economy: No More Excuses
- 06/10/14 12:30 AM
Over five years ago we suffered the worst recession since the great depression almost 100 years ago. Since then our economic recovery has been the weakest of all recoveries as well. There are many reasons for the weak recoveries. The fact that our real estate market was devastated and needed years to recover was certainly a main factor. But there were other reasons for the stops and starts which were external. We had domestic and world-wide natural disasters from hurricanes and super storms to tsunamis. We will not get into a debate as to whether global warming is causing these … (1 comments)
economy: Stocks Continue To Be Resilient
- 05/27/14 01:07 AM
The stock market has been on quite a run for the past five years or so. Granted, most of this was a rebound from the precipitous drop we experienced during the financial crisis and recession. However, a run this long and this far is hard to ignore. So many times in the past five years we have seen periods of weakness that looked like either corrections or the end of the run, only for stocks to bounce back and hit new highs. Why have stocks been so resilient? There are a multitude of theories, but the bottom line is that stocks … (0 comments)
economy: The China Card
- 04/21/14 03:55 AM
The past few weeks has seen some major volatility within the stock markets. Some weeks have seen major pullbacks and others we have seen significant bounce-backs. The first ten days of April, the volatility of the markets hit on the downside. One thing which is interesting about this pullback is that it happened as the economy was pulling out of its pause caused by a very cold and harsh winter. For example, the first week in April we saw a stronger employment report and the second week first time claims for unemployment fell to levels not seen for many years. When … (2 comments)
economy: The Report We Have Been Waiting For
- 04/08/14 03:47 AM
Friday’s employment report has given us three things we have been waiting for. First, this jobs report was relatively good after a string of disappointments over the winter. It tells us that at least part of the slowdown was definitely due to the weather — a question everyone has been asking. Secondly, the report contains another upward revision to the previous two months’ of data. There were actually 37,000 more jobs created in January and February when compared to last month’s release. That is a revision which we speculated could be coming. Finally, the economy has now recovered all of the … (0 comments)
economy: April Fools' Day
- 03/31/14 04:30 AM
We had a very robust last half of 2013. The economy expanded and the job creation machine heated up. The Federal Reserve Board predicted even stronger growth this year. So what happened? We saw the economy take a step back, especially with regard to the creation of jobs. Even the real estate market seems to have quieted down since roaring back in 2013. This has given us a lot of fuel for speculation. We have speculated about the weather and political situations such as Ukraine having at least a temporary effect. Yet we go into April wondering whether late last year … (2 comments)
economy: Around The World
- 03/24/14 04:23 AM
Here is the rule—as our economy gets stronger, rates will rise and so will oil and gas prices. But rules are made to be broken. In mid-March we saw a stark reminder of how the rules don’t always work. Though the news from the economy looked pretty good–from retail sales to first time claims for unemployment, rates dropped. How can that be? We can never tell what will affect the markets. In this case we received some not-so-good economic news coming from China and a growing crisis with regard to the Russian incursion into Crimea. Therefore, in a week in which … (0 comments)
economy: Spring Thaw?
- 03/10/14 04:45 AM
Here is about the only thing we will predict. This winter is not lasting forever. It may seem like it has lasted forever but a spring thaw will come. When it comes, we will see that many Americans will emerge from their homes with a bad case of cabin fever. What will we do when the weather is nice? Well, many will wash the salt off their cars. Others will go looking at cars, homes and furniture. Still others will start spring cleaning and see that they need to begin home improvement projects. The next question is — will they just … (2 comments)
economy: Here Comes The Jobs Numbers
- 03/07/14 04:23 AM
Here Comes The Jobs Numbers The monthly jobs report is the single most important economic release every month. Why? It is all about jobs–the economy, interest rates, real estate and more. To put it simply, consumer spending drives the economy and without enough jobs being created, consumer consumption will not grow. The relationship between job creation and real estate is a perfect example. When more jobs are created, increased demand is created within the real estate sector. When there is more real estate demand, more jobs are created. The next question is — what are we looking for within the report? … (0 comments)
economy: Oil Hits $100 Per Barrel
- 02/26/14 02:28 AM
An effect of a long and cold winter is invariably the rising cost of energy. Energy bills get hit with a double whammy in a cold winter. First, homes use more energy for heating purposes because of the cold and because we are home more often and secondly the cost of the energy we use goes up because of higher demand. Thus after a nice respite with lower energy costs which helped the economy last year, we start this year with oil prices hitting a benchmark of $100 per barrel in the middle of February with natural gas prices rising as … (0 comments)
economy: The Bright Side of Slower Growth
- 02/17/14 02:31 AM
It is hard to look at the bright side of a very cold winter which seems to have interrupted the economic recovery and kept most of the nation indoors for much of the winter. Cold winters also increase the price we pay for energy and this winter has been no exception. So where is the bright side? The bright side will be found within the real estate sector. For years the nation’s real estate has been on sale with ridiculously low interest rates and low home prices.
Last year, the sale waned a bit as demand picked up. Homes … (0 comments)
economy: Predictions Are Futile
- 02/03/14 02:15 AM
We have just started a new year and that means just about every economist has made their predictions for the year. One consensus of predictions for 2014 has been for higher interest rates. It makes sense–as the economy recovers interest rates will continue rising from record lows. Keep in mind that even as rates rise they are still at bargain lows. However, when one looks at rates for the first month of the year, they are trending moderately lower. There are many reasons one can give for these lower rates, starting with the weak December jobs report released in early … (0 comments)
economy: Debt Limit Deadline Approaches
- 01/27/14 03:59 AM
For several years we have been recovering from a financial disaster. The bad news is that the recovery has been so weak that many have felt we were not recovering. The good news is that the recovery has continued slowly but surely. During the way we have had several speed bumps thrown in our way. Some of these were not avoidable — such as tsunamis and super storms. Others were man-made such as the threat of a government shutdown or a fiscal cliff. Today, many are more optimistic about what is on the horizon.
The most important sector of the … (0 comments)
economy: Jobs -- The Key Ingredient
- 01/20/14 02:03 AM
Last week we reported on a disappointing jobs report. We also indicated that we should not jump to a conclusion as to the importance of this one report. One report can be very misleading and is subject to significant revisions in the next two reports. In this case we had inclement weather which could have temporarily affected the numbers as well — especially within the construction industry. In addition, if you look at the trends in first time unemployment claims, you can see a reason to be optimistic about better numbers ahead.
But the next question we must ask … (0 comments)
economy: Employment Picture Becomes Cloudy
- 01/16/14 03:42 AM
Just when we were starting to get used to strong jobs data we were reminded of an important adage — never try to predict the future. While the analysts were predicting December job growth would be around 200,000, the number came in short of 100,000. This number disappointed the markets. In a strange twist, the unemployment rate fell from 7.0% to 6.7% when no decrease was expected, but this was not seen as a sign of strength as many left the workforce in December.
In all, the economy added just over two million jobs in 2013 which is pretty … (0 comments)
economy: New Year – New Hope
- 01/03/14 02:54 AM
It has been five years since the depth of the recession was upon us. For five years we have been recovering. The recovery has been painful and slow with many starts and stops. Yet, as we approach 2014 there seems to be more optimism regarding the status of the economy recovery and our future. Some of this optimism is rooted in facts and some of this optimism comes from sentiment.
First the facts. For the first time in five years, the real estate market participated and is contributing in the recovery. When homeowners feel wealthier because of rising home values, … (0 comments)
economy: Rising Prices and Slowing Sales?
- 12/12/13 03:32 AM
Here is an interesting picture. The S&P/Case-Shiller House Price index showed prices in the 20 largest cities increased 13.3 percent annually in September, the highest year-over-year increase since February 2006. Yet, existing home sales have slowed a bit and pending home sales have been lower for several months, according to the National Association of Realtors. How can home prices be rising at a time in which home sales are slowing down? The answer is found in two important numbers.
For one, the percentage of distressed sales is falling as the foreclosure inventory shrinks. LPS reports that the foreclosure inventory is … (0 comments)
economy: Oil Prices Moderate
- 12/02/13 04:36 AM
We find it kind of interesting that the stock market continues to hit records at a time in which oil prices are moderating. Conventional wisdom tells us that the stock market rallies when the economy is getting stronger. A stronger economy causes higher demand for energy. That would cause oil and gas prices to rise. Yet, in August oil prices pushed to approximately $110 per barrel and by the middle of November, they had receded to below $95.00 per barrel.
In the meantime, in the middle of November stock prices hit record levels again. Why the disconnect? Some of the … (0 comments)
economy: Happy Thanksgiving
- 11/25/13 03:55 AM
It is all about turkey and giving thanks this week. As much as we have struggled to rebound from the financial crisis and recession during the past five years, we have plenty to be thankful for. For one thing, our rebound did happen — albeit very slowly. Just a few years ago, economic prognosticators were predicting that real estate would not rebound for at least a decade.
It has been five years and we are already at least one year into a rebound. Again, we are not all the way back but at this point you can’t deny the … (0 comments)
economy: How Much Damage?
- 10/07/13 03:33 AM
Now that the shutdown has lasted at least a work week–we have to ask the most important question. How much damage was done to the economy because of the actions or inactions of Congress? And it was not just the government shutdown. What we are talking about here is is also the threat of the shutdown which hovered over the markets and our populace for weeks. How much confidence do businesses and consumers lose when they are reminded that we have a government which is largely ineffective? While certain members of Congress were playing games, we had a military that was … (0 comments)
economy: The Resilient Markets
- 09/23/13 03:50 AM
It has been five years since the collapse of the financial markets. Five years ago, the world financial systems were on the brink of collapse. For five years we have been crawling out of a deep hole. You can’t get very far by crawling, but if one moves forward a little-by-little for five years, how far we have come will look very impressive. Let’s just look at the stock markets. Early in 2009 the Dow Jones Industrial Average bottomed at just under 6500 in reaction to the crisis. This year the Dow has topped 15,500. That is a gain of approximately … (0 comments)
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