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U.S. Census Bureau finds monthly housing costs reach $1,000 for homeowners
National Mortgage Professional Magazine
Thu, 2010-08-19 11:54
The nation's homeowners paid a median of $1,000 in monthly housing costs in 2009, compared with $808 for renters, according to data released today by the U.S. Census Bureau and the U.S. Department of Housing & Urban Development (HUD). However, renters usually paid a higher percentage of their household income on these costs than did owners (31 percent compared with 20 percent). These new figures come from the 2009 American Housing Survey, the definitive source of information on the quality of housing in the United States. Statistics are provided for apartments, single-family homes, manufactured housing, new construction and vacant housing units.
Issued jointly bi-annually by the Census Bureau and HUD, this survey provides detailed information on the characteristics of the nation's housing stock.
A wide range of specific topics is covered, such as the presence of air conditioning, crowding, housing costs, special living services offered to older residents, safety equipment present, type of heating fuel used, satisfaction with the neighborhood, cost of utilities and size of the home. The survey also covers the demographic characteristics of the housing units' occupants.
"So many of these measures are really unique to this survey," said Tamara Cole, chief of
the Census Bureau's American Housing Survey Branch. "Together they provide a comprehensive view of the quality of the nation's housing stock. This survey is also a longitudinal one, meaning it follows the same unit over time. For example, you can track the remodeling done to a specific unit from one survey to the next."
The 2009 survey indicates that respondents are generally quite content with where they live: Approximately 70 percent rate their homes an 8, 9, or 10 on a scale of 1 to 10 with 28 percent giving them the "best" rating of 10. Residents of new construction tend to rate their homes even more highly: 84 percent gave them between an 8 and 10, and 45 percent gave a perfect 10 rating. Likewise, more than two-thirds of residents (68 percent) rated their neighborhood highly with 25 percent giving it a "best" rating. People living in newly built homes rate their neighborhoods especially highly: 75 percent (rated highly) and 35 percent (rated best), respectively.
Other highlights for the nearly 112 million occupied housing units:
• The median year housing units were built was in 1974, with owner-occupied units being slightly newer (median of 1975 compared with 1971 for renter-occupied units).
• The median purchase price of homes was $107,500; for a newly constructed home, it was $240,000.
• Thirty-two percent of owner-occupied units were owned free and clear, 66 percent had a regular and/or home equity mortgage and 2 percent had only a line-of-credit.
• The most important consideration for recent movers in choosing their homes was financial (28 percent), followed by room layout/design (15 percent) and size of home (10 percent). Furthermore, the most common reasons recent movers had for choosing their neighborhoods were convenience to job (20 percent), convenience to friends or relatives (14 percent), look/design of neighborhood (10 percent) and the house itself (10 percent).
• About two-thirds (64 percent) of the units used a warm-air furnace for heating; 12 percent used an electric heat pump; and 11 percent used a steam or hot water system. The latter is increasingly falling out of use as only two percent of new units use this system.
• About half of homes (48 percent) had a separate dining room and three in 10 (30 percent) reported two or more living rooms or recreation rooms. About one-third (35 percent) had a usable fireplace.
• About two-thirds of housing units (65 percent) had central air conditioning and another 21 percent had window units; for new units, the percentage with central air conditioning was even higher (89 percent).
• About nine in 10 units (93 percent) reported the presence of a smoke detector. Additionally, 36 percent reported having a working carbon monoxide detector, 45 percent purchased or recharged a fire extinguisher in the last two years and 5 percent had a sprinkler system.
• Most homes had three or more bedrooms (64 percent), with the percentage even higher in new homes (80 percent). Additionally, about half of homes (51 percent) had two or more bathrooms, with the percentage even higher (89 percent) in new homes.
• Ten percent of communities had secured entrances, with the likelihood somewhat higher (15 percent) in new communities.
To view a copy of the 2009 American Housing Survey, click here.
For more information, visit http://www.census.gov
http://nationalmortgageprofessional.com/news19774/us-census-bureau-finds-monthly-housing-costs-reach-1000-homeowners
Consumer Confidence Drops in the U.S. Housing Market, One in Three Homeowners Now Think Worst is Yet to Come
Posted by Michael Gerrity
08/19/10 12:00 AM EST
According to Zillow's new Q-2, 2010 Homeowner Confidence Survey, homeowners are more pessimistic about the short-term future of home values in their local market than they have been in the past three quarters. One-third (33 percent) believe home values in their local housing market have not yet reached a bottom, while 38 percent believe they have already reached a bottom.
More than one-quarter (28 percent) of U.S. homeowners said home values in their local real estate market will decrease in the next six months, up from 20 percent in the first quarter. Additionally, less than one-third (30 percent) believe home values in their local market will increase, down from 42 percent in the first quarter.
Despite the increasing pessimism, a large number of homeowners anxiously await the opportunity to sell. Five percent of U.S. homeowners say they are very likely to put their home on the market in the next six months if they see signs of a real estate market turnaround. This translates into 3.8 million homes with the potential to come into the market. By comparison, 5.2 million existing homes were sold in all of 2009.
Looking backward, homeowners also became slightly more pessimistic about the performance of their own homes' values in the past year. Less than a quarter (24 percent) of homeowners said their home had increased in value in the past year, compared to 27 percent in the first quarter. In reality, 34 percent of homes increased in value in the second quarter, according to the Zillow's Q2 Real Estate Market Reports.
"As homeowners have been so inundated recently with news of declining home sales post-tax credit, it's no surprise that they would become more pessimistic about the future of home values," said Dr. Stan Humphries, chief economist at Zillow.com. "Homeowners have become much more responsive to current market conditions than they were just two years ago, when a more typical reaction was denial.
"Given this sentiment, we're surprised so many homeowners believe their market has already bottomed. Although our Q2 reports indicated signs of stabilization in 30 percent of markets we cover, we're concerned that this was at least partly due to the homebuyer tax credits. We're already seeing payback for the credits in the form of declining home sales, and this trend will push up inventory levels and exert downward pressure on home values. Add in the inventory from the millions of sidelined sellers and we'll take more steps back. Our forecast remains largely unchanged: We're in for an L-shaped recovery that will likely keep annualized home value appreciation very low for the next three to five years."
According to Zillow's report, long-term home value expectations vary by region. Looking further into the future, the majority of homeowners believe their own homes' values will either increase (27 percent) or stay the same (35 percent) in the next 12 months, while 12 percent expect a decrease and 26 percent don't know.
Of those who expect their home's value to increase, the median expectation is a rise of 6 percent, although that varies by geography. Northeastern and Western homeowners who expect an increase anticipate a median rise of 10 percent, while Southern and Midwestern homeowners expect a median increase of 5 percent. Those who expect their home's value to decrease in the next year, anticipate a median decrease of 10 percent.
http://tinyurl.com/2aku8dj
Home 'Affordability Index' Remains High, Says NAHB
Posted by Michael Gerrity
08/19/10 1:44 PM EST
According to the National Association of Home Builders / Wells Fargo Housing Opportunity Index (HOI) released today, bolstered by favorable interest rates and low house prices, housing affordability remained near its highest level nationwide for the sixth consecutive month since the series was first compiled nearly two decades ago.
The HOI indicated that 72.3 percent of all new and existing homes sold in the second quarter of 2010 were affordable to families earning the national median income of $64,400. The index for the second quarter was slightly more affordable than the previous quarter and almost equaled the record-high 72.5 percent set during the first quarter of 2009.
Until 2009, the HOI rarely topped 67 percent and never reached 70 percent.
"Homeownership is within reach of more households than it has been for almost a generation," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "Interest rates continue to hover at historic low levels, the economy is beginning to rebound and with house prices starting to stabilize, conditions are beginning to draw home buyers back into the market, which is a positive step on the path to recovery."
Syracuse, N.Y., was the most affordable major housing market in the country, edging out Indianapolis-Carmel, Ind., which had held the top ranking for nearly five years. In Syracuse, 97.2 percent of all homes sold were affordable to households earning the area's median family income of $64,300.
Also near the top of the list of the most affordable major metro housing markets were Detroit-Livonia-Dearborn, Mich.; Youngstown-Warren-Boardman, Ohio-Pa.; and Buffalo-Niagara Falls, N.Y.
Among smaller housing markets, the most affordable was Springfield, Ohio, where 96.6 percent of homes sold during the second quarter of 2010 were affordable to families earning a median-income of $56,800. Other smaller housing markets near the top of the index included Mansfield, Ohio; Bay City, Mich.; Monroe, Mich.; and Lansing-East Lansing, Mich., respectively.
New York-White Plains-Wayne, N.Y.-N.J., continued to lead the nation as its least affordable major housing market during the second quarter of 2010. There, 19.9 percent of all homes sold during the quarter were affordable to those earning the New York area's median income of $65,600. This was the ninth consecutive quarter that the New York metropolitan division has occupied this position.
The other major metro areas near the bottom of the affordability scale included San Francisco-San Mateo-Redwood City; Santa Ana-Anaheim-Irvine, Calif.; Los Angeles-Long Beach-Glendale, Calif.; and Honolulu, all metro areas that have lingered among the bottom rankings for several quarters.
San Luis Obispo-Paso Robles, Calif., was the least affordable of the smaller metro housing markets in the country during the second quarter. Others near the bottom included Santa Cruz-Watsonville, Calif.; Ocean City, N.J; Santa Barbara-Santa Maria-Goleta, Calif.; and Napa, Calif.
http://tinyurl.com/25um2ub
Mortgage rates dip even further this week
National Mortgage Professional Magazine
Thu, 2010-08-19 10:54
Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), concluding fixed-rate mortgages reached another low, while the five-year adjustable rate mortgage (ARM) remained tied at its low for this survey. The 30-year fixed-rate survey began in 1971, the 15-year began in 1991, and the five-year adjustable in 2005.
“Investors in long-term bonds appear very confident that inflation will remain in check, and as a result long-term fixed mortgage rates have continued to fall," Amy Crews Cutts, deputy chief economist, Freddie Mac. "This week marks the ninth straight week in the Primary Mortgage Market Survey that 30-year-fixed mortgage rates have met or set a new record low."
According to the PMMS, 30-year fixed-rate mortgages (FRM) averaged 4.42 percent, with an average 0.7 point for the week ending Aug. 19, 2010, down from last week when it averaged 4.44 percent. Last year at this time, the 30-year FRM averaged 5.12 percent. This week, the 15-year FRM averaged a record low of 3.90 percent, with an average 0.6 point, down from last week when it averaged 3.92 percent. A year ago at this time, the 15-year FRM averaged 4.56 percent.
The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.56 percent this week, with an average 0.6 point, unchanged from last week when it also averaged 3.56 percent. A year ago, the five-year ARM averaged 4.57 percent. The one-year Treasury-indexed ARM averaged 3.53 percent this week, with an average 0.7 point,
unchanged from last week when it also averaged 3.53 percent. At this time last year, the one-year ARM averaged 4.69 percent.
“This week’s release of the Consumer Price Index indicates that current inflation is very low," said Cutts. "The 12-month growth in the core consumer price index has held at only 0.9 percent for four straight months ending in July. The last time price growth was this low was the year ending January 1966. The housing market appears to be in a lull following the expiration of the homebuyer tax credits. Single-family starts fell for the third straight month in July to an annual pace of 432,000 homes, the fewest since May 2009. In addition, homebuilder confidence fell for the third consecutive month in August to the lowest since March 2009, according to the NAHB/Wells Fargo Housing Opportunity Index. Even confidence among realtors was at a 16-month low in June, according to the National Association of Realtors.”
For more information, visit www.freddiemac.com
http://nationalmortgageprofessional.com/news19766/mortgage-rates-dip-even-further-week
McDonald's Makes History With Hong Kong Bond Offering
by RTT Staff Writer
8/19/2010 11:50 AM ET
(RTTNews) - Fast-food chain McDonald's Corp. (MCD: News ) said Thursday that it will issue $29.4 million of yuan-denominated bonds in Hong Kong, becoming the first non-financial foreign company to make such an offering in the city's debt capital market.
The Oak Brook, Illinois-based company sold 200 million yuan of 3% notes to institutional investors in Hong Kong, saying it was another sign of the company's confidence in its long-term growth opportunities in China. The notes have a maturity date of September 2013. The company will use the proceeds to help fund its expansion in China, including the opening of new restaurants.
Timothy Fenton, President of McDonald's APMEA or Asia/Pacific, Middle East and Africa region, said, "We are pleased and honored that McDonald's is set to become the first issuer of RMB-denominated bonds by a multinational company. China is the fastest-growing market for McDonald's worldwide in terms of new restaurant openings."
McDonald's said it plans to continue investing in China by opening new restaurants, re-imaging existing restaurants and rolling out convenience initiatives. This year, the company intends to open between 150-175 restaurants in the country.
McDonald's employs 60,000 people in Mainland China and has opened more than 1,100 stores there since its China debut in Shenzhen in October 1990.
In early August, McDonald's reported a 7% increase in its global comparable sales for July, reflecting strong sales across its segments. Beverages, premium menu offerings and breakfast items were the main drivers. Comparable store sales in the APMEA region climbed 10.1% for the month, driven by strong sales growth in Japan, Australia, China and other countries.
Standard Chartered plc, which will handle McDonald's bond offering, said that the launch of McDonald's yuan-denominated bonds signifies the beginning of a new funding channel for international companies to raise working capital for their China operations.
The bonds issue is also expected to help accelerate Hong Kong's development as a yuan offshore center. China plans to expand the use of yuan-denominated bonds in Hong Kong after the yuan was approved for use to settle cross-border trade in the former British colony last year.
China's central bank, the People's Bank of China, said Tuesday that it will allow foreign financial institutions to participate in the interbank bond market on a trial basis as part of the yuan cross-border settlement program. Foreign financial institutions involved in the settlement program will be able to reinvest the proceeds in the interbank bond market. The move is designed to encourage the use of the yuan overseas as the central government steps up efforts to internationalize its currency.
http://www.rttnews.com/ArticleView.aspx?Id=1398278&pageNum=1
Major Averages Close Sharply Lower But Off Worst Levels
by RTT Staff Writer
8/19/2010 4:27 PM ET
(RTTNews) - Stocks saw substantial weakness on Thursday, as a series of disappointing economic reports renewed recent concerns about the economic outlook. The major averages moved sharply lower in morning trading and remained stuck firmly in negative territory throughout the remainder of the session.
The sell-off on Wall Street came following the release of several troubling economic reports, including a report from the Labor Department showing that initial jobless claims rose to their highest level in nine months in the week ended August 14th.
Most of the major sectors showed notable moves to the downside on the day, with airline stocks turning in some of the market's worst performances. The NYSE Arca Airline Index ended the session down by 3.8 percent after closing higher in the five previous sessions.
Delta Airlines (DAL) helped to lead the airline sector lower, falling by 5.1 percent on the day. With the loss, Delta ended the session at an eight-month closing low.
Biotechnology stocks also came under considerable pressure over the course of the trading day, dragging the NYSE Arca Biotechnology Index down by 2.6 percent. Affymetrix (AFFX) posted a particularly steep loss, ending the day down by 9.3 percent.
Defense, healthcare, housing, and banking stocks also posted notable losses, reflecting the broad based weakness in the markets. On the other hand, some internet stocks bucked the downtrend on the news of the McAfee acquisition.
While the major averages ended the day off their worst levels, they still posted steep losses. The Dow plummeted 144.33 points or 1.4 percent to 10,271.21, the Nasdaq fell 36.75 points or 1.7 percent to 2,178.95 and the S&P 500 dropped 18.53 points or 1.7 percent to 1,075.63.
http://www.rttnews.com/Content/USMarketUpdate.aspx?Node=B5
Philly Fed Index Unexpectedly Turns Negative In August
by RTT Staff Writer
8/19/2010 10:06 AM ET
(RTTNews) - Manufacturing activity in the Philadelphia area has unexpectedly deteriorated in the month of August, the Federal Reserve Bank of Philadelphia revealed in a report on Thursday, with the index of regional activity unexpectedly falling into negative territory.
The Philly Fed said its diffusion index of current activity fell to a negative 7.7 in August from a positive 5.1 in July, with a negative reading indicating a contraction in manufacturing activity. The steep drop came as a big surprise to economists, who had expected the index to rise to a reading of 7.5.
http://www.rttnews.com/Content/USEconomicNews.aspx?Node=B2&Id=1398190
Leading Indicators Index Rises Less Than Expected In July
by RTT Staff Writer
8/19/2010 10:09 AM ET
(RTTNews) - After reporting a decrease in leading economic indicators for June, the Conference Board released a report Thursday morning showing a modest increase in its leading indicators index for July. However, the index increased by less than economists had expected.
The report showed that the leading indicators index edged up by 0.1 percent in July following a revised 0.3 percent decrease in June. Economists had expected the index to increase by 0.2 percent compared to the 0.2 percent drop originally reported for the previous month.
http://www.rttnews.com/Content/USEconomicNews.aspx?Node=B2&Id=1398197
Philly Fed Index Unexpectedly Indicates Contraction In August
by RTT Staff Writer
8/19/2010 11:01 AM ET
(RTTNews) - Manufacturing activity in the Philadelphia area has unexpectedly deteriorated in the month of August, the Federal Reserve Bank of Philadelphia revealed in a report on Thursday, with the index of regional activity unexpectedly falling into negative territory.
The Philly Fed said its diffusion index of current activity fell to a negative 7.7 in August from a positive 5.1 in July, with a negative reading indicating a contraction in manufacturing activity. With the decrease, the index turned negative for the first time since July of 2009.
The steep drop by the Philly Fed Index came as a big surprise to economists, who had expected the index to rise to a reading of 7.5.
An acceleration in the pace of contraction in new orders contributed to the weakness in the sector, with the new orders index falling to a negative 7.1 in August from a negative 4.3 in July.
The shipments index also fell to a negative 4.5 in August from a positive 4.0 in July, indicating a contraction in shipments following an expansion in the previous month.
Employment also contracted after expanding in the previous month, with the number of employees index falling to a negative 2.7 in August from a positive 4.0 in July.
With regard to inflation, the prices paid index slipped to 11.8 in August from 13.1 in July, while the prices received index dropped to a negative 12.5 from a negative 8.4 in the previous month.
Looking ahead, the Philly Fed said the future general activity index remained positive for the 20th consecutive month, although it weakened slightly, dropping to 19.6 in August from 25.0 in July.
Commenting on the data, Peter Boockvar, equity strategist at Miller Tabak, said, "While very weak, it follows the 1st August data point seen on Monday, the NY survey, which was just shy of estimates."
"Thus, we need to see other regional surveys and then reconcile it with the national ISM to see just how soft things have gotten," he added.
The report from the New York Federal Reserve released on Monday showed a modest improvement in conditions for New York manufacturers.
The New York Fed said its general business conditions index edged up to 7.1 in August from 5.1 in July, with a positive reading indicating growth in the manufacturing sector. Economists had been expecting the index to increase to a reading of 7.5.
http://www.rttnews.com/Content/USEconomicNews.aspx?Node=B2&Id=1398241
Spike in layoffs feeds fear of faltering recovery
Christopher S. Rugaber, AP Economics Writer
On Thursday August 19, 2010, 5:08 pm EDT
Layoffs are back: Spike in unemployment claims points to weak job market, faltering recovery
WASHINGTON (AP) -- Layoffs are back, and that's bad news for the fragile economic recovery.
New applications for unemployment benefits hit a nine-month high last week -- a spike that suggests private employers may shed jobs this month for the first time this year.
Workers are losing construction jobs in Georgia and manufacturing jobs in Indiana. Some of the layoffs are coming as stimulus money dries up and public works projects come to a halt. Government employees are being let go, too, as states and cities grapple with budget crises.
Without more jobs, consumers will not feel secure enough to spend much money, further slowing the economy. The grim outlook has economists lowering their estimates for growth in the second half of the year. And on Thursday it led to a sell-off on Wall Street led by investors worried that the United States could tumble back into recession.
"Today's news on the economy has been nothing but awful," Paul Ashworth, an economist at Capital Economics, wrote in a note to clients. "The recovery is clearly slowing."
The Labor Department announced Thursday that initial claims for jobless benefits rose by 12,000 last week to 500,000 -- the highest level since November and the third straight increase.
As the economy recovered from the worst downturn since the 1930s, jobless claims declined steadily from a peak of 651,000 in March 2009 to a low of 427,000 in July before rising steadily over the past six weeks. In a healthy economy, jobless claims usually drop below 400,000.
"This is obviously a disappointing number that shows ongoing weakness in the job market," said Robert Dye, senior economist at the PNC Financial Services Group.
Dye said claims showed a similar pattern in the last two recoveries, but eventually began to fall again. The current elevated level of claims is a sign that employers are reluctant to hire until the rebound is well under way. That's what happened after the 1991 and 2001 recessions, which were dubbed "jobless recoveries."
Economists caution that more than 350,000 temporary census jobs ended in recent months, and those workers could be applying for benefits. Congress also recently restored an extended unemployment benefits program, which can sometimes spike claims.
The jobless report and a separate report showing that manufacturing activity in the mid-Atlantic declined in August sent stock markets tumbling. The Dow Jones industrial average closed down 144 points for the day. Interest rates dropped sharply as investors flocked to the safety of Treasury bonds.
A rush to move money into Treasurys in recent months has sent mortgage rates to the lowest level in decades. They dipped for the eighth time in nine weeks.
Also Thursday, the Congressional Budget Office said the deficit is on pace to exceed $1.3 trillion for the budget year that ends in September. That would be the second-largest ever, just below the record of more than $1.4 trillion in the last fiscal year.
Partially fueling the deficit was hundreds of billions of dollars in stimulus spending intended to help lift the country out of recession. But many of the programs are now ending, taking jobs with them.
Ken Simonson, chief economist at the Associated General Contractors of America, said highway contractors began working on stimulus projects as much as a year ago, "and now that pipeline is empty."
Work on commercial projects such as office buildings, malls and hotels is "dead, dead, dead," he added.
Construction firms are letting go of more workers as the housing sector slumps and federal stimulus spending on public works projects winds down. Construction-related layoffs have been particularly heavy in recent weeks in Georgia, Pennsylvania and North Carolina.
In Washington, Republicans have made Democrats' handling of the economy the No. 1 campaign issue heading into the midterm congressional elections. President Barack Obama cited the jump in jobless claims to call attention to Republicans who are opposing his proposal to help small businesses.
That bill would provide up to $30 billion in additional lending to small businesses and about $12 billion in tax breaks to encourage hiring. But Republicans and some Democrats are balking at more government spending because of the effect on the deficit.
The nationwide increase in unemployment claims suggests the economy is creating even fewer jobs than in the first half of this year, when private employers added an average of about 100,000 per month. That's barely enough to keep the unemployment rate from rising. The jobless rate has been stuck at 9.5 percent for two months.
Private employers added only 71,000 jobs in July. But that increase was offset by the loss of 202,000 government jobs, including 143,000 temporary census positions.
July marked the third straight month that the private sector hired cautiously, and economists are concerned that the unemployment rate will start rising again because overall economic growth has weakened significantly since the start of the year.
After expanding at a 3.7 percent annual rate in the first quarter, the economy's growth slowed to 2.4 percent in the April-to-June period. Some economists forecast it will drop as low as 1.5 percent in the third quarter.
http://finance.yahoo.com/news/Spike-in-layoffs-feeds-fear-apf-896075528.html?x=0&sec=topStories&pos=5&asset=&ccode=
Major study charts long-lasting oil plume in Gulf
Seth Borenstein, AP Science Writer
On Thursday August 19, 2010, 6:42 pm
New study: Oil plume under Gulf surface is big -- 22 miles long --and likely to survive awhile
WASHINGTON (AP) -- A 22-mile-long invisible mist of oil is meandering far below the surface of the Gulf of Mexico, where it will probably loiter for months or more, scientists reported Thursday in the first conclusive evidence of an underwater plume from the BP spill.
The most worrisome part is the slow pace at which the oil is breaking down in the cold, 40-degree water, making it a long-lasting but unseen threat to vulnerable marine life, experts said.
Earlier this month, top federal officials declared the oil in the spill was mostly "gone," and it is gone in the sense you can't see it. But the chemical ingredients of the oil persist more than a half-mile beneath the surface, researchers found.
And the oil is degrading at one-tenth the pace at which it breaks down at the surface. That means "the plumes could stick around for quite a while," said study co-author Ben Van Mooy of the Woods Hole Oceanographic Institution in Massachusetts, which led the research published online in the journal Science.
Monty Graham, a scientist at the Dauphin Island Sea Lab in Alabama who was not involved in the study, said: "We absolutely should be concerned that this material is drifting around for who knows how long. They say months in the (research) paper, but more likely we'll be able to track this stuff for years."
Late Thursday, federal officials acknowledged the deepwater oil was not degrading as fast as they initially thought, but still was breaking down "relatively rapidly." Jane Lubchenco, chief of the National Oceanic and Atmospheric Administration, said agency scientists and others were "working furiously" to come up with actual rates of biodegradation.
She noted a bright spot from the slow breakdown of the oil: Faster would mean a big influx of oil-eating microbes. Though they are useful, they also use up oxygen, creating "dead zones" that already plague the Gulf in the summer. Dead zones are not forming because of the oil plume, Lubchenco said.
The underwater oil was measured close to BP's blown-out well, which is about 40 miles off the Louisiana coast. The plume started three miles from the well and extended more than 20 miles to the southwest. The oil droplets are odorless and too small to be seen by the human eye. If you swam through the plume, you wouldn't notice it.
"The water samples when we were right in the plume look like spring water," study chief author Richard Camilli said. "You certainly didn't see any oil droplets and you certainly didn't smell it."
The scientists used complex instruments -- including a special underwater mass spectrometer -- to detect the chemical signature of the oil that spewed from the BP well after it ruptured April 20. The equipment was carried into the deep by submersible devices.
With more than 57,000 of these measurements, the scientists mapped a huge plume in late June when the well was still leaking. The components of oil were detected in a flow that measured more than a mile wide and more than 650 feet from top to bottom.
Federal officials said there are signs that the plume has started to break into smaller ones since the Woods Hole research cruise ended. But scientists said that wouldn't lessen the overall harm from the oil.
The oil is at depths of 3,000 to 4,000 feet, far below the environment of the most popular Gulf fish like red snapper, tuna and mackerel. But it is not harmless. These depths are where small fish and crustaceans live. And one of the biggest migrations on Earth involves small fish that go from deep water to more shallow areas, taking nutrients from the ocean depths up to the large fish and mammals.
Those smaller creatures could be harmed by going through the oil, said Larry McKinney, director of Texas A&M University's Gulf of Mexico research center in Corpus Christi.
Some aspects of that region are so little known that "we might lose species that we don't know now exist," said Graham of the Dauphin Island lab.
"This is a highly sensitive ecosystem," agreed Steve Murawski, chief fisheries scientist for the federal agency NOAA. "The animals down at 3,300 to 3,400 feet grow slowly." The oil not only has toxic components but could cause genetic problems even at low concentrations, he said.
Lubchenco said NOAA is "very concerned about the impact" of the oil below the surface and federal officials last week started more aggressive monitoring of it.
For much of the summer, the mere existence of underwater plumes of oil was the subject of a debate that at times pitted outside scientists against federal officials who downplayed the idea of plumes of trapped oil. Now federal officials say as much as 42 million gallons of oil may be lurking below the surface in amounts that are much smaller than the width of a human hair.
While federal officials prefer to describe the lurking oil as "an ephemeral cloud," the Woods Hole scientists use the word "plume" repeatedly.
The study conclusively shows that a plume exists, that it came from the BP well and that it probably never got close to the surface of the Gulf of Mexico, Camilli said. It is probably even larger than 22 miles long, but scientists had to stop measuring because of Hurricane Alex.
Earlier this week a University of South Florida team reported oil in amounts that were toxic to critical plant plankton deep underwater, but the crude was not necessarily in plumes. Those findings have not been reviewed by other scientists or published.
The plume is probably still around, but moving west-southwest of the BP well site at about 4 miles a day, Camilli said.
While praising the study that ended on June 28, Murawski said more recent observations show that the cloud of oil has "broken apart into a bunch of very small features, some them much farther away." Texas A&M's McKinney said marine life can suffer harm whether it is several smaller plumes or one giant one.
NOAA redirected much of its sampling for underwater oil after consulting with Woods Hole researchers. The federal agency is now using the techniques that the team pioneered with a robotic sub and an underwater mass spectrometer, Murawski said.
Previous attempts to define the plume were "like watching the Super Bowl on a 12-inch black-and-white TV and we try to bring to the table a 36-inch HD TV," said Woods Hole scientist Chris Reddy. The paper, fast-tracked for the world of peer-reviewed science, was written on a boat while still in the Gulf, he said.
Reddy said he could not yet explain why the underwater plume formed at that depth. But other experts point to three factors: cold water, the way the oil spewed from the broken well, and the use of massive amounts of dispersants to break up the oil before it gets to the surface.
The decision to use 1.8 million gallons of dispersants amounted to an environmental trade-off -- it meant less oil tainting the surface, where there is noticeable and productive life, but the risk of longer-term problems down below.
Retired Coast Guard Adm. Thad Allen, the government's point man on the Gulf oil spill, said it was a choice between two difficult options -- with the discussions going on in front of the president. In the end, officials decided to "accept the implication of the hydrocarbons in the water column rather than Barataria Bay or the Chandeleur Islands" in Louisiana.
Given the slow rate at which the oil is degrading in the cold water, Samantha Joye of the University of Georgia, and others say it is too early to even think about closing the books on the spill: "The full environmental impacts of the spill will thus not be felt for some time."
Online:
http://www.sciencemag.org
http://finance.yahoo.com/news/Major-study-charts-apf-2439191540.html?x=0&sec=topStories&pos=2&asset=&ccode=
South African Politics Stirring Mining Confusion
the tickerspy.com Staff,
On Thursday August 19, 2010, 3:35 pm EDT
Platinum and palladium could be headed higher, according to Bloomberg coverage of remarks by J.P.Morgan fund manager Ian Henderson. The report notes concerns over South African rule changes that have stalled production at some mines. "My anxiety is in the South African politics," Henderson, who manages about $7 billion in natural resource assets, and has been long platinum for a "long time," explained.
Confusion over mining legislation has caused a stir in South Africa, as miners and investors fret over unclear regulations tied to a 2004 development act, which was aimed to help rectify inequalities of apartheid, and incentivizes the sale of mining stakes to the black population.
As a whole, the Platinum and Palladium Stocks Index has outperformed the S&P 500 by 4% over the last month, but shares are pulling back almost across the board during today's session.
Vancouver-based Polymet Mining (AMEX: PLM - News) is ahead by 6% to recoup Wednesday's losses on sparse news. Elsewhere, Impala Platinum (Pink Sheets: IMPUY - News), Anooraq Resources (AMEX: ANO - News), Aquarius Platinum Ad (Pink Sheets: AQPTY - News), and Platinum Group Metal (AMEX: PLG - News) are all off by more than -2% for the session.
In the Commodity ETFs Index, the ETFS Platinum Trust (NYSE: PPLT - News) and E-TRACS UBS Long Platinum ETN (NYSE: PTM - News) are slipping fractionally on the day while the massive SPDR Gold Trust (NYSE: GLD - News) and Ishares Silver Trust (NYSE: SLV - News) trade mixed.
It will be interesting to see whether clarity from South Africa can give mining shares a boost, or if further confusion will result in a rally for the underlying commodities. Investors can track the Platinum and Palladium Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
Fun and informative, tickerspy.com is a free investing website where you can track multiple stock portfolios and compare against 250 proprietary Indexes tracking themes from dividends to ETFs to green energy to precious metals. Best of all, tickerspy.com lets you spy on the portfolios of nearly 3,000 Wall Street institutions and hedge funds and see graphs of their performance. Try tickerspy.com today and find out how you stack up against investing legends like Warren Buffett!
http://finance.yahoo.com/news/South-African-Politics-indie-127138346.html?x=0&.v=1
People, I am sorry but I will have to move to the next level. The integrity of the board has fallen and I am not too happy about it. OT did not work, warnings did not work, so any post (even borderline posts) that I or al feel should not be here will be deleted. Please do not act surprised if your post is no longer on the board. If this doesn't work, then I will have to do something that I really don't want to do and that is banning. I will do whatever it takes to return this board's integrity as an informative economy driven board. Don't mess with me, I am not in the mood and will straight up ban you from the board. So get that crap out of your system or leave.
I see that I must of freaked some of you out about OT and for this I am sorry.
Only time an OT is needed is when the post does not speak of money, trends, stocks, taxes, economy, markets, employment, discussion and speculation, (Congress, Obama as long as it is related to money). All we need is a word or sentence that speaks of anything economy, money matters, etc.
I do not want to create a situation where people are too concerned about what they are posting.
Could use an OT 8^)
No OT needed 8^)
Thanks kismet...
APNT has more cash than debt. It has a number of insider purchases. I also see that they got out of the red in their last quarterly report.
To All posters, if I don't see just a mention of market or money matters or economy etc, etc, in your post then an OT will be required. Of course I can only do so much policing so some may get by, but al44 will be watching too.
The YE forum appreciates your cooperation.
Hi sludge, that post should be marked with an OT. Your presence here is respected and I probably should let this go by, but those in the forum (including myself) really need to see an OT.
Thank you for using OT rogue, I appreciate it - and yes these 2 posts should be marked as OT.
I am a big fan of NVEC, wish I owned some for a LT Buy & Hold stock. Another one I like is TINY, it is an nanotech incubator of companies with varying applications.
NVEC
Business Summary
NVE Corporation engages in the development and sale of devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information. It provides standard sensors that detect the presence of a magnet or metal to determine position or speed; and custom sensors primarily for medical devices to replace electromechanical magnetic switches. The company also offers spintronic couplers, including IL600-Series passive-input couplers; IL700/IL200-Series digital-input couplers; IL500-Series couplers; and IL400/IL3000-Series isolated network signal couplers. In addition, it licenses the spintronic magnetoresistive random access memory technology, as well as provides contract research and development services. NVE Corporation sells its products through distributors primarily in the United States, Europe, and Asia. The company was founded in 1982 and is based in Eden Prairie, Minnesota.
http://finance.yahoo.com/q/pr?s=NVEC+Profile
NVEC website
http://www.nve.com/index.php
<><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><><>
TINY
Business Summary
Harris & Harris Group, Inc. is a venture capital firm specializing in seed, start up, early stage, and mid venture investments. It primarily invests in tiny-technology-enabled companies with a focus on nanotechnology, microsystems, and microelectromechanical systems technology. Harris & Harris Group, Inc. was founded in 1981 and is based in New York, New York with an additional office in Palo Alto, California.
http://finance.yahoo.com/q?s=tiny
Home website portfolio
http://www.tinytechvc.com/portfolio.cfm
MBA Says Mortgage Refinancings at Highest Point in Over a Year
Joyce Hanson
8/18/2010
Refinancings jumped 17% in week following Fed’s decision to buy Treasury debt
The Federal Reserve’s recent decision to keep the U.S. economy on track by buying longer-term Treasury notes already appears to have garnered at least one positive effect: the rate at which homeowners are refinancing their mortgages.
In the week following the Federal Open Market Committee’s decision to buy Treasuries—thus joining eager bond buyers who have already pushed interest rates lower—mortgage refinancings are at their highest level since May 2009. The FOMC announced August 10 that it will use the proceeds from its massive mortgage-bond portfolio to buy long-term government debt.
The refinance index for the week ending August 13 jumped 17.1% from the previous week, the Mortgage Bankers Association (MBA) reported in its weekly mortgage applications survey.
The MBA also reported that the market composite index, a measure of overall mortgage loan application volume, increased 13.0% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index increased 12.4% compared with the previous week.
However, the purchase index that tracks the demand for new residential mortgages was down, staying at its lowest level in more than a decade. The low level suggests that the U.S. housing market remains weak.
“The refinance share of mortgage activity increased to 81.4% of total applications from 78.1% the previous week, which is the highest refinance share observed since January 2009,” the MBA said. “The adjustable-rate mortgage (ARM) share of activity decreased to 5.7% from 5.9% of total applications from the previous week. “
The seasonally adjusted purchase index decreased 3.4% from one week earlier while the unadjusted purchase index decreased 4.6% compared with the previous week. It was 38.6% lower than the same week a year ago.
The Federal Reserve’s recent decision to keep the U.S. economy on track by buying longer-term Treasury notes already appears to have garnered at least one positive effect: the rate at which homeowners are refinancing their mortgages.
In the week following the Federal Open Market Committee’s decision to buy Treasuries—thus joining eager bond buyers who have already pushed interest rates lower—mortgage refinancings are at their highest level since May 2009. The FOMC announced August 10 that it will use the proceeds from its massive mortgage-bond portfolio to buy long-term government debt.
The refinance index for the week ending August 13 jumped 17.1% from the previous week, the Mortgage Bankers Association (MBA) reported in its weekly mortgage applications survey.
The MBA also reported that the market composite index, a measure of overall mortgage loan application volume, increased 13.0% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the index increased 12.4% compared with the previous week.
However, the purchase index that tracks the demand for new residential mortgages was down, staying at its lowest level in more than a decade. The low level suggests that the U.S. housing market remains weak.
“The refinance share of mortgage activity increased to 81.4% of total applications from 78.1% the previous week, which is the highest refinance share observed since January 2009,” the MBA said. “The adjustable-rate mortgage (ARM) share of activity decreased to 5.7% from 5.9% of total applications from the previous week. “
The seasonally adjusted purchase index decreased 3.4% from one week earlier while the unadjusted purchase index decreased 4.6% compared with the previous week. It was 38.6% lower than the same week a year ago.
http://www.investmentadvisor.com/News/2010/8/Pages/MBA-Says-Mortgage-Refinancings-at-Highest-Point-in-Over-a-Year.aspx
Crude Settles Slightly Lower On Conflicting Data
By Jerry A. DiColo
AUGUST 18, 2010, 4:15 P.M. ET
NEW YORK (Dow Jones)--Crude futures settled slightly lower Wednesday, after a wild ride through most of the trading session sparked by conflicting oil inventory data and a turnaround in equities markets.
Light, sweet crude for September delivery settled 35 cents, or 0.5%, lower at $75.42 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange settled 46 cents lower at $76.47 a barrel.
Oil prices fell sharply early in the session, dropping below $74 before inventory data from the Energy Department's Energy Information Administration refuted an earlier report from the American Petroleum Institute, an industry group, showing a sharp rise in stockpiles. A move higher in equities markets, which have led crude for several weeks as a sign of future economic growth, also helped pare losses.
The Dow Jones Industrial Average was recently up 21 points to 10427.
"The market had discounted a bearish API report yesterday, and when the EIA came in much less negative, the market got a pop," said Jim Ritterbusch, president of Ritterbusch and Associates, which tracks the oil industry.
The EIA said crude stockpiles for the week ended Aug. 13 fell by 800,000 barrels. Gasoline inventories were flat, while distillates, which include heating oil and diesel fuel, rose by 1.1 million barrels.
The more influential government report contrasted with API data Tuesday afternoon, which showed a 5.8-million-barrel increase in crude stocks that sent futures prices falling.
Despite the rebound in oil on a better-than-anticipated inventory picture, the energy department report still showed that increasingly large supplies of crude are now present in the U.S.
Oil stockpiles last week rose to the highest level on record, since data became available nearly 27 years ago. While data until 1990 provided only a monthly snapshot, the record levels suggest signs of further weakening of the global economy could leave producers with too much oil.
As such, traders continue to focus on broader economic data and equities markets to gauge whether future demand will keep up with supplies.
"There is a knee-jerk reaction (to the data), and then let's move on from there," said Matt Smith, an oil analyst with Summit Energy in Louisville, Kent. "Crude is overlooking the current picture and looking out to how things are going to turn out for the rest of the year."
Front-month September reformulated gasoline blendstock, or RBOB, managed a small gain, settling 0.8 cents higher at $1.9612 a gallon. September heating oil settled 0.1 cent lower at $2.0249 a gallon.
More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching for the following headlines:
Nymex Light Crude Oil Close Nymex Harbor RBOB Gasoline Close Nymex Heating Oil Close ICE Brent Crude Oil Close ICE Gas Oil Close -By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155; jerry.dicolo@dowjones.com
http://online.wsj.com/article/BT-CO-20100818-711094.html
>>> Housing riots today, food riots tomorrow. >>>
Looks to me like we are being set-up for a Katrina like event, but on a much larger scale...
rd, posts like post#53107 needs to have an OT in front of the headline
How Far is the US From Food Shortages and Food Riots?
by Monica Davis ( davis4000_2000 [at] yahoo.com )
Saturday Apr 12th, 2008 2:37 PM
Even the United States is not immune from the potential for food shortages, food riots and food insecurity. We’re just blind to the possibility.
As Americans complain over high gasoline and food prices, many third world countries are experiencing food riots over price and scarcity of food. In some parts of the word rice is so expensive that it is transported in heavily guarded convoys and farmers guard their fields from thieves.
Food riots are becoming more common, as more land and crops are being diverted from the food chain by the world biofuels industry. According to an investment magazine, the crisis shows no signs of weakening. Food, the bread of life, is fast becoming the “gold” of the Twenty-first century.
Fatal food riots in Haiti. Violent food-price protests in Egypt and Ivory Coast. Rice so valuable it is transported in armoured convoys. Soldiers guarding fields and warehouses. Export bans to keep local populations from starving. (Globalinvestor.com)
The face of food security is rapidly changing around the world and there are no quick fixes experts say. What worries many is that food stockpiles are at historic lows. In the United States alone, stockpiles of wheat hit a 60-year low in the United States as prices soared. Almost all other commodities, from rice and soybeans to sugar and corn, have posted triple-digit price increases in the past year or two. (Ibid)
Experts say the high prices will continue for years, putting billions of people at risk for malnutrition or starvation. World leaders continue to cast fearful eyes at the burgeoning bio-fuels industry, noting that the competition generated by the industrial biofuels industry and food agriculture is pushing up food prices and making it more profitable to grow fuel crops for industrialized countries than it is for big farmers in Third World countries to grow food for their own citizens.
What has put many world leaders on notice is the fact that this artificially generated food crisis has not yet peaked. As of this writing, no one knows when the situation will reach a crescendo, or to what extent this demand will affect food security and political stability in the world.
Many believe that the food crisis is in its infancy and they worry about increasing food-based political instability worldwide.
British Prime Minister Gordon Brown said this week he's worried that ethanol production is pushing up food prices everywhere, and he called for an urgent review of the issue. Economist Dr. Hazell has said that filling an SUV tank once with ethanol consumes more maize than the typical African eats in a year. (Ibid)
So far, Americans have been able to weather the storm. While rising fuel and food prices have generated grumbling from the populace and hand wringing from the politicians, this country has yet to experience the level of social unrest and rioting that high food prices have generated in other parts of the world.
In Haiti, ongoing instability and riots over food prices has led to the probable ousting of the nation’s Prime Minister. Newswires are reporting “A Haitian senator says that parliament has voted to dismiss Prime Minister Jacques Edouard Alexis following deadly riots over rising food prices.” (Wire services)
A few analysts believe that the United States is on the verge of a major economic revolution, a process, which will change where we live, what we eat, and how we view agriculture. Looking at the rumbles from around the world we are already seeing wars over oil and energy resources, not to mention the violent eviction of traditional farmers in South America and other parts of the world by the industrialized bio-fuels industry.
The fight over finite land resources is slowly taking shape out of sight of most of the United States as agribusinesses lay claim to land around the world. Agro-conglomerates chase natives off tribal lands in South America, Indonesia and parts of the Far East at gunpoint. Murder over land continues in the Third World, as conglomerates move onto jungle and rain forest land, clearing acreage with slash and burn campaigns.
What was once climate producing tropical rain forest has become fields for sugar cane, corn and other biofuels. More profitable biofuel crops have now deprived the food chain of a large supply of corn and other crops, driving up the cost of corn-based food such as corn meal, tortillas, corn syrup and a hundred other crops and products which grace our tables at ever greater cost.
The food riots in Haiti are mirrored by riots in parts of Africa and Asia, sending shock waves throughout the Third World. According to a report from the United Nations, the 60 per cent price increase in the price of corn and feedstock over the past two years can be directly traced to the increased demand on corn and soybeans made by the biofuels industry. The United States, as the world’s largest exporter of corn, has diverted millions of pounds of corn and soybean crops to the growing biofuels industry, creating a market that makes fuel crops more profitable than food crops. National surpluses of grains have give way to increased demand for biofuels, driving up the price of corn and grains around the world. (World Bank)
Traditional food crops—rapeseed, maize (corn), palm and soybean are in demand by both food agriculture and the growing biofuels industry, creating an increased competition, which is driving up food costs by double digits, generating food riots around the world. Thai farmers and other farmers are now guarding rice crops, as skyrocketing grain prices are leading to crop theft and food riots around the world. According to international reports:
Rice farmers here (Thailand) are staying awake in shifts at night to guard their fields from thieves. In Peru, shortages of wheat flour are prompting the military to make bread with potato flour, a native crop. In Egypt, Cameroon, and Burkina Faso food riots have broken out in the past week. (Thoughtcriminal.org)
In Thailand and other rice and grain producing nations, food theft is rising. Crops are stolen directly from fields.
The reported thefts in five rice-growing provinces in central Thailand are the first signs of criminal activity in this region stemming from the sharpest global spike in commodity prices since the oil crisis in the mid-1970s. Across the world, higher food prices are triggering thefts and violence – both by people who can’t afford to eat and those who want to make an easy buck. (Ibid)
The United States produces 46% of the world’s biofuels, with Brazil coming in at a close second with 42%. (Biofuels: the Promise and the Risks). As a world leader in food exports, grain in particular, the United States has altered world grain markets by diverting grain into fuel production, thereby increasing demand for grains with a resultant rise in the price of the commodity because of demand. The ensuing market shortage has generated price increases in the world grain market, making food staples too expensive for much of the world’s poor to afford.
So far, Americans are mostly bystanders in the game, content to grumble at the gas pump and complain in the grocery aisles. As a “First World” nation, the United States so far has not been subject to the food riots, which we have seen in Haiti and other parts of the world. Americans have more per capita income than much of the world; hence the crisis of the Third World, so far, is inconvenience in the “First World” and in developed nations such as the United States.
That said, however, we must understand that this situation is not sustainable. While Americans do have more disposable income than the rest of the word, that income is not unlimited and our food supply is much more vulnerable than we think. When it comes to food security, both in terms of supply and accessibility, this country is much more vulnerable than we think.
As one retired grain salesman noted, most of the nation’s grain is moved around the country by just TWO railroads. Little is stored in the event of disaster and the whole system is extremely vulnerable. While we in the United States look at the food riots in other countries with a sense of disbelief, we are not immune. Under the right circumstances, we could be in the same boat. (Ibid)
In order for riots to break out the whole food supply doesn't have to be wiped out. It just has to be threatened sufficiently. When people realize their vulnerability and the fact that there is no short-term solution to a severe enough drought in the Midwest they will have no clue as to what they should do. Other nations can't make up the difference because no other nation has a surplus of grain in good times let alone in times when they are having droughts and floods also. (Robert Felix, “US Food Riots Much Closer than You Think”)
Critics say the US is currently too preoccupied with foreign excursions and oil to pay attention to food security, particularly how concentration of suppliers and processors threaten the food chain. The highly concentrated meat processing industry has generated millions of pounds of recalls this year. Outbreaks in e.coli and other food borne pathogens continue to haunt the headlines, as food prices rise around the world.
The concentration of food processing, cultivation and distribution into the hands of a few companies is wrecking havoc around the world. A Canadian reporter noted the connection between market concentration and price increases around the world:
In Mexico and most other countries, a handful of international companies is controlling more and more of the food production line—from growing crops to purchasing crops from farmers, to warehousing, processing and distribution.
Carlsen said investigations following the tortilla crisis found that huge stores of corn in warehouses had cut down the supply and led to a jump in prices. (Matthew Little, Epoch Times, “Food Prices Skyrocket Amidst Growing Shortages.”)
Food security, that is the availability and affordability of food, has been pushed aside by the War on Terror, and continues to lag behind our awareness, despite their being linked together in a dangerous dance of death, which has been created by the bio-fuels industry. Ultimately, the price of oil, depends on supply, demand and risk (War), and the price of food has now become dangerously linked to the energy market by the requirements of the fuel crop industry. We now are dealing with a ‘double whammy’ that is dangerously impeding our food supply.
Living in the “Breadbasket of the World,” it is hard for most Americans to even conceive of the idea that food could become scarce in this country. Few of us are paying attention to the close relationship between biofuel, grain crops and price inflation.
Think tank analyst Pat Mooney noted the close connection between corn and oil prices.
"The market place does now tie the price of a bushel of corn to the price of a barrel of crude and when it does that it means that poor people are going to lose out," said Mooney. (Ibid)
The world’s grain and food markets have been turned on their heads. Where once the price of fuel and oil-based fertilizers used to cultivate crops added to the cost of the crop, now the use of crops as fuel generates still another tier of demand on the world’s soils and crops.
With finite amounts of cropland, competition between fuel and food crops for land and economic resources, and unpredictable natural disasters, wars and pestilence waiting in the wings, our food supply is not as secure as we think it is.
Even the United States is not immune from the potential for food shortages, food riots and food insecurity. We’re just blind to the possibility.
The author is an activist/writer/public speaker based in the Midwest. She has written articles on the mortgage crisis, land theft, mis-education of ethnic youth and food security. Books include: Land, Legacy and Lynching: Building a future for Black America, and Urban Asylum: Politics, Lunatics and the Refrigerator Woman.
www.Lulu.com/davis4000_2000
http://www.indybay.org/newsitems/2008/04/12/18492403.php
Food Stocks & Indexes
http://stockcharts.com/symsearch/?food
It's my belief that nanotech and/or water will be the next hot thing to trade or buy and hold in the near future... Here are a couple of indexes for starters.
Nano
http://finance.yahoo.com/q/cp?s=%5ELUXNI
Water
http://finance.yahoo.com/q/cp?s=%5EZWI+Components
Water: The Ultimate Commodity
by James E. McWhinney
The Palisades Water Index is an unmanaged benchmark that many water indexes and ETFs track. Why the interest in water? Like gold and oil, water is a commodity - and it happens to be rather scarce. (To see the lastest news in the commodity market, visit Commodity News at Forbes.com.)
Global Water Resources
About 70% of the earth's surface is covered in water, but 97% of it is saltwater, which is unfit for human use. Saltwater cannot be used for drinking, crop irrigation or most industrial uses. Of the remaining 3% of the world's water resources, only about 1% is readily available for human consumption.
Global Shortage
Rapid industrialization and increasing agricultural use have contributed to worldwide water shortages. Areas that have experienced water shortages include China, Egypt, India, Israel, Pakistan, Mexico, parts of Africa and the United States (Colorado, California, Las Vegas and the East Coast), to name but a few.
Pollution also highlights the need for clean water. In the U.S., the dead zone off the Gulf Coast highlights the impact of fertilizer runoff, and methyl tertiary butyl ether (MTBE), an additive in unleaded gasoline, can be found in well water from California to Maryland. Overseas, highly publicized incidents in Russia, China and elsewhere demonstrate that pollution isn't limited to the West. Of course, fouled water supplies further limit the amount of fresh water available for human use.
Indexes
Like any other scarcity, the water shortage creates investment opportunities. Here are some of the more popular indexes designed to track various water-related investment opportunities:
• Palisades Water Index - This index was designed to track the performance of companies involved in the global water industry, including pump and filter manufacturers, water utilities and irrigation equipment manufacturers. The index was set at 1000 as of December 31, 2003. It closed at 1351.08 on December 30, 2005.
• Dow Jones U.S. Water Index - Composed of approximately 23 stocks, this barometer climbed from 500 to 800 over the 12 months ending December 31, 2005.
• ISE-B&S Water Index - Launched in January 2006, this index represents water distribution, water filtration, flow technology and other companies that specialize in water-related solutions. It contains 20 stocks.
• S&P 1500 Water Utilities Index - A sub-sector of the Standard & Poor's 1500 Utilities Index, this index is composed of just two companies, American States Water (NYSE:AWR) and Aqua America (NYSE: WTR). In 2005, the S&P 1500 Water Utilities Index rose in excess of 45% .
The Bloomberg World Water Index and the MSCI World Water Index provide a look at the water industry from an international perspective, although it can be rather difficult to find current information about either index. There are also a variety of utility indexes that include some water stocks. (For further reading, see Indexes: The Good, The Bad And The Ugly.)
Investment Opportunities
A look at the holdings of any of the water indexes provides an easy way to begin your search for suitable investments. Companies from blue chip stalwart General Electric to micro cap Layne Christensen are all seeking a piece of the water market. In addition to direct stock purchases, some of the larger firms offer dividend reinvestment plans. Firms seeking to profit from water-related businesses include beverage providers, utilities, water treatment/purification firms and equipment makers, such as those that provide pumps, valves and desalination units.
When it comes to bottled water, the market is growing internationally. Demand is on the rise from China to Mexico, following in the footsteps of the spike in U.S. consumer demand. The Beverage Marketing Corp. reports that the bottled water market in the U.S. grew 19% in 2004, and U.S. consumers drank 26 gallons of bottled water per person in 2005, up from 11.7 gallons in 1995. On the desalination front, some 100 countries currently rely on desalination for at least part of their freshwater consumption needs.
If stock picking doesn't interest you, ETFs, mutual funds and unit investment trusts (UITs) also provide plenty of opportunities to invest in water. The PowerShares Water Resource ETF, mentioned earlier, tracks the Palisades Water Index, and the iShares Dow Jones U.S. Utilities Index ETF (ARCA: IDU) provides some exposure to water-related stocks. On the mutual find side, as with ETFs, pure-play water funds are hard to find, but funds such as the New Alternatives Fund and the ICON Telecommunications & Utilities Fund provide some exposure to the sector, as do numerous other utility funds and ETFs. (To learn more, see Introduction To Exchange-Traded Funds.)
Additionally, two unit investment trusts that specialize in water-related investments are the Claymore-Boenning & Scattergood Global Water Equities UIT and the Claymore-Boenning & Scattergood U.S. Water Equities portfolio.
Conclusion
Recent years have seen an upswing in the demand for investments that seek to profit from the need for fresh, clean water. If the trend continues, and by all indications it will, investors can expect to see a host of new investments that provide exposure to this precious commodity and to the firms that deliver it to the marketplace. There are currently numerous ways to add water exposure to your portfolio - most simply require a bit of research.
Just as with any other investment in commodities or sector funds, wise investors should limit their exposure to water. Generally speaking, highly concentrated investments such as these should not represent more than 10% of the assets in a well-diversified portfolio. Limiting exposure to concentrated positions provides some opportunity to capture positive returns while limiting overall portfolio volatility.
For more information about concentrated portfolios and diversification, see Do Focused Funds Provide A Better Outlook?, Introduction To Diversification and The Importance Of Diversification.
by James E. McWhinney (Contact Author | Biography)
James McWhinney has been a professional writer for nearly two decades. He has worked for many of the nation's top mutual fund providers and banks in addition to numerous magazines, websites and other publications. He specializes in financial services and travel.
Filed Under: ETFs, Mutual Funds, Portfolio Management
http://www.investopedia.com/articles/06/Water.asp
Water Industry News
http://waterindustry.org/
Hi bob, I did not mean to bring you down 8^) actually I thought of this as good news.
The banksters building vaults to hold gold should be good news (or so I thought) because they are going to want a higher return, therefore the price of gold should rise.
OTOH it may stay down (due to market manipulation) while they load up, still once they finish feeding at the trough I cannot see why they would want to go short.
Where Dummies Go For Business News
The human cost of cheap clothing
By James Melik | Reporter, Business Daily, BBC World Service
25 July 2010 Last updated at 12:14 ET
http://www.bbc.co.uk/news/business-10535743
Guest Post: The Purpose Behind Engineered Economic Collapse
Submitted by Tyler Durden
on 08/17/2010 08:47 -0500
http://www.zerohedge.com/article/guest-post-purpose-behind-engineered-economic-collapse
Banks set new store on building gold vaults
By Javier Blas in London
Published: June 11 2010 22:33 | Last updated: June 11 2010 22:33
Some of the world’s biggest banks and security companies are building vaults to store gold bars and coins worth tens of billions of dollars, cashing in on resurgent demand and record prices.
The growing interest in gold among investors worried about the global economy and Europe’s sovereign debt crisis has led to a shortage of long-term storage space.
Bankers said that vaulting had become highly profitable. Rising bullion prices translate into higher storage fees, which are usually calculated as a percentage of the gold price. Gold prices this week rose to a nominal record of $1,251.20 a troy ounce, up 14.5 per cent since January. On Friday, bullion traded at $1,226.
“Physical gold is being sought more than ever and that is causing all sorts of strains,” said Peter Hambro, chairman of Petropavlovsk, the gold miner.
Much of the increased demand comes from exchange-traded funds. The world’s largest, the SPDR Gold Trust, was on Friday holding a record 42m ounces of gold worth $51.5bn at current prices.
While some banks said they had space, others said their vaults were nearly full. Several said they were building or planning new vaults. JPMorgan recently opened a new gold vault in Singapore and Via Mat International, the Swiss-based security company, has just opened a silver safe warehouse in west London. Deutsche Bank is mulling a new vault, bankers said.
Frank Ziegler, head of precious metals at BayernLB in Germany, said its vault was full. “We are discussing increasing the size. We are just at the planning phase,” he said. Roger Jones, global head of commodities at Barclays Capital in London, said the bank was “actively looking at the precious metal vaulting business”.
While the traditional image of a bank vault is a basement deep underground, modern vaults are purpose-built warehouses, above ground and surrounded by high security. The trend to build new vaults reverses the dismantling in the early 1990s of the elaborate – and expensive – infrastructure of vaults put in place during the last gold boom of the late 1970s.
Philip Klapwijk of GFMS, the precious metals consultancy, said the move to build vaults reflected the “new nature” of the gold market. Investors hoping to benefit from a rising gold price and who are driving demand want long term storage. Jewellery makers deposit gold for short periods.
Additional reporting by Jack Farchy
http://www.ft.com/cms/s/0/53163d56-7584-11df-86c4-00144feabdc0.html
Is ‘Biflation’ Real?
by Nick Summers
August 16, 2010
Stagflation by any other name --bw
With the consumer price index flatlining, economists are watching warily for signs of deflation. The Fed said on Aug. 10 it would buy Treasury bonds to ward off fears that the recovery is stalling, which could bring falling wages and prices. Meanwhile, home sales appear set to drop now that a federal tax credit has expired. But the commodities market is one place where signs of deflation aren’t visible. Copper is up some 14 percent over the last year, oil is still near $80, and wheat is skyrocketing. Some economists warn that inflation, not deflation, is the real threat. What is going on?
It may be “biflation,” a concept now gaining currency on economic blogs. The term is generally defined as inflation and deflation occurring simultaneously in different parts of the economy—specifically, rising prices for commodities that trade in global markets and falling prices for things bought with credit domestically, like homes and automobiles. “I think there’s some truth to it,” says Nariman Behravesh, chief economist at IHS Global Insight, noting that demand from India and China buoys metal and oil, while unemployment and weak consumer demand in the U.S. keep home prices low. Some economists remain skeptical. Columbia University’s Ricardo Reis says it’s common sense that when overall inflation is near zero, sectors will be positive and negative in equal proportion. Others point out similarities to stagflation, or rising prices plus sluggish growth. One thing is certain: the U.S. recovery is fragile. Whichever “flation” takes hold, at least we’ll have a name for it.
http://www.newsweek.com/2010/08/16/what-is-biflation.html
Implode -O- Meter's
BANKS
341 major U.S. lending operations have "imploded" since early 2007
http://bankimplode.com/
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MORTGAGE LENDERS
384 major U.S. lending operations have "imploded" since late 2006
http://ml-implode.com/
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HEDGE FUNDS
117 funds at 71 outfits have "imploded" since mid-2007
http://hf-implode.com/
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HOME BUILDERS
85 major builders have "imploded" since late 2006
(*plus 53 additional tiny implosions)
http://builder-implode.com/
The Ryan Budget's Radical Priorities
By Paul N. Van de Water
Revised July 7, 2010
Provides Largest Tax Cuts in History for Wealthy, Raises Middle Class Taxes, Ends Guaranteed Medicare, Privatizes Social Security, Erodes Health Care
http://www.cbpp.org/cms/index.cfm?fa=view&id=3114
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High-Income People Would Benefit Significantly From Extension of “Middle-Class” Tax Cuts
By Chuck Marr and Gillian Brunet
August 13, 2010
http://www.cbpp.org/cms/index.cfm?fa=view&id=3263
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2010 Medicare Trustees’ Report Shows Benefits of Health Reform and Need for Its Successful Implementation
By Paul N. Van de Water
August 16, 2010
http://www.cbpp.org/cms/index.cfm?fa=view&id=3265
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Extension of High-Income Tax Cuts Would Benefit Few Small Businesses; Jobs Tax Credit Would Be Better
By Chuck Marr and Gillian Brunet
August 3, 2010
http://www.cbpp.org/cms/index.cfm?fa=view&id=3251
Ben Bernanke: Wall Street's servant
Dean Baker guardian.co.uk,
Monday 16 August 2010 14.00 BST
The Federal Reserve is failing in its duty to tackle unemployment – because its chairman heeds only the banks, not the US public
Last week, the Fed announced that it would use the proceeds from retired mortgage-backed securities to buy up more government bonds. This may have a very modest effect in keeping long-term interest rates low, thereby giving a small boost to the economy.
Such a measure would be reasonable if the economy was basically fine and just in need of a modest lift. But this is not the case.
The unemployment rate is 9.5% and virtually certain to rise in the 2nd half of the year. Job growth has basically stopped and GDP is likely to be in the range of 1-2% in the next four quarters, as state and local governments cut back spending, the stimulus phases down and the housing market resumes its slide.
In this scenario, the Fed should be taking aggressive steps to bring the economy back to full employment. After all, this is part of its job description. Its responsibility is to promote price stability and full employment. There is no concern about price stability in the sense of the rate of inflation being too high right now. Therefore, the Fed's responsibility should be to do everything within its power to reach full employment; obviously, we are nowhere close now.
Its chairman, Ben Bernanke, even knows exactly what needs to be done, as the Wall Street Journal recently reminded us. He wrote a paper back in 1999 about Japan's stagnant economy and mild deflation. Following a recommendation by Paul Krugman, he urged Japan's central bank to target an inflation rate in the range of 3-4%.
A rate of inflation in this range would substantially reduce real interest rates, giving firms a powerful incentive to invest. It would mean, for example, that if they built a factory this year, the goods it produces would be selling for 15-20% more in five years. This modest level of inflation would also go far in reducing the debt burdens of households. The burden of their mortgages and other debt would be eroded as wages rise roughly in step with inflation, while the size of the debt remains fixed.
In spite of knowing exactly what needs to be done, Bernanke and the Fed show no inclination of moving in this direction. Instead, the Fed seems prepared to ignore its legal mandate to promote full employment.
The explanation for this incredible policy failure is straightforward. The people that Bernanke must answer to are the Wall Street bankers, not Congress and the public. The Wall Street bankers are not troubled by 9.5% unemployment. Their profits are back to pre-recession levels and bonuses are again hitting record levels.
For the Wall Street bankers, everything is just fine now. If Bernanke were to pursue a policy of targeting 3-4% inflation, it could erode the real value of many of their assets. These banks own mortgage debt and other assets whose value would be reduced by even modest rates of inflation. While targeting a slightly higher rate of inflation may be a no-brainer from the standpoint of workers and most of the country, it is not good for Wall Street – and this is who our supposedly independent Fed is answering to.
This is not the first time that Bernanke has done Wall Street's bidding. When Goldman, Citigroup and the rest were on the edge of bankruptcy, Bernanke deliberately misled Congress to help pass the Troubled Asset Relief Program (Tarp). He told them that the commercial paper market was shutting down, raising the prospect that most of corporate America would be unable to get the short-term credit needed to meet its payroll and pay other bills.
Bernanke neglected to mention that he could singlehandedly keep the commercial paper market operating by setting up a special Fed lending facility for this purpose. He announced the establishment of a lending facility to buy commercial paper the weekend after Congress approved Tarp.
Of course, the whole crisis stems directly from the Fed and Bernanke's fealty to Wall Street. It was easy for any competent economist to recognise the housing bubble and the danger it posed to the economy as early as 2002. Yet, the Fed and Bernanke (then working as Greenspan's sidekick as a Fed governor) insisted that everything was just fine with the housing market. After all, the Wall Street banks were making tons of money, what could be the problem?
The country badly needs a central bank that is independent of Wall Street, where its governors can do what they believe is best for the economy and the country. Unfortunately, we do not have such a Fed. Until Congress and the public start putting heat on Bernanke for his policy failures, we can expect to get kicked in the face again and again.
http://www.guardian.co.uk/commentisfree/cifamerica/2010/aug/16/ben-bernanke-banks-unemployment
America’s Quiet Banking Collapse
From theTrumpet.com
July 27, 2010
Seven more banks fade into history.
The Federal Deposit Insurance Corporation (fdic) announced that it had seized the assets of seven additional banks, on Friday. During 2010 so far, 103 banks have gone bankrupt, putting the nation on pace for the most bank failures since the Savings and Loan crisis during the 1990s.
America’s quiet banking collapse may be one of the most underreported stories of the year.
If the rate at which banks continue to fail continues, 175 institutions will become wards of the state by the end of December. In 1992, during the height of the banking crisis, 179 banks were shut, so this year could be a record—of the bad kind.
One difference between 1992 and today is that banks that are failing now are bigger and more interconnected. Hence the determination by the fdic to keep a low profile. When banks do fail and are seized by regulators, the press is only notified as it is heading into the weekend doldrums, as was the case this Friday.
But going forward, the increasing numbers of bank failures may become more difficult to hide.
At the end of 2008, there were 252 U.S. banks on the fdic’s problem list, according to analyst Michael Snyder. At the end of 2009, there were 702 U.S. banks on the fdic’s problem list.
As of today, there are now 775 banks on the problem list—that is about one in every ten! Three months ago, there were only 702 problem banks. And the list might have been even worse had the government not made accounting rules less stringent.
But the fragility of the system is worse than most people understand.
The approximately 8,000 banks that operate in America have about $13 trillion in deposits. But guess how much money the fdic has on hand to insure those deposits?
The answer is worse than zero! The fdic is completely broke and is operating in the red, even though banks are still paying their premiums for coverage. As of the end of the first quarter of this year, the fdic was $20.7 billion in the hole.
The next question is: Who is going to bail out the fdic?
The government you say? That is all fine and good, but the government is doing a lot of bailing out these days. In fact, it may have already bailed out too much. If that is the case, who is going to bail out the government?
http://www.thetrumpet.com/index.php?q=7370.5947.0.0