Monday:

No Economic Reports

Richard Fisher (Dallas Federal Reserve President) Speaks

Tuesday:

Consumer Credit: The dollar value of consumer installment credit outstanding. Changes in consumer credit indicate the state of consumer finances and portend future spending patterns. The consensus estimate is for a huge decrease from 20.4 billion to 7 billion. What it means to you: Growth in consumer credit can hold positive or negative implications for the economy and markets. Economic activity is stimulated when consumers borrow within their means to buy cars and other major purchases. On the other hand, if consumers pile up too much debt relative to their income levels, they may have to stop spending on new goods and services just to pay off old debts. That could put a big dent in economic growth.

ICSC Goldman Store Sales:  This weekly measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10 percent of total retail sales. What it means to you: Consumer spending accounts for more than two-thirds of the economy, so if you know what consumers are up to, you’ll have a pretty good handle on where the economy is headed.

Redbook: A weekly measure of sales at chain stores, discounters, and department stores. It is a less consistent indicator of retail sales than the weekly ICSC index. What it means to you: The pattern in consumer spending is often the foremost influence on stock and bond markets.

3 Year Note Auction

Ben Bernanke (Federal Reserve Chief) Speaks

Wednesday:

EIA Petroleum Report: The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S. The level of inventories helps determine prices for petroleum products. What it means to you: Petroleum product prices are determined by supply and demand – just like any other good and service. During periods of strong economic growth, one would expect demand to be robust. If inventories are low, this will lead to increases in crude oil prices – or price increases for a wide variety of petroleum products such as gasoline or heating oil.

John William (San Francisco Federal Reserve President) Speaks

10 Year Note Auction

Thursday:

Weekly Jobless Claims: New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. The consensus estimate is for an increase from 367,000 to 370,000. What it means to you: By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation threatens, it’s a good bet that interest rates will rise.

Bloomberg Consumer Comfort Index: A weekly, random-sample survey tracking Americans’ views on the condition of the U.S. economy, their personal finances and the buying climate. What it means to you: The pattern in consumer attitudes can be a key influence on stock and bond markets. Consumer spending drives two-thirds of the economy and if the consumer is not confident, the consumer will not be willing to spend. Confidence impacts consumer spending which affects economic growth.

Wholesale Trade: Wholesale trade measures the dollar value of sales made and inventories held by merchant wholesalers. It is a component of business sales and inventories. The consensus estimate is for an increase in inventories from .1 to .4. What it means to you: Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a slower rate of growth that won’t lead to inflationary pressures. Wholesale sales and inventory data give investors a chance to look below the surface of the visible consumer economy.  

30 year Note Auction

Money Supply

Friday:

International Trade: International trade is composed of merchandise (tangible goods) and services. It is available nationally by export, import and trade balance. Detailed information is reported on oil and motor vehicle imports. Services trade is available by export, import and trade balance for seven principal end-use categories. The consensus estimate is for the same -47.8 as last month. What it means to you: The international trade balance on goods and services is the major indicator for foreign trade. While the trade balance (deficit) is small relative to the size of the economy (although it has increased over the years), changes in the trade balance can be quite substantial relative to changes in economic output from one quarter to the next. Measured separately, inflation-adjusted imports and exports are important components of aggregate economic activity, representing approximately 17 and 12 percent of real GDP.

Consumer Sentiment: The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending. Consumer confidence and consumer sentiment are two ways of talking about consumer attitudes. The consensus estimate is for a small  decrease to 74.3 from 75. What it means to you:  Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it’s easy to see how this index of consumer attitudes gives insight to the direction of the economy.

Treasury Budget: The U.S. Treasury releases a monthly account of the surplus or deficit of the federal government. Changes in the budget balance of the annual fiscal year (which begins in October) are followed as an indicator of budgetary trends and the thrust of fiscal policy. The consensus estimate is for a deficit of $50.1 billion after last month’s deficit of $86 billion. What it means to you: The budget data have several direct and indirect meanings for the financial markets. The most direct relationship lies between the size of the budget deficit and the supply of Treasury securities. The higher the deficit, the more Treasury notes and bonds the government must sell to finance its operation. From there it’s simple supply and demand — if demand is constant but the supply of bonds goes up, the price goes down. The same is true if the deficit falls or is eliminated altogether — the government needs to sell fewer Treasury bonds, so the supply drops and the price of T-bonds rises. In the past few years, the budget deficit has increased dramatically, and this has put more Treasury securities into the market place.

Ben Bernanke (Federal Reserve President) Speaks

Sandra Pianalto (Cleveland Federal Reserve President) Speaks

Hello, and welcome to Real Estate Reality Radio. The most important hour of radio every Friday from 9 to 10 on WBCB 1490 am. Thank you for joining Vince and me. For those of you who are not familiar with the show I am the guy with a bow tie and a bit of an attitude and Vince is the fun affable best friend. Our show is dedicated to dispelling the myths associated with Real Estate and finance in your marketplace.

Within every market there are obstacles and solutions on the path to tremendous opportunities. Vince and I think most people are looking for practical advice. Please feel free to call 215-740-8999 or visit peterbuchsbaum.com.

Please join us live on the web at www.wbcb1490.com from 9:00am to 10:00 am every Friday.

We are joined again today by Mario Henry from Halo America. HALO America stands for Homeowners Assistance Lease Option program. HALO America was spawned in 2008 during the sub-prime mortgage crisis from the company formally known as Credit Evolution and Development. It is a bridge for home-ownership program that is catered to the masses stuck renting due to credit challenges. HALO America has branded a state-of-the-art process to bolster credit-challenged renters and grant them access to the real estate market. We want to bring the middle class back into the city while simultaneously increasing city revenue and upgrading community potential.

So last week we discussed the State of the Union.  The administration wants “responsible homeowners to find relief and be able to refinance. This week has had some interesting current events: Obama Proposes New Home Loan Refinancing Plan; Home Prices post Steep Decline in November; Freddie Mac a mess and likely to stay that way; The housing recovery that wasn’t.

Ever since the mortgage crisis began with the meltdown of Fannie Mae and Freddie Mac people have been trying to create a new normal real estate market.

Today we have the opportunity to spend an hour with Mario Henry and discuss how he and his team at Halo assist buyers through the maze of buying a home. The process for HALO is more than just numbers. Theirs is an education in how to own a home. Their motto is my favorite. Rent for 6 months and own for a lifetime.

Please join us live at www.wbcb1490.com for the open discussion with Sandy. Our discussion topic will be credit and credit scores and the effects of those scores. .

Each week we discuss the myths of the mortgage market. It is not about rate. A higher rate with no mortgage insurance may provide a lower payment.

Next week we hope to be joined by another member of Right Side Up Michael Goldberg a lawyer who represents homeowners negotiate with their lender to discuss what to do if you are not sure you can afford to sell your home.

The Week Ahead…

Market Focus: A very busy week of reports about income, employment costs, confidence, productivity and the all important employment report. All of this with the back drop of the Florida GOP primary and Greece’s ongoing drama. Should prove interesting.

Monday:

Personal Income and Outlays: Personal income is the dollar value of income received from all sources by individuals. Personal outlays include consumer purchases of durable and nondurable goods, and services. Theconsensus estimate is for personal income to have risen .4% month over month (was up .1 last month). Consumer spending to be up .1 month over month (same as last month’s .1%). The core PCE index to be up .1% month over month (same as last month’s up 1% ).   What it means to you: The income and outlays data are another handy way to gauge the strength of the consumer sector in this economy and where it is headed. Income gives households the power to spend and/or save. Spending greases the wheels of the economy and keeps it growing. Savings are often invested in the financial markets and can drive up the prices of stocks and bonds. Even if savings simply go into a bank account, part of those funds typically is used by the bank for lending and therefore contributes to economic activity. Income is the major determinant of spending — U.S. consumers spend roughly 95 cents of each new dollar. Consumer spending accounts directly for more than two-thirds of overall economic activity and indirectly influences capital spending, inventory investment and imports.

Tuesday:

Employment Cost Index: A measure of total employee compensation costs, including wages and salaries as well as benefits. The employment cost index (ECI) is the broadest measure of labor costs. The consensus estimate is for a slight increase from.3 to .4. What it means to you: By tracking labor costs, investors can gain a sense of whether businesses will feel the need to raise prices. If wage inflation threatens, it’s a good bet that interest rates will rise.

S & P Case-Schiller: The S&P/Case-Shiller home price index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S. The composite indexes and the regional indexes are seen by the markets as measuring changes in existing home prices and are based on single-family home re-sales. The indexes are based on single-family dwellings with two or more sales transactions. Condominiums and co-ops are excluded as is new construction. What it means to you: Home values affect much in the economy – especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. Many economists believe that the U.S. economy and especially the depressed housing sector will not recover until home prices firm back up. This makes watching home prices all the more important for the investor.

Chicago PMI: Manufacturing and non-manufacturing firms are both surveyed. Hence, it is not directly comparable to pure manufacturing surveys. Readings above 50 percent indicate an expanding business sector.The consensus estimate is for an increase from 62.5 to 63.  What it means to you: The Chicago PMI gives a detailed look at the Chicago region’s manufacturing and non-manufacturing sectors. Many market players don’t realize that non-manufacturing activity is covered in this index and tend to focus on the manufacturing side only. On its own, it can be viewed as a regional indicator of general business activity.

Consumer Confidence: The Conference Board compiles a survey of consumer attitudes on present economic conditions and expectations of future conditions. Three thousand households across the country are surveyed each month. The consensus estimate is for an increase from 64.5 to 68 What it means to you: Consumer spending drives two-thirds of the economy and if the consumer is not confident, the consumer will not be willing to pull out the big bucks. Confidence impacts consumer spending which affects economic growth.

State Street Investor Confidence: The State Street Investor Confidence Index measures confidence by looking at actual levels of risk in investment portfolios. This is not an attitude survey. The State Street Investor Confidence Index measures confidence directly by assessing the changes in investor holdings of equities. The more of their portfolio that institutional investors are willing to invest in equities, the greater their confidence.  What it means to you: “State Street believes direct measurement, rather than a survey of portfolio managers who often don’t have time to fill out monthly questionnaires, is a more reliable approach to consumer confidence. The investor confidence index is compiled with techniques based on modern portfolio theory. According to State Street, “the more of their portfolios that professional investors are willing to devote to riskier as opposed to safer investments, the greater their risk appetite or confidence.”

ICSC Goldman Store Sales: This weekly measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10 percent of total retail sales. What it means to you: Consumer spending accounts for more than two-thirds of the economy, so if you know what consumers are up to, you’ll have a pretty good handle on where the economy is headed.

Redbook: A weekly measure of sales at chain stores, discounters, and department stores. It is a less consistent indicator of retail sales than the weekly ICSC index. What it means to you: The pattern in consumer spending is often the foremost influence on stock and bond markets.

Wednesday:

Motor Vehicle Sales: Unit sales of domestically produced cars and light duty trucks (including sport utility vehicles and mini-vans). Motor vehicle sales are good indicators of trends in consumer spending. Theconsensus estimate is for 13.6 million units to (same as last month). What it means to you: Since motor vehicle sales are an important element of consumer spending, market players watch this closely to get a handle on the direction of the economy. The pattern of consumption spending is one of the foremost influences on stock and bond markets. In a more specific sense, auto and truck sales show market conditions for auto makers and the slew of auto-related companies. Given that most consumers borrow money to buy cars or trucks, sales also reflect confidence in current and future economic conditions.

Challenger Job Cut Report: This monthly report counts and categorizes announcements of corporate layoffs based on mass layoff data from state departments of labor. The job-cut report must be analyzed with caution. It doesn’t distinguish between layoffs scheduled for the short-term or the long term, or whether job cuts are handled through attrition or actual layoffs. Also, the job-cut report does not include jobs eliminated in small batches over a longer time period. What it means to you: The job-cut report is basically a rehash of the weekly jobless claims report but provides additional insight into where layoffs are occurring. There is industry and geographic (states) detail that is not available with weekly jobless claims.

ADP: The ADP national employment report is computed from a subset of ADP records that in the last six months of 2008, represented approximately 400,000 U.S. business clients and approximately 24 million U.S. employees working in all private industrial sectors. What it means to you: The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.

ISM Mfg Index: The Institute for Supply Management surveys more than 300 manufacturing firms on employment, production, new orders, supplier deliveries, and inventories. Readings above (below) 50 percent indicate an expanding (contracting) factory sector. Export orders, import orders, backlog orders and prices paid for raw and unfinished materials are also measured, but these are not included in the overall index. Theconsensus estimate is for a slight increase from 53.9% to 54.5%. What it means to you: The ISM manufacturing composite index indicates overall factory sector trends. The relevance of this indicator is enhanced by the fact that it is available very early in the month and not subject to revision. The ISM manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. More than one of the ISM sub-indexes provides insight on commodity prices and clues regarding the potential for developing inflation.

Construction Spending: The dollar value of new construction activity on residential, non-residential, and public projects. Data are available in nominal and real (inflation-adjusted) dollars. The consensus estimateis for .5% a decrease from last month’s 1.2% increase. What it means to you: Construction spending has a direct bearing on stocks, bonds and commodities because it is a part of the economy that is affected by interest rates, business cash flow and even federal fiscal policy. Businesses only put money into the construction of new factories or offices when they are confident that demand is strong enough to justify the expansion. The same goes for individuals making the investment in a home.

Charles Plosser (Philadelphia Federal Reserve President) Speaks

3, 10 and 30 Year Bond Announcements

EIA Petroleum Report: The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S. The level of inventories helps determine prices for petroleum products. What it means to you: Petroleum product prices are determined by supply and demand – just like any other good and service. During periods of strong economic growth, one would expect demand to be robust. If inventories are low, this will lead to increases in crude oil prices – or price increases for a wide variety of petroleum products such as gasoline or heating oil.

Thursday:

Chain Store: Monthly sales volumes from individual department, chain, discount, and apparel stores are usually reported on the first Thursday of each month. Chain store sales correspond with roughly 10 percent of retail sales. Chain store sales are an indicator of retail sales and consumer spending trends. What it means to you: Just a few words of caution. Sales are reported as a change from the same month, a year ago. It is important to know how strong sales actually were a year ago to make sense of this year’s sales. In addition, sales are usually reported for “comparable stores” in case of company mergers. Chain store sales not only give you a sense of the big picture, but also the trends among individual retailers and different store categories. Perhaps the discount chains such as Target and Wal-Mart are doing well, but the high-end department stores such as Tiffany’s are lagging. Maybe apparel specialty retailers are showing exceptional growth.

Weekly Jobless Claims: New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. The consensus estimate is for a decrease from 377,000 to 370,000. What it means to you: By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation threatens, it’s a good bet that interest rates will rise.

Productivity and Costs: Productivity measures the growth of labor efficiency in producing the economy’s goods and services. Unit labor costs reflect the labor costs of producing each unit of output. Both are followed as indicators of future inflationary trends. The consensus is for a .8% increase in Productivity  (a substantial drop from last month’s 2.3% and an increase of 1% in Unit Labor Costs A substantial increase from last month’s -2.5%). What it means to you: Productivity growth is critical because it allows for higher wages and faster economic growth without inflationary consequences. In periods of robust economic growth, productivity ensures that inflation will remain well behaved despite tight labor markets. Productivity growth is also a key factor in helping to increase the overall wealth of an economy since real wage gains can be made when workers are more productive per hour.

Bloomberg Consumer Comfort Index: A weekly, random-sample survey tracking Americans’ views on the condition of the U.S. economy, their personal finances and the buying climate. What it means to you: The pattern in consumer attitudes can be a key influence on stock and bond markets. Consumer spending drives two-thirds of the economy and if the consumer is not confident, the consumer will not be willing to spend. Confidence impacts consumer spending which affects economic growth.

Richard Fisher (Dallas Federal Reserve President) Speaks

Money Supply

Friday:

Monster Employment: The Monster Employment Index is a comprehensive monthly analysis of U.S. online job demand. It is conducted by Monster Worldwide, Inc. and is based on a real-time review of a large, representative selection of career sites and job boards, including Monster,” according to Monster Worldwide. The Index presents a snapshot of employer online recruitment activity nationwide. What it means to you:When the employment index measuring job availability is falling, this bodes well for the bond market because it implies a drop in labor demand and perhaps an economic downturn. While the Fed worries about inflation, they also are concerned about rising unemployment. A rising jobless rate can mean a more accommodative monetary policy.

Employment Situation: The employment situation is a set of labor market indicators based on two separate surveys in this one report. Based on the Household Survey, the unemployment rate measures the number of unemployed as a percentage of the labor force. The average workweek reflects the number of hours worked in the nonfarm sector. Average hourly earnings reveal the basic hourly rate for major industries as indicated in nonfarm payrolls. The consensus estimate is for a decrease from last month’s 200,000 to 135,000, the rate to remain the same at 8.5.%, and average hourly earnings to be unchanged at .2%. What it means to you:The employment situation is the primary monthly indicator of aggregate economic activity because it encompasses all major sectors of the economy. It is comprehensive and available early in the month. Many other economic indicators are dependent upon its information. It not only reveals information about the labor market, but about income and production as well. In short, it provides clues about other economic indicators reported for the month and plays a big role in influencing financial market psychology during the month.

Factory Orders: Factory orders represent the dollar level of new orders for both durable and nondurable goods. This report gives more complete information than the advance durable goods report which is released one or two weeks earlier in the month. The consensus estimate is for 1.5% (a slight decrease from last month’s 1.8%. What it means to you: The orders data show how busy factories will be in coming months as manufacturers work to fill those orders. This report provides insight to the demand for not only hard goods such as refrigerators and cars, but nondurables such as cigarettes and apparel. In addition to new orders, analysts monitor unfilled orders, an indicator of the backlog in production. Shipments reveal current sales. Inventories give a handle on the strength of current and future production.

ISM Non Mfg Report: The non-manufacturing ISM surveys nearly 400 firms from 60 sectors across the United States, including agriculture, mining, construction, transportation, communications, wholesale trade and retail trade. The consensus estimate is for a slight rise from last month’s reading of 52.6 to 53.3. What it means to you: The non-manufacturing composite index has four equally weighted components: business activity, new orders, employment, and supplier deliveries. The ISM did not begin publishing the composite index until the release for January 2008. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly-and causing potential inflationary pressures.

Within every market there are obstacles and solutions on the path to tremendous opportunities. Vince and I think most people are looking for practical advice.  Please join us live on the web at www.wbcb1490.com from 9:00am to 10:00 am, every Friday. And, feel free to call 215-740-8999 to talk to us live. You can also listen to the newest shows and archive at: http://peterbuchsbaum.com/radio

We are joined today by Katie Brown and Kelly McGinty from Congressman Michael Fitzpatrick’s office. Katie and Kelly are “constituent advocates”. A great term to tell us that they work for us. As a Member of the 109th Congress Mike could be describes as an independent- minded advocate for his constituents. He fought for stronger borders, lower taxes and smaller budget deficits. Locally he worked successfully to bring the National Veterans’ Cemetery to Bucks County. Mike is presently on the “Committee on Financial Services.”

So last week we discussed credit and financial IO. This week has had some interesting current events: The New Consumer Bureau and it priority; Has President Obama’s Housing Policy Failed; Foreclosure Nightmares. The New Consumer Bureau sounds great. It protects consumers. Can’t argue with that. However we are in a mortgage lending crisis so clamping harder on the mortgage industry seems counterproductive to me. Obama Administration is selling the same thing that bad loan officers sell. Rate! Mortgages are more than just a low rate. This will not solve the problem.

Ever since the mortgage crisis began with the meltdown of Fannie Mae and Freddie Mac the government has tried to fix the problem with lower interest rates.

Today we have the opportunity to spend an hour with Congressman Fitzpatrick’s team and discuss what kinds of issues they are experiencing when communicating with existing lenders.

Please join us live at www.wbcb1490.com for the open discussion with Sandy. Our discussion topic will be credit and credit scores and the effects of those scores. .

Each week we discuss the myths of the mortgage market. It is not about rate. A higher rate with no mortgage insurance may provide a lower payment.

Next week we hope to be joined by another member of Right Side Up to discuss what to do if you are not sure you can afford to sell your home.

This past weekend I spent time with some very special people from Right Side Up. The list of members included Congressman Mike Fitzpatrick and two of his “constituent advocates”, two counselors from Bucks County Housing, the “credit doctor” from United One Resources, and out team coach Kathy Gentner from Keller Williams.

I mentioned all of the participants because in particular the members from Bucks County Housing and Congressman Fitzpatrick’s office spent their personal time helping promote our effort to assist homeowners.  A special thank you to all of those who participated.

I am often accused of being angry in how I express my opinions about the current state of affairs in the housing world. I would like that description to be interpreted as “passionate”. As I live and work in a community of people I am increasingly passionate about how we all exist. I am a product of the 60’s and I believe we all need each other as we slide down the banister of life picking up little splinters along the trip.

The afternoon events were an open discussion as to how to help people who are “upside down” in their homes. This term is in the news almost every week. There are places to go and get help. The group mentioned above, Right Side Up is a group of community conscious likeminded people trying to provide the homeowner with a resource center.

That being said, there are solutions to the problem that we all are currently facing. I seriously mean “all”. As members of the communities we all live in real estate plays a huge roll. We all need a place to live. If you own a home or rent a home we need the values to stop falling. To do that we need to stop the foreclosures. A simple case of supply and demand but on steroids. Foreclosures breed more foreclosures. This is no longer a matter that we can blame on “irresponsible” borrowers as the banks have sold us on. The banks need to step up. Remember us we propped you up with our tax dollars at the beginning of this “crisis.”

Market Focus: With the S & P downgrade of 9 Eurozone countries the US markets should be under some added pressure. The positives will be found if the inflation numbers remain low as expected.

Monday:

US Holiday: Martin Luther King Jr. Day. Bond, Equity Markets Closed

Tuesday:

Empire State MFG: The New York Fed conducts this monthly survey of manufacturers in New York State. Participants from across the state represent a variety of industries. On the first of each month, the same pool of roughly 175 manufacturing executives (usually the CEO or the president) is sent a questionnaire to report the change in an assortment of indicators from the previous month. Respondents also give their views about the likely direction of these same indicators six months ahead. The consensus estimate is that there will be an increase from 9.53 to 10.5. What it means to you: The Empire Manufacturing Survey gives a detailed look at New York State’s manufacturing sector, how busy it is and where things are headed. Since manufacturing is a major sector of the economy, this report has a big influence on the markets. Some of the Empire State Survey sub-indexes also provide insight on commodity prices and other clues on inflation.

ICSC Goldman Store Sales: This weekly measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10 percent of total retail sales. What it means to you: Consumer spending accounts for more than two-thirds of the economy, so if you know what consumers are up to, you’ll have a pretty good handle on where the economy is headed.

Redbook: A weekly measure of sales at chain stores, discounters, and department stores. It is a less consistent indicator of retail sales than the weekly ICSC index. What it means to you: The pattern in consumer spending is often the foremost influence on stock and bond markets.

Wednesday:

Producer Price Index: The Producer Price Index (PPI) is a measure of the average price level for a fixed basket of capital and consumer goods received by producers. The consensus estimate is for a 0% gain in the overall number and a .1% gain in the core rate. The overall number significantly down from the previous month but the core to remain the same.  What it means to you: Changes in the producer price index for finished goods are considered a precursor of consumer price inflation. If the prices that manufacturers pay for their raw materials rise, they would have to raise the prices that consumers pay for their finished goods in order to not decrease profit margins. Changes in the supply and demand for labor will affect wage changes with a delay because wages are institutionalized and contractual. However, commodity prices react more quickly to changes in supply and demand.

Industrial Production: The index of industrial production is available nationally by market and industry groupings. The major groupings are comprised of final products (such as consumer goods, business equipment and construction supplies), intermediate products and materials. The industry groupings are manufacturing (further subdivided into durable and nondurable goods), mining and utilities. The capacity utilization rate — reflecting the resource utilization of the nation’s output facilities — is available for the same market and industry groupings. The consensus estimate is for an increase from last month’s -.2% to an increase of .5% in the month over month.  What it means to you: Industrial production and capacity utilization indicate not only trends in the manufacturing sector, but also whether resource utilization is strained enough to forebode inflation. Also, industrial production is an important measure of current output for the economy and helps to define turning points in the business cycle (start of recession and start of recovery).

Housing Market Index: The National Association of Home Builders produces a housing market index based on a survey in which respondents from this organization are asked to rate the general economy and housing market conditions. The housing market index is a weighted average of separate diffusion indexes: present sales of new homes, sale of new homes expected in the next six months, and traffic of prospective buyers in new homes. What it means to you: This report provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments.

EIA Petroleum Report: The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S. The level of inventories helps determine prices for petroleum products. What it means to you: Petroleum product prices are determined by supply and demand – just like any other good and service. During periods of strong economic growth, one would expect demand to be robust. If inventories are low, this will lead to increases in crude oil prices – or price increases for a wide variety of petroleum products such as gasoline or heating oil.

Thursday:

Weekly Jobless Claims: New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. The consensus estimate is for a decrease from 399,000 to 383,000. What it means to you: By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation threatens, it’s a good bet that interest rates will rise.

CPI: The Consumer Price Index is a measure of the average price level of a fixed basket of goods and services purchased by consumers. Monthly changes in the CPI represent the rate of inflation.   The consensus estimate is for an increase of .1% and an increase in the core rate of .1% (down from last month’s .2%).  What it means to you: The consumer price index is the most widely followed monthly indicator of inflation. The CPI is considered a cost-of-living measure since it is used to adjust contracts of all types that are tied to inflation. For monetary policy, the Federal Reserve generally follows “headline” and “core” inflation. This latter measure excludes the volatile food and energy components. The Fed’s preferred inflation measure is not the CPI but the personal consumption price index because it reflects what consumers are actually buying during any given period-the component weights are updated annually while those for the CPI are updated infrequently.

Philadelphia Fed Survey: The general conditions index from this business outlook survey is a diffusion index of manufacturing conditions within the Philadelphia Federal Reserve district. This survey, widely followed as an indicator of manufacturing sector trends, is correlated with the ISM manufacturing index and the index of industrial production. The consensus estimate is for a decrease from 10.3 to 10. What it means to you: By tracking economic data such as the Philly Fed survey, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more moderate growth so that it won’t lead to inflation. The Philly Fed survey gives a detailed look at the manufacturing sector, how busy it is and where things are headed.

Housing Starts: A housing start is registered at the start of construction of a new building intended primarily as a residential building. The start of construction is defined as the beginning of excavation of the foundation for the building. The consensus estimate is for a drop from .685 million annualized units to .678 million units.  Also a slight drop in “permits from .681 to .68 million. What it means to you: The housing starts report is the most closely followed report on the housing sector. Housing starts reflect the commitment of builders to new construction activity. The level as well as changes in housing starts reveals residential construction trends. Housing starts are subject to substantial monthly volatility, especially during winter months. It takes several months to establish a trend. Thus, it is useful to look at a 5-month moving average (centered) of housing starts.

Bloomberg Consumer Comfort Index: A weekly, random-sample survey tracking Americans’ views on the condition of the U.S. economy, their personal finances and the buying climate. What it means to you: The pattern in consumer attitudes can be a key influence on stock and bond markets. Consumer spending drives two-thirds of the economy and if the consumer is not confident, the consumer will not be willing to spend. Confidence impacts consumer spending which affects economic growth.

Friday:

Existing Home Sales: Existing home sales tally the number of previously constructed homes, condominium and co-ops in which a sale closed during the month. Existing homes (also known as home re-sales) account for a larger share of the market than new homes and indicate housing market trends. The consensus estimate is for an increase from an anemic 4.42 million units to 4.65 million units. What it means to you: This provides a gauge of not only the demand for housing, but the economic momentum. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.

Hello, and welcome to Real Estate Reality Radio. The most important hour of radio every Friday from 9 to 10 on WBCB 1490 am. Thank you for joining Vince and me. For those of you who are not familiar with the show I am the guy with a bow tie and a bit of an attitude and Vince is the fun affable best friend. Our show is dedicated to dispelling the myths associated with Real Estate and finance in your marketplace.

Within every market there are obstacles and solutions on the path to tremendous opportunities. Vince and I think most people are looking for practical advice. Please feel free to call 215-740-8999 or visit peterbuchsbaum.com.

Please join us live on the web at www.wbcb1490.com from 9:00am to 10:00 am every Friday.

We are joined today by Mario Henry from Halo America. HALO America stands for Homeowners Assistance Lease Option program. HALO America was spawned in 2008 during the sub-prime mortgage crisis from the company formally known as Credit Evolution and Development. It is a bridge for home-ownership program that is catered to the masses stuck renting due to credit challenges. HALO America has branded a state-of-the-art process to bolster credit-challenged renters and grant them access to the real estate market. We want to bring the middle class back into the city while simultaneously increasing city revenue and upgrading community potential.

So last week we discussed Private Mortgage Insurance and the loss of deductibility in 2012. This week has had some interesting current events: Foreclosures Fall to lowest level since 2007 (more than 4 million homes have been lost to foreclosure over the past 5 years); Can anyone Save Fannie Mae? It is estimated that their bailout will cost in excess of $124 billion through 2014. But rest assured whatever else happens Twinkies will survive bankruptcy. Yes Hostess Brands filed for bankruptcy Wednesday but will continue to churn out Ho Ho’s and Ding Dongs.  Finally, turning Foreclosures into Rentals. The federal reserve hopes to launch a pilot program intended to sell properties in bulk to investors to turn them into rentals.

Ever since the mortgage crisis began with the meltdown of Fannie Mae and Freddie Mac people have been trying to create a new normal real estate market.

Today we have the opportunity to spend an hour with Mario Henry and discuss how he and his team at Halo assist buyers through the maze of buying a home. The process for HALO is more than just numbers. Theirs is an education in how to own a home. Their motto is my favorite. Rent for 6 months and own for a lifetime.

Please join us live at www.wbcb1490.com for the open discussion with Sandy. Our discussion topic will be credit and credit scores and the effects of those scores. .

Each week we discuss the myths of the mortgage market. It is not about rate. A higher rate with no mortgage insurance may provide a lower payment.

Finally Vince and I have been invited to participate in the Home Retention Workshop on January 14^th at Kenny’s in Southampton from 12:03 to 1:37. The workshop is sponsored by Right Side Up.

Next week we hope to be joined by another member of Right Side Up to discuss what to do if you are not sure you can afford to sell your home.

Market Focus: Europe All over again. With a look back at 4^th quarter earnings as well as a look ahead to 2012. It should be another volatile week.

Monday:

Consumer Credit: The dollar value of consumer installment credit outstanding. Changes in consumer credit indicate the state of consumer finances and portend future spending patterns. The consensus estimate is for a sleight decrease from 7.7 billion to 7.6 billion. What it means to you: Growth in consumer credit can hold positive or negative implications for the economy and markets. Economic activity is stimulated when consumers borrow within their means to buy cars and other major purchases. On the other hand, if consumers pile up too much debt relative to their income levels, they may have to stop spending on new goods and services just to pay off old debts. That could put a big dent in economic growth.

Dennis Lockhart (Atlanta Federal Reserve President) Speaks

Tuesday:

Wholesale Trade: Wholesale trade measures the dollar value of sales made and inventories held by merchant wholesalers. It is a component of business sales and inventories. The consensus estimate is for a decrease in inventories from 1.6 to .5 What it means to you: Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a slower rate of growth that won’t lead to inflationary pressures. Wholesale sales and inventory data give investors a chance to look below the surface of the visible consumer economy.  

ICSC Goldman Store Sales:  This weekly measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10 percent of total retail sales. What it means to you: Consumer spending accounts for more than two-thirds of the economy, so if you know what consumers are up to, you’ll have a pretty good handle on where the economy is headed.

Redbook: A weekly measure of sales at chain stores, discounters, and department stores. It is a less consistent indicator of retail sales than the weekly ICSC index. What it means to you: The pattern in consumer spending is often the foremost influence on stock and bond markets.

John Williams (San Francisco Federal Reserve President) Speaks

Esther George (Kansas City Federal Reserve President) Speaks

3 Year Note Auction

Wednesday:

Beige Book: This book is produced roughly two weeks before the monetary policy meetings of the Federal Open Market Committee. On each occasion, a different Fed district bank compiles anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts. What it means to you: This report on economic conditions is used at FOMC meetings. If the Beige Book portrays an overheating economy or inflationary pressures, the Fed may be more inclined to raise interest rates in order to moderate the economic pace. Conversely, if the Beige Book portrays economic difficulties or recessionary conditions, the Fed may see the need to lower interest rates in order to stimulate activity.

EIA Petroleum Report: The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S. The level of inventories helps determine prices for petroleum products. What it means to you: Petroleum product prices are determined by supply and demand – just like any other good and service. During periods of strong economic growth, one would expect demand to be robust. If inventories are low, this will lead to increases in crude oil prices – or price increases for a wide variety of petroleum products such as gasoline or heating oil.

Charles Evans (Chicago Federal Reserve President) Speaks

Dennis Lockhart (Atlanta Federal Reserve President) Speaks

Charles Plosser (Philadelphia Federal Reserve President) Speaks

10 Year Note Auction

Thursday:

Retail Sales: Retail sales measure the total receipts at stores that sell durable and nondurable goods. Consumer spending accounts for two-thirds of GDP and is therefore a key element in economic growth. The consensus estimate is for a rise of .4% after last month’s .2% increase and up .0.4% excluding autos after last month’s .2% increase. What it means to you: Retail sales are a major indicator of consumer spending trends because they account for nearly one-half of total consumer spending and approximately one-third of aggregate economic activity.

Weekly Jobless Claims: New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. The consensus estimate is for an increase from 372,000 to 375,000. What it means to you: By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation threatens, it’s a good bet that interest rates will rise.

Bloomberg Consumer Comfort Index: A weekly, random-sample survey tracking Americans’ views on the condition of the U.S. economy, their personal finances and the buying climate. What it means to you: The pattern in consumer attitudes can be a key influence on stock and bond markets. Consumer spending drives two-thirds of the economy and if the consumer is not confident, the consumer will not be willing to spend. Confidence impacts consumer spending which affects economic growth.

Business Inventories: Business inventories are the dollar amount of inventories held by manufacturers, wholesalers, and retailers. The level of inventories in relation to sales is an important indicator of the near-term direction of production activity. The consensus estimate is for a decrease of last month’s .8 to .5. This will still leave inventories historically low.  What it means to you:  Rising inventories can be an indication of business optimism that sales will be growing in the coming months. By looking at the ratio of inventories to sales, investors can see whether production demands will expand or contract in the near future. For example, if inventory growth lags sales growth, then manufacturers will have to boost production lest commodity shortages occur. On the other hand, if unintended inventory accumulation occurs (that is, sales do not meet expectations), then production will probably have to slow while those inventories are worked down.

Treasury Budget: The U.S. Treasury releases a monthly account of the surplus or deficit of the federal government. Changes in the budget balance of the annual fiscal year (which begins in October) are followed as an indicator of budgetary trends and the thrust of fiscal policy. The consensus estimate is for a deficit of $79 billion after last month’s deficit of $137.3 billion. What it means to you: The budget data have several direct and indirect meanings for the financial markets. The most direct relationship lies between the size of the budget deficit and the supply of Treasury securities. The higher the deficit, the more Treasury notes and bonds the government must sell to finance its operation. From there it’s simple supply and demand — if demand is constant but the supply of bonds goes up, the price goes down. The same is true if the deficit falls or is eliminated altogether — the government needs to sell fewer Treasury bonds, so the supply drops and the price of T-bonds rises. In the past few years, the budget deficit has increased dramatically, and this has put more Treasury securities into the market place

Money Supply

Friday:

International Trade: International trade is composed of merchandise (tangible goods) and services. It is available nationally by export, import and trade balance. Detailed information is reported on oil and motor vehicle imports. Services trade is available by export, import and trade balance for seven principal end-use categories. The consensus estimate is for a slight widening from -43.5 billion to -45 billion. What it means to you: The international trade balance on goods and services is the major indicator for foreign trade. While the trade balance (deficit) is small relative to the size of the economy (although it has increased over the years), changes in the trade balance can be quite substantial relative to changes in economic output from one quarter to the next. Measured separately, inflation-adjusted imports and exports are important components of aggregate economic activity, representing approximately 17 and 12 percent of real GDP.

Import and Export Prices: Import price indexes are compiled for the prices of goods that are bought in the United States but produced abroad and export price indexes are developed for the prices of goods sold abroad but produced domestically. These prices indicate inflationary trends in internationally traded products.  The consensus estimate is for a significant decrease of .1% from last month’s .7 decrease. What it means to you: Changes in import and export prices are a valuable gauge of inflation here and abroad. Furthermore, the data can directly impact the financial markets such as bonds and the dollar.

Consumer Sentiment: The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending. Consumer confidence and consumer sentiment are two ways of talking about consumer attitudes. The consensus estimate is to increase to 71.5 from 69.9. What it means to you:  Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it’s easy to see how this index of consumer attitudes gives insight to the direction of the economy.

Charles Evans (Chicago Federal Reserve President) Speaks

Jeffrey Lacker (Richmond Federal Reserve President) Speaks

Hello, and welcome to Real Estate Reality Radio. The most important hour of radio every Friday from 9 to 10 on WBCB 1490 am. Thank you for joining Vince and me. For those of you who are not familiar with the show I am the guy with a bow tie and a bit of an attitude and Vince is the fun affable best friend. Our show is dedicated to dispelling the myths associated with Real Estate and finance in your marketplace.

Within every market there are obstacles and solutions on the path to tremendous opportunities. Vince and I think most people are looking for practical advice. Please feel free to call 215-740-8999 or visit peterbuchsbaum.com.

Please join us live on the web at www.wbcb1490.com from 9:00am to 10:00 am every Friday.

We are joined today by Diane Cleland an “agent/owner” at Keller Williams.

So last week we discussed credit reports and their effects on home buying. . This week’s current events include the January market activity in election years, Federal Reserve to publish future rates, Wall Street anticipates the S&P will rise 7% in 2011, Bailout concerns mounting for FHA, Oil Prices spike 4% on Iranian concerns.

 Over the past 10 years the debate as to putting down 20% or 10% or 5% has raged on. The debate has interesting sides. You hear a lot about “no skin in the game” is why people walk away from their homes. I believe this is just a sound bite. The lowest level of foreclosures is in the Veterans Marketplace where it so happens there is generally no down payment. The debate may change tone as it appears that the deduction that has been available on private mortgage insurance will no longer be allowed. Another sign that those who govern the marketplace have no idea how the marketplace works. 

As we begin the New Year we welcome the opportunity to introduce you to Diane Cleland of Keller William in Doylestown. Diane is an Agent/Owner.

Please join us live at www.wbcb1490.com for the open discussion with Sandy. Our discussion topic will be credit and credit scores and the effects of those scores. .

Each week we discuss the myths of the mortgage market. It is not about rate. A higher rate with no mortgage insurance may provide a lower payment.

Finally Vince and I have been invited to participate in the aforementioned Home Retention Workshop on January 14^th at Kenny’s in Southampton from 12:03 to 1:37.

Next week we will be joined by a Mario Henry of HALO. Their mission statement is “Rent for 6 months, Own for a lifetime”.

Market Focus:

If Real Estate is Location, Location, Location this week should be Jobs, Jobs, Jobs!

Monday:

All Markets Closed: New Years Day Observed

Tuesday:

ISM Mfg Index: The Institute for Supply Management surveys more than 300 manufacturing firms on employment, production, new orders, supplier deliveries, and inventories. Readings above (below) 50 percent indicate an expanding (contracting) factory sector. Export orders, import orders, backlog orders and prices paid for raw and unfinished materials are also measured, but these are not included in the overall index. The consensus estimate is for a slight increase from 52.7% to 53.2%. What it means to you: The ISM manufacturing composite index indicates overall factory sector trends. The relevance of this indicator is enhanced by the fact that it is available very early in the month and not subject to revision. The ISM manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. More than one of the ISM sub-indexes provides insight on commodity prices and clues regarding the potential for developing inflation.

Construction Spending: The dollar value of new construction activity on residential, non-residential, and public projects. Data are available in nominal and real (inflation-adjusted) dollars. The consensus estimate is for .5% a decrease from last months .8% increase. What it means to you: Construction spending has a direct bearing on stocks, bonds and commodities because it is a part of the economy that is affected by interest rates, business cash flow and even federal fiscal policy. Businesses only put money into the construction of new factories or offices when they are confident that demand is strong enough to justify the expansion. The same goes for individuals making the investment in a home.

FOMC Minutes: The Federal Open Market Committee issues minutes of its meetings with a lag. The minutes of the previous meeting are reported three weeks after the meeting.  What it means to you: Investors who want a more detailed description of Fed opinions will generally read the minutes closely. However, the Fed discloses its official view at the end of each FOMC meeting with a public statement. Fed officials make numerous speeches, which freely give their views to the public at large.

ICSC Goldman Store Sales:  This weekly measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10 percent of total retail sales. What it means to you: Consumer spending accounts for more than two-thirds of the economy, so if you know what consumers are up to, you’ll have a pretty good handle on where the economy is headed.

Redbook: A weekly measure of sales at chain stores, discounters, and department stores. It is a less consistent indicator of retail sales than the weekly ICSC index. What it means to you: The pattern in consumer spending is often the foremost influence on stock and bond markets.

Wednesday:

Motor Vehicle Sales: Unit sales of domestically produced cars and light duty trucks (including sport utility vehicles and mini-vans). Motor vehicle sales are good indicators of trends in consumer spending. The consensus estimate is for an increase from 10.3 million units to 10.5 million units. What it means to you: Since motor vehicle sales are an important element of consumer spending, market players watch this closely to get a handle on the direction of the economy. The pattern of consumption spending is one of the foremost influences on stock and bond markets. In a more specific sense, auto and truck sales show market conditions for auto makers and the slew of auto-related companies. Given that most consumers borrow money to buy cars or trucks, sales also reflect confidence in current and future economic conditions. 

Challenger Job Cut Report: This monthly report counts and categorizes announcements of corporate layoffs based on mass layoff data from state departments of labor. The job-cut report must be analyzed with caution. It doesn’t distinguish between layoffs scheduled for the short-term or the long term, or whether job cuts are handled through attrition or actual layoffs. Also, the job-cut report does not include jobs eliminated in small batches over a longer time period. What it means to you: The job-cut report is basically a rehash of the weekly jobless claims report but provides additional insight into where layoffs are occurring. There is industry and geographic (states) detail that is not available with weekly jobless claims.

Factory Orders: Factory orders represent the dollar level of new orders for both durable and nondurable goods. This report gives more complete information than the advance durable goods report which is released one or two weeks earlier in the month. The consensus estimate is for an  increase from last month’s -.4% to .2% increase. What it means to you: The orders data show how busy factories will be in coming months as manufacturers work to fill those orders. This report provides insight to the demand for not only hard goods such as refrigerators and cars, but nondurables such as cigarettes and apparel. In addition to new orders, analysts monitor unfilled orders, an indicator of the backlog in production. Shipments reveal current sales. Inventories give a handle on the strength of current and future production.

EIA Petroleum Report: The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S. The level of inventories helps determine prices for petroleum products. What it means to you: Petroleum product prices are determined by supply and demand – just like any other good and service. During periods of strong economic growth, one would expect demand to be robust. If inventories are low, this will lead to increases in crude oil prices – or price increases for a wide variety of petroleum products such as gasoline or heating oil.

Thursday:

Chain Store: Monthly sales volumes from individual department, chain, discount, and apparel stores are usually reported on the first Thursday of each month. Chain store sales correspond with roughly 10 percent of retail sales. Chain store sales are an indicator of retail sales and consumer spending trends. What it means to you: Just a few words of caution. Sales are reported as a change from the same month, a year ago. It is important to know how strong sales actually were a year ago to make sense of this year’s sales. In addition, sales are usually reported for “comparable stores” in case of company mergers. Chain store sales not only give you a sense of the big picture, but also the trends among individual retailers and different store categories. Perhaps the discount chains such as Target and Wal-Mart are doing well, but the high-end department stores such as Tiffany’s are lagging. Maybe apparel specialty retailers are showing exceptional growth.

ADP: The ADP national employment report is computed from a subset of ADP records that in the last six months of 2008, represented approximately 400,000 U.S. business clients and approximately 24 million U.S. employees working in all private industrial sectors. What it means to you: The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.

Weekly Jobless Claims: New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. The consensus estimate is for a decrease from 381,000 to 375,000. What it means to you: By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation threatens, it’s a good bet that interest rates will rise.

Bloomberg Consumer Comfort Index: A weekly, random-sample survey tracking Americans’ views on the condition of the U.S. economy, their personal finances and the buying climate. What it means to you: The pattern in consumer attitudes can be a key influence on stock and bond markets. Consumer spending drives two-thirds of the economy and if the consumer is not confident, the consumer will not be willing to spend. Confidence impacts consumer spending which affects economic growth.

ISM Non Mfg Report: The non-manufacturing ISM surveys nearly 400 firms from 60 sectors across the United States, including agriculture, mining, construction, transportation, communications, wholesale trade and retail trade. The consensus estimate is for a slight rise from last month’s reading of 52. to 53.4. What it means to you: The non-manufacturing composite index has four equally weighted components: business activity, new orders, employment, and supplier deliveries. The ISM did not begin publishing the composite index until the release for January 2008. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly-and causing potential inflationary pressures.

Money Supply

Friday:

Monster Employment: The Monster Employment Index is a comprehensive monthly analysis of U.S. online job demand. It is conducted by Monster Worldwide, Inc. and is based on a real-time review of a large, representative selection of career sites and job boards, including Monster,” according to Monster Worldwide. The Index presents a snapshot of employer online recruitment activity nationwide. What it means to you: When the employment index measuring job availability is falling, this bodes well for the bond market because it implies a drop in labor demand and perhaps an economic downturn. While the Fed worries about inflation, they also are concerned about rising unemployment. A rising jobless rate can mean a more accommodative monetary policy.

Employment Situation: The employment situation is a set of labor market indicators based on two separate surveys in this one report. Based on the Household Survey, the unemployment rate measures the number of unemployed as a percentage of the labor force. The average workweek reflects the number of hours worked in the nonfarm sector. Average hourly earnings reveal the basic hourly rate for major industries as indicated in nonfarm payrolls. The consensus estimate is for a increase from last month’s 120,000 to 140,000, the rate to increase slightly from 8.6 to 8.7%, and average hourly earnings to be up from -.1 to .2%. What it means to you:  The employment situation is the primary monthly indicator of aggregate economic activity because it encompasses all major sectors of the economy. It is comprehensive and available early in the month. Many other economic indicators are dependent upon its information. It not only reveals information about the labor market, but about income and production as well. In short, it provides clues about other economic indicators reported for the month and plays a big role in influencing financial market psychology during the month.

Hello, and welcome to Real Estate Reality Radio. The most important hour of radio every Friday from 9 to 10 on WBCB 1490 am. Thank you for joining Vince and me. For those of you who are not familiar with the show I am the guy with a bow tie and a bit of an attitude and Vince is the fun affable best friend. Our show is dedicated to dispelling the myths associated with Real Estate and finance in your marketplace.

Within every market there are obstacles and solutions on the path to tremendous opportunities. Vince and I think most people are looking for practical advice. Please feel free to call 215-740-8999 or visit peterbuchsbaum.com.

Please join us live on the web at www.wbcb1490.com from 9:00am to 10:00 am every Friday.

We are joined today by Sandy McQuail of United One Resources. United One Resources is a risk assessment company. The items they list on their website as values include; personal responsibility, teamwork and collaboration, responsiveness, positive attitude and contribution, and stewardship. The thought I liked most was “recognize that every one of our employees is a contributor to the company’s success.”

 So last week we discussed home values with an appraiser. This week’s current events include the Whitehouse seeking another $1.2 trillion in debt ceiling increase. Foreclosure Free Ride. The time it takes from the first missed payment to taking possession has increased from 253 days in 2007 to 674 days today. A federal Appeals court delayed proceedings against Citi Mortgage in a mortgage fraud case. Economists surveyed became a bit more optimistic about the economy as the year comes to a close. The survey showed that the likelihood of a new downturn has moved from 30% to 20%. Finally, the FHA has once again extended a waiver of its anti-flipping regulation through 2012.

 A lot of emphasis has been placed lately on “credit”. Credit has morphed from a report showing your past payment history to a model that now incorporates your ratio of money owed to the limit on your particular credit. A model has been developed to place a score on an individual and that score determines mortgage rates, and insurance costs. It has even moved into the world of hiring. That’s right your employer is looking at your credit.

  Credit woes are not just for people anymore. Greece, Italy, Spain, Portugal, France and the US have all had their credit ratings downgraded. But let’s bring this a little closer to home again on this show. Moody’s Investor Service lowered Newtown’s score because of 5 consecutive years of operating in a deficit. The township gets the majority of its revenue from a 1 percent earned income tax. Local residents are earning less so the township is collecting less.

 As we end the year we welcome the opportunity to introduce you to Sand McQuail our “credit doctor”. Sandy is here as a member of Right Side Up. Her participation in this local resource is as a credit doctor, and title insurer. Please feel free to visit Sandy in person to discuss your credit privately Saturday January 14^th from 12:03 to 1:37 at Kenny’s in Southampton at Right Side Up’s Home Retention Workshop. The “credit doctor” is a FREE service.

Please join us live at www.wbcb1490.com for the open discussion with Sandy. Our discussion topic will be credit and credit scores and the effects of those scores. .

Each week we discuss the myths of the mortgage market. Your credit score can be moved higher with some effort.

Finally Vince and I have been invited to participate in the aforementioned Home Retention Workshop on January 14^th at Kenny’s in Southampton from 12:03 to 1:37.

Next week we will be joined by a realtor who is an owner of a Keller Williams office in Doylestown.

Market Focus: Next week brings data on home sales, consumer confidence, weekly unemployment claims and a reading on manufacturing activity in the Chicago area. Stocks have been supported recently by signs of improvement in the U.S. economy, including declines in initial claims for jobless benefits and an uptick in construction. Low volume is still the predominate player in the final week of 2011.

Monday:

Markets Closed: US Holiday Christmas Day Observed

Tuesday:

S & P Case-Schiller: The S&P/Case-Shiller home price index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S. The composite indexes and the regional indexes are seen by the markets as measuring changes in existing home prices and are based on single-family home re-sales. The indexes are based on single-family dwellings with two or more sales transactions. Condominiums and co-ops are excluded as is new construction. What it means to you:  Home values affect much in the economy – especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. Many economists believe that the U.S. economy and especially the depressed housing sector will not recover until home prices firm back up. This makes watching home prices all the more important for the investor.

Consumer Confidence: The Conference Board compiles a survey of consumer attitudes on present economic conditions and expectations of future conditions. Three thousand households across the country are surveyed each month. The consensus estimate is for an increase from 56 to 58.6. What it means to you: Consumer spending drives two-thirds of the economy and if the consumer is not confident, the consumer will not be willing to pull out the big bucks. Confidence impacts consumer spending which affects economic growth.

State Street Investor Confidence: The State Street Investor Confidence Index measures confidence by looking at actual levels of risk in investment portfolios. This is not an attitude survey. The State Street Investor Confidence Index measures confidence directly by assessing the changes in investor holdings of equities. The more of their portfolio that institutional investors are willing to invest in equities, the greater their confidence.   What it means to you: “State Street believes direct measurement, rather than a survey of portfolio managers who often don’t have time to fill out monthly questionnaires, is a more reliable approach to consumer confidence. The investor confidence index is compiled with techniques based on modern portfolio theory. According to State Street, “the more of their portfolios that professional investors are willing to devote to riskier as opposed to safer investments, the greater their risk appetite or confidence.”

ICSC Goldman Store Sales:  This weekly measure of comparable store sales at major retail chains, published by the International Council of Shopping Centers, is related to the general merchandise portion of retail sales. It accounts for roughly 10 percent of total retail sales. What it means to you: Consumer spending accounts for more than two-thirds of the economy, so if you know what consumers are up to, you’ll have a pretty good handle on where the economy is headed.

Redbook: A weekly measure of sales at chain stores, discounters, and department stores. It is a less consistent indicator of retail sales than the weekly ICSC index. What it means to you: The pattern in consumer spending is often the foremost influence on stock and bond markets.

Wednesday:

EIA Petroleum Report: The Energy Information Administration (EIA) provides weekly information on petroleum inventories in the U.S. The level of inventories helps determine prices for petroleum products. What it means to you: Petroleum product prices are determined by supply and demand – just like any other good and service. During periods of strong economic growth, one would expect demand to be robust. If inventories are low, this will lead to increases in crude oil prices – or price increases for a wide variety of petroleum products such as gasoline or heating oil.

Thursday:

Weekly Jobless Claims: New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. The consensus estimate is for a increase from 364,000 to 370,000. What it means to you: By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation threatens, it’s a good bet that interest rates will rise.

Bloomberg Consumer Comfort Index: A weekly, random-sample survey tracking Americans’ views on the condition of the U.S. economy, their personal finances and the buying climate. What it means to you: The pattern in consumer attitudes can be a key influence on stock and bond markets. Consumer spending drives two-thirds of the economy and if the consumer is not confident, the consumer will not be willing to spend. Confidence impacts consumer spending which affects economic growth.

Chicago PMI: Manufacturing and non-manufacturing firms are both surveyed. Hence, it is not directly comparable to pure manufacturing surveys. Readings above 50 percent indicate an expanding business sector. The consensus estimate is for an decrease from 662.6 to 60.1.  What it means to you: The Chicago PMI gives a detailed look at the Chicago region’s manufacturing and non-manufacturing sectors. Many market players don’t realize that non-manufacturing activity is covered in this index and tend to focus on the manufacturing side only. On its own, it can be viewed as a regional indicator of general business activity.

Pending Home Sales Index: The National Association of Realtors developed the pending home sales index as a leading indicator of housing activity. As such, it is a leading indicator of existing home sales, not new home sales. A pending sale is one in which a contract was signed, but not yet closed.  The consensus estimate is for a rise from of 1.5 after last month’s 10% increase. What it means to you: This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy.

Money Supply

Friday:

Early Close 2:00