Feb 27
Entries for month: February 2010
Feb 26
Fidelity Viewpoints (excerpts)
By Lisa Emsbo-Mattingly, Director of Economic Analysis
February 19, 2010
"I find the leading indicators extremely optimistic for job growth. The best long-term indicator of employment is corporate profitability, which became more robust as 2009 progressed. (See chart below.) At the same time, the U.S. economy grew at an annualized rate of 5.7% in the fourth quarter of 2009, the fastest pace in six years, according to the U.S. Commerce Department. As corporate profits continue to recover in 2010—and I expect they will—this can translate into job creation."
"Temporary hiring is a reliable leading indicator of future permanent hiring. At this stage of the economic recovery, corporations are still averse to hiring full time. But demand for temp workers surged in the second half of last year. During the previous two business cycles, temp hiring eventually led to permanent hiring. The Conference Board's index of employment trends is rising at the fastest six-month pace since 1994."
Office Vacancy RateFeb 26
Phoenix Business Journal Friday, February 26, 2010 (Excerpts) - Karen Mills was sworn in as head of the U.S. Small Business Administration last April, just as the economic stimulus bill was starting to revive the SBA’s lending programs. Now she is pushing President Barack Obama’s jobs plan, which calls for increased lending to small businesses, tax breaks for hiring and business investment, and programs to help innovative businesses grow.
Mills sat down Feb. 18 with Kent Hoover, the Washington Bureau chief of American City Business Journals, to talk about increasing small businesses’ access to capital...
...We have a program called 504. It’s for owner-occupied real estate, if you expand and create jobs. Temporarily, let’s use 504 to do owner-occupied real estate refinancing -- not the bad stuff, not the speculative portfolios that have been accumulated; but owner-occupied, and you haven’t gone into default. It’s probably less risky than funding an expansion. It looks like we can do it for zero subsidy; we’ll charge a fee to take on the risk, and we’ll need a little administrative oversight. We think we can do $7 billion to $10 billion at very little or no cost to taxpayers.
We have the infrastructure to do that right now. We know the demand is going to be there. (end)
How to get a SBA Guaranteed Loan
Boston Office Space , Office Building Sales , Office Space , Office Space Negotiations , SBA LoanFeb 23
Officing Today February 9, 2010: The US has been experiencing plenty bad weather this winter season. A storm watch alert has been issued in Southern California, where reports of mudslides and flooding dominate the local news. The nation’s capital had 20 inches of snowfall over the weekend, and is expecting more of the same today. These conditions have required schools and offices to shut down in the area.
In other parts of the country, though, many people living in areas with harsh winter weather are finding that virtual offices are the perfect storm solution. Virtual office clients are able to manage their businesses much more easily in winter weather than those who work in traditional office set-ups.
Radio Iowa’s Dar Danielson reported in December that Iowans with virtual offices were not affected by the winter weather problems that other people trying to get to work were facing. A virtual office client interviewed for the piece advised that, simply put, a virtual office “allows you to work whenever and wherever you need to.”
Another virtual office client interviewed pointed out other perks of this alternative workplace solution: “She says it gives a tremendous amount of flexibility, as it allows people to work out of their homes and during their own hours, but still have access to the information they need.” The client highlighted the fact that a blizzard earlier in the season had less of an impact on her business, since her employees are able to work without having to come to an office building.
As the winter storms continue to rage on, it is likely that more businesses will find that they can’t afford not to be using a virtual office set-up.
Office Space , Virtual Office SpaceFeb 22
A newsletter I received today is a bit more positive on the recovery and does make a good point that despite high unemployment our national office vacancy rate is better that expected.
Monday Morning Outlook
Brian S.
Wesbury - Chief Economist First Trust
Robert Stein, CFA - Senior
Economist First
Trust
Over the past
year, as we have defended our forecast of a V-shaped recovery and the economy
has clearly turned upward, two things have happened. First – slowly and quietly
the consensus forecast for economic growth has been lifted – to roughly 3% real
GDP growth from an anemic 2%. We expect this to continue as the consensus
forecast continues to move toward our 4%+ forecast.
Second – the list
of worries over the economy has grown. Remember credit card fears? Well,
delinquency rates are declining now. What about Credit Default Swaps (CDS’s)?
Yeah, what about them? As you read this, AIG is writing the value of these
contracts up. And who could forget Dubai? Oh, you already did?
Well, no matter
how many of these economy killers disappear into the mist of history, there are
more to take their place. A commercial real estate collapse, the “real”
unemployment rate, housing foreclosures, ARM resets, deficits,
government-created uncertainty, the lack of bank lending, universal healthcare,
cap and trade, looming tax hikes, China, Greece, and don’t forget the unwinding
of economic intervention by the Fed and Treasury and the petering out of
stimulus.
It’s almost as if
the better the economic data, the more things people worry about.
We don’t want to
say that all these worries are not important, or misplaced. There are problems
and issues, but we do believe they are being overblown. For example, the
national office vacancy rate is 17.5% – high – but still lower than it was in
the 1990-91 recession, and lower than one would expect when the unemployment
rate is 9.7%. And now with unemployment declining, vacancy rates should fall as
well.
Many people fear
a “real” unemployment rate of 16.5% (which includes the official unemployment
rate plus marginally attached workers). But this rate is always above
the official unemployment rate and moves along with it. In other words it
offers no new information. Everyone knows unemployment is high, but recoveries
always begin when unemployment is high.
Government
deficits are high, and it is true that government activity is creating
uncertainty, but this has stirred political push-back rarely seen in the US. It
is very likely that the awakened and renewed political energy showing up these
days will finally force Congress to address the issues of its long-term unfunded
liabilities and its out-of-control spending. In other words, the worry and fear
may finally produce action.
Finally, bank
lending, or the lack of it, is bothering many. Conventional wisdom suggests
that the economy cannot recover (at least strongly) without a pick-up in bank
lending. However, this theory leaves us wanting. After declining in the past
two years, total loans and leases held by commercial banks stood at $6.76
trillion at the end of 2009, which was above year-end 2007 levels or any time
before that. In other words, bank lending is currently at levels above those
that existed during what most people call a “bubble” in bank
lending.
Much of this is
about attitude. If you want to find things to worry about, you always can.
It’s like hypochondria. But, in the end, with monetary policy accommodative and
the panic over, the economy is heading upward. And it’s funny how so many
problems seem to dissolve when growth gets underway.
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