Economic Folk | Business News, Real Estate and Stock Market

Sears to spin off Orchard Supply Hardware chain in IPO

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 12:00:00 +0000

Sears Holdings Corp. plans to spin off its home improvement unit, Orchard Supply Hardware, as a separate publicly traded company, the department store giant said Thursday. The move comes amid a flurry of initial public offerings in recent months.

Known as OSH, Orchard Supply Hardware is a San Jose-based chain that operates 89 stores, all of them in California. OSH reported a profit of $8.7 million on $660.7 million in revenue in fiscal 2010.

The chain plans to be traded as OSHS on the Nasdaq once Sears Holdings, its parent company since 1996, spins it off as a standalone company.

Significantly smaller than its national big-box rivals Home Depot and Lowe's, OSH began in the 1930s as a purchasing cooperative by orchardists selling picking pails and ladders, according to the San Jose Mercury News. In the 1950s, it became a general retailer and has gone through several ownership changes since.

Sears Holdings said in a filing with the Securities and Exchange Commission that it believed OSH would generate more value for shareholders as an independent company and valued the IPO at $82 million. The company did not list a target price for the stock and said the spin-off, expected to go to market in the fall, still needed final approval from its board of directors.

-- Andrea Chang

Full story at http://feeds.latimes.com/~r/MoneyCompany/~3/fI9gDFY5PVs/sears-to-spin-off-orchard-supply-hardware-chain-in-ipo.html

Could The US Have An ?Expansionary Fiscal Contraction??

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 12:00:00 +0000

Full story at http://baselinescenario.com/2011/06/23/could-the-us-have-an-expansionary-fiscal-contraction/

Straight Talk

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 12:00:00 +0000

Full story at http://baselinescenario.com/2011/06/23/straight-talk/

Burberry Shares Leap on Sales Update

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 11:00:00 +0000

Shares in British luxury goods company Burberry Group PLC jumped Tuesday after the company reported strong second-half sales and predicted a full-year profit at the top end of market forecasts.

Burberry's popularity in the Asia Pacific region, particularly Hong Kong and Taiwan, led sales 33 percent higher in the six months to March 31, compared to a year earlier.

Chief Executive Angela Ahrendts said the company expects full-year pretax profit to be at the top end of market forecasts, or around 347 million pounds ($564 million).

"While the luxury industry faces global challenges in the year ahead, we remain confident in our team's ability to outperform, underpinned by the consistent execution of our key strategies," said Ahrendts in a trading update.

Continue reading Burberry Shares Leap on Sales Update

Burberry Shares Leap on Sales Update originally appeared on BloggingStocks on Tue, 19 Apr 2011 08:04:00 EST. Please see our terms for use of feeds.

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Johnson & Johnson's Income Falls 23%

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 11:00:00 +0000

Health care giant Johnson & Johnson says sales rebounded but its profit dropped 23 percent in the first quarter, due to higher expenses, costs of recalls and litigation and a tax gain that boosted results a year ago.

Adjusted earnings topped expectations. J&J also raised its full-year earnings outlook.

The maker of Band-Aids, baby shampoo and birth control pills posted net income of $3.48 billion, or $1.25 per share, down from $4.53 billion, or $1.62 per share, in 2010's first quarter.

But after two years of declines, revenue rose by 3.5 percent to $16.17 billion.

Adjusted income was $4.86 billion, or $1.35 per share. Analysts expected earnings of $1.03 per share and revenue of $15.6 billion.

Johnson & Johnson's Income Falls 23% originally appeared on BloggingStocks on Tue, 19 Apr 2011 08:22:00 EST. Please see our terms for use of feeds.

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Goldman Earnings Sink After Buffett Dividend

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 11:00:00 +0000

Goldman Sachs' first-quarter income fell 72 percent after the bank paid $1.64 billion in dividends to redeem preferred shares it issued to billionaire investor Warren Buffett during the financial crisis.

The New York investment bank said Tuesday that it earned $908 million, or $1.56 per share, compared with $3.3 billion, or $5.59 a share in the first quarter of last year.

Excluding the dividend payment, earnings per common share were $4.38, beating the $3.95 per share forecast of analysts surveyed by FactSet.

Revenue fell 7 percent to $11.9 billion on weakness in the bank's core businesses of trading stocks and bonds and advising clients. Goldman's stock fell 0.9 percent to $152.38 in late morning trading.

The Federal Reserve gave Goldman Sachs Group Inc. permission to repay Berkshire Hathaway last month. While the Fed's decision wasn't a surprise given Goldman's ever-widening profits since the financial crisis, it reflected how far Goldman and other major banks have progressed from the darkest days of September 2008.

Continue reading Goldman Earnings Sink After Buffett Dividend

Goldman Earnings Sink After Buffett Dividend originally appeared on BloggingStocks on Tue, 19 Apr 2011 09:03:00 EST. Please see our terms for use of feeds.

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Head Scratcher

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 11:00:00 +0000

Mercenary Links Roundup for Thursday, June 23rd (below the jump).

06-23 Thursday

?Head-Scratcher? IEA Petroleum Release to Inflate U.S. Crude Supply Glut

Greece and Foreign Lenders Agree on Austerity Plan – NYTimes.com

Greece agrees to more austerity cuts – FT.com

EU Halts Greek Backtrack on Austerity – WSJ.com

China Formally Working With IMF To Avoid Eurozone Restructuring | zero hedge

As Greece Ponders Default, Lessons From Argentina – NYTimes.com

Greece?s euro exit can now only be a matter of time – FT.com

Some Greeks Fear Government Is Selling Nation – NYTimes.com

Tax Dispute Stalls Debt Talks – WSJ.com

Eric Cantor, House G.O.P. Leader, Leaves Budget Talks – NYTimes.com

Americans See Debt Threat, Reject Tax ?Scare? – Bloomberg

U.S. Firms Mitigate Tax Impact by Incorporating Overseas – WSJ.com

China’s Wen says prices under control: report | Reuters

HK to set daily renminbi rate against dollar – FT.com

Airbus Adds $18 Billion Plane Order From AirAsia – NYTimes.com

Many Cities Face a Long Wait for Jobs to Return – NYTimes.com

J.P. Morgan Drops Pursuit of Some Credit-Card Debt – WSJ.com

Emerging Markets – US to Lose Second Place in World Trade to India: Citi

Global Oil Reserves Tapped in Effort to Cut Cost at Pump – NYTimes.com

A Coalition Strike on Oil Prices – WSJ.com

Global oil supplies are healthier than they seem | The A-List

Traders disagree on outlook for crude spreads – FT.com

For Many in Britain, Being a Homeowner Is a Fading Dream – NYTimes.com

BOE Says Debt Crisis Is Biggest U.K. Financial-Stability Threat – Bloomberg

Hedge fund bosses sound alarm on super-sized funds | Reuters

Exclusive: Deutsche’s firing of top trader sparks probe | Reuters

U.S. Says Gadhafi Might Flee Tripoli – WSJ.com

Arrest Puts Spotlight on Brazen Hacking Group LulzSec – NYTimes.com

Russian Social Network VKontakte Said to Consider Public Offering in U.S.

Obama eyes investments in technology manufacturing | Reuters

F.T.C. Is Said Near a Move On Google – NYTimes.com

The Rise and Inglorious Fall of Myspace – BusinessWeek

Alleged Crime Boss James ‘Whitey’ Bulger Arrested – WSJ.com

Expert on Mental Illness Reveals Her Own Struggle – NYTimes.com

As Japan’s Towns Scrutinize Reactors, Tokyo Sweats – WSJ.com

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Hacker Group Leaks A TON Of Arizona Law Enforcement Documents, In Operation "F*$K The Border Control"

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 11:00:00 +0000

LulzSec, the same group responsible for hacking Sony and the CIA's website, has penetrated the Arizona Department of Public Safety (AZDPS) in retaliation for the state's strict immigration legislation.

According to the Wall Street Journal, the hacker group obtained emails, intelligence documents, training manuals, and other documents it said belonged to the AZDPS.

The trove of files was uploaded and made available for download via Pirate Bay.

According to the LulzSec press release.

We are releasing hundreds of private intelligence bulletins, training manuals, personal email correspondence, names, phone numbers, addresses and passwords belonging to Arizona law enforcement. We are targeting AZDPS specifically because we are against SB1070 and the racial profiling anti-immigrant police state that is Arizona.

The documents classified as “law enforcement sensitive”, “not for public distribution”, and “for official use only” are primarily related to border patrol and counter-terrorism operations and describe the use of informants to infiltrate various gangs, cartels, motorcycle clubs, Nazi groups, and protest movements.

Every week we plan on releasing more classified documents and embarassing [sic] personal details of military and law enforcement in an effort not just to reveal their racist and corrupt nature but to purposefully sabotage their efforts to terrorize communities fighting an unjust “war on drugs”.

Hackers of the world are uniting and taking direct action against our common oppressors – the government, corporations, police, and militaries of the world. See you again real soon! ;D

Called Operation F*ck The Border Patrol (Operation Chinga La Migra) this attack is a grand departure from LulzSec's previous self-centered agenda and is likely to draw much geater heat on its members.

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And Now Thank God You Don't Live In Taiwan -- Or Anywhere Else You Go To Jail For Saying Food Is Too Salty

Full story at http://feedproxy.google.com/~r/businessinsider/~3/40vjcuinIgw/lulzsec-leaks-hacks-arizona-law-enforcement-documents-2011-6

"Papandreou has Serious Doubts Greek Parliament Will Take Necessary Steps"

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 11:00:00 +0000

Greek finance minister Evangelos Venizelos (the former defense minister appointed to a new post in a cabinet shakeup, and who knows little about finance) is under pressure from labor unions to get a change in austerity measures and under pressure by the EU to not change a thing.

Reuters reports EU tightens squeeze on Greece; banks discuss rollover

Greece's new finance minister grappled with EU and IMF officials over gaps in his austerity plans on Thursday, with European leaders insisting on deep spending cuts and more tax hikes if Athens wants to secure funds and avoid potential default.

Euro zone governments are meanwhile talking to European banks and insurance companies to try to convince them voluntarily to maintain their exposure to Greek debt when their bonds mature, as part of a possible second rescue for Athens.

Greek Finance Minister Evangelos Venizelos met inspectors from the European Commission, European Central Bank and the International Monetary Fund in Athens to try to iron out differences over the current bailout program.

"All conditions must be met," Luxembourg Prime Minister Jean-Claude Juncker told reporters as he arrived for a summit of EU leaders at which Greece's crisis will top the agenda.

"If Greece does what it has to do, we will do what we have to do. This is not a threat. It's just a confirmation that we're continuing our efforts."

While Papandreou has expressed confidence over the June 28 vote in public, Slovak Prime Minister Iveta Radicova said he had voiced uncertainty in a private telephone call on Wednesday.

"Papandreou has serious doubts about whether the necessary steps will pass in parliament," Radicova told the Slovak parliament's European affairs committee.

Once again it's important to remember this pissing in the wind cannot accomplish a thing, but make the size of the default bigger later. Of course, the rating agencies are likely to rule the rollover by banks constitutes a default anyway.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Full story at http://feedproxy.google.com/~r/MishsGlobalEconomicTrendAnalysis/~3/sZ88xBsrN8Q/papandreou-has-serious-doubts-greek.html

The Rise Of The Third Coast: The Gulf Region?s Ascendancy In U.S.

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 11:00:00 +0000

For most of the nation?s history, the Atlantic region ? primarily New York City ? has dominated the nation?s trade. In the last few decades of the 20th Century, the Pacific, led by Los Angeles and Long Beach, gained prominence. Now we may be about to see the ascendancy of a third coast: the Gulf, led primarily by Houston but including New Orleans and a host of smaller ports across the regions.

The 600,000 square mile Gulf region has long been derided for its humid climate, conservative political traditions and vulnerability to natural disasters. Yet despite these factors, the Gulf is destined to emerge as the most economically vibrant of our three coasts. In our rankings of the fastest-growing job markets in the country, six Gulf cities made the top 50: Houston, Corpus Christi and Brownsville, in Texas; New Orleans; and Gulfport-Biloxi and Pascagoula, in Mississippi. In contrast, just one Pacific port, Anchorage, Alaska, and one small Atlantic port, Portsmouth, N.H., made the cut.

This reflects a long-term shift of money, power and jobs away from both the North Atlantic and the Pacific to the cities of the Gulf. The Port of Houston, for example, enjoyed a 28.1% jump in foreign trade this year, and trade at Louisiana?s main ports also reached records levels.

This growth stems from a host of factors ranging from politics, demographics and energy to emerging trade patterns and new technologies. One potential game-changer is the scheduled 2014 $5.25 billion widening of the Panama Canal, which will allow the passage to accommodate ships carrying twice as much cargo as they are able to carry currently. This will open the Gulf to megaships from Pacific Basin ports such as Singapore, Shanghai, Pusan and Kaohsiung, which have mostly sent their cargos to West Coast ports such as Los Angeles and Long Beach. Some analysts predict that more than 25% of this traffic could shift to Gulf and South Atlantic ports. ?More of Asia will be heading to this part of the world,? says Jimmy Lyons, CEO of the Alabama State Port Authority.

The area also is getting a big jolt from ascendant Latin America, the Gulf?s historic leading trade partner. Bill Gilmer, an economist with the Federal Reserve Bank of Dallas, notes that Latin America is home to many of the world?s fastest-growing economies, with overall growth rates last year exceeding 6.1%. Since 2002 about 56 million people in the region have risen out of poverty, according to the World Bank.

Trade with Latin American partners ? including Mexico ? is ramping up growth in Houston as well as other Gulf ports. Brazil, for instance, has risen to become Mobile, Ala.?s leading trade partner. Latin immigration to virtually all the Gulf cities, including New Orleans, can only strengthen these economic ties.

The energy industry represents another critical force in the Gulf?s resurgence. It employs at least 55,000 workers in the Gulf, which produces roughly one-quarter of the nation?s natural gas and one-eighth of its oil. Although Houston seems assured of its spot as the focal point of the world fossil fuel industry, oil and gas also boosts numerous economies throughout the region, notably in Corpus Christi and various ports across Southern Louisiana.

Though the Obama administration puts its bets on subsidizing ?green jobs,? traditional energy jobs may prove, in the short and medium term, far more important. There is even widespread talk about the Gulf emerging as a center for the export of natural gas. Over $ 6 billion in new investments are already being proposed for export facilities, notes David Dismukes, associate director of the Louisiana State University Center for Energy Studies.

The energy-related economy produces high-wage jobs that range from geology and engineering to the muscle work on the oil rigs, which provide well above average wages for blue collar workers. Such growth is particularly critical to regions such as New Orleans, long dependent on generally lower-wage industries like hospitality and personal services. The energy business also will help accelerate the expansion of business services such as law, accounting, architecture and advertising.

The shift to the Gulf includes some rapid industrial expansion, particularly for energy intensive industries. Huge natural gas supplies are creating enormous opportunities for expanding petrochemical industries. The German firm Thyssen Krupp opened a new $5 billion steel mill last year, and Nucor Steel announced a large new facility to be built just outside New Orleans. Like energy production, these facilities tend to pay above-average wages for blue collar workers, which will likely raise living standards for a region that has lagged historically.

At the same time, demographic trends suggest these areas will continue to become more attractive to international commerce. Despite a legacy of hurricanes and floods, Houston, with over 5 million people, has emerged as among the fastest-growing large metropolitan regions in the country. The region?s population is expected to double in the next 20 years. Most of the economies its port serves ? Dallas-Fort Worth, San Antonio and Austin ? also have experienced rapid growth. Recoveries are in place in many other hurricane-devastated areas, including greater New Orleans.

Overall the Gulf is expected to be home to 61.4 million people by 2025, a nearly 50% increase from its 1995 base. This expanding domestic market ? along with the possibilities posed by the canal ? have already persuaded two larger retailers, Wal-Mart and Home Depot, to establish modern new distribution centers in Houston.

Finally there is the matter of political will. Both the Northeast and the Pacific regions are increasingly dominated by environmental, labor, urban land and other interests often hostile to wide-ranging industrial expansion. A legacy of labor unrest, most notably a big strike of West Coast ports in 2002, convinced some shippers to diversify their operations elsewhere. Growing regulation in California, suggests economist John Husing, a leading expert on port-related issues, makes the prospects for growing warehouse, logistics and manufacturing jobs increasingly ?impossible? there.

East Coast ports, subject to some of the same pressures, may be slow to make the ?intense capital improvements? required to capture expanding trade. In contrast, the Gulf?s leaders in both parties support broad based economic growth. New Orleans? Democratic Mayor Mitch Landrieu is no less friendly to industrial and port expansion than Republican Gov. Bobby Jindal. Houston Democratic mayors like Annise Parker, Bill White and Bob Lanier have been as strongly in favor of critical business and infrastructure investment as their Republican counterparts.

Such differences in attitude have driven power shifts throughout American economic history. In the 19th century New York through a combination of ruthless ambition and greater vision overcame aristocratic Boston and more established Philadelphia. Icy Chicago performed a similar coup over its then far more established and temperate rival, St. Louis, in the mid- and late 1800s.

In the last century, unfashionable Los Angeles, without a great natural port, overcame the grand Pacific dowager San Francisco, blessed by one of the world?s great natural harbors, as the economic center of the West Coast. Los Angeles built a vast new modern and largely artificial port to make up for what nature failed to provide, and also nurtured a host of industries from aerospace, oil and entertainment to garments.

Now history is about to repeat itself as Texas, Louisiana and other Gulf Cities seek to reorder the nation?s economic balance of power. Unless California and the Northeast awaken to the challenge, they will be increasingly supplanted by a region that seems more determined to expand their economic dominion.

This piece originally appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

Photo by NASA Goddard Photo and Video

Full story at http://feedproxy.google.com/~r/Newgeography/~3/tUknMJx7-xA/002296-the-rise-of-the-third-coast-the-gulf-region%E2%80%99s-ascendancy-in-us

Obama Releases Oil Reserves To Counter Lost Crude

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 11:00:00 +0000

The Obama administration announced it will release 30 million barrels from the nation's strategic petroleum reserve. The move was coordinated with members of the International Energy Agency to offset supply disruptions from Libya's civil war.

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Full story at http://www.npr.org/2011/06/24/137387929/obama-releases-oil-to-counter-lost-libyan-production?ft=1&f=1006

Business News

noreply@blogger.com (Palapple team) — Fri, 24 Jun 2011 11:00:00 +0000

Steve Inskeep has business news.

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Full story at http://www.npr.org/2011/06/24/137387925/business-news?ft=1&f=1006

Fed worries about spillover from Europe's debt crisis to U.S. financial system

noreply@blogger.com (Palapple team) — Thu, 23 Jun 2011 12:00:00 +0000

So let?s say Greece or one of the other financially weakest countries in Europe were to default on its bonds. Would that hit the U.S. banking system?

Federal Reserve Chairman Ben S. Bernanke was asked that question at his news conference on Wednesday. The response he gave was pretty much what many on Wall Street already had assumed: U.S. banks don?t have much in the way of direct financial holdings in Greece and Europe?s other ?peripheral? countries (Ireland, Portugal).

Still, the Fed worries that the indirect effects of a European debt blow-up could be ?quite significant? in U.S. markets, Bernanke conceded.

He also singled out U.S. money market mutual funds, which make very short-term loans to banks and other institutions, as an area of ?concern? in terms of European investments.

Given that the European government-debt crisis began to unfold in November 2009, U.S. banks have had plenty of time to get out of the riskiest securities. Greece got its first bailout from the rest of the euro-zone countries a year ago. Ireland was bailed out last fall and Portugal followed spring.

Europe?s financial system has been rocked in recent months by fears that Greece was headed for default despite its year-old bailout. The Greeks now want another chunk of money from the rest of Europe to avoid default on nearly $500 billion in government debt. The Athens government, which has agreed to a new round of harsh austerity measures in return for the second bailout, met a critical test on Tuesday when it survived a no-confidence vote by the Greek Parliament.

Next up: Parliament must approve the austerity package by the July 3 deadline set by euro-zone authorities.

By now, it would be hard to imagine any U.S. bank having much at stake in Greece, Portugal or Ireland. But U.S. banks? finances are intertwined with those of the largest European banks in Germany, France and Britain, the ?non-peripheral? countries. And many of those European giants naturally have plenty at stake in their poorer neighbors via loans or bond holdings.

Here?s how Bernanke put it:

We have been very assiduous in examining the exposures of financial institutions to the so-called peripheral countries. The answer is that the banks that we regulate are not significantly exposed to those countries directly, at least.

They have significant exposures to European banks in the non-peripheral countries, and so indirectly they have that exposure. And that statement which I just made includes credit default swaps and so on.

With regard to Greece, specifically, Bernanke said the Fed has ?asked the banks to, essentially, do stress tests and ask, looking at all their positions, all the hedges, what would the effect on their capital be if Greece defaulted. And the answer is that the effects are very small.?

But later in the same answer, Bernanke warned of potentially broader effects that regulators can?t predict:

A disorderly default in one of those countries would no doubt roil financial markets globally, would have a big impact on credit spreads, on stock prices and so on. And so in that respect, I think the effects on the United States would be quite significant.

European authorities sounded a similar, but maybe more dire, alert on Wednesday.

Bernanke also said the Fed was keeping a ?close eye? on the $2.7-trillion money market mutual fund industry, even though the central bank doesn?t regulate the funds.

"There again, the situation is similar in some sense [to banks? situation], in that, with very few exceptions, the money market mutual funds don?t have much direct exposure to the three peripheral countries which are currently dealing with debt problems," Bernanke said. "They do have very substantial exposure to European banks in the so-called core countries: Germany, France, etc.

"So to the extent that there is indirect impact on the core European banks, that does pose some concern to money market mutual funds," he said.

Fitch Ratings said in a report this week that the biggest U.S. money funds have about 50% of their assets in debt or certificates of deposit of European banks, mainly large British, German and French institutions.

But the Investment Company Institute, the funds? trade group, sought to downplay worries about money funds' holdings in a brief report it issued early this week.

-- Tom Petruno

Big bills racked up to buttress economic recovery are coming due

Economic head winds "may be stronger than we thought," Bernanke says

Photo: Anti-government riots in Athens this month. Credit: Lefteris Pitarakis / Associated Press

Full story at http://feeds.latimes.com/~r/MoneyCompany/~3/KEPr2mPXApI/banks-money-market-funds-europe-greece-default-bernanke-fed.html

?The Elderly? for Beginners

noreply@blogger.com (Palapple team) — Thu, 23 Jun 2011 12:00:00 +0000

Full story at http://baselinescenario.com/2011/06/17/the-elderly-for-beginners/

China and the Saving of Europe

noreply@blogger.com (Palapple team) — Thu, 23 Jun 2011 12:00:00 +0000

Full story at http://baselinescenario.com/2011/06/20/china-and-the-saving-of-europe/

Burberry Shares Leap on Sales Update

noreply@blogger.com (Palapple team) — Thu, 23 Jun 2011 11:00:00 +0000

Continue reading Burberry Shares Leap on Sales Update

Burberry Shares Leap on Sales Update originally appeared on BloggingStocks on Tue, 19 Apr 2011 08:04:00 EST. Please see our terms for use of feeds.

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Johnson & Johnson's Income Falls 23%

noreply@blogger.com (Palapple team) — Thu, 23 Jun 2011 11:00:00 +0000

Johnson & Johnson's Income Falls 23% originally appeared on BloggingStocks on Tue, 19 Apr 2011 08:22:00 EST. Please see our terms for use of feeds.

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Goldman Earnings Sink After Buffett Dividend

noreply@blogger.com (Palapple team) — Thu, 23 Jun 2011 11:00:00 +0000

Continue reading Goldman Earnings Sink After Buffett Dividend

Goldman Earnings Sink After Buffett Dividend originally appeared on BloggingStocks on Tue, 19 Apr 2011 09:03:00 EST. Please see our terms for use of feeds.

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Poll: Are You Confident in Ben Bernanke?

noreply@blogger.com (Palapple team) — Thu, 23 Jun 2011 11:00:00 +0000

CNBC is conducting a poll: Are You Confident in Ben Bernanke?

The Fed makes its announcement on the state of the economy Wednesday at 12:30 p.m. Then at 2:15 p.m. Fed Chief Ben Bernanke will address the media in the form of a news conference. With that in mind, we want to know if you have confidence in the way Mr. Bernanke is handling the economy?

Here are the humorous results of the CNBC poll as of 3:06 PM Central 2011-06-22.

Of course this prompts me to ask the same question.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Outlawing New Houses in California

noreply@blogger.com (Palapple team) — Thu, 23 Jun 2011 11:00:00 +0000

UCLA's most recent Anderson Forecast indicates that there has been a significant shift in demand in California toward condominiums and apartments. The Anderson Forecast concludes that this will cause problems, such as slower growth in construction employment because building multi-unit dwellings creates less employment than building the detached houses that predominate throughout California and most of the nation. The Anderson Forecast says that this will hurt inland areas (such as the Riverside-San Bernardino area and the San Joaquin Valley) because their economies are more dependent on construction than coastal areas, such as Los Angeles, the San Francisco Bay Area and San Diego.

Detached Housing Permits Remain Strong in the Historic Context: The Anderson Forecast reports that multi-unit building permits have recovered more quickly than building permits for detached housing. However, any such shift is likely to be highly volatile. Since the peak of the bubble, the distribution of building permits between detached and multi-unit in California has been on a roller coaster. Indeed the Anderson Forecast characterizes the "2010 US Census" as "showing a significant shift in demand toward condominiums and apartments." Actually, the 2010 US Census asked no question from which such a conclusion about housing types or any question from which such a conclusion could be drawn.

The trends in the building permit data are not completely clear. In 2005, the year before prices started to collapse, 75 percent of building permits in California were for detached housing. This trended downward, reaching a low of 52 percent in 2008. In 2009, the detached housing recovered to account for 73 percent of all housing building permits. Then the figure fell back to 59 percent in 2010.

With these erratic trends, it is tricky to forecast longer term market trends and consumer demand. �Economic projections in 1934 would have suffered from a similar problem, as the Great Depression was continuing and no one could really tell when it would end. Today's continuing housing depression may be similar.

Moreover, as the Anderson Forecast notes, detached housing construction declined in the early 1980s, dropping to 42 percent in 1985. In fact, over the 25 years between 1960 and 1985, detached houses accounted for an average of only 54 percent of new housing construction in California, well below the 2010 figure of 59 percent (Figure 1).

Equally important, the condominium market remains in a deep depression. In 2010, less than four percent of houses built for sale in the United States were multi-unit buildings, including condominiums (Figure 2), as an increasing majority of multi-unit buildings have been built as rentals (Figure 3). Comparable California data is not available, but from the peak of the bubble (2006/7) to 2009, there was a loss of more than 3,000 owner occupied� multi-unit dwellings with 10 or more units, while owner occupied detached houses increased by nearly 100,000 (Note 1).

If there is an intrinsic pent-up preference for condominium living, it is not evident in the poor performance of high-density developments even in such theoretically desirable places as Santa Monica, San Francisco, Oakland, San Jose and North Hollywood. Condominium prices, for example, have fallen 52 percent in the major California metropolitan areas, compared to 48 percent for single-family houses (Figure 4). Na�ve developers, relying too much on the much promoted notion that suburban empty-nesters were chomping at the bit to move to new housing in the core area, often watched their empty units liquidated at $0.50 or less on the dollar or turned into rentals. �Further, if people are moving to apartments, it?s not for love of density but more likely due weakening economic circumstances.

Inland California Continues to Grow Faster: The Anderson Forecast also suggests that growth in interior California will suffer because "workers are less likely to move inland into an apartment and commute toward the coast." This assumption of slower inland growth reflects the conventional wisdom that areas outside the large coastal metropolitan areas have stopped growing since the burst of the housing bubble as people flock towards the coastal urban core (Note 2). The reality is different, as interior California and the peripheral metropolitan areas of the larger metropolitan regions (Note 3) continue to grow more strongly even in bad economic times. After the burst of the bubble, from 2008 to 2010 (Figure 5):

In the Los Angeles area, the adjacent Riverside-San Bernardino ("Inland Empire") and Oxnard metropolitan areas, combined, have grown at seven times the rate of the core Los Angeles metropolitan area.

In the San Francisco Bay area, the adjacent Napa, Santa Cruz, Santa Rosa and Vallejo metropolitan areas, combined, have grown nearly twice as quickly as the core San Francisco and San Jose metropolitan areas.

California's deep interior, the San Joaquin Valley has grown even faster than the exurban areas of Los Angeles and San Francisco.

One key reason: most people who move to interior areas do not commute toward the core.� For example, less than 10 percent of workers in the Riverside-San Bernardino metropolitan area commute into Los Angeles County, a market share that declined 15 percent between 2000 and 2007. Many also simply cannot afford the higher cost of living in the coastal metropolitan areas, which likely will continue to retard growth in the core metropolitan areas.

The Policy Threat to New Houses : A survey by the Public Policy Institute of California suggests a vast preference (70%) for detached housing among the state?s consumers. �This continuing preference is demonstrated by detached housing prices that are generally two times historic norms relative to incomes in the coastal metropolitan areas (Los Angeles, San Francisco, San Diego and San Jose).

Yet now, this choice is under a concerted assault by both the state and many local governments, cheered on by most media and the academic community. �For years, planning regulations have driven land prices so high that house prices have risen to well above the rest of the nation (Figure 5) under regulations referred to by terms such as "smart growth" and "urban containment." The regulations and the inevitably resulting speculation propelled a disproportionate rise (nearly $2 trillion) in California house prices compared to national norm. If California house prices had risen at the same rate relative to incomes as in more liberally regulated areas, the loss to financial markets could have been hundreds of billions of dollars less when the bubble burst (Figure 6).

Planning for Crowding and Density: California's assault on detached housing is taking on a distinctly religious fervor. �The state's global warming law (Assembly Bill 32) and urban planning law (Senate Bill 375) is providing a new basis to impose draconian limits on the construction of detached housing. For example, in the San Francisco Bay area, it has been proposed that 97 percent of new housing be built within the existing urban footprint. That would mean an emphasis on multi-unit housing and little or no new housing on the urban fringe. The option of a single family home will be all but non-existent for� �even solidly middle income Californians.

Planning authorities in the Bay Area seem oblivious to the fact that destroying affordability also destroys growth, already evident by the state?s poor economic performance and ebbing demographic vigor. ��Planners rosily project 2 million more people between 2010 and 2035 in the San Francisco Bay area. The growth rate over the past 10 years suggests a number less than half that (Figure 7) and given the rapid aging of the area, even this estimate may be too high. The planners also project more than 1.2 million ��new jobs, something difficult to believe given the more than 300,000 job loss (Note 4) that occurred in the Bay Area between 2000 and 2010 (Figure 8).

The Environmental "Fig Leaf:" The environmental justification for these policies is fragile . Research supporting higher density housing has routinely excluded the greater emissions from construction material extraction and production, building construction itself and common greenhouse gas emissions from energy consumption that does not appear on consumer bills. Further, higher densities are associated slower and more erratic speeds, which retards fuel efficiency and increases greenhouse gas emissions, a factor not sufficiently considered.

The report seems to ignore any other options besides rapid densification, which as McKinsey Global Institute has pointed out is not at all necessary to reduce GHG emission reductions. They point to other factors as more fuel efficient cars. ��

Oddly, the San Francisco Bay Area proposal does not even mention working at home (much of it telecommuting), the most environmentally friendly way of accessing employment. Working at home has grown six times the rate of transit since 2000 in the Bay Area.

Outlawing New Houses Detached housing remains the overwhelming choice of Californians. There is no indication that this preference is about to be replaced by a preference for high-density housing. �Current and future middle class Californians could be corralled into more crowded conditions, because their "social betters" have decided that detached housing should be outlawed.

----

Notes:

1. Calculated from 2006, 2007 and 2009 American Community Survey data. The over ten unit category is used because is more generally reflective of the dense condominium development generally favored by densification advocates (Latest data available).

2. �Another questionable tenet of conventional wisdom is that the price declines in the outer suburbs were greater than in the cores. When the price declines reached their nadir, core California markets were generally at least as depressed from their peak prices as suburban markets.

3. Metropolitan region refers to combined statistical areas, which have a core metropolitan area, such as the Los Angeles MSA and include surrounding metropolitan areas, such as the Riverside-San Bernardino MSA and the Oxnard MSA.

4. Annual, 2000 to 2010, calculated from California Economic Development Department data.

Lead photo: Houses in Los Angeles. Photograph by author.

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of ?War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life?

Full story at http://feedproxy.google.com/~r/Newgeography/~3/Jwq61Ybo4iY/002292-outlawing-new-houses-california

Valvoline Introduces Greener Motor Oil

noreply@blogger.com (Palapple team) — Thu, 23 Jun 2011 11:00:00 +0000

As drivers get their cars ready for summer road trips, Valvoline is marketing a new, greener car oil which is made from 50 percent recycled oil. Recycled oil used to have a bad rap but re-refining technology has improved.

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Full story at http://www.npr.org/2011/06/23/137360762/valvoline-introduces-greener-motor-oil?ft=1&f=1006

Business News

noreply@blogger.com (Palapple team) — Thu, 23 Jun 2011 11:00:00 +0000

Renee Montagne has business news.

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Full story at http://www.npr.org/2011/06/23/137360758/business-news?ft=1&f=1006

Airline revenues going up, up and away

noreply@blogger.com (Palapple team) — Wed, 22 Jun 2011 12:00:00 +0000

Passenger revenue for the nation's airlines rose 14.4% in May, marking the 17th consecutive month of revenue growth, according to a trade group for the country's air carriers.

The Air Transport Assn. of America reported Tuesday that passenger traffic -- as measured by miles flown by paying passengers -- grew 2.5% in May, compared with the same month in 2010. Meanwhile, the average price to fly rose 11.6%, the association reported, based on data from more than two dozen airlines.

Airlines reported the biggest revenue increase, 26%, from flights to Latin America and the Caribbean.

"Increased air travel spending in May, leading up to the busy summer travel season, reflects the recovering economy," said the association's chief economist, John Heimlich. "A double-digit yield increase with improvements in U.S. domestic and international markets will help the industry cope with stubbornly high energy costs."

-- Hugo Martin

Photo: Los Angeles International Airport. Credit: Los Angeles Times

Full story at http://feeds.latimes.com/~r/MoneyCompany/~3/YImkHz2Xfqw/airline-revenues-going-up-up-and-away.html

?The Elderly? for Beginners

noreply@blogger.com (Palapple team) — Wed, 22 Jun 2011 12:00:00 +0000

Full story at http://baselinescenario.com/2011/06/17/the-elderly-for-beginners/

China and the Saving of Europe

noreply@blogger.com (Palapple team) — Wed, 22 Jun 2011 12:00:00 +0000

Full story at http://baselinescenario.com/2011/06/20/china-and-the-saving-of-europe/