashing Out

• Safety was cited by more than 60% of millennials and a full two-thirds of workers 45 and older, who said fear of losing money in the stock market was what kept them in cash. However, those who avoided equities missed out on the recent rally that saw the Nasdaq 100 enter a bull market last week and the S&P 500 post back-to-back quarterly gains.  Fear of Stock Losses Has Retirement Savers Sticking With Cash? — Suzanne Woolley | Bloomberg | April 4, 2023