The Pragmatic Economist

Why you may want to refinance your home now.

2011-05-27T12:55:00.000-07:00

Interest rates have dropped again. If you missed the last round of refinancing at the end of 2010, now may be your best opportunity to refinance.

Why you may ask?

According to this article at Mortgage News Daily, rates have decrease to their lowest levels this year (despite a slight uptick this last week). According to the article as well, many are waiting in the wings for rates to return to those lows. I see the chance of that occurring as very slim.

Last years drop in rates were due to QE2. I got news people, there isn't going to be a QE3. When people realize this is as good as it's going to get, we'll have another round of refinancing, which will push rates back up.

Get in while the gettings good.

Central Florida Real Estate Developer to Build Less Homes?

2011-05-26T13:06:00.000-07:00

At least someone in the building community is intelligent.

According to this Orlando Sentinel Article, K. Hovnanian Homes is building 400 detached homes (aka stand alone houses), as opposed to 1,000 townhomes and condos near the Millenia area.

Now if only we could get other homebuilders around the country to do the same, maybe we could get through this excess inventory in 2 years instead of 4.

Commercial Real Estate Declines (Again)

2011-05-25T17:05:00.000-07:00

According to Calculated Risk and Moody's, commercial real estate declined by 4.2% in march. Unfortunately we can probably expect more of the same over the next few years. Commercial real estate needs jobs. Jobs will come when we work through the residential real estate inventory, which could be 4-5 years from now.

Unemployment Rate for College Grads is still low

2011-05-25T13:30:00.000-07:00

What if I was to ask you what the unemployment rate was for College graduates? What would you say? 10%, 8%? Try 4.5%. In other words, not bad at all.

This data was collected from the Bureau of Labor Statistics at www.bls.gov

Top 10 Dying Industries

2011-03-29T04:13:00.000-07:00

From The Wall Street Journal: Top 10 Dying Industries

Leading the way for the top 10 dying industries is Wired Telecommunications Carriers. Not suprising. Here's the rest of the list:

Wired Telecommunications
Mills
Newspaper Publishing
Apparel Manufacturing
DVD, Game & Video Rental
Manufactured Home Dealers
Video Postproduction Services
Record Stores
Photofinishing
Formal Wear & Costume Rental

Technological improvements and foreign competition are to blame for these dying industries, but for me I see the list and see progress. Who wants to spend time going to the video store or get your pictures developed? Wireless everything please. And cheap clothing from overseas?...yes, thank you. The only industry I think we should worry about is newspaper publishing. It remains to be seen what the long term affects of the dying industry will have on all of us.

Problem Banks Highest since 1992

2011-03-28T05:43:00.000-07:00

As reported in the blog Calculated risk(Unoffical Problem Bank List) problem banks as reported by the FDIC are at their highest levels since 1992. The important question is of course, is this a problem?

From my perspective, no, but it's something that should be watched closely.

The reason for my opinion is that in the years 1990-1992, both the number of problem banks and the amount of assets they held were significantly higher. (FDIC Historical Trends) We all know how the economy did between 92-2000. Also, in 2007, the number and assets of problem banks were very low, and we all know how 2008 turned out.

The bottom line is that problems occur when we don't KNOW how many banks are really in trouble, and it seems at this point that the FDIC has a good handle on it.

I thought a more significant piece of information was the trend of the number of FDIC employees. The number of employees steadily decreased from 1991 to 2006/2007 and is back on the rise. The question is, are they still significantly understaffed, and do they have the manpower to identify problems before they surface to everyone's surprise.

Election Season is Upon Us

2010-10-18T04:58:00.001-07:00

The political season is ramping up, and so I guess it's about that time for me to face my social responsibility as a citizen and actually do some research. Here is an interesting post from the blog "The Big Picture".

"Hey, Big Spender" by The Big Picture

Bottom line, spending during the obama administration hasn't been the worst, but it certainly hasn't been the best. Given that he started in a recession and absolutely had to provide some sort of stimulous, I have to say that he's done an ok job. I'll give him a C.

That being said, I'm a small government, lower taxes kind of guy. We certainly didn't get that from democrats this time around, and the leadership I was hoping for from them was lackluster at best. On the other hand, republicans have not shown a willingness to tackle the big 3 of spending: social security, defense, and medicare/medicaid and they certainly aren't in line with my social views. Until we tackle these big spending issues, I won't be voting for them either. Unfortunately it looks like my only option is to abstain from most of my votes this political season. I haven't researched the candidates yet, so I'm hoping I'll be suprised by one of them stating what needs to be done. Unfortunately in our country, I don't see it happening. People want lower taxes but they don't want to cut any benefits. Sorry people, it doesn't work like that.