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29 ноября 2019, 14:36

Как мы делали датчик для измерения уровня мусора

Тариф на вывоз мусора в нашей стране скоро будет рассчитываться исходя из объема образованных отходов. И сразу возникает вопрос, как измерить этот объем, который напрямую отразится на нашем кошельке. Самым действенным представляется измерение объемов отходов в контейнерах. Решению этой инженерной и отчасти экологической задачи и посвящена статья. Рисунок 1 — Измерение уровня наполненности контейнера без применения электронных средств. Я руковожу отделом разработки радиоэлектронной аппаратуры в производственной компании ООО “Большая Тройка”. Компания занимается автоматизацией работы по обращению с отходами. Если вы хоть что-то слышали про территориальные схемы обращения с отходами и автоматизированные системы управления для региональных операторов, есть очень большая вероятность, что их разработали и внедрили именно мы. Мой отдел небольшой, но работает над весьма интересными задачами: телематические контроллеры для управления парком автомобилей-мусоровозов, разнообразная автоматика для полигонов, контейнерных площадок и самих контейнеров. Я расскажу о разработке датчика уровня наполненности контейнера отходами. Задача такого прибора — измерять количество насыпанного в контейнер мусора и передавать эти данные на сервер для дальнейшей обработки. Уже сейчас, до внедрения тарификации по объему, данные от таких датчиков могут очень помочь в оптимизации использования контейнерных площадок: отходы из контейнеров должны вывозиться в строго определенный промежуток времени, холостой пробег мусоровозов должен быть минимизирован, а количество и качество контейнеров на контейнерной площадке должно быть максимально адекватно потребностям отходообразователей. Читать дальше →

31 декабря 2018, 23:44

The Economic Security of Older Women

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Today, the Office of Economic Policy at the Treasury Department released the fourth in a series of briefs exploring the economic security of American households. This brief​ focuses on the economic security of older women. In this brief, we ask: Are older women at greater risk of poverty or being unable to manage their expenses than other populations? Are there specific groups of women at risk? What are the implications for policy? Compared with men, we find that elderly women are much more likely to be economically insecure. We attribute this finding to a variety of factors. Women live longer than men, meaning they have to finance a longer retirement and that they are more likely to reach an age in which they must finance disability costs.  In addition, women tend to have lower lifetime earnings than men. Finally, women are more likely than men to live alone and thus are less likely to live with someone with whom to share economic risks.  In this brief, we assess economic insecurity in a number of ways but focus on two measures: the poverty rate and the “overextended” rate—the share of the population whose spending exceeds what it can afford based on its income and annuitized wealth. We view this latter measure as reflecting economic insecurity, because elderly women who are overextended and on fixed incomes must reduce spending to live within their means. For women with low levels of consumption, this could entail cutting back on necessities like food and medicine. Comparing different measures of economic security, we find that the overextended share of the female population is 29 percent, far higher than the poverty rate of 12 percent. The implication is that economic insecurity is broader than the poverty rate implies. We find that single women are far more economically insecure on all measures than married women and that widowhood dramatically increases the likelihood of becoming insecure relative to remaining married. Widowhood is associated with a large loss in income and wealth; and while widows experience a large drop in household spending at widowhood, they continue to cut spending at rates faster than single women and married households.  We also find that disability is associated with economic insecurity. The median disabled woman’s household assets (including non-liquid assets like housing) are sufficient only to finance six months in a nursing home, and the median disabled woman’s household has financial wealth sufficient to cover less than half a month of nursing home expenses. Women who remain married throughout their elderly years, on the other hand, do not experience high rates of economic insecurity. And holding constant marital status and disability status, we do not observe sharp increases in economic insecurity as women age. Notably, even though the poverty rate rises for women as they age, the overextended rate falls as women rely more on wealth to support themselves.   All told, our findings suggest that public policy should focus on specific risks associated with aging, particularly living alone and living with a disability. We note that married couples might benefit from shifting more of their wealth from periods in which both spouses are alive to periods in which only one spouse is alive. Such an outcome could be accomplished in the private sector with greater use of financial products with survivor benefits. Experts have also suggested ways that public policy could help address the challenge, such as by restructuring Social Security to increase survivor benefits. Looking at disability, we note that while Medicaid and private long-term care insurance provide protection for some households, there is still a large unmet need that is apparent when looking at the economic security risks posed by disability. Karen Dynan is the Assistant Secretary of Economic Policy at the Department of the Treasury.

01 декабря 2018, 04:37

Meet the Heckler and Koch G11: The Super Assault Rifle You Don't Know About

Kyle Mizokami Security, Was it just ahead of its time? In the last days of the Cold War, West Germany developed perhaps the most advanced assault rifle of all time. A compact weapon capable of firing a withering 2,100 rounds per minute, the Heckler and Koch G11 utilized technologies not seen even in today’s armies. The advanced nature of the G11 came at a considerable cost however, as the gun was much too complicated to be practical on an increasingly unlikely battlefield. For decades the armed forces of West Germany, the Bundeswehr, utilized the G3 battle rifle. Adopted in 1959 to replace surplus American-made M1 Garand rifles, the G3 itself had a World War II lineage, being a refinement of the StG 44 assault rifle. The G3 was a delayed blowback weapon chambered in 7.62-millimeter NATO and capable of fully automatic fire. It took a twenty round magazine and was made of metal stampings and plastic. Tough and reliable, the G3 served for more than three decades in the Bundeswehr. In 1969, the German Army put out a requirement for a new weapon with a very high first round hit probability. German arms manufacturer Heckler and Koch determined that a rifle with a very high rate of fire firing short, sharp bursts was best suited for the job. A burst of three rounds, for example, could achieve sufficient dispersion to allow at least one bullet to hit the target. With that goal in mind, Heckler and Koch engineers went to the drawing board to design a weapon. One of the first conclusions they came to was that traditional gun operating systems—and using brass-cased bullets—was too slow for their purposes. Eliminating the ejection process from a gun would allow faster firing rates, so Heckler and Koch designed one of the first so-called “caseless” rounds. Instead of a brass casing fitted with a primer and loaded with powder and a bullet, H&K designed a smaller round that was encased in gunpowder propellant. While conventional guns ejected the brass casing through a side port in the weapon after firing, a caseless gun dispensed with that process entirely, and even dispensed with the ejection port itself. This resulted in larger magazine capacities and the elimination of the firing port promised a weapon less likely to be fouled by dirt, dust or other battlefield crud. Read full article

30 ноября 2018, 21:00

Hedge Portfolio With These ETFs Ahead of Trump-Xi G-20 Meet

Investors are likely to be on toe ahead of Trump-Xi G-20 meet, which could give a new direction in the ongoing trade tensions. So, they can consider these ETFs to hedge their portfolio.

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30 ноября 2018, 20:59

Where does Deontay Wilder v Tyson Fury stand in boxing’s pantheon? | Kevin Mitchell

A surfeit of heavyweight titles and champions since the days of Muhammad Ali v George Foreman or Joe Frazier means the sport has fallen from the forefront of public attentionIt is impossible to imagine the impact Muhammad Ali would have made on all our lives were he born into the current era of heavyweight boxing. Certainly, he would have put the world title fight in Los Angeles between Deontay Wilder and Tyson Fury into sharp relief. Related: Tyson Fury and Deontay Wilder clash in feisty LA face-off before world title fight Continue reading...

30 ноября 2018, 19:10

3 Things That Happened Just Before The 2008 Crisis Are Happening Again Right Now

Authored by Michael Snyder via The Economic Collapse blog, Real estate, oil and the employment numbers are all telling us the same thing, and that is really bad news for the U.S. economy.  It really does appear that economic activity is starting to slow down significantly, but just like in 2008 those that are running things don’t want to admit the reality of what we are facing.  Back then, Fed Chair Ben Bernanke insisted that the U.S. economy was not heading into a recession, and we later learned that a recession had already begun when he made that statement.  And as you will see at the end of this article, current Fed Chair Jerome Powell says that he is “very happy” with how the U.S. economy is performing, but he shouldn’t be so thrilled.  Signs of trouble are everywhere, and we just got several more pieces of troubling news. Thanks to aggressive rate hikes by the Federal Reserve, the average rate on a 30 year mortgage is now up to about 4.8 percent.  Just like in 2008, that is killing the housing market and it has us on the precipice of another real estate meltdown. And some of the markets that were once the hottest in the entire country are leading the way down.  For example, just check out what is happening in Manhattan… In the third quarter, the median price for a one-bedroom Manhattan home was $815,000, down 4% from the same period in 2017. The volume of sales fell 12.7%. Of course things are even worse at the high end of the market.  Some Manhattan townhouses are selling for millions of dollars less than what they were originally listed for. Sadly, Manhattan is far from alone.  Pending home sales are down all over the nation.  In October, U.S. pending home sales were down 4.6 percent on a year over year basis, and that was the tenth month in a row that we have seen a decline… Hope was high for a rebound (after new-home-sales slumped), but that was dashed as pending home sales plunged 2.6% MoM in October (well below the expected 0.5% MoM bounce). Additionally, Pending Home Sales fell 4.6% YoY – the 10th consecutive month of annual declines… When something happens for 10 months in a row, I think that you can safely say that a trend has started. Sales of new homes continue to plummet as well.  In fact, we just witnessed a 12 percent year over year decline for sales of new single family houses last month… Sales of new single-family houses plunged 12% in October, compared to a year ago, to a seasonally adjusted annual rate of 544,000 houses, according to estimates by the Census Bureau and the Department of Housing and Urban Development. With an inventory of new houses for sale at 336,000 (seasonally adjusted), the supply at the current rate of sales spiked to 7.4 months, from 6.5 months’ supply in September, and from 5.6 months’ supply a year ago. If all of this sounds eerily similar to 2008, that is because it is eerily similar to what happened just before and during the last financial crisis. Up until now, at least the economic optimists could point to the employment numbers as a reason for hope, but not anymore. In fact, initial claims for unemployment benefits have now risen for three weeks in a row… The number of Americans filing applications for jobless benefits increased to a six-month high last week, which could raise concerns that the labor market could be slowing. Initial claims for state unemployment benefits rose 10,000 to a seasonally adjusted 234,000 for the week ended Nov. 24, the highest level since the mid-May, the Labor Department said on Thursday. Claims have now risen for three straight weeks. This is also similar to what we witnessed back in 2008.  Jobless claims started to creep up, and then when the crisis fully erupted there was an avalanche of job losses. And just like 10 years ago, we are starting to see a lot of big corporations start to announce major layoffs. General Motors greatly upset President Trump when they announced that they were cutting 14,000 jobs just before the holidays, but GM is far from alone.  For a list of some of the large firms that have just announced layoffs, please see my previous article entitled “U.S. Job Losses Accelerate: Here Are 10 Big Companies That Are Cutting Jobs Or Laying Off Workers”. A third parallel to 2008 is what is happening to the price of oil. In 2008, the price of oil shot up to a record high before falling precipitously. Well, now a similar thing has happened.  Earlier this year the price of oil shot up to $76 a barrel, but this week it slid beneath the all-important $50 barrier… Oil’s recent slide has shaved more than a third off its price. Crude fell more than 1% Thursday to as low as $49.41 a barrel. The last time oil closed below $50 was in October 4, 2017. By mid morning the price had climbed back to above $51. Concerns about oversupply have sent oil prices into a virtual freefall: Crude hit a four-year high above $76 a barrel less than two months ago. When economists are asked why the price of oil is falling, the primary answer they give is because global economic activity is softening. And that is definitely the case.  In fact, we just learned that economic confidence in the eurozone has declined for the 11th month in a row… Euro-area economic confidence slipped for an 11th straight month, further damping expectations that the currency bloc will rebound from a sharp growth slowdown and complicating the European Central Bank’s plans to pare back stimulus. In addition, we just got news that the Swiss and Swedish economies had negative growth in the third quarter. The economic news is bad across the board, and it appears to be undeniable that a global economic downturn has begun. But current Fed Chair Jerome Powell insists that he is “very happy about the state of the economy”… Jerome H. Powell, the Federal Reserve’s chairman, has also taken an optimistic line, declaring in Texas recently that he was “very happy about the state of the economy.” That is just great.  He can be as happy as he wants, and he can continue raising interest rates as he sticks his head in the sand, but nothing is going to change economic reality. Every single Fed rate hiking cycle in history has ended in a market crash and/or a recession, and this time won’t be any different. The Federal Reserve created the “boom” that we witnessed in recent years, but we must also hold them responsible for the “bust” that is about to happen.

30 ноября 2018, 17:31

Why Is Kellogg (K) Down 1.2% Since Last Earnings Report?

Kellogg (K) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

30 ноября 2018, 17:14

PVH Corp (PVH) Q3 Earnings Beat, Raises '18 EPS Outlook

PVH Corp (PVH) reports mixed third-quarter fiscal 2018. However, management raises earnings guidance for the fiscal year.

30 ноября 2018, 16:55

On Deck Capital, Thor Industries and Boeing highlighted as Zacks Bull and Bear of the Day

On Deck Capital, Thor Industries and Boeing highlighted as Zacks Bull and Bear of the Day

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30 ноября 2018, 15:00

Anna Jones’ recipe for pasta with radicchio and balsamic dressing | The Modern Cook

Bitter flavours have as much a part to play as sweet and salty – see for yourself in this exciting pasta dish and a moreish, citrussy salad dressingBitter is not a comfortable word – certainly not when it comes to food. It’s a flavour that has been bred out of our food. Despite the reappearance of negronis on cocktail menus and radicchio in restaurants, bitter is not a flavour most want to introduce into our own cooking. But I think of bitter foods as I would spicy or salty foods. Too much can derail a dish but, balanced with other flavours– sweet, sharp, salty – bitter can be that triumphant, missing piece of a dish’s flavour puzzle. Bittersweet, you could say. Continue reading...

30 ноября 2018, 13:07

GOP governors call out Trump after midterm drubbing

Republican governors say the president and the party has to find a way to appeal beyond a narrowing conservative base to avoid losing in 2020.

30 ноября 2018, 12:47

Research Review | 30 November 2018 | Risk Factors

Factor Investing: Get Your Exposures Right! François Soupé (BNP Paribas Asset Management), et al. October 26, 2018 This paper is devoted to the question of optimal portfolio construction for equity factor investing. The first part of the paper focusses on how to make sure that a given equity portfolio has the targeted factor exposures, even […]

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30 ноября 2018, 11:51

Autumn Comes To An End In The U.S. With A Sharp Divide Between Rain And Drought

Precipitation trends this fall sharply divided the United States between rain in the east and dangerous drought in the west.

30 ноября 2018, 09:57

The Market is All Packed for Buenos Aires

The Market is All Packed for Buenos Aires

30 ноября 2018, 03:40

GOP cries foul after California thumping

‘What they call strange and bizarre, we call democracy,’ says the Democrat who oversees the state’s elections.

30 ноября 2018, 02:37

Mueller stalks Trump abroad — again

White House aides hope the G-20 summit will showcase the president's deal-making skills. But Mueller's latest move threatens to overshadow any achievements.

29 ноября 2018, 23:44

Here's Why Boeing (BA) Stock Looks Like a Buy Right Now

Let's see why BA stock looks like it might be worth buying at the moment.

29 ноября 2018, 23:30

'A moment of crisis': Warren lays out foreign policy vision

Sen. Elizabeth Warren called Thursday for a U.S. foreign policy that “works for all Americans,” not just wealthy capitalists, and helps block the rise of authoritarianism.In a speech at American University, the likely 2020 White House contender also announced her opposition to President Donald Trump’s newly renegotiated trade deal with Canada and Mexico, while calling for a smaller defense budget, a pullout of U.S. troops from Afghanistan and a “no first use” nuclear weapons policy. “Our country is in a moment of crisis decades in the making, a moment in which America’s middle class has been hollowed out, working people have been betrayed, and democracy itself is under threat,” Warren said.If she decides to run in 2020, the Massachusetts Democrat will need to differentiate herself in a crowded presidential field, especially from other progressive favorites such as Bernie Sanders. Both Warren and Sanders have had more of a domestic and economic focus during their legislative careers. But foreign policy will be a hard issue to avoid during the 2020 race, not least because of Trump’s repeated clashes with U.S. allies and seeming fondness for autocrats abroad. Warren has beefed up her global affairs and national security bona fides in recent years, including by joining the Senate Armed Services Committee. She made it clear during her speech, however, that her foreign policy will be heavily influenced by the leftist economic views that helped her win political office, arguing that it’s a “fiction” to cast foreign and domestic policies as separate. “We need to refocus our international economic policies so that they benefit all Americans, not just wealthy elites,” she plans to say. “At the same time, we must refocus our security policies by reining in unsustainable and ill-advised military commitments and adapt our strategies overseas for the new challenges we see in this coming century.” Republicans have dismissed Warren‘s chances, especially after she sparked controversy last month by releasing DNA tests to back up her claims of distant Native American ancestry — claims Trump has mocked."It's ironic that Elizabeth Warren has chosen to launch her 2020 campaign with the two topics she knows the least about: her heritage and foreign policy,” Republican National Committee spokesman Michael Ahrens said in a statement Thursday.Warren, who simultaneously published an essay in Foreign Affairs laying out her views, devoted much of her speech to bashing unfettered trade policies that she argues have left ordinary workers behind while fostering corruption among the wealthy elite around the world.She linked all of that — especially the corruption — to the rise of authoritarianism in parts of the world. And she added that it’s clear that American hopes that capitalism would lead to more open societies were misplaced; instead, autocratic countries such as China and Russia now pose grave threats to the United States. “Efforts to bring capitalism to the global stage unwittingly helped create the conditions for anti-democratic countries to rise up and lash out,” she said to a largely sympathetic audience heavy on students. “Russia has become belligerent and resurgent. China has weaponized its economy without loosening its domestic political constraints. And over time, in country after country, faith in both capitalism and democracy has eroded.” Warren criticized the new trade deal covering the U.S., Canada and Mexico — NAFTA 2.0, she called it — as a pact that “won’t stop outsourcing, it won’t raise wages, and it won’t create jobs.” She asserted that even though Trump’s rhetoric appears to be pro-worker, his policies aren’t.“We need a new approach to trade, and it should begin with a simple principle: our policies should not prioritize corporate profits over American paychecks,” she said.Another Warren target: defense contractors, whom she accused of having a “stranglehold” on U.S. military policy and helping bloat the Pentagon budget to more than $700 billion a year. Some of that money would be better spent on other programs, including U.S. diplomacy and infrastructure, Warren suggested.Warren pointed out that Trump has refused to get tough on Saudi Arabia over the killing of Washington Post columnist Jamal Khashoggi because of his interest in moving forward with arms deals. “ It is time to identify which programs actually benefit American security in the 21st century, and which programs merely line the pockets of defense contractors — and then pull out a sharp knife and make some cuts,” she said. In the past, she’s called for an end to “wasteful and duplicative” defense spending. Warren repeatedly went after Trump. In a question-and-answer session after delivering her remarks, Warren denounced Trump’s slow response to Moscow this past week after Russia fired on Ukrainian ships and seized their crews near the Crimean Peninsula. Russian President Vladimir Putin is “testing Donald Trump“ to see how far he can go without punishment, Warren said, and Trump is “failing.” “He is not responding with strength,” Warren said of the mercurial Republican president, who has at times overtly sought friendly relations with the Russian strongman.Shortly before Warren spoke, Trump announced on Twitter that he was canceling a planned meeting with Putin on the sidelines of this week’s G-20 summit in Argentina because of the Ukraine clash.Warren also noted, however, that Trump has threatened to engage in a new nuclear arms race against Russia. She insisted that is a foolish idea because the U.S. does not need more nuclear weapons.Warren said the U.S. should pursue more arms control initiatives, and she came out in favor of a “no first use” doctrine, which means the U.S. would pledge not to be the first to use a nuclear weapon in a conflict. So far, America has reserved the right to use such weapons first. “To reduce the chances of a miscalculation or an accident, and to maintain our moral and diplomatic leadership in the world, we must be clear that deterrence is the sole purpose of our arsenal,” Warren said. The senator, who emphasized that her three brothers served in the armed forces, decried the U.S. military role in Afghanistan, which has lasted 17 years. She said the U.S. must remain vigilant about stopping terrorism and that it should support a peace process involving Afghan parties, which includes the Taliban. But she restated her position that: “It is time to bring our troops home from Afghanistan — starting right now.” Warren said America’s global standing will erode if its citizens do not address a struggling education system, drug addiction and other problems at home. And while she warned that the U.S. must protect its elections from foreign attacks in the wake of Russia’s alleged interference in 2016, she also spoke out against domestic policies that make it harder for Americans to vote. All of these trends are a threat to U.S. democracy, Warren said. “President Trump’s actions and instincts align with those of authoritarian regimes around the globe,” she said. “Americans must demonstrate to this president and to the world that we are not sliding toward autocracy—not without a fight.” Article originally published on POLITICO Magazine]]>

29 ноября 2018, 22:55

Rising Rates Are Killing The Housing Market

Authored by Lance Roberts via RealInvestmentAdvice.com, Earlier this year, I penned an article entitled “The Coming Collision Of Debt & Rates” which discussed the 10-areas that rising interest rates would impact most directly. Number two on that list was housing: “Rising interest rates slow the housing market as people buy payments, not houses, and rising rates mean higher payments.” The housing recovery is ultimately a story of the “real” employment situation. With roughly a quarter of the home buying cohort unemployed and living at home with their parents, the option to buy simply is not available.  Another large chunk of that group are employed but at the lower end of the pay scale which pushes them to rent due to budgetary considerations and an inability to qualify for a mortgage. Even after a “decade of recovery,” the full-time employment-to-population ratios remain well below levels normally associated with a strong economy, and wage growth remains stagnant. Both of which makes home affordability an issue. Despite much of the media rhetoric to the contrary, I have warned repeatedly that rising rates would negatively impact the housing market which was still being supported by low interest rates. The mistake that mainstream analysts made was in the assumption that the recent increases in real estate prices were largely driven by first time home buyers creating an organic market. The reality, however, has been that market increases were being driven by speculators in the “buy to rent” game. As I noted previously: “As the “Buy-to-Rent” game drives prices of homes higher, it reduces inventory and increases rental rates. This in turn prices out “first-time home buyers” who would become longer-term homeowners, hence the low rates of homeownership rates noted above. The chart below shows the number of homes that are renter-occupied versus the seasonally adjusted homeownership rate.” “Speculators have flooded the market with a majority of the properties being paid for in cash and then turned into rentals. This activity drives the prices of homes higher, reduces inventory and increases rental rates which prices ‘first-time homebuyers’ out of the market. The recent rise in the home-ownership rate, and subsequent decline in renter-occupied housing, may an early sign of rental investors, aka hedge funds, beginning to exit the market. If rates rise further, raising borrowing costs, there could be a ‘rush for the exits’ as the herd of speculative buyers turn into mass sellers. If there isn’t a large enough pool of qualified buyers to absorb the inventory, there will be a sharp reversion in prices.” You can see that a bulk of the real estate activity has occurred at the price levels of homes that make the best rental properties – between $200,000 and $400,000. Importantly, you can see activity has dropped sharply over the course of the last couple of months. This is particularly the case at the very high-end and very low-end of the spectrum. The latest data on existing and new home sales, permits, and completions show that we have likely seen the peak from the bounce in housing activity that started in 2010. It is important to remember, as we have discussed previously, that there are only a certain number of individuals that, at any given time, are actively seeking to ‘buy’ or ‘sell’ a home in the market. Furthermore, individuals buy “payments,” not “houses,” so artificially suppressed interest rates are only half of the payment equation. When home prices increase to levels that begin to price buyers out of the market – activity will slow. The chart below is our Total Housing Activity Index which simply combines the 4-primary components of the housing market cycle – permits, completions, and sales of new and existing homes. You will notice the last time the activity index broke is rising trend, the subsequent decline was not healthy. More importantly, both the current, and previous, “housing bubble” preceded the peak in household net worth. In both cases, the “pin that pricked the bubble” was interest rates. As shown below, when mortgage rates rise housing activity slows as “people buy payments” rather than houses. This is because higher rates have two immediate impacts on the housing market: The monthly payment rises to a level that buyers can’t afford, or; Buyers stop their activity to “wait and see” if rates come back down again.  The monthly mortgage payment required for a loan has risen about 12% over the last three years as mortgage rates rose approximately 1%. The simply put houses out of reach for a vast majority of Americans already living from one paycheck to the next. As a result, and shown below, the annual growth rate of housing activity is back into negative territory. However, it is really how many of those “permits” turn into “completions” that matter. Currently, that ratio is sending an important warning which is suggesting more troubles ahead for the housing market as “permits” are being pulled due to lack of demand. At The Margin Another “Damocles Sword” hanging over the mortgage industry is that rising interest rates will continue to kill the “refinance market.” Banks and mortgage-related companies have made huge profits over the last couple of decades as homeowners serially refinanced their homes to take out cash and refinance at a lower mortgage rate. That activity has largely ceased as a result of higher rates. We are now seeing default risk rise as adjustable rate credit lines on home equity loans begin to exceed homeowners ability to service the debt. Furthermore, individuals were previously able to sell their existing home and “upgrade” to a newer or larger home. That upgrade was afforded by extremely low interest rates. Now, as rates rise, the “trade up” activity will greatly diminish as individuals become locked into their existing homes. Housing is always a function of what happens at the “margins” with the activity contained to those actively searching to buy a house versus those willing, or able, to sell. But in order for MOST individuals to engage in the housing market, they need a mortgage to do so. As rates rise, that activity slows. There is no argument that housing has indeed improved from the depths of the housing crash in 2010. However, that recovery still remains at very weak historical levels and the majority of drivers used to get it this point have begun to fade. Furthermore, and most importantly, much of the recent analysis assumes this has been a natural, and organic, recovery. Nothing could be further from the truth as analysts have somehow forgotten the trillions of dollars, and regulatory support, infused to generate that recovery. We must also remember that record low mortgage rates driven by Fed purchases of Mortgages Backed Securities (MBS) played a large role in the recovery. Homebuilder sentiment has gone well beyond the actual level of activity. The recent turn lower is bringing that over-confidence back to reality and with that expect to see a decline in new permits and likely rise in the unemployment rate of those involved in the housing sector. For the housing market, the recent rise in interest rates is extremely important.  There are many hopes pinned on housing activity continuing to foster the domestic economic recovery. If rates do indeed pop the current housing “bubble,” the entire economic recovery thesis will be called into question. While the Fed has repeatedly noted the strength of the economy as a central underpinning for continuing to hike rates and tighten monetary policy, it is quite likely the damage from rising rates has already been done. Such was noted yesterday when Fed Chair Jerome Powell reversed his position on hiking rates and changed the language to suggest they were close to finished. But the Fed’s change of tone may just be “too little, too late” as the negative impacts of increased borrowing costs with respect to both auto loans and housing have already become evident. It is only a function of time until the broader economic indicators feel the pinch.

29 ноября 2018, 22:07

Fed Sees Rate Hike "Fairly Soon" But Shifts To Greater Data Dependence

With Fed Chair Powell having blown his dovish wad yesterday, today's FOMC Minutes (from a hawkish Fed statement) - as dated as they are - seem like a bit of non-event. The main headline from the minutes is that almost all Fed officials saw another rate-hike "warranted fairly soon." But The Fed discussed modifying language on "Further Gradual" hikes while expressing its greater reliance on incoming data. On hiking "fairly soon"... Consistent with their judgment that a gradual approach to policy normalization remained appropriate, almost all participants expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations. But being data dependent: Many participants indicated that it might be appropriate at some upcoming meetings to begin to transition to statement language that placed greater emphasis on the evaluation of incoming data in assessing the economic and policy outlook; such a change would help to convey the Committee's flexible approach in responding to changing economic circumstances. Which means Incoming data is key: "Participants emphasized that the Committee's approach to setting the stance of policy should be importantly guided by incoming data and their implications for the economic outlook" As forward guidance may be revised: Participants also commented on how the Committee's communications in its postmeeting statement might need to be revised at coming meetings, particularly the language referring to the Committee's expectations for "further gradual increases" in the target range for the federal funds rate. As Bloomberg notes, the language about removal of "further gradual increases" implies the committee's preference to be as flexible as possible in setting policy. Indeed, the key message in recent Fedspeak and the November minutes is that they will be data-dependent. Some more on "further gradual" language: Almost all participants reaffirmed the view that further gradual increases in the target range for the federal funds rate would likely be consistent with sustaining the Committee's objectives of maximum employment and price stability. And counter to the "fairly soon" language a few participants, while viewing further gradual increases in the target range of the federal funds rate as likely to be appropriate, expressed uncertainty about the timing of such increases On the neutral rate and why the market misread Powell's statement: only a "couple" (less than many, less than several, less than a few) participants noted that the federal funds rate might currently be near its neutral level: A couple of participants noted that the federal funds rate might currently be near its neutral level and that further increases in the federal funds rate could unduly slow the expansion of economic activity and put downward pressure on inflation and inflation expectations.  Also, those wondering, the Fed was not at all bothered by market vol; is the Powell Put much lower? "In their discussion of financial developments, participants observed that financial conditions tightened over the intermeeting period, as equity prices declined, longer-term yields and borrowing costs for most sectors increased, and the foreign exchange value of the dollar rose. Despite these developments, a number of participants judged that financial conditions remained accommodative relative to historical norms." And here is the punchline: monetary policy can change overnight: "Monetary policy was not on a preset course; if incoming information prompted meaningful reassessments of the economic outlook and attendant risks, either to the upside or the downside, their policy outlook would change" Meanwhile, tighter financial conditions were clearly a concern: Various factors such as the recent tightening in financial conditions, risks in the global outlook, and some signs of slowing in interest-sensitive sectors of the economy on the one hand, and further indicators of tightness in labor markets and possible inflationary pressures, on the other hand, were noted in this context Even as chances of QE4 are clearly being contemplated: "Participants also observed that regimes with abundant excess reserves could provide effective control of short-term rates even if large amounts of liquidity needed to be added to address liquidity strains or if large-scale asset purchases needed to be undertaken to provide macroeconomic stimulus in situations where short-term rates are at their effective lower bound" And lets not forget the high level of debt/leveraged loans: "Several participants were concerned that the high level of debt in the nonfinancial business sector, and especially the high level of leveraged loans, made the economy more vulnerable to a sharp pullback in credit availability, which could exacerbate the effects of a negative shock on economic activity." The Fed also discussed potentially tweaking the IOER, perhaps even before the December meeting to keep the fed funds in its corridor range: While the funds rate seemed to have stabilized recently, there remained some risk that it could continue to drift higher before the Committee's next meeting. As a contingency plan, participants agreed that it would be appropriate for the Board to implement such a technical adjustment in the IOER rate before the December meeting if necessary to keep the federal funds rate well within the target range established by the FOMC. Putting it all together, Bloomberg economist Tim Mahedy writes that Powell's comments yesterday may have been a nod to the discussion around the need for flexibility in the rate path. So far, a strong labor market has been the guiding light for policy, but inflation is likely to play a bigger role in 2019. Core PCE in this morning's report was softer than expected, and recent research by Adam Shapiro at the San Francisco Fed argues that inflationary pressures this year can be traced to acyclical inflation -- components not sensitive to economic conditions -- and thus inflation could be lower than the headline data series depict. Both of these factors could make the Fed more dovish next year. Still, inflation lags growth, and capacity constraints along with continued above-trend growth point to firming pressures next year.' Meanwhile, as Mayank Seksaria, strategist at Macro Risk Advisors, points out the obvious: "If the Fed doesn't downshift the dots for 2019, that will be hawkish in December." That said, the market has already given up on The Fed's forecasts...   And expectations in the markets are now for less than one 25bps rate-hike next year...   Furthermore, it is worth noting that the US macro surprise index is at its weakest in over a year *  *  * Full Minutes Below (link):