The Hawaiian Islands are a lush tropical paradise with palm trees, beaches, and breathtaking active volcanoes. Their very makeup intrigues many, but it is also the source of potential catastrophe. The Island of Hawai’i, commonly referred to as the Big Island, is home to five volcanoes, including Mt. Kilauea. Kilauea is one of the world’s most active volcanoes which has been erupting on and off over the last several thousands of years. Kilauea’s current eruption has made headlines over the past few months, but this eruption is actually part of the ongoing eruption which began in 1983. When many people think of volcanoes they think of steep, explosive stratovolcanoes like Mt. St. Helens in Oregon or Mt. Pinatubo in the Philippines—both of which have had some of the most destructive eruptions in recent history. In contrast, the Hawaiian volcanoes are a different variety known as shield volcanoes which are characterized by their gentle sloping sides and broad domes. The eruptions are also very different in the Hawaiian shield volcanoes, where the lava is very fluid and basaltic as opposed to pyroclastic. On May 17, 2018, Kilauea experienced an explosive eruption. This type of eruption, while not entirely unexpected, is uncommon with these types of volcanoes. The flowing lava came in contact with the water table, which in turn generated the explosive eruption, sending ash plumes into the air and impacting air quality. Even though catastrophic eruptions are not common with Mt. Kilauea, the nature of the flowy basaltic lava does pose a great risk to homes and businesses in its path. CoreLogic® analyzed the area impacted to understand the potential damage.
The area impacted by the lava flow is a small, remote part of the Big Island of Hawaii, far from the popular cities of Kona and Hilo. The US Geological Survey (USGS) monitors the volcanoes and has identified a “thermal zone” which has potential for risk. Within the entire thermal zone, there are 5,902 homes at potential risk. Of these, 1,029 homes are in the high-risk area. The area impacted is called the Leilani Estates. The average home value in this region is $230 thousand which puts the total value of residential properties at high risk around $239 million. It is important to note that a high-risk property does not guarantee that it will burn, but knowing the weight of the risk is essential for insurance companies and homeowners. According to the most recent report by Hawaii County Civil Defense on June 23, 2018, lava is covering an area of 6,144 acres. A total of 637 homes in this area have been destroyed, which is a total value of approximately $146.5 million lost. The area within the thermal zone has been evacuated, but beyond life safety, a big concern is insurance for the lost homes. Many have questioned the insurance coverage for homes lost to lava flow in Hawaii. The insurance commissioner of Hawaii Gordon Ito had commented on May 9 that most homes are covered by standard homeowner policies as the structure was lost to fire—but this is not always the case as some policies have exclusions for lava. Lava has yet to stop flowing in Hawaii, and if the past 35 years have been telling, it is unlikely to suddenly cease. While much of the lava is running off into the ocean, growing the island bit by bit, the risk remains for those homes and homeowners yet unaffected. Having a strong grasp on that risk is paramount to make smart decisions when it comes to selecting a policy which protects and restores homes.
Musk says Tesla moves from production problems to delivery problems
Tesla Chief executive Elon Musk has had what seemed like endless problems over the past couple months. He now says that the company is facing bigger logistical problem concerning delivery than overall production delays. Musk admitted problems in Twitter response to a customer complaint on a delivery delay. Tesla has been working to iron out production bumps after failing to meet production targets for its Model 3 sedans. Musk said last week, the company would eliminate some color options for its electric cars to streamline production. In the past month, Musk has been the target of much criticism and unwanted publicity following a podcast appearance in which he smoked a tobacco product that reportedly contained marijuana. Tesla has also seen the departure of a number of executives since 2016. In September alone, the automaker saw its vice-president of worldwide finance and operations, chief people officer and chief accounting officer all leave. He also was threatened with a lawsuit surrounding alleged comments against one of the cave divers that helped save the members of the youth soccer team that was trapped in a flooded mine. Back on August 7, Musk tweeted that he was considering taking the company private at $420 per share in a transaction valuing it at $72 billion, and that funding was “secured.” On the evening of August 24, Musk, by then facing US Securities and Exchange Commission scrutiny into the factual accuracy of his financing tweet, blogged that Tesla would remain public, citing investor resistance.
Manafort to forfeit $21.7 million in real estate holdings
According to a report from NBC News, Paul Manafort will forfeit an estimated $21.7 million in New York real estate assets as part of his recent plea deal, which includes his apartment in Trump Tower worth an estimated $3 million. Manafort pleaded guilty to two counts – federal conspiracy and conspiracy to obstruct justice – and agreed to cooperate with Special Counsel Robert Mueller in his investigation of President Trump’s alleged involvement with Russia. Manafort also admitted guilt to 10 outstanding counts from his earlier trial in Virginia, which prosecutors could use against him should he renege on his promise to cooperate with Mueller. Manafort’s plea deal mandates the forfeiture of his Hamptons home ($7.3 million), three apartments in Manhattan, a Brooklyn townhouse, three bank accounts and a life insurance policy. Despite these forfeitures, Manafort won’t be destitute when he makes it out of the pen. He negotiated to hang on to one of his bank accounts and according to NBC News, he still has at least three properties left in his name worth an estimated $6 million.
GM recalls 1.2M pickups, SUVs for power steering problem
General Motors is recalling 1.2 million big pickup trucks and SUVs mainly in North America because of power-assisted steering problems that have been cited in a number of accidents. GM says the power steering can fail momentarily during a voltage drop and suddenly return, mainly during low-speed turns. Such a failure increases the risk of a crash. The company says it has 30 reports of crashes with two injuries, but no deaths. The recall covers certain 2015 Chevrolet Silverado and GMC Sierra 1500 pickups as well as Chevy Tahoe and Suburban SUVs. Also affected are 2015 Cadillac Escalade and GMC Yukon SUVs. Dealers will update the power steering software at no cost to owners. No date has been set to notify customers, but GM says the software is available now, so owners can contact dealers to schedule repairs. More than 1 million of the trucks are in the US, and most of the rest are in Canada and Mexico. There’s a small number in other countries. GM recalled 2014 model year trucks last year for the same problem.
DSNews – the week ahead: the pulse of the housing market
On Tuesday, the latest installment of the NAHB Wells Fargo Housing Market Index (HMI) will drop, providing insights into “the pulse of the single-family housing market.” The Index is based on a survey that asks home builders “to rate market conditions for the sale of new homes at the present time and in the next six months as well as the traffic of prospective buyers of new homes.” The previous release of the HMI found the Index dropping one point to “a solid 67” in mid-August. “The good news is that builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations,” said NAHB Chairman Randy Noel at the time. “However, they are increasingly focused on growing affordability concerns, stemming from rising construction costs, shortages of skilled labor and a dearth of buildable lots.” Here’s what else is happening in The Week Ahead.
– Housing Starts Survey, Wednesday, 8:30 a.m. ET
– MBA Mortgage Apps 7:30 a.m. ET
– NAR Existing Home Sales 10 a.m. ET
– Fed Balance Sheet, 4:30 p.m. ET
Micahel Arroyo pleads guilty to loan scheme
Fortune reported that a New York real estate broker pleaded guilty to a loan scheme that defrauded banks of $3.5 million, a crime for which he will spend 21 months in prison. Micahel Arroyo was sentenced to 21 months in prison and five years of supervised release for conspiracy to commit bank fraud by “shotgunning” loans, a practice where the fraudster submits several loan applications to different banks at the same time in order to underhandedly acquire multiple home equity lines of credit. Arroyo and his partner in crime Rafael Popoteur obtained loans of more than $500,000 on residential properties in New York and New Jersey from multiple banks between 2012 and 2014, according to Department of Justice officials. Popoteur also pleaded guilty to conspiracy to commit bank fraud and was sentenced to thee years of supervised release, including one year of house arrest.