Archive for February 2013
Construction Employment
Despite a boom in residential construction activity, construction employment growth has remained lackluster and is up just 100,000 from the trough in early 2011. This is because residential building declined by more than residential employment resulting in value added/worker falling from about $80,000/year to about $60,000/year as employers kept their best workers. But with total…
Read MoreBuilding Stock
In another sign of good news for home building, TRI Pointe Homes’ IPO was the sector’s first since 2004. The firm raised $233 million selling 13.7 shares at $17 on 1/31/13. Today’s close, $18.45. And, it looks like Taylor Morrison will soon follow as it’s currently filing papers with the SEC in a deal worth…
Read MoreMortgage Monopoly
During the 1990s, the percentage of new mortgages guaranteed by Fannie and Freddie averaged about 44% and that number rises to about 55% if you add FHA and VA loans. During 2005 and 2006, those numbers fell to historic lows of 38% and 40% respectively. Now, due to a lack of private capital those numbers…
Read MoreSequester Symptoms
Despite sequestration calling for $110 billion in annual cuts, the full impact will not be felt until after 2015. Outlays will be reduced by $44 billion in FY 2013, by $89 billion in 2014, and $102 billion in 2015. Full year 2013 GDP will fall by about 0.7%, with q2 GDP falling by about 1.25%!…
Read MoreHead Banger
The Friday File: Being required to wear a bicycle helmet reduces head injuries for 5-19 year olds by 13%. But, and there’s always a but, it also reduces non-head bicycle injuries by 9%, and results in an 11% increase in all other types of injuries from wheeled activities. This means many young riders are switching…
Read MoreGovernment Diversion
Federal government spending has steadily increased from 14% of GDP in 1950 to about 25% today. Because of this, legislators and bureaucrats are increasingly lobbied in an effort to have them bestow government largess on one group or another. Unfortunately, this is a zero-sum game. Were government spending to decline, so would the importance of…
Read MoreYou Say Tomato I Say To-mah-to
Recently there’s been talk of currency wars. If a nation prints money to lower interest rates to promote growth and happens to weaken its currency, it’s OK. But if a country prints money to lower interest rates to weaken its currency and happens to promote growth, that’s bad. In today’s slow growth environment, printing money…
Read MoreTicket to Ride
Despite having 26% of the US Market, the American Airlines-US Airways merger will proceed. That said, it will mean higher fares between smaller cities, reduced service on unprofitable routes and possibly fewer hubs. The key to minimizing harm to consumers is eliminating overwhelming airline dominance at airports. Hello passengers in Cincinnati, Charlotte, Dallas, Miami, Minneapolis…
Read MoreBuy Phone
The Friday file: When buying stuff over the phone, men stay on the phone for 7 minutes and 23 seconds, women just 6.5 minutes. Men prefer to call between 3am and noon, women between noon and 9pm. Two-thirds of calls to nutritionists are from women, while men make two-thirds of all calls to auto repair…
Read MoreHappy Valentine’s Day
Americans will spend $19 billion on Valentine’s Day gifts — $60/person. 56% will be spent on a romantic partner, 20% on family, 7% on friends, 5% on teachers and 4% each on; co-workers, others, and pets! That’s $750 million on Fido, a tad less than the $860 million spent on greeting cards. Guys will spend…
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