LOCAL GDP GROWTH SLOW

The San Diego economy continues to grow but at a pace slower than similar regions across the country. report from the National University System Institute for Policy the country. A report from the National University System Institute for Policy Research says that from 2009 to 2012, San Diego ranked 30th out of the 40 regions that produce $85 billion or more in goods and services.  

In the areas covered by the report San Diego ranks number 16 in size.

In 2012, the San Diego gross domestic product [GDP] grew 2.7 percent to $177.4 billion, its best performance since the start of the recession. It was one notch lower than San Jose's 2.8 percent [17th largest area] but slower than Phoenix areas 3.2 percent 15th largest area.

San Diego is expected to maintain its current pace with a projected 2013 GDP expanding at 1.7 percent. Market observers in looking ahead to 2014 are suggesting a possible slow down to 2.5 percent.

The San Diego manufacturing sector has seen increased output but has not added to employment as jobs have declined by 2,200 this past year due to automation and higher- value goods as aerospace products and medical devices. In the San Diego area, the across-the-board federal spending cuts had negative impact on the military and defense related industries.

JonathonHorn@utsansandiego "Report: San Diego Growth Not Keeping Up"  11/29/13

From dpsandiego.com editor at large Rocky Mountain.

BIDDING WARS ARE ON

Even though the housing market overall has softened a bit, there are pockets of intense competition for suitable housing. The competition is more brisk than anticipated, given some of the effects on consumer confidence during and following the government shut down. Competition has declined in some and increased in other markets as the buyer-seller dynamic has changed.

"Many Americans changed their buying plans during the shutdown, with home tours and offers rebounding once the government reopened. Strong demand coupled with reduced inventory kept competition from falling even further in October. Some buyers realized they may have missed the bottom of the market and home price will continue to rise in 2014," said Rachel Musiker, market analyst at Redfin.

Boston saw the biggest drop in competition with 61.3 percent of offers facing bidding wars down from 71.3 in September. San Diego experienced the largest increase with 63 percent of offers competing against multiple bid compared with 56 percent.

All-cash purchases are the key element in sale resolutions.

ToryBarringer@dsnews  "Bidding Wars Resume In Major Markets In October"  11/22/13

From dpsandiego.com editor at large Rocky Mountain.

NEGATIVE EQUITY STILL COMMON

In te third quarter, 1.4 million homeowners escaped from being underwater as their home value outranked their equity, largest drop in Zillow's records, dating back to the second quarter 2011. The negative equity rate now stands at 21 percent,, down about one-third from  peak of 23.8 percent in the second quarter.

Since the negative equity peak, 4.9 million homeowners have risen above water but 10.8 million still remain with negative equity. The effective negative equity rate is at 39.2% i the third quarter. The effective rate includes all homeowners who have less than 20% equity in their homes.

The effective rate has importance because selling a home and purchasing a new one requires equity of 20 percent or more to comfortably meet related expenses, according to Zillow.

More than half of underwater borrowers are underwater still by at least 20 percent. Assuming an estimated price growth of 3.8 percent, it will take a homeowner with at least 20 percent negative equity five years to rise above the surface.

"Rising home prices and a greater willingness among lenders to engage in short sales have both contributed substantially to the significant decline this quarter. We should feel good we are moving in the right direction and at a fast clip," according to Stan Humphries, chief economist at Zillow.

Humphries, along with industry analysts, agrees that housing prices will moderate during the next year and the current fast pace is due for a slow down. Persistent negative equity of the housing market will remain a normal part of the activity for several years.

KristaFranksBrock@dnews  "Negative Equity: A New Way Of Life"  11/22/13

From dpsandiego.com editor at large Rocky Mountain.

MORTGAGE LENDING EASES

In October, available credit for mortgages started to ease slightly even though standards still remain high. The Mortgage Bankers Association Credit Availability Index inched up to 0.7 percent to a score of 111.5 in October after two consecutive months of decline. The average FICO score on new loans has fallen from 750 at the beginning of the year to around 732 in September.

The fluctuation stems from some investors reducing minimum credit score requirements on a limited number of products. There were some investors who reduced availability of cash-out refinances and limited other programs to primary residences, equating to the slight increase for the month.

"We have seen a steady loosening in an incremental way since beginning of the year. There has been a significant rise in the percentage of loans with a credit scores under 700." said Jonathon Corr, Ellie Mae's president and chief operating officer.

In September, 32 percent of all loans closed had credit scores of less than 700, when compared to less than 17 percent one year ago.

BrenaSwanson@housingwire  "MBA:Mortgage Lending Loosens Up A Bit"  11/12/13

From dpsandiego.com editor at large Rocky Mountain.

BENEFITS IN JEOPARDY

In California there are 222,000 persons receiving extended unemployment benefits ranging from $40 to $450 per week. Everyone gets the state base covering 26 weeks but the government has made a series of extensions that at one point provided benefits for 99 weeks. The extensions are scheduled to expire December 28 unless Congress and President Obama approve continuing benefits into 2014.

A Californian on unemployment beyond the standard 26 weeks will be cut off from weekly payments no matter how many weeks they have remaining. The state Employment Development Department [EDD] has notified current recipients that the check will stop.

Since the extensions were put in place in 2008, the state has paid more than $44.6 million to cover the extensions. For the last two years, the EDD has stopped qualification for the final tiers of extensions because the unemployment rate has been falling. The California jobless rate in August was 8.9 percent, down from an October 2010 peak of 12.4 percent. The San Diego county August rate was 7.4 percent.  The September and October rates have not been officially released.

The U.S. jobless rate is 7.3 percent with nearly 4.1 million unemployed 27 weeks or longer, down from 5.1 million one year ago. The 4.1 million represent 36 percent of the nation's jobless. Across the country, 1.3 million are on unemployment extensions.

Democrats in Congress have started a drive to renew the federal extensions but there is opposition from Republicans opposed to the projected $25 billion cost unless it is coupled with cuts elsewhere in the budget.

JonathonHorn@utsandiego "Thousands In State May Have Jobless Benefits Cut Next Week" 11/21/13

From dpsandiego.com editor at large Rocky Mountain.

HOUSING RECOVERY CONTINUES

The highest quarterly home price increase since the national housing recovery began in 2012. occurred in the third quarter, driven by an increase in home sales and a decline in foreclosure sales, according to the FNC Residential Price Index.

Prices rose 2.5 percent during the third quarter in the 100 largest metropolitan areas. National home prices have rise 11 percent since the start of 2012.

Leading the recovery are the markets that experienced the greatest distress during the 2008-2009 crisis. Phoenix posted the highest cumulative gain at 42.6 percent, followed by Las Vegas [38.3%], Riverside, CA [23.5%]. Los Angeles [22.7%], Orlando, FL [20.5%].

Three cities showed price declines in September - St. Louis [1.3%].  New York [0.6%] and Denver [0.3%]. There was an increase in foreclosure sales in Denver and St. Louis, affecting the declines. In St. Louis, foreclosure sales made up almost 30 percent of September home sales.

KristaFrenksBrock@dsnews  "High-Distressed Markets Continue To Lead Recovery" 11/18/13

From dpsandiego.com editor at large Rocky Mountain.

GOOGLE UNVEILS PREPAID CARD

Google has created Google Wallet Card, a prepaid debit card, that can be tied to customer Google Wallet accounts and be used to make purchases and withdraw money from ATMs. The new card can be used at all locations where MasterCard is accepted. There are no  fees attached. There are no ATM withdrawal fees, even though some ATMs will include a separate fee.

With the new prepaid card,  phone is no longer necessary to pay in stores. Customers can simply swipe the card in a normal way.

Google Wallet has been available since 2011 funded by transfers from other Google Wallet users or money transferred from other bank or credit card accounts. That balance can be used to pay with a mobile phone at certain retailers.

Retailers need to have the appropriate point-of-sale equipment to process transactions.

BlakeEllis@cnnmoney  "Google Launches Prepaid Card"  11/20/13

From dpsandiego.com editor at large Rocky Mountain.

FALL SEASON LOOKS GOOD

The Realtors.com October report shows the late in the year selling season season has not slackened. Inventory has been returning to 2012 levels, prices continue to rise, and sales activity has been maintained or increased. Eighty-five percent of the markets covered showed annual improvement in the median list price and only 19 reported a decline. The price fell 0.25 percent month-over-month to $199,900, 7.57 above its 2012 level.

Inventory levels have become manageable in many local markets. The markets where the inventory was down 4 percent or more annually dropped to 65 in October in keeping with a trend started during the summer.

An encouraging statistic is the median age of the inventory - 94 days in October, a 11.32 decrease from one year ago. Properties to turn over quickly in contrast to usual seasonal patterns, despite the increase in prices.

ToryBarringer@dsnews "Housing Picks Up Steam With Little Regard For Changing Of The Seasons" 11/19/13

From dpsandiego.com editor at large Rocky Mountain.

JOB OUTLOOK POSITIVE

Chapman University has released results of a study that indicates there should be a slight job growth in California in the fourth quarter. The study encompassed the gross domestic product, construction spending, exports and the S&P 500. An index value was set at 121.6, slightly higher than the third quarter 120.5 and a positive sign. The index had bottomed out at 46.6 in the third quarter of 2009.

The study is based on third quarter data and does not include any data relative to the 16-day government shutdown.

Real exports grew 3 percent year-over-year in the third quarter, compare with 2 percent in the second quarter. This as the biggest boost in the index.

Construction spending based on six-quarters of building permits, were up 23.8 percent in the third quarter, a tad above 23.5 the previous quarter.

The annualized gross domestic product growth rate of 1.6 in the quarter remained the same as consumer spending lagged.

The S7P year-over-year increased 16.7 percent in the third quarter, slightly less than the 17.9 percent one year ago.

In August the California jobless rate was 8.9 percent, fifth lowest in the country. San Diego County had an unemployment rate of 7.4 percent in August that was not adjusted for seasonal factors.

JonathonHorn@utsandiego "State Job Growth Should Pick Up"  11/19/13

From dpsandiego.com editor at large Rocky Mountain.

GASOLINE AT BOTTOM

The dream of having gasoline below $3.00 per gallon this year nationwide will probably not happen. After declining steadily to its lowest level in nearly three years, the national average price has inched up to $3.20. A 5 percent jump of November 14 may have put a crimp to the $3.00 dream. There are eight states with gasoline below $3.00, Missouri being the lowest at $2.86.

Pump prices had fallen for ten straight weeks, down to a mid-October average of $3.47 per gallon. Slumping crude prices, decline in seasonal demand and excess inventory has pushed prices down nearly 9 percent in the past month.

Gas prices usually bottom out in December and observers believe the market could still get a bit lower.

The Energy Information Administration reported that U.S. crude oil production hit a 24 year high in October and exceeded imports for the first time since February 1995. It expects 2014 gasoline prices to be $3.39 a gallon, vs. $3.50 this year and $3.63 in 2012.

GaryStrauss@USAToday  "Gas Prices Bottoming Out For 2013?"  11/14/13

From dpsandiego.com editor at large Rocky Mountain.

HOME PRICE INCREASES CONTINUE

In a survey of 276 markets by Clear Capital, prices had risen in 225, keeping in lines with escalating home prices nearly everywhere. Prices nationwide have risen by 10.9 percent with a median price for existing homes up $30,000 to $215,000.

Generally. in 2013 there has been a sense of urgency by traditional buyers to take advantage of home prices that were affordable with low interest rates. Inventory has been low, bidding wars became prevalent among investors and cash buyers seeking a quick sale.

On average, prices are still 31.5 percent below the 2005 peak. The percentage of monthly family consumed by mortgage payments [4.1% mortgage] is 15.6 percent, compared with 23.5 percent in mid-2006.

Market observers expect home prices to rise in 2014 but at a slower rate nationally probably within a 3% to 4% range. Moody's Analytics thinks there should be some  activity among younger buyers who give up renting to become an owner. Home owners who have escaped negative equity should become more active in the market.

CoreLogic reports that almost 3.5 million homeowners were lifted from negative equity between the end of 2010 and mid-2013.

The Conference Board, a non-profit group, reports that the percentage of consumers who intend to buy a home within the next 6 months is the highest since 2000.

PatMertzEsswein/Kiplinger "2014 Outlook: Home Prices Head Higher"  11/17/13

From dpsandiego.com editor at large Rocky Mountain.

TIME FRAME AFFECTS LOSSES

During the housing crisis, home prices have risen 14 percent nationally, and the losses on residential-mortgage-backed securities [RMBs] have improved a modest 5 percent, according to a Fitch Ratings Report. The primary reason is prolonged liquidation time lines which reached an all-time high in the third quarter of this year, having increased at a faster rate this year than any other previous year.

Thirty-two percent of serious delinquent homeowners have not made a payment on their mortgage in more than 4 years. This is up from 7% at the start of 2012. About 40 percent of the mortgages that have been seriously delinquent are Countrywide legacy loans now serviced by Bank of America.

The Fitch study shows that the average liquidation timeline is 32 months as of the third quarter of this year, twice as long as the 2008 average,

There is one bright side. While extended time lines are raising loan severity losses, short sales have risen from 20% of liquidations in 2009 to 60% currently. Short sales of homes with sub-prime loans incur loss severities about 20% lower than losses incurred through REO sales.

KristaFranksBrock@dnews  "Long Liquidation Times Ramp Up Loss Severities Despite Rising Prices" 11/12/13

From dpsandiego.com editor at large Rocky Mountain.

HOME SALES ACTIVE

It has been an active year for home sales aided by a declining inventory that has created pressure from buyers to move rapidly an snap up the inventory that is available. The homes listed by Zillow in September were selling t a pace of one month quicker than one year ago. As a whole, spend 88 days on the market, down from 116 days in September one year ago.

Zillow calculated the median number of days at the national, metropolitan and county levels, dating back to January 2010. To account for homes that are listed, removed and then reported with a new price. Listings at the same address for 40 days were counted one listing. Since 2010, homes nationwide on Zillow spend a median of 119 days before being sold or taken off the market.

Among the 30 largest markets, homes moved he fastest and spent the least amount of time on the market in the Bay Area of California [48 days], Sacramento [59 days] and Dallas [60 days]. Homes were selling faster this year in September all 30 metropolitan markets than they were one year ago.

"Home shoppers in today's environment need to be prepared to move quickly, with pre-approvals and an established sense of what they are willing to pay for a home. But even though things are moving fast, buyers should resist the urge to enter into bidding wars or pay prices they are uncomfortable with. We expect that the need for speed will abate in the near-term as mortgage-rates rise and more inventory is available because of new construction and declining negative equity," said Dr. Stan Humphries, Zillow chief economist.

Ashley R. Harris@dnews "Report: Homes Selling Faster Than Previous Year"  11/14/13

From dpsandiego.com editor at large Rocky Mountain.

LOCAL HOUSING MARKET COOLS OFF

As the San Diego housing market slowed in October, the median price of a home dropped $9,250 from September. It was the largest month-to-month decline in value since $16,000 from December 2012 to January 2013. The median value pegged at $412,750, up 17.4% from one year ago, according to DataQuick, a real estate tracker.

The median price is up 17.9% from $350,000 in October 2012. From June 2012 to June 2013 the gain was 24.1%. The highest county median price reached a peak of $517.500  in November 2009.

The number of transactions increased from September to October, the first since July there has been an increase. Activity was down 3.1 percent from one year ago when 3,622 home wee sold.

Average interest for 30-year fixed-rate loans was 4.28 % in October, according to Fannie Mae, down from 4.57% in September but considerably higher than the 3.37% available to borrowers in May.

Inventory was up In October with 6,848 listings in the county. The number of available properties has climbed steadily since January when there were  5.312 listings. Listings rose above 6,000 in August for the first time since that mark in July 2012.

The October numbers reflect those for the first time since the government shutdown and there appears to have been no major negative implications. It will take another month before there is a realistic measure of the impact of that episode.

JonathonHorn@utsandiego "County Housing Market Cools Off"  11/12/13

From dpsandiego.com editor at large Rocky Mountain.

SCRIPPS HOWARD SHUTS DOWN

The shift away from print media as a source of news has lead to the proposed shut down in January of the Scripps Howard News Service which has provided syndicated stories to the U.S. for 96 years. The McClatchy-Tribune Information Service will assume Scripps Howard clients.

The McClatchy group will be expanded to include the most popular Scripps Howard features and will help Cincinnati Scripps to commit more resources to Washington coverage and investigative journalism.

The Scripps Howard News Service supplied clients with Washington coverage and news from round the world, as well as photos, commentary and editorial cartoons. Wire services once thrived as there was nationwide demand throughout a very prosperous newspaper industry that had numerous publications in all major cities and multiple additions each day.

Today, internet new is relatively free and easily accessible. The newspapers that remain have consolidated, advertising income has declined and shrinking circulation has diluted the importance of the industry.

NickTurner@bloomberg.net  "Scripps Howard News Service Will Close Operations After 96 years" 11/12/13 

From dpsandiego.com editor at large Rocky Mountain.

OCTOBER MARKET AT STANDSTILL

Although there was improvement in home prices, purchases of new homes and sales of existing-homes, the overall economy and housing market remains fragile, according to the Obama administration October housing score card. Administration efforts continue to be work to stabilize the housing market and help responsible homeowners get back on their feet.

Home prices continue steady with slight growth in the Standard & Poor's Case-Shiller Home Index to 164.5 from 162.4 in September. One year ago it was 145.8.

New home sales continued slight growth, rising to  35,100 from 31,200 in September, compared with 31,700 in October 2012.

Existing-home inventory was virtually unchanged, edging up a tad to 4.9 month supply. The inventory of new homes for sale dropped to a 5 month supply from 5.2 during the previous month.

Foreclosure starts increased to 58,000 from 55,800.

Mortgage delinquency rates for prime borrowers remained at 3.3 percent

BrenaSwanson@housingwire  "Obama October Scorecard"  11/8/13

From dpsandiego.com editor at large Rocky Mountain.

NASSCO BOOMING

The need for shipping companies to replace older vessels has been reflected at NASSCO in San Diego as an order has been received for a new 610 feet long oil tanker that will be fuel efficient and feature the latest environmental protection technology. There is an option for a second tanker being considered. The tankers have a 350,000 barrel capacity.

The SEACOR contract is an addition to the work in progress at NASSCO being committed to major construction and repair wok for the U.S. Navy A keel for a mobile landing platform for the Navy and Marines was laid last week as a follow-up to two previously built. The contracts have earned over $1 billion for NASSCO.

The NASCO workforce is moving from a 20-year low of 3,100 workers to about 4,000 with assurance that the new contracts will sustain an extended period of employment.

NASSCO is he shipyard of choice for Jones Act tankers operating under legislation that has improved health, safety and employment conditions for merchant marines. This Act requires ships traveling between U.S. ports to be constructed by American companies and owned by U.S. companies or citizens. Crew members must be United States citizens or legal aliens.

GaryRobbins@utsandiego  "Tanker Contract Spurs Boom At NASSCO"  11/13/13

From dpsandiego.com editor at large Rocky Mountain.

A LOOK AHEAD

Existing-home sales activity should remain steady over the next year as prices continue to increase. Projected sales are anticipated to be up about 10% in 2013 to 5.13 million and hold steady at that volume in 2014. The national median existing-home price should end the year about 11% higher than 2012, reaching $197,000. Those were among the observations made by Lawrence Yun, chief economist of the National Association of Realtors at a recent conference of the group.

Over the past two years, existing-home sales have had a 20 percent cumulative growth accompanied by an 18 percent price increase. Income has risen somewhere between 2 and 4 percent.

For housing production, 917,000 starts are projected through the end of this year and carry forward to 1.13 million in 2014 falling short of demand for 1.5 million units.

New home sales are estimated to top the 429,000 level this year and reach 508,00 next year.

The NAR expects the top ten turn around markets in 2014 to be - Salt Lake City, Utah; Naples and Tampa, Florida; Boise, Idaho; Atlanta, Georgia; Houston, Texas; Charlotte,  North Carolina; Denver, Colorado; Seattle, Washington and Tucson, Arizona.

ToryBarringer@dsnews "NAR Chief Economist Reveals 2014 Predictions"  11/11/13

From dpsandiego.com editor at large Rocky Mountain.

LAND PRICES CURB CONSTRUCTION

Increasing costs of land upon which to build new homes has slowed that land market and builders are starting to balk at paying exorbitant prices for lots. Land typically accounts for 40 percent of the cost of building a new home. Lot prices have gone from a gain of of nearly 7% in the first quarter 2013 to 6% in the second quarter to 4% in the third quarter, according to a survey of land buyers and sellers by Zelman & Associates.

The new home market turned down as buyers became disenchanted by double-digit price increases and a 1 percentage point increase in interest rates between May and September.

Since 2011, investors have been bidding up the price of finished lots, which are home pads with infrastructure as utilities and sewer pipes in place ready for construction.

Lot prices have been volatile since early 2009 when prices for finished lots were 55% to 60% lower than their 2006 peak. Land prices have marched hand-in-hand with the rising prices of new homes. The average price of a new home reached an all-time high in April at $337,000. During the housing crisis, the average had fallen to as low as $245,000 in January 2009.

msnrealestate "Land Prices Hit The Brakes"  11/12/13

From dpsandiego.com editor at large Rocky Mountain.

EQUITY TROUBLE AHEAD

Billions of dollars in home equity lines of credit that were extended ten years ago during the housing boom carry "resets" requiring borrowers to begin paying both interest and principal on balances after ten years. The credit lines are secured mortgages with floating rates and flexible withdrawal terms. During the initial 10-year draw period, only interest payments are required. The difference between interest-only and reset payments can be as much as $500 to $600 per month. Those unable to handle higher payments could be subject to foreclosure, refinancing or loan modification.

Refinancing will become more difficult as stricter mortgage rules take place in January and the combined first and second mortgages may exceed the value of the home. Interest rates are likely to increase when the Federal Reserve tapers the purchase of Treasury and mortgage-backed securities.

Borrowers with negative equity, and one of every seven owners continue to be, and reset payments are unaffordable, the bank may not be able to foreclose because there is no equity to recover. Bank recourse is to sell the charged-off account to a collection agency or pursue for a deficiency judgment. The biggest negative of all is the credit score which could create problems for years.

Banks are aware of and planning ahead for the bulge in high-risk assets. They are willing to discuss reset-related problems and work toward possible solutions.

According to Federal financial regulators, about $30 billion in home equity lines are due for reset in 2014, $53 billion in 2015 and $118 billion in 2018.

KennethHarvey@nation's housing "Wave Of Equity Credit Resets Spells Trouble"  10/11/13

From dpsandiego.com editor at large Rocky Mountain.

SUBPRIME SPURS AUTO SALES

As the fifth year of the Federal Reserve stimulus program approaches and interest rates have been maintained at a low level, the market for subprime lending has accelerated especially as it has become easier for people with marginal credit history to buy cars. Car sales are on a pace for the best sales year since 2007 and reach as many as 16.1 million. From 2000-2007, sales were at the 16.8 million level.

Surging light truck and vehicle sales have been a recent bright spot as the economy recovers, spurred by buyers with less than perfect credit. Such buyers represent 27% of loans for new vehicles.

Questionable loans on vehicles are relatively safe because the asset can be evaluated accurately, easy to repossess and is an essential necessity for those needing transport to work causing them to prioritize regular payments.

Loans taken to buy new vehicles usually entail higher than above average interest rates of 4.2 percent. Dodge, for example. charge an annual percentage rate [APR] of 7.4% and of their loans 23% had APRs of more than 10%. In the market, Dodge had highest percentage of loans of more than 10% followed by Chrysler and Mitsubishi. Dodge sales rose 17% through October.

Loan payments on subprime auto loans remain under control, declining as little as 2.83 percent in August as compared with 13.3 percent in 2009, according to a Standard & Poor's report. The Federal Reserve Bank of New York reports it has seen no disproportionate or unusual volume of new loans going to riskier borrowers.

SarahMulholland/TimHiggins@bloombergnews "Subprime Buyers Rev Up Auto Sales" 11/10/13

From dpsandiego.com editor at large Rocky Mountain.

HOUSING ROLE SHOULD CONTINUE

A recent Zillow poll of 108 economists, investment and market strategists and real estate experts reveals that ideally the government should back up to about 35 percent of all new mortgages. Presently, the government guarantees about 90 percent of all mortgages. The last time the government held a 35 percent share of new originations was in 2006.

The opinions were widespread that the government majority share should be scaled back. about 58.4 percent said the government should continue to play a significant, some what significant or very significant role in the housing market. Eight percent said the government should exit the housing market completely.

Analysts generally expect price growth to slow but not stagnate over the next few years a price growth of 8.3% is expected for 2013, a 4.3% rise in price in 2014 and settle at an annual rate 3.4% increase. Prices should exceed their May 2007 peak by 2018.

Government discussions in reforming the nation's housing finance system are on-going but there is no real consensus as to what the market will be to any new proposals.

KristaFranksBrock@dsnews "Analysts Say Government Should Continue Significant Role In Housing" 11/8/13

From dpsandiego.com editor at large Rocky Mountain.

UNEMPLOYMENT INCHES UPWARD

Even though 204.000 jobs were added in October, the unemployment rate increased to 7.3 percent from 7.2 percent as there was an exodus in the work force as many just gave up looking for a job. About one-third of the nation's unemployed have been out of a job for six months or more - 720,000 left the work force in October. The overall work reached its lowest level in 35 years.

The average length of employment has come down from a peak of 41 months and there is concern that may workers have lost skills and job connections that could help them find new work. There is a shift taking place in the economy as employers aim toward hiring more skilled labor. Nearly 11 percent of workers without a high school diploma were unemployed last month, compared with 4 percent of college graduates. There is a need for expanded worker training programs to ensure that businesses have a pool of skilled workers to fill open positions.

In October, retailers added 44 jobs, many at restaurants and bars, hospitality hired a net 53,000 while the manufacturing sector increase by 19,000.

Ylan Q. Mui@thewashington post "U.S. Economy Adds 204K Jobs In Oct"

From dpsandiego.com editor at large Rocky Mountain.

MORTGAGE RATES TICK UPWARD

In the aftermath of the 16-day government shutdown, the economy has resumed its recovery and shown sufficient improvement to put a small boost to mortgage rates. The Freddie Mac Primary Mortgage Market Survey for the week ending November 7 shows the 30-year, fixed-rate mortgage [FRM] increased to 4.16 percent [0.8 point] from 4.10 percent. One year ago the 30-year FRM was 3.40 percent. The 15-year FRM is now at an average 3.27 percent [0.7 point], an increase from 3.20 percent.

Adjustable rates were stalled or down slightly. The 5-year Treasury-indexed ARM is now at an average 2.96 [0.5 point] unchanged as the 1-year ARM is at 2.61 percent [0.5 point] down from 2.64 percent.

The mortgage rate structure indicates the shut down had no serious repercussions to the economy. Manufacturing production expanded for the 5th consecutive month to its strongest pace since April 2011. The non-manufacturing sector grew for the second  straight month in October, topping expert analytical projections of a decline.

ToryBarringer@dsnews "Mortgage Rates Reverse Trend, Heading Higher"  11/7/13

From dpsandiego.com editor at large Rocky Mountain.

FHA AID FOR OLDER HOMES

Nearly two-thirds [71 percent] of homes in the U.S. were built before 1990 and provide an opportunity for buyers looming for a bargain as well as looking to update and improve the value of their property. In the market place there is less competition from other buyers and reduced points.

The FHA has a 203[k] program to help owner-occupied buyers to finance the purchase, rehab and upgrade an older home while taking advantage of rolling minor or major costs in to a refinance.

Disbursement of fund schedules, inspections and required paperwork are determined by the lender to conform with FHA guidelines. Restorations must begin within 30 days of a loan closing and be completed within a time frame established in the agreement not to exceed six months.

Long-time homeowners can finance into a  lower rate even if the home needs major upgrades and as long as the property is not in default and has at least 5% equity.

A RealtyTrac study reveals that homes sold this year which were built before 1990 sold at an average price of $233,221, while homes built in 1990 or later sold at an average price of $256,292, a 9% increase.

Sales of homes to institutional entities that have bought more than 10 or homes during the past year, favor newer homes, often as much as 50 percent in some markets.

CarrieBay@dsnews  "FHA Program Offers Financing Solution For Stock Of Aging Homes"

From dpsandiego.com editor at large Rocky Mountain.

VETERANS SMALL BUSINESS WEEK

Veterans were spotlighted this week as the Small Business Administration called attention to the need of former military veterans to have the tools and money they need to start and grow a business. Veterans are 45 percent more likely to be self-employed than those with active-military service. The aim of the SBA is to make sure veterans are familiar with what programs and resources are available.

The Small Business Administration provides on-going counseling training and special programs and in fiscal 2013 supported $1.86 billion in loans for more than 3,000 veteran owned small businesses. Since 2009, that support level has nearly doubled.

Veterans own nearly one in ten of the small businesses in the country, employing almost 6 million people and generating more than $1 trillion in receipts. In San Diego, veterans make up almost 11 percent of the county-wide population.

SCOPE San Diego offers its workshops free to active military veterans within one year of being discharged or if pre-registered more than two days before a class.  Information is available at  sandiego.score.org/local workshops.

KatherinePoythress@utsandiego "SBA Focuses On Veterans This Week"   11/6/13

From dpsandiego.com editor at large Rocky Mountain.

WATT NOMINATION STALLS

The proposed nomination of Mel Watt, D-North Carolina, has been dimmed for the time being by a Senate vote of 56-42 to end debate over his confirmation. Senate rules require 60 votes to invoke cloture and end debate. Watt proponents say he supports stronger consumer protection and greater assistance than now given to at-risk home owners by the Federal Housing Finance Agency [FHFA].

The agency has been led since August 2009 by Edmund DeMarco, serving as the acting director. His supporters say he protects taxpayers and pursues policies that promote a healthy housing economy and should officially become the director. DeMarco has generated strong criticism from Democrats and consumer advocates who say he has not one far enough  in helping distressed homeowners. He has been strongly opposed to principal forgiveness which he believes would be too costly to taxpayers.

In the past, Watt has favored principal reductions for his constituents. He likely would not lower limits at Freddie Mac and Fannie Mae or make aggressive changes in their multi-family lending programs.

Watt, along with all other Representatives, is up for re-election in 2014. It is not known what direction he will take should the pending nomination not work out.

ToryBarringer@dsnews "FHFA Still Piloted By 'Acting Head' As Watt Vote Blocked" 10/31/13

From dpsandiego.com editor at large Rocky Mountain.

BIG YEAR FOR CHICKEN

The commercial urge to "eat mor chikin" is taking place. The largest-ever corn crop harvest is driving poultry farmers to expand chicken production and reduce costs in the pipeline to major buyers as Costco Wholesale, McDonald's, KFC, Burger King, and Wendy's.

Chicken companies increased egg production in 6 of the first 7 months this year. Processors are earning 5 cents a pound compared with losses of 4 to 5 cents last year. The wholesale price for broilers [young chicks suitable for cooking] will average 98 cents to $1.00 per pound this year, as much as 15 percent more than in 2012. Projections are that per pound prices prices could drop as low as 92 cents.

Processors slaughtered 705.7 million chickens in September, an increase of 4.5 percent. Birds weighed an average 5.95 pounds. Wholesale chickens averaged $1.528 cents per pound at grocery stores in September while boneless round steaks averaged $4.874 per pound.

There was an average of 345.5 million egg laying hens in September, an increase of 4.5 percent over 2012. Production of meat from broilers will approach 37.708 billion pounds this year and 38.75 billion pounds in 2014.

Feed, including corn, makes up 68 percent of the cost of raising a live bird, compared to 72 percent for hogs and 85 percent for cattle. It takes as few as six to ten weeks from the time an egg is laid until the bird enters the processing plant. Boosting output takes about one year for hogs and three years for cattle.

ElizabethCampbell/DaltonBarker@blombergnews "Plump Year For Chicken"  11/5/13

From dpsandiego.com editor at large Rocky Mountain.

HOME PRICES REGAIN STRENGTH

After a short lull in the summer, home prices gathered strength in September and spread across the country on a monthly, quarterly and yearly basis, according to the DataQuick Property Intelligence Report. For the year, with the exception of July and August, home price growth has been consistently positive for the past 12 to 18 months, will all of the reporting markets seeing growth exceeding their long-term average.

Some implications for housing to look for include an increase in home price listings and overall sales as homeowners with negative equity are moved to positive equity, a decrease in foreclosures as homeowners have the equity to sell and avoid default, and  an increase in demand for home equity lines of credit as borrowers look to tap into increased equity lines from home price growth. There will be continued single-family demand for rentals, driven by decreases in home affordability.

In the past, moderate economical fundamentals have supported long-term home price growth rates of  three to four percent. The current economic driver in the 42 counties reporting in this survey is roughly 16 percent.

ToryBarringer@dsnews "Home Price Increases Widen In September, Sales Weaken" 11/3/13

From dpsandiego.com editor at large Rocky Mountain.

NEW TAX RATES SET

For next year, the top taxable rate of 39.6% will apply to married couples exceeding $457,600, up 1.7% from 2013. The top rate for individuals will start at $406,750, up from $400,000. Taxpayers will start having taxes withheld in January for the 2014 tax year and for filing in 2015.

The per-person standard deduction will encompass modest increases to $6,200 from $6,100 and the personal exemption will be $3,950, up from $3,900.

Inflation for 2013 has not been enough to make increases in some thresholds. The $1,000 childhood credit and the ordinary income deduction for capital losses are not tied to inflation.

The start of tax filing has been delayed until January 28, citing the 16-day government shutdown as the cause. Returns for 2013 will be accepted starting on that date. The change will not affect the April 15, 2014 deadline for filing or seeking extensions.

Bloombergnews "IRS: Top Tax Rate Starts At $457,600 Next Year"  11/4/13

From dpsandiego.com editor at large Rocky Mountain.

WELLS FARGO GIVES BACK

Wells Fargo has a Leading the Way community outreach program aimed at providing financial assistance through grants to non-profits actively involved and experienced in community revitalization efforts. The program has announced it will donate $6 million among 63 non-profits across the nation in areas designated for revitalization.

Projects are approved by the Wells Fargo Foundation to provide additional resources in support of large-scale neighborhood projects.  Grants can be used for any costs associated with the development or redevelopment of the project but recipients must be IRS501c3 organizations with successful histories of building or renovating housing for low-to-moderate income home buyers.

"Wells Fargo is bringing much needed support to non-profits in communities to help them grow and thrive. We believe the work of the non-profit community is a critical conduit to revitalize neighborhoods in cities that have been impacted by the economy," said Kimberly Jackson, executive director of the Wells Fargo Foundation.

Of the 63 designated projects receiving grants, 11 are in California.

Ashley R. Harris@dsnews "Wells Fargo Gives Back To Community Groups Dedicated To Recovery" 11/1/13

From dpsandiego.com editor at large Rocky Mountain.

U-T BUYS COMMUNITY NEWSPAPERS

U-T San Diego is closing the purchase of eight San Diego County community newspapers from Main Street Communications. The papers have a combined circulation of 99,431 copies. They will operate under a new U-T division called the U-T Community Press. The move is to expand local news coverage for the counties largest communities. The sales price was not revealed.

Main Street Communications acquired the San Diego Union-Tribune [now the U-T] in November 2011. In October 2012, they purchased the North County Times from Lee Enterprises for $11.95 million and it was merged into the U-T. The new additions will continue to be independently operated.

The papers are the La Jolla Light, Del MarTimes, Ranch Santa Fe Review, Solano Beach Sun, Rancho Bernardo & 4S Ranch News, Poway NewsChieftan, Carmel Valley News and the Ramona Sentinel.

JonathonHorn@utsandiego "U-T Buying Eight Local Community Newspapers"  11/2/13

From dpsandiego.com editor at large Rocky Mountain.

BENEFITS TO GO UP 1.5 PERCENT

As expected, the increase in Social Security benefits for 2014 will be among the smallest since automatic annual adjustments were adopted in 1975. The new benefit will be pegged at 1.5% and provide an annual raise of $19.00 per month to keep up with the rising cost of living [COLA]. Consumer prices have not gone up much during the year, based upon a government measure of inflation released October 30.

The COLA benefits affect more than 58 million people, one-fifth of whom are Social Security recipients, as well as disabled military veterans, federal retirees and those receiving Supplemental Security Income, the disability program for the poor.

The amount of wages subject to Social Security tax also is increasing. Social Security is funded by a 12.4% tax on the first $113,700 earned by a worker with one-half paid by the employer and one-half withheld from a worker's pay. The new threshold will be $117,000.

Supporters of aid for older Americans complain that the COLA falls short, especially for  those with high medical costs.

Stephen Ohlemacher@assocpress  "Social Security Benefits To Increase 1.5% in 2014" 10/31/13

From dpsandiego.com editor at large Rocky Mountain.

STUDENT AID COMING

Help is on the way in the University of California system to provide $5 million for special counseling and financial assistance for students living in the U.S. illegally. An additional $10 million has been pledged for recruiting and training graduate students and research fellows. The funds will not come from tuition or the university state-funded operating budget. It will be drawn from reserves in system accounts used to help finance faculty mortgages and campus efficiency projects.

Out of a total student population of 239,000 in the UC System, about 900 students were brought to this country illegally as children. As part of a bill signed by Governor Brown earlier this year, students who are not legal residents and ineligible for most types of federal financial aid are allowed to apply for state grants and scholarships.

This is the first major policy of Janet Napolitano who was appointed President of the UC System in July. It alleviates concerns of campus activists who worried she would be hostile to such immigrants because of her background in Washington and as former Governor of Arizona.

assocpress "Napolitano Pledges $5M To Aid Students In U.S. Illegally"  10/31-13

From dpsandiego.com editor at large Rocky Mountain.

COUNTY CAR SALES ACTIVE

Automobile dealers in San Diego County are having a banner year. Through September, 104,376 new cars and light trucks had been sold. Sales are on a ace to sell 140,000 by the end of the year. That would be the best sales volume since 2006 when 146,066 new vehicles were sold.

On an annual basis the sales progression has shown a steady climb in new vehicle sales since the  market bottomed out at 77,707 in 2009. Sales jumped 27.5% from 99,255 2011 to 126,570 in 2012 as the nation was recovering from the recession. This pace is expected to slow to 10.6 percent by the end of the year and to 7.6 percent in 2014 as pent-up demand slackens as older model cars have been replaced. A forecast of 150,000 new car and light truck sales in 2014 would top the 2006 level.

In terms of vehicle choice, Toyota led the San Diego market share at 20.6 percent in the third quarter, up slightly from 20.4 percent in 2012. Honda is second with 11.9 percent an Ford had 11 percent.

The used-car market experienced a sales decline of 5.9 percent through the third quarter as 195,960 previously-owned car were purchased. The Toyota Camry is the best-selling used car less than 2 years old. The Toyota Carolla leads the market for cars that are 3 and 4 years old.

JonathonHorn@utsandiego "SD Vehicle Sales Zoom To Pre-Recession Pace"  10/30/13

From dpsandiego.com editor at large Rocky Mountain.

OBAMA APPROVAL RATING DROPS

The approval rating of President Obama has fallen to an all-time low as frustration from the public over the  direction the government is moving continues to mount. The Obama job performance received 42% approval, down 5 points from earlier this month. Fifty-one percent voiced disapproval of his job in office, tied for his all-time high.

No single reason explains the negativity but there has been a series of setbacks since summer - alleged spying by the National Security Agency, debate over Syria's chemical weapons, government shutdown and now intense scrutiny over problems associated with the health care law federal website and its implementation.

Politicians in general are looked upon with disfavor and top leaders in both houses of Congress are unpopular. By a 41% to 21% margin, poll respondents have a less favorable impression after the shutdown than a more favorable one. Seventy-four percent of voters believe Congress is contributing to rather than solving problems in Washington. Twenty-two percent think the nation is headed in the right direction. Half of the respondents think it is likely there will be anther government shutdown.

Sixty-three percent of voters want to replace their own member of Congress, which is the highest percentage ever recorded to this poll question, dating back to 1992.

The poll conducted by NBC News and the Wall Street Journal between October 28-30 interviewed 800 adults, including 240 cell-phone only respondents, has an overall margin of error of plus-or-minus 3.5 percentage points.

MarkMurray@NBCnews "NBC/WSJ poll: Obama Approval Sinks To New Low"   10/30/13

From dpsandiego.com editor at large Rocky Mountain.

FEDERAL RESERVE TO KEEP STIMULUS

As the U.S. economy continues to be soft, the Federal Reserve announced in its most meeting that it will continue the $85 billion per month bond purchase. Following the recent 16-day government shutdown, the recovery in the housing market has lost its momentum. There is comfort at the Fed about maintaining the current level of interest rates.

The political fight that triggered the shutdown has shaken consumer and business confidence. Data on hiring, factory output an home sales in September suggested the economy had started a slowdown even before the government shutdown. In October,U.S. private sector employers hired the fewest number of workers in six months.

The Fed had stated previously that the unemployment level must drop below 6.5 percent and inflation rise above 2.5 percent before there is any movement to pare the program. The intent is to keep interest rates low. October 30 data showed inflation over the past 12 months has been 1.2% which is well below the target.

Pedro da Costa/AlisterBull "Fed Maintains Strong Stimulus As U.S Growth Stumbles"

From dpsandiego.com editor at large Rocky Mountain.

IMMIGRANTS SURVIVED RECESSION WELL

A recent study by the University of Southern California Lusk Center for Real Estate reports that Asian and Latino homeowners were more successful in holding onto their homes during he recession than were native born home owners. Most all homeowners took an economic hit of some kind but the damage was much less for immigrants, In fact, in some metropolitan areas there was no decline at all among the immigration population.

A number of demographic patterns occurred. There were fewer immigrants coming into the country. Those that were here were mature and settled and it was likely that new arrivals were renters. Immigrants always have been mobile and able to move to areas hit the least by the recession. New immigrants were less likely to have been exposed to to the abuses of subprime mortgage lending.

Gary Painter, research director at Lusk Center, has analyzed the immigrant population and its relationship to the U.S. economy for 15 years. He projects the majority of population growth over the next 40 years to be 40 million people, mostly immigrants.

For this study, data from Census Bureau's American Community Survey was used. The authors reviewed the top 20 cities in terms of immigrant population plus an additional  60 cities representing a cross section of smaller metropolitan areas. Also included was home foreclosure records from the Federal Reserve.

CarrieBay@dsnews "Study: Immigrants Fared Better Than Native  Homeowners During Recession" 10/29/13

From dpsandiego.com editor at large Rocky Mountain.

SLOW SALES QUARTER PROJECTED

The National Association of Realtors Pending Home Sales Index [PHSI] for September indicates a decline in home sales for the final quarter of the year. The PHSI, a forward-looking indicator based upon contract signings but not closings, fell 5.6 percent for the fourth straight month with a reading of 107.6. On a year-over-year basis, the September Index was down to 102.8, the first yearly decline in 29 months and its lowest level since a December 2012 reading of 101.3.

The realtor association expect existing home sales for 2013 to be 10 percent higher than 2012, totaling more than 5.1 million units. The national median existing-home price is expected to rise to 11%-11.5% this year followed by a 5% to 6% gain in 2014.

"Declining housing affordability conditions are responsible for the bulk of the reduced contract activity. Government and contract workers were sidelined with growing insecurity over lawmakers' inability to agree on a budget curbing major expenditures as home purchases. This tells us to expect lower home sales in the fourth quarter, with a flat trend going into 2014," said Lawrence Yun, chief economist at NAR.

On a monthly basis, all four geographic regions showed a decline in PHSI values. The Northeast led the drop at 9.6%, the West 9%, the Midwest 83% and the South 0,4%.

On an annual basis, the PHSI for the Northeast and West both fell, decreasing 6.4% and 9.8%, respectively. In the Midwest and South the readings were 5.7% and 2.0% above September 2012.

ToryBarringer@dsnews "Slow Quarter Ahead Judging From Pending Home Sales"10/28/13

From dpsandiego.com editor at large Rocky Mountain.

INVESTOR HOME PURCHASES SOAR

A new report from RealtyTrac reveals that investors since 2011 have purchased more than 950,000 homes, with 370,000 having been made so far this year, surpassing the number of purchases made in the past two years. In total, the investments have been $1 trillion. The data is from RealtyTrac's first Investor Insight released October 28 and labeled Real Estate Investor Purchase and Finance Patterns: 201i to 2013.

The characteristics showed differences in buying activity between smaller and larger investors.

More than 50 percent of investor buys were all cash and that percentage increases when considering investor entities that have bought at least 1,000 homes since 2011.

Overall, over 50 percent of investor purchases  were negative equity properties but not in foreclosure, compared with 37 percent of home bought by investors that bought at least 1,000 properties.

Large investors purchased more homes in foreclosure - 54% compared to 37%. Twenty percent of all investor purchases were regular equity sales.

In recent years, 57 percent of investor purchases have been resold but currently the larger investors are holding onto their properties. Among investors that have bought 100 properties or more the resold rate drops to 25 percent as compared to a meager 1 percent for purchasers of 1000 or more properties.

KristaFranksBrock@dsnews "Investor Home Purchases Total $1 Trillion Since 2011" 10/28/13

From dpsandiego.com editor at large Rocky Mountain.

BANKS NEED TO INCREASE ASSETS

The Federal Reserve is proposing that big banks maintain enough cash, government bonds and other high quality assets to enable survival should a financial crisis occur in magnitude of the 2008 crisis. This is the first time the Reserve would subject banks to liquidity regulations to access cash quickly.

Banks with assets of more than $250 billion would be required to have sufficient assets and securities to fund their operations for 30 days during a period of market stress. Banks with more than $50 billion but less than $250 billion would need to have enough to cover 21 days.

The largest banks would need to hold an estimated $2 trillion to meet that obligation. They already have 90 percent of that, according to the Federal Reserve

The public will be given 90 days to comment on the proposal after which the rules will be phased in beginning in January 2015. The proposal has the unanimous consent of the six-member Federal Reserve Board of Governors.

During the financial crisis, hundreds of U.S. banks received financial bailouts, including Bank of America, JPMorgan Chase, Goldman Sachs, Citigroup and Well Fargo. The industry has recovered steadily with profits rising and banks starting to loosen lending standards.

MaryGordon@assocpress "Fed Proposes Banks Hold More Liquid Assets"  10/25/13

From dpsandiego.com editor at large Rocky Mountain.

CATTLE RUSTLERS ARE ACTIVE

With cattle prices as much as $1,000 per steer, rustling in California has been increasing. The California Bureau of Livestock Identification reports 1,317 head of cattle were stolen or reported missing in 2012, a 22 percent increase from pre-recession numbers.

In the state, there has been no fixed set of fines for cattle rustling but a recent law to become effective after January 1, 2014 establishes fines up to $5,000 and rules the crime to be a felony.

There are about 3 million head of cattle in California, most of them dairy cows. About 575,000 roam the range with identification being only a brand. In 2012, the ID Bureau returned cattle worth $1.4 million to owners. That number is said to be under reported. In most cases, the only way to establish ownership is through a brand.

The increase in cattle theft is part of a national trend. Last year more than 10,400 cattle and horses were reported stolen or missing to the Southwestern Cattle Raisers Association, a 36 percent jump from 2010.

Rustlers can load a livestock trailer and be in another state in a matter of hours. With unbranded livestock, rustlers realize immediate full value in the market place.

assocpress "Cattle Rustling Up In California"  20/28/13 

From dpsandiego.com editor at large Rocky Mountain.

HOUSING WRITE-OFFS SEEM SECURE

A positive for tax-sensitive home owners has emerged from the 16-day federal shut down. Chances are remote that Congress is going to authorize any fundamental tax reforms this year and maybe even unlikely next year. The mortgage interest deduction, local property tax write-offs, second home deductions and capital gains exclusions are safe pending further action.

In both the House and Senate far-reaching major legislation is being prepared to address tax reform with a wide variation that will generate new net revenue without tax increases.

The current write-off structure costs the Treasury abut $30 billion a year. The mortgage interest deduction costs the government more than twice as much in tax revenue, about $70 billion a year. Only people who itemize their federal returns, a minority of all tax payers, can claim deductions.

All 435 members of the House of Representatives are up for election in 2014 and with discord among all caucuses on key issues it is expected very little is going to be done with tax reform affecting real estate.

KennethHarney@nationshousing "Housing Write-Offs Appear To Be Safe"  10/27/13

From dpsandiego.com editor at large Rocky Mountain.

INTEREST RATES DROP

As U.S. interest rates on fixed mortgages fell to a four-month low on top of a weak jobs report, investors moved to the security of government bonds. Mortgage rates have dipped after signals in August that the Federal Reserve needed to see more improvement in the economy before scaling back its stimulus program aimed at maintaining lower borrowing costs.

Yield from 10-year Treasuries are a benchmark for home loans and dropped to a 3-month low in the week ending October 25 as a report showed the increase in U.S. payrolls was well below economic predictions.

Purchases of existing homes dropped 1.9 percent in September from a near four-year high as rising prices and mortgage rates had created an air of caution among would-be buyers. Home affordability was at a near five-year low with an 11.7 percent increase in the median price from one year ago.

Average rate for a 30-year fixed dropped to 4.13% in week ending October 25, down from 4.28%. The average 15-year fixed fell to 3.24% from 3.33% with both averages being the lowest since the end of the second quarter.

PrashantGobal@bloombergnews "Positive Sign For Housing"  10/25/13

From dpsandiego.com editor at large Rocky Mountain.

GAS PRICES CONTINUE DECLINE

The yo-yo at the gas pump has become positive as per gallon prices have fallen for five consecutive weeks. A gallon was at $3.78, down 5 cents for the week ending October 26, nearly $1.00 per gallon below the peak of $4.70 in October 2012, according to data from the Automobile Club of Southern California.

Production problems at California refineries earlier in the year have been fixed after the unplanned outages had put a severe pinch on available supply. That has been reversed. Barring any unforeseen problems the price should continue to decline the balance of the year. Supply is plentiful in California as well as across the country. Gains in fuel economy is expected to keep gasoline consumption drifting lower.

The increase in supply from California refiners has prompted exporting gas to other markets, including foreign. A recent cut in foreign demand has left refinery tanks with more than an adequate supply. There has been an increase in demand for export of diesel fuel, the price of which also has fallen for five straight weeks. In San Diego, diesel fuel was $4.17 per gallon this week.

DanMcSwain@utsandiego "Cheaper Gas Trend On Fifth Week"  10/27/13

From dpsandiego.com editor at large Rocky Mountain.

EXISTING-HOME SALES SLIP

After peaking from a four-year high, sales of existing-homes dropped in September being hampered by limited inventory, higher interest rates and a cautious consumer. Sales fell to an annualized rate of a revised 5.29 million. The sales pace of single-family homes, town homes, condominiums and cooperatives fell 1.9 percent. The September numbers are still 10.7 percent above the 4.78 million pace of September 2012. A market shift from distressed to conventional sales [excluding distressed properties] was up 25 percent year-over-year.

Distressed sales, including foreclosures and short sales, accounted for 14 percent of September sales, an increase of 1 percent over August.

First-time buyers made up 28 percent of September purchases, unchanged from August but falling from a recorded 32 percent in September 2012.

The national median existing-home price for all housing types reached $199,000 in September, an increase of 11.7 over same period 2012, making the 10th consecutive month of double-digit year-over-year increases.

The median time on the market for all homes was 50 days in September, an increase from 43 days in August but improved over the 70 days in September 2012.

BrenaSwanson@housingwire "Existing-Home Sales Slip From Four-Year High" 10/21/13

From dpsandiego.com editor at large Rocky Mountain.

BANK OF AMERICA CUTS JOBS

Bank of America has cut 1,200 t0 1,300 more jobs in its mortgage-related divisions as refinance activity has slowed down and there has been improvement in the portfolio of delinquent home loans. The bank will be eliminating an additional mortgaging jobs by the end of the year. More than 9,000 full-time employees have been laid off in the third quarter.

The employees are from divisions that handle processing new mortgages and servicing home loans past due.

Bank of America earned $22.6 billion from home loans in the third quarter, down  from 11 percent in the previous quarter. The number of mortgage applications received but not processed fell 60 percent from end of June to end of September. Loans that were delinquent by more than 60 days fell from 94,000 to 398,000 during the quarter.

Well Fargo also announced it was cutting 925 jobs on top of 5,300 jobs of mortgage servicing employees who were dismissed in the third quarter.

PeterRudegeiar@msnmoney "Bank of America Eliminates Up To 1,300 Mortgage Jobs" 10/14/13

From dpsandiego.com editor at large Rocky Mountain.

DISTRESSED HOUSING IMPROVES

Distressed housing in Southern California continues to diminish as foreclosures dipped to 7-year lows in the third quarter. Foreclosures were down 18.1 percent from the second quarter to 4.009 and defaults were off 20.7 percent to 11,444, according to DataQuick. For all of California, the foreclosure level was the lowest since the first quarter of 2006. In San Diego County, the figures for both foreclosures and defaults for September was the lowest since September 2007 when it stood at 13.3 percent.

Other DataQuick data reports the median price for a California home was $360,000 in the third quarter, up 4 percent from the previous quarter and 26.3 percent from the third quarter 2012 when it was $285,000.

RogerShowley@utsandiego "Housing Distress Drops In SOCAL"  10/23/13

From dpsandiego.com editor at large Rocky Mountain.

TAX-FILING START DELAYED

The scheduled start of the tax-filing season has been delayed one week by the IRS and pushed to January 28, 2014 when returns for 2013 will be accepted. The IRS furloughed more than 90 percent of its employees during the government shutdown and wants to make sure that all of the intricate systems in the process are working properly.

To start each filing season, IRS issues refunds as quickly as possible to the early filers. This year the IRS issued $135 billion in refunds from January 30 to March 1. That was    more than the agency disbursed from March 2 to May 10, a period when 50 percent more returns were received.

This year the U.S. debt limit is suspended through February 7 and changes in spending will affect how long the projected Treasury Department measures to prevent default will continue. The delay will probably create a backlog of potential returns for those filing early rather than delaying all returns equally.

The Bipartisan Policy Center projects the U.S. will run out of borrowing authority between the end of February and mid-March 2014.

RichardRubin@bloombergnews "IRS To Delay Start of Tax-Filing Season"  10/23/13

From dpsandiego.com editor at large Rocky Mountain.

HOME PRICES AT HIGH LEVEL

The housing market continues to sustain momentum as September sale prices edged up for the 19th consecutive month. Over the year home prices have risen 8.5 percent and sit 9.4 percent below April 2007 levels and equal to April 2005 levels, according to the Federal Housing Finance Agency [FHFA]. The increase in prices has been a boost to homeowners escaping from negative equity and bringing consumer confidence back to the market place.

For the nine FHFA divisions, the monthly price changes were the highest in the Pacific, up 18.2 percent. Middle Atlantic reported values up 4 percent and the Mountain division increased 1.3 percent. South Atlantic division was the only region with a weaker price value with a decline of 0.9 percent for the month.

The FHFA Home Price Index is based on monthly price data from Freddie Mac and Fannie Mae.

Christina Mlynski@housingwire "Home Prices Hit 19-Month Stride" 10/23/13

From dpsandiego.com editor at large Rocky Mountain.

CHASE DONATES HOMES

In 2009, JPMorgan Chase initiated a Community Revitalization Program to help customers and communities cope with the housing crisis. The program has since donated or sold more more than 5,300 properties to nonprofit organizations valued at more than $250 million. The number equates to about three properties each day.

In 2011, Chase pledged to award 1,000 free mortgages to military families by 2016. Since then over 600 mortgage-free homes have been awarded, with value of more than $62 million. The donations have helped rehabilitate communities, spur job growth and provide housing for thousands of low-to-moderate income families.

More than 450 organizations participate in Chase programs before donating, reselling or retaining for future use. Chase continues an ongoing follow-up program of post-renovation, property inspections, tracking title filings and insuring that homes are sold within program guidelines.

Chase has had a long history and commitment to helping build vibrant communities through a variety of corporate-wide programs.

ToryBarringer@dsnews  "Chase Hits Major Milestone In Home Donations" 10/21/13

From dpsandiego.com editor at large Rocky Mountain.

JOB MARKET STALLS

Employment numbers were relatively stable in September as only 148,000 jobs were added to payrolls and the unemployment rate was recorded as 7.3 percent by he Labor Department. The number of unemployed stayed consistent at 11.3 million even though falling 522,000 since June.

Adult men had an unemployment rate of 7.1 percent, adult women a rate of 6.2 percent and teenagers were at 21.4 percent.

Analysts are optimistic that following in the wake of the government shutdown, the labor market will turn around and show marked improvement.

KerriAnnPanchuk@dsnews  "Nation Added Only 148,000 Jobs In September"  10/22/13

From dpsandiego.com editor at large Rocky Mountain.

HOME FLIPPING PROFITABLE

The third quarter of the year was busy and profitable for high-end home flipping. Profit to investors averaged $48,893 driven by sale increases of homes selling for $750,000 or more. The flipping was concentrated in four California markets and the New York metropolitan area. Three-fourths of the high-end flips were in New York, Los Angeles, San Francisco, San Jose and San Diego, according to RealtyTrac, an industry data tracker..

A home flip is defined as the purchase of a property that is resold within six months, usually netting a profit.

In Los Angeles, 2,116 homes were flipped with an average gross profit of $127,634. In New York, there were 2,075 flips, averaging $72,222 gross profit.

In total, the RealtyTrac Home Flipping Report of October 17 revealed that 32,993 single-family home flips were made in the third quarter. At the high-end, 968 homes were flipped, down 13 percent from the second quarter but up 34 percent from the same quarter one year ago.

"Increasing home prices over the past 18 months combined with decreasing numbers of foreclosures has created a market less favorable to the high quantity of middle-to-low and bread-and-butter flips that we saw in late 2012 and early 2013. The average gross profit on a high-end flip equals more than four times that of flips in the lower price ranges," said Daren Blomquist, vice president, RealtyTrac.

CarrieeBay@dsnews "High-End Home Flipping On The Rise"  10/17/13

From dpsandiego.com editor at large Rocky Mountain.

FOOD STAMP BENEFITS REDUCED

Millions of American recipients food stamps are facing reduction in the benefits in November. The current food stamp plan, now called the Supplemental Nutritional Assistance Program [SNAP], is scheduled to scale back benefits for all recipients on November 1 as a recession-era boost to the program is expiring. The size of the program has grown in recent years amid a weak economy and high unemployment.

The program now serves more than 23 million households or nearly 48 million people. The U.S. Department of Agriculture says the average monthly benefit is about $275 per household.  The exact reduction will depend upon individual situations but a family of four with no other change in circumstances will receive $36 less per month.

In real dollars, the cuts bring the program's aid level back in line with where they were in the mid-2000s, before benefits were boosted as part of the American Reinvestment and Recovery Act.

There is concern over debate in Congress as to whether if and how much the SNAP program will be cut in the future. The House passed a bill in mid-September that would eliminate $39 billion from the SNAP budget over 10 years. The Senate has approved a bill making the cuts much smaller.

AllisonLinn@cnbcnews "Food Stamp Benefits Going Down Before The Holidays" 10/21/13

From dpsandiego.com editor at large Rocky Mountain.

AUTO SALES SHIFT GEARS

Automobile sales have tapered off in some markets as dealers place blame on the impasse in Congress as having shaken customer confidence and backing of from making a big commitment. The August sales pace was robust and a slow down became evident during September. Sales had been at an annual rate of 15.5 million up from 14.4 million posted for 2012 and getting back to pre-recession levels. In the first week in October, sales had at a rate of 15.6 million units but the rate slipped to 15.3 million.

Now that the governmental gridlock has ended there appears to be an end to any major disruption to the industry. The authority of the Treasury to continue to borrow through February 7 should restore consumer confidence and sales should regain momentum over the balance of the year.

Hyandai sales data suggests about a 10 percent drop in October from September but then a return to a rate of 15.2 or 15.3 million for the entire month.

Automobile sales have been a bright spot in the U.S. economy for the past four years, steadily increasing sales from a 30-year low of 10.4 million in 200.

TomKrisher@assocpress "Auto Sales Decline"  10/18/13

From dpsandiego.com editor at large Rocky Mountain.

CA HOME SALES BOOMING

Home sale activity in California in September reached levels not seen since the financial crisis. In September an estimated 36,027 new homes and resales and condominiums were sold. according to DataQuick. This is down from a busy August when 42,546 homes sold but up from 34,011 sales in September 2012. The September volume was the highest for any September since 40,241 in 2009. The average for all Septembers for any September since 40,241 in 2009. The average for all Septembers since 1988 is 43,253, ranging from a high of 69,304 in 2003 to  low of 24,460 in 2007

Median price for a California home in September was $355,000, down from $361,000 in August but up from $287,000 in September 2012.

The typical monthly mortgage payment for California buyers in September was $1,429, down from $1,456 in August but up from $1,027 one year ago. After adjustment for inflation, that payment was 38.1 percent below a typical payment in the spring of 1989, the peak of a previous real estate cycle and 49.9 percent below the current cycle's peak in June 2006.

Properties in distress continue to decline. Foreclosure activity remains well below one-year ago. Financing with multiple mortgages is low, while down payment sizes are stable, according to DataQuick.

AshleyR.Harris@dsnews "California Home Sales Hitting Record Levels"  10/18/13

From dpsandiego.com editor at large Rocky Mountain.

HOUSE PRICES SHOW SLIGHT GAIN

The number of home transactions in San Diego County dipped slightly in September for the third straight month but sales prices inched upward slightly, according to DataQuick. The median price of $422,000 was up from $415,000 in August and $417,500 in July. Over the last full year, the median price has increased 20.6 percent.

The number of sales dropped 17.5% from August to September. In September 3,383 homes were sold in San Diego County, first time since April that there had been less than 4,000 transactions. Year-over-year, sales were up 5.3% from September 2012.

Short sales were 14.3% of the market in September, down from 30.5% one-year ago. Foreclosures were 4.4% of the market, down  from 13.2% in September 2012. A drop in distressed sales, plus double-digit year-over- year price increases are major factors in the slowdown.

Interest rates continue to be low. On October 10, Freddie Mac reported the average 30-year fixed-rate loan was 4.23 %. In May the rate was 3.35%.

The Greater San Diego County Association of Realtors reported that there were 6,838 active listings in September, up from 5,589 one year ago. Inventory remains low as listings regularly were more than 10,000 per month from early 2010 through November 2011.  

On October 10, the Association recorded 7,050 active listings in the County.

JonathonHorn@utsandiego "Home Prices In County Up Slightly"  10/17/13

From dpsandiego.com editor at large Rocky Mountain.

GOVERNMENT SHUTDOWN ENDS

A temporary truce has been reached in Congress and the 16-day partial government shut-down has ended.The Senate voted 81-18 and the House followed 285-144. In the vote, House Republicans split 144 against and 87 in favor. All 198 voting Democrats supported the measure, which sets a time frame of early winter when the debate over spending and and borrowing will continue toward final resolution. The legislation permits the Treasury to borrow normally through February or maybe one month longer. The government will be funded through January 15. The president signed the legislation.

All employees were ordered back to work and all agencies, bureaus and public entities that had been affected were ordered to be opened and fully staffed. More than 2 million employees will be paid, those who remained on the job as well as those furloughed.

Issues related to the Obama Health Care Plan that were center pieces of the impasse and supported by Republicans were not compromised.

DavidEspo@assocpress "Agreement Reached"  10/17/13

From dpsandiego.com editor at large Rocky Mountain.

NEW LOAN SERVICING RULES COMING

The Consumer Financial Protection Board [CFPB] will be changing some rules for loan servicing and the Federal Housing Finance Agency is issuing an early alert so that Freddie Mac, Fannie Mae and others can update their policies and be in compliance. The new CFPB guidelines will address loss mitigation, foreclosure procedures and the borrower appeal process.

Under the new rules,is to be prohibited from mentioning foreclosure earlier than 121 days into a delinquency situation. After 121 days, the servicer has 5 business days to refer a loan to foreclosure. The servicer must take legal action to foreclose. If the borrower submits a complete borrower response package more than 37 days prior to the scheduled foreclosure sale, the servicer must delay legal action.

When a servicer denies  loan modification, it must let the borrower know the reason for the denial and the borrower has the right to appeal the denial within 14 days. The servicer must respond to the appeal within 30 days. The servicer must ensure the appeal review is completed by a different individual or set of individuals from those who originally denied the borrower loan mitigation.

The single point of contact requirement was reinforced so that servicers must develop an approach to managing delinquent borrowers that provides continuity of contact with the borrower and allows a borrower to contact one individual or a dedicated team of individuals in the servicer's organization.

Most of the rule changes must be in place by January 10, 2014, the same date as the CFPB changes are to be implemented.

KristaFranksBrock@dsnews "GSEs Update Servicing Guidelines To Prepare for Changes" 10/14/13

From dpsandiego.com editor at large Rocky Mountain.

BANK OF AMERICA POSTS PROFIT

The goal of selling more products to its customers is paying off for Bank of America. Third quarter profits in its largest units, consumer and business, spurred a growth of 32 percent in revenue. The bank issued more than 1 million credit cards, highest number since 2008 with nearly two-thirds going to existing customers. In the quarter, improved performance of the loan portfolio helped the bottom line as $1.69 billion in loans was written off, down from 4.12 billion a year earlier.

The bank reported a 71 percent slide in mortgage income as higher interest rates made refinancing less attractive. The bank made 22.6 billion in home loans during the quarter, down 11 percent from the second quarter.  Mortgage production is expected to continue its decline as mortgage-related staff is reduced as part of a plan to curtail activity in the mortgage sector.

Chief Executive Officer at the Bank says that mortgage loans will never be huge business for the company given the competition and thin profit margins.

The bank has been trying to improve retail banking and brokerage since acquiring Merrill Lynch at the height of the financial crisis. The acquisition of Countrywide Financial in July 2008 turned out to be a disaster, creating $40 billion in legal settlements and other charges.

Peter Rudegeair@reuters "Bank Of America Posts Profit As Fewer Loans Go Bad" 10/16/13

From dpsandiego.com editor at large Rocky Mountain.

MORTGAGE RATES ARE STEADY

As the government continues to be partially shutdown in debate over the budget, mortgage rates are holding steady with very little movement. Investors have become cautious about the prospects of slow economic growth and are moving into longer term government and mortgage-backed bonds. Mortgage rates are closely related to yields on long-term government bonds.

According to the Freddie Mac Primary Mortgage Market Survey, the 30-year fixed-rate mortgage [FRM] averaged 4.23 percent [0.7 point] for the week ending October 10, up from 4.22 percent the previous week. One year ago the 30-year ARM averaged 3.39 percent. The current 15-year fixed-rate mortgage is at an average 3.31 percent [0.7 point], up from 3.29 percent.

News was similar for adjustable rates. The five-year Treasury adjustable-rate mortgage [ARM] averaged 3.05 percent [0.4 point], up from 3.03 percent. The one-year ARM averaged 2.64 percent [0.4 point], increasing a singe basis point.

ToryBarringer@dsnews "Mortgage Rates Hold Steady Amid Stalemate On Capitol Hill" 10/11/13

From dpsandiego.com editor at large Rocky Mountain.

FHA TO MAKE CONCESSIONS

The Federal Housing Agency [FHA] has asked all approved mortgagees and lenders to be sensitive to the financial hardships some borrowers are facing as the partial government shutdown continues, including those subject to furlough, layoff or income reduction. The agency is asking its industry partners to communicate with and assist affected borrowers by extending informal forbearance plans and fully evaluating borrowers for available loss mitigation options to avoid foreclosure.

FHA is also strongly encouraging all lenders and mortgagees to waive late fees for affected borrowers and to suspend credit reporting nationwide for those affected by the shutdown.

"FHA is working to ensure that hard-won improvement in the housing market is not substantially compromised by government action and, in particular that FHA borrowers impacted by the shutdown receive the support they need," said Carol Galante, FHA Commissioner.

CarrieBay@dsnews "FHA Makes Concessions For Those Impacted By Shutdown" 10/15/13

From dpsandiego.com editor at large Rocky Mountain.

HELP FOR VETERANS ON WAY

California Governor Jerry Brown has signed a measure that will provide more affordable rental housing for veterans. The bill will ask voters in June to allow the state to use preapproved bond money instead of restricting the funds to loans for buying single-family homes and farms. A ballot measure is needed to redirect a share of the bond money as voter had originally approved the bonds.

Supporters of the measure say more than $1 billion in earlier bond authority has gone unspent. I approved, the Department of Veteran Affairs would use $600 million to provide apartments and other services. The state would control about $530 million for loans to help veterans purchase property.

In 2000 and 2008, California voters approved separate housing bonds for veterans. None of the $1 billion authorized bonds have been sold and there is $230 million remaining from a $500 million measure passed in 2000. There is $100 million in cash in the Department of Veteran Affairs to lend without going back to the bond market.

The Department issued 1,130 new home loans in 2008, but only 83 in 2012. The number of existing loans in the same period dropped from 20,169 to 7,913. Between January 1, 2000 and June 30, 2013, the Department has loaned $390 million to 1,835 applicants in San Diego County.

California has the largest number of veterans and homeless veterans in the country. Nearly 2 million veterans live in the state of whom 16,500 do not have a permanent residence. There are 1,500 homeless veterans in San Diego County.

MichaelGardner@utsandiego "Brown Inks Bills That Help Veterans"  10/11/13

From dpsandiego.com editor at large Rocky Mountain.

SAN DIEGO BREWERS WIN AWARDS

San Diego breweries once again passed the taste test in national competition and was awarded 15 medals at the Great American Beer Festival in Denver. This is in keeping with an average of 16 meals in recent years. The festival has a history of 32-years and this year encompassed 730 breweries displaying 809 varieties in 84 categories before 2 01 judges.

One San Diego brew, Bonobos, an American-style strong pale ale brewed at Monkey Paw was judged the best of its style in he nation.

Other San Diego award winners were: Coronado Brew Pub [Silver], Karl Strauss [Gold]. LostAbbey/Port Brewing [Bronze]. Ale Smith [Silver], Oceanside Ale Works [Bronze]. Pizza Post Ocean Beach [Gold, Silver and Bronze], Rock Bottom, LaJolla [Gold, Silver and 2 Bronze] and Pizza Port, Solana Beach [Bronze].

The Karl Strauss Red Trolley Irish-style red ale, first brewed in 1898 has won Gold twice at the Great American Beer Festival and twice at the World Beer Cup, an international competition.

PeterRowe@utsandiego "Breweries Of S.D. Win 15 Medals At Festival"  10/13/13

From dpsandiego.com editor at large Rocky Mountain.

CLOTHIER TURNS DOWN OFFER

An unsolicited offer from Jos. A. Bank to acquire Men's Wearhouse has been rejected as being opportunistic and inadequate. The proposal would have created a suit and tuxedo chain close to 2,000 stores. The offer of $2.3 billion was $48 per share in cash, a premium of 42 percent at the time the offer was made September 17.

Jos. A. Bank sells men's tailored and casual clothing, sports and foot ware in 623 stores in 44 states  and the District of Columbia. Men's Wearhouse sells its clothing through its namesake chain of stores well as Moores and K & G retail chains.

Men's Wearhouse was founded in 1973 by George Zimmer. Earlier this year as chairman of the company he was ousted in a dispute over the direction of the company. He was the company spokesperson and appeared in TV commercials with the slogan - "You are going to like the way you look, I guarantee it".

Anne D'Innocenzio@assocpress "Jos. A. Bank Offer Nixed For Men's Wearhouse" 10/9/13

From dpsandiego.com editor at large Rocky Mountain.

SHADOW INVENTORY AT LOW LEVEL

At the midpoint of 2013, the shadow inventory was 1.9 million homes. the lowest since August 2008, according to CoreLogic. The current inventory carries a value of $293 billion, down from $380 billion assessed in July 2012. The inventory represents a 3.7 month's supply and accounts for 85 percent of the 2.2 million that were seriously deliquent, in foreclosure or bank-owned as July ended.

Of the properties in the inventory, 874,000 were seriously delinquent [1.8 month supply], 661,000 were in some stage of foreclosure [1.3 month supply] and 318,000 were in REO [0.6 month supply]..

CoreLogic estimates the pending supply [shadow inventory] by calculating the number of properties that are seriously delinquent, in foreclosure or held as REO by mortgage servicers but not currently listed on multiple listing services. Properties not delinquent but on the edge of being so are not included in the estimate.

The shadow inventory peaked at 3 million homes in 2010 but has decreased 38% since.

CarrieBay@dsnews "Shadow Inventory Falls To Lowest Level SInce August 2008" 10/9/13

From dpsandiego.com editor at large Rocky Mountain.

HERSHEY TO ADD CARAMEL

For the first time in 30 years, Hershey is launching a new brand, a soft caramel cream line called Lancaster. It will be introduced in the U.S. and China in 2014. Two sizes will be offered at $2.50 and $4.00. The name comes from Hershey founder Milton Hershey's first candy company, The Lancaster Caramel Company formed in 1886.

Lancaster Caramels will come in three flavors - caramel, vanilla and caramel. and vanilla and raspberry, in keeping with 2 1/2 years of research into customer tastes.

Caramel is the fastest growing category globally, exceeding chocolate and other non-chocolate candies. China already is a major market for Hershey Kisses, Hershey bars and Ice Breakers. China is the world's second largest candy market behind the U.S. and contributes about $1.5 billion annually to Hershey sales

MaeAndersen@assocpress "New Hershey Candy Its First In 30 Years"  10/11/13

From dpsandiego.com editor at large Rocky Mountain.

UNEMPLOYMENT APPLICATIONS INCREASE

People applying for unemployment benefits increased to a seasonally adjusted 374,000, largely because California processed a huge backlog of claims and the government shut-down spurred companies to cut jobs. Applications had been holding at near six-year low at the end of September. Falling applications are usually followed by an increase in hiring but there are no signs that is happening. The government employment report was not issued because of the shutdown.

Payroll data processor, ADP, reported that businesses added 166,000 jobs in September as an indication that hiring continued to be slow-moving. ADP figures usually vary from those reported by government and other sources.

Before the shutdown,  many economists had projected an annual growth rate of 2.5% to 3% from October through the balance of the year. The shutdown could shave as much as 0.15 percentage points from that estimate for each week it lasts.

Christopher S. Rugaber@assocpress "U.S. Sees Spike In Unemployment Applications" 10/11/13

From dpsandiego.com editor at large Rocky Mountain.

MILITARY TO GET BENEFITS

President Obama has signed a bill that will continue payment of financial benefits to families of fallen troops during the government shutdown. Prior to the signing, a military charity, the Fisher House Foundation, had agreed to make the payments during the shut-down. The Pentagon typically pays out $100,000 within three days of a service member's death but had not authority to make payments. Twenty-nine members of the military have died during active duty since parts of the government close on October 1.

assocpress "Obama signs bill to pay military death benefits"  10/10/13

From dpsandiego.com editor at large Rocky Mountain.

DUNKIN DONUTS COMING BACK

Dunkin Donuts, a publicly traded company based in Massachusetts, plans to open 27 new stores in California in the next few years, returning after exiting California in the late 1990s. This is an addition to an announcement in July that 45 stores would be opened. Dunkin Donut has more than 10,500 stores  in 31 countries, 7,500 in the U.S. There is only one store in California, as Camp Pendleton that opened in May.

The expansion to the West has included locations in Texas, Phoenix and Las Vegas. The move into California will encompass active recruitment of new franchisees in Ventura, Los Angeles, Orange, Riverside, San Bernardino and San Diego counties. An early store will be opening in the Embassy Suites hotel in San Diego next year that will combine a restaurant with its fellow subsidiary Baskin Robbins.

The stores range from 1700 to 2500 square feet and typically have a drive-through option for those on-the-go. New interiors are designed to appeal to those who just wish to sit down and hang out in a comfortable environment with Wi-Fi access. The stores feature the company's signature donuts, private brand coffee and breakfast sandwiches.

KatherinePoythress@utsandiego :"More Dunkin Donuts In Store For Region"  10/8/13

From dpsandiego.com editor at large Rocky Mountain.

YELLEN NOMINATED TO LEAD FED

President Obama has nominated Janet Yellen to head the Federal Reserve and become the first woman to run the world's most influential central bank. She currently is the Vice Chair of the Federal Reserve Board of Governors. Confirmation is expected as replacement for Ben Bernanke whose second term ends January 31. She is expected to continue the current policies of the bank. She is an advocate of aggressive action to stimulate economic growth through low interest rates and large scale bond purchases.

She was appointed Vice Chair at the Fed in October 2010. She had been President and CEO of the Federal Bank of San Francisco from 2006 to 2010 and has served as chair of the Council of Economic Advisors from 1997 to 1999. She has spent much of her career as a professor teaching at the University of California Berkeley.

"While we have made progress, we have farther to go. The mandate of the Federal Reserve is to serve all the American people, and too many Americans still can't find a job and worry how they will pay the bills and provide for their families. The Federal Reserve can help if it does its job effectively," she said at the nomination ceremony.

nbcnews.com "President Obama Nominates Yellen As First Woman To Lead Fed"  10/9/13

From dpsandiego.com editor at large Rocky Mountain.

WEAK THIRD QUARTER ON TAP

FBR Capital Markets [FBR] has previewed the third quarter earnings of major U.S. banks and notes that in general bank mortgages stocks have under performed the broader market by about 2 percent over the third quarter. Zeroing in on the mortgage market provides no evidence for optimism. Rising interest rates have discouraged homeowners from refinancing.

FBR estimates third quarter mortgage originations at $349 million, down 29 percent over the quarter. A slowdown in the refinancing market has been a major drag on the industry. Refinancing has declined 46% with only a 2% increase in purchase originations. Further declines in purchase originations are anticipated for the balance of the year and well into 2014 before a significant uptick in the third quarter of 2014.

Real estate investment trust activity is expected to increase modestly at about 2 percent.

KristaFranksBrock@dsnews "Weak Third Quarter Expected For Mortgage Banks" 10/9/13

From dpsandiego.com editor at large Rocky Mountain.

LAW LIMITS CLAIMS

California has enacted a law prohibiting professional athletes from filing workers' compensation claims in California after spending most of their careers in other states. Athletes have been collecting large cash settlements by claiming they have suffered cumulative trauma during their careers, even with little or no employment history in California.

The California Insurance Guarantee Association has paid professional athletes nearly $42 million in claims since 2002. An average of 34 new claims are filed each month. The compensation itself is paid by employers, including team owners, not by taxpayers. The law brings California into line with the majority of the states which  limit such claims.

California has been one of nine states that permit compensation claims on cumulative trauma like those claimed by professional athletes over extended periods of time. The state also has broad rules on how former athletes are eligible claims in the state. Claims already filed will be allowed to continue through the process.

Proponents of the legislation say athletes should get compensation for their injuries in the state where they are primarily employed.

DonThompson/LauraOlson@assocpress "Law Limits Claims on Workers' Compensation"10/9/13

From dpsandiego.com editor at large Rocky Mountain.

TRUCKERS TO STAGE SLOWDOWN

Several thousand truck drivers have pledged to spend Friday through Sunday slowing down traffic on the Washington, DC Beltway as a protest of what US Today describes as "low wages, fuel prices, regulations, government shutdown, debt ceiling, President Obama and the corruption that is destroying America.'

The 3,000 strong  convoy has been organized under the name Truckers Ride for the Constitution and the truckers promise to let motorists pass if they are displaying "T2SDA" - somewhere on their vehicles. That symbol is short hand for the groups original name - Truckers To Shut Down America.

The group released a statement saying the stage has been set for what they feel is the last peaceful defensive stand in a war that has been declared by Wall Street, Washington and the White House upon the American people.

msnnews/dashboard "3000 Angry Truckers Plan To Shutdown DC Beltway This Weekend"10/8/13

From dpsandiego.com editor at large Rocky Mountain.

PART-TIME JOBS FILL NEEDS

The unemployment rate, while showing improvement from the economic crash of 2009, has made no significant inroad and remains 7.3 percent in August. The rate has almost been stagnant in the past few months, according to the Bureau of Labor Statistics [BLS] with 11.9 million people without jobs.

The BLS report reveals that 7.9 million workers have filled part-time jobs in place of full-time. The trend has been that part-time work has become the new normal. Early in the recession, part-time employment served as a means not to furlough employees and provided workers with part-time hours while keeping them employed.

A basic shortcoming of part-time and temporary employment is the unavailability of health insurance through reduced hours. A possible advantage is that it opens the door for future potential permanent employment and the opportunity to sharpen skills or develop new ons. A major pu is it eliminates employment gaps in the work resume.

Younger workers like the freedom of flexible hours and older employees often find more time through the variable working hours to care for children or an aging parent. Day care costs can be reduced by tag-teaming child care responsibility between spouses.

BPT:utsandiego.com "Part-Time Jobs May Be The New Normal In Job Market"  10/6/13

From dpsandiego.com editor at large Rocky Mountain.