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Archive for October, 2012

October 27, 2012

Posted by nahetsblog on October 29, 2012

UNITED STATES OIL PRODUCTION ON PACE TO SURPASS SAUDI ARABIA

With new technologies and higher prices the U.S. output is going to surpass the Saudies sometime within the next two years,2012 is on pace to be the biggest one year increase since 1951, we have been averaging 7% increases over the last four years, the boom has surprised even the pundits who have been real critical of the Obama administration of showing favoritism to the green energies over the crude oil business. The Energy Department predicts that our oil production next year will be just over 11.6 million barrels per day,which is what Saudi Arabia is producing every day right now.Some of the experts think we could get to 14 to 15 million barrels per day ,which would make us the new Middle East.But, we will still have to import oil,our peek needs right now is just a little over 18 million barrels per day. Even though our production is at an all time high it has not led to cheaper prices at the pump,but one year ago all of the pundits were warning us to brace ourselves because they thought that with an election year the price of a gallon could get to $4.50 to $5.00 per gallon,and this was because they thought this administration was anti "big oil". Predicting the price of a gallon of gasoline 6 months to a year in advance is a lot harder than people think.

The increase in drilling is a boom to the local economies,the states that are getting the benefit right now are North Dakota, Oklahoma, Wyoming, Montana and Texas.The national unemployment rate is around 7.8 %,the unemployment rate in those five states is 5.2 %, that is a huge difference. All of the businesses in those areas benefit, it has been reported that the increase in the drilling,transportation and refining has created 1.3 million new jobs.The biggest factor that is driving the domestic production is our new found ability to squeeze oil out of the rock that used to be to difficult and expensive to get.That process to pump water,sand and chemicals into the well is known as "fracking" Their is no doubt that it works,but their is a concern that it might contaminate the under ground water supplies.

ECONOMIST ARE FORECASTING 2013 TO BE LESS PAINFUL THAN 2012

According to the USA TODAY,s quarterly report most of economist surveyed felt that 2013 was going to be better than 2012, not a lot better but better.But they all premise their predictions on the fact that Congress does not hinder the growth,that’s akin to being the Monday morning quarterback on Thursday.Their forecasts have the economy growing at an average rate of 2.3 percent,that is up from the 1.65 percent we are doing now, anything over 3% is considered good.The current unemployment rate is 7.8%, next year the prediction is the unemployment rate will average 7.6% for the year.Business investment growth estimated at 4.6% is expected to be at 7.5% next year,the Fed has agreed to continue buying mortgage backed securities until the job market improves and will keep short-term interest rates low. All of the economists surveyed thinks that the deficit needs to be reduced,but just like our Congress they cannot agree as to how or when.One of the unintended consequences of the economy improving is an influx of illegal Mexicans coming across the border,this is according to a report completed by the University of Southern California and a Mexican government research group that said for the first time since July of 2007 the number immigrants heading north is more than the number heading south.

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October ,2012

Posted by nahetsblog on October 29, 2012

"U.S. OUTLOOK IS ONE OF NEAR-TERM WEAKNESS AND LONG TERM STRENGTH’ anyone puzzled by recent economic numbers is not alone,they can be contradictory and confusing sometimes and as we have learned in the past consumers spending habits usually run hand in hand with the consumer confidence index.Everyday their is good news and then the next paragraph that will have news that is not so good. Most Americans are reducing their debt right now with the extra cash they have,if they are fortunate to have any in lieu of spending freely,

Businesses are cautious about hiring and expanding until they get a clear signal that consumer spending is back to where it was,reduced debt and rising home prices will eventually boost consumer spending,consumer spending needs the business community to start hiring and giving out raises that exceed the cost-of-living index,so who blinks first,consumers need businesses to start spending money and the businesses need the consumers to start spending money.

SEPTEMBER HOUSING LOOKS SOLID,CONSTRUCTION GAIN MAY BUOY U.S. ECONOMY

A recovery in home construction is building strength helping the economy instead of dragging it down,according to IHS GLOBAL INSIGHT the September housing permits far exceeded the expectations in all four regions,the northeast was the lowest but it was 15 percent higher than September of 2011.The Commerce Department reported that housing permits are less volatile than starts and more reflective of future work and they were up 11.6 percent in all four regions,those are strong numbers real strong. With 114,000 new jobs created in September those are the positive numbers that economist have been hoping for. Housing typically leads the U.S. out of a recession it has not done so in this one and the only reason I can come up with is because housing is what caused this recession and that has never happened before,this is called the biggest recession since the great depression,and that is true.

Home construction is closely watched because it’s labor intensive,since losing two million jobs after the housing crash it has been a slow and painful recovery.Last year their were only 434,000 single-family homes built ,that was the worst year on record, so this year each quarter is between 10 and 20 percent increase over last year as you can see we have a ways to go to get back to where we were.But with seven months in a row with an increase,even a slight increase or a large increase we are on the way back.September auto sales were the best month the auto business has had this year in United States and Canada, With last weeks unemployment number taking a huge leap forward,the naysayers were out in force accusing the Obama administration of playing games with the number,with only three weeks to go before the Presidential election some people were questioning how the unemployment percentage could fall below 8 percent for the first time since Obama was elected. The next one that matters comes out three days before the election, if that number takes a huge tumble down than we can all start to wonder.

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October 23, 12

Posted by nahetsblog on October 23, 2012

The National Association of Home Builders (NAHB) Paints Rosy Picture

Last Friday the NAHB came out with their September numbers and their forecasts for the next six months. According to NAHB out of the 337 largest metropolitan areas, 188 saw an increase in construction employment 119 saw a decrease,and the rest were stagnant.Also,the housing starts for September were up 1.2 percent over the same time frame last year and the Commerce Department readjusted their figures for August and the new number is 1.1 percent over the same time frame last year.That two month period of time has more housing starts than any two month period going back to October of 10.The mortgage rates have gone up a very small amount in the last 6 months,coupled with the fact that the average price is inching up every month gives the impression that the worst of times are behind us.The consumer price index is also inching up ever so slightly,but it is going up.Most of today,s economists agree that for every two homes that are built it creates one full time job.I think the two is a little on the high side,I think the real number is closer to 1.3 than two,regardless which one is correct the more houses we build the more people that go back to work.

THE EIGHT HUNDRED POUND GORILLA TRIPS ON THE DANCE FLOOR

Remember three weeks ago that I blogged that Caterpillar called a press conference to announce their sales and dollar per share profit, for the year 2015, which was extremely generous,well they announced two days ago that those figures were wrong and they were going to have to ratchet down their sales estimates and their profit per share. At the time I wondered why they were making a big deal over their estimates for the next three years, I had assumed that Caterpillar had made their announcements within a week of China making their announcement that over the next decade they were going to spend close to a trillion dollars upgrading,repairing,fixing and building their interstate system,railroad bridges,runways and airports and sea ports. This was the largest construction project ever announced and I assumed that Caterpillar was counting on getting a huge chunk of those projects.Also at the time they announced that their was going to be a three percent price hike across the board starting the first of the year,making those announcements at the same time was nice timing,what has changed in the last three weeks, it is not like they made a mistake adding up the numbers.The announcement that the revenue and profitability figures were off by 10 or 11 percent was not front page news like price hike announcement,Oh well Komat"su announced last week that they were lowering their revenue and expenses estimates for 2015 too..

Caterpillar announced last week that they are going into a partnership with Illinois Valley Community College and MAG>IAS (worlds largest tool manufacturer) to teach a class that will meet Caterpillars needs for employees,the press release was a little scant on the details but from what I gathered is the class is going to be tailored so when a person completes the program they will be familiar with Caterpillars equipment.It did not mention if their was going to be a heavy equipment school or a heavy equipment training program, and I dont know exactly what their definition is regarding tools, also I do not know if these people are going to be students or employees or a combination of both.

According to some economists today Caterpillars sales and profitability is an accurate reflection of the worlds economy.According to Caterpillar they have had 28 quarters in a row with an increase in revenue.I can remember when I was 12 or 14 years old their was a quip going around that if General Motors caught the flu the rest of the economy sneezed.General Motors went B.K. four years ago and stiffed their stock holders,bond holders and vendors out of at least 75 billion dollars,that,s billion with a B.

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October 15,2012

Posted by nahetsblog on October 18, 2012

"U.S. OUTLOOK IS ONE OF NEAR-TERM WEAKNESS AND LONG TERM STRENGTH’ anyone puzzled by recent economic numbers is not alone,they can be contradictory and confusing sometimes and as we have learned in the past consumers spending habits usually run hand in hand with the consumer confidence index.Everyday their is good news and then the next paragraph that will have news that is not so good. Most Americans are reducing their debt right now with the extra cash they have,if they are fortunate to have any in lieu of spending freely,

Businesses are cautious about hiring and expanding until they get a clear signal that consumer spending is back to where it was,reduced debt and rising home prices will eventually boost consumer spending,consumer spending needs the business community to start hiring and giving out raises that exceed the cost-of-living index,so who blinks first,consumers need businesses to start spending money and the businesses need the consumers to start spending money.

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SEPTEMBER HOUSING LOOKS SOLID,CONSTRUCTION GAIN MAY BUOY U.S. ECONOMY

A recovery in home construction is building strength helping the economy instead of dragging it down,according to IHS GLOBAL INSIGHT the September housing permits far exceeded the expectations in all four regions,the northeast was the lowest but it was 15 percent higher than September of 2011.The Commerce Department reported that housing permits are less volatile than starts and more reflective of future work and they were up 11.6 percent in all four regions,those are strong numbers real strong. With 114,000 new jobs created in September those are the positive numbers that economist have been hoping for. Housing typically leads the U.S. out of a recession it has not done so in this one and the only reason I can come up with is because housing is what caused this recession and that has never happened before,this is called the biggest recession since the great depression,and that is true.

Home construction is closely watched because it’s labor intensive,since losing two million jobs after the housing crash it has been a slow and painful recovery.Last year their were only 434,000 single-family homes built ,that was the worst year on record, so this year each quarter is between 10 and 20 percent increase over last year as you can see we have a ways to go to get back to where we were.But with seven months in a row with an increase,even a slight increase or a large increase we are on the way back.September auto sales were the best month the auto business has had this year in United States and Canada, With last weeks unemployment number taking a huge leap forward,the naysayers were out in force accusing the Obama administration of playing games with the number,with only three weeks to go before the Presidential election some people were questioning how the unemployment percentage could fall below 8 percent for the first time since Obama was elected. The next one that matters comes out three days before the election, if that number takes a huge tumble down than we can all start to wonder.

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HOUSING MARKET "FORECLOSURE FILINGS HEAD DOWN"

September count marks a five year low,according to a report filed last Thursday their were fewer homes on track to be seized by their lenders than any time in the last five years,nationwide that makes two months in a row sharp decline,the foreclosure rates follow geographic borders a little closer than some of the other indicators,and that has to do how bad they were hit when the housing bubble burst along with the job market recovery.The five worst states are Arizona,California,Illinois,Georgia and Florida, at last Nevada fell out of the top five after leading the country for two years in a row.

Home prices build to new peaks in dozens of U.S. cities,the average home price has begun to inch up after four or five years of soft market conditions,in more than 100 metropolitan areas August prices have hit an all time high.In addition their are another 50 metropolitan areas that are within 2 percent of their all time high,an example of those areas are Austin,TX Denver,CO Indianapolis,IN and Portland MN,according to Moody,s Analytics Chief some of these cities did not have far to go to get back to where they were,other cities that got hit hard are months away of just getting back to where they were.

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I owe an apology to our friends to the north more specifically the good people in the great city of Saskatoon,Canada. I received a banner from the Mayors office two months announcing their graduation of the first class from their joint-partnership with the local community college teaching heavy equipment . After one year their heavy equipment training program had graduated 8 students and 7 of them had gone to work.I still do not know if they were bragging about the 8 or the 7, but either way I did not think it warranted all of the attention it received in the newspaper and e-mail.So I made a couple of snide comments about the success of their heavy equipment training program because I am extremely familiar with how much it cost in time and money to get somebody through the heavy equipment school and their is no way training that few students you can stay open without government help.Regardless nothing justifies my snippy comments especially after I learned that they do not enjoy 300 days of sunshine like we do,their training season is only 6 months long so I guess thats pretty good.So to the good people of Saskatoon if you were offended by what I wrote you have my sympathies.

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October 15,2012

Posted by nahetsblog on October 18, 2012

"U.S. OUTLOOK IS ONE OF NEAR-TERM WEAKNESS AND LONG TERM STRENGTH’ anyone puzzled by recent economic numbers is not alone,they can be contradictory and confusing sometimes and as we have learned in the past consumers spending habits usually run hand in hand with the consumer confidence index.Everyday their is good news and then the next paragraph that will have news that is not so good. Most Americans are reducing their debt right now with the extra cash they have,if they are fortunate to have any in lieu of spending freely,

Businesses are cautious about hiring and expanding until they get a clear signal that consumer spending is back to where it was,reduced debt and rising home prices will eventually boost consumer spending,consumer spending needs the business community to start hiring and giving out raises that exceed the cost-of-living index,so who blinks first,consumers need businesses to start spending money and the businesses need the consumers to start spending money.

SEPTEMBER HOUSING LOOKS SOLID,CONSTRUCTION GAIN MAY BUOY U.S. ECONOMY

A recovery in home construction is building strength helping the economy instead of dragging it down,according to IHS GLOBAL INSIGHT the September housing permits far exceeded the expectations in all four regions,the northeast was the lowest but it was 15 percent higher than September of 2011.The Commerce Department reported that housing permits are less volatile than starts and more reflective of future work and they were up 11.6 percent in all four regions,those are strong numbers real strong. With 114,000 new jobs created in September those are the positive numbers that economist have been hoping for. Housing typically leads the U.S. out of a recession it has not done so in this one and the only reason I can come up with is because housing is what caused this recession and that has never happened before,this is called the biggest recession since the great depression,and that is true.

Home construction is closely watched because it’s labor intensive,since losing two million jobs after the housing crash it has been a slow and painful recovery.Last year their were only 434,000 single-family homes built ,that was the worst year on record, so this year each quarter is between 10 and 20 percent increase over last year as you can see we have a ways to go to get back to where we were.But with seven months in a row with an increase,even a slight increase or a large increase we are on the way back.September auto sales were the best month the auto business has had this year in United States and Canada, With last weeks unemployment number taking a huge leap forward,the naysayers were out in force accusing the Obama administration of playing games with the number,with only three weeks to go before the Presidential election some people were questioning how the unemployment percentage could fall below 8 percent for the first time since Obama was elected. The next one that matters comes out three days before the election, if that number takes a huge tumble down than we can all start to wonder.

HOUSING MARKET "FORECLOSURE FILINGS HEAD DOWN"

September count marks a five year low,according to a report filed last Thursday their were fewer homes on track to be seized by their lenders than any time in the last five years,nationwide that makes two months in a row sharp decline,the foreclosure rates follow geographic borders a little closer than some of the other indicators,and that has to do how bad they were hit when the housing bubble burst along with the job market recovery.The five worst states are Arizona,California,Illinois,Georgia and Florida, at last Nevada fell out of the top five after leading the country for two years in a row.

Home prices build to new peaks in dozens of U.S. cities,the average home price has begun to inch up after four or five years of soft market conditions,in more than 100 metropolitan areas August prices have hit an all time high.In addition their are another 50 metropolitan areas that are within 2 percent of their all time high,an example of those areas are Austin,TX Denver,CO Indianapolis,IN and Portland MN,according to Moody,s Analytics Chief some of these cities did not have far to go to get back to where they were,other cities that got hit hard are months away of just getting back to where they were.

I owe an apology to our friends to the north more specifically the good people in the great city of Saskatoon,Canada. I received a banner from the Mayors office two months announcing their graduation of the first class from their joint-partnership with the local community college teaching heavy equipment . After one year their heavy equipment training program had graduated 8 students and 7 of them had gone to work.I still do not know if they were bragging about the 8 or the 7, but either way I did not think it warranted all of the attention it received in the newspaper and e-mail.So I made a couple of snide comments about the success of their heavy equipment training program because I am extremely familiar with how much it cost in time and money to get somebody through the heavy equipment school and their is no way training that few students you can stay open without government help.Regardless nothing justifies my snippy comments especially after I learned that they do not enjoy 300 days of sunshine like we do,their training season is only 6 months long so I guess thats pretty good.So to the good people of Saskatoon if you were offended by what I wrote you have my sympathies.

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October 2012

Posted by nahetsblog on October 4, 2012

If a 20 ton bucket to haul your dirt was not big enough than today is your lucky day,Caterpillar has just come out with a 22 ton bucket,it was a 16 % increase over the old one,their new R3000H has the largest bucket of any underground LHD,(load-haul-dump) that is one gimongous bucket,22 tons! The extra 2 tons you will be hauling will help pay for the price increase,Caterpillar also announced that they were raising the prices 3% across the board,that price increase is for all of their mining and construction equipment.

With factory activity picking up, The Institute for Supply Management,a trade group of purchasing agents said Monday that factory activity rose from 49 % to 51 % 50 is considered the cut off point between an increase and a decrease in activity,most economist were happy with the report,this comes after a dismal spring with factory orders.in addition,the government said that U.S. builders spent more on home construction in August than any other month this year.

Home prices are starting to rise faster than anyone expected,U.S.home prices are coming off the bottom faster than anyone expected and with the 30 year fixed rate at an all time low their are buyers now that were fence sitters 30 days ago,August was the sixth month in a row with a modest increase,the figures are not in yet for September but it is expected to be at least a 5% increase over September of 2011.Last year most economist had predicted that home prices would fall all through 2012,the fact that they were wrong should not come as a surprise,their predictions have not been close to accurate since New York was a prairie,they missed the bubble bursting,they missed the ripple effects that it had around the globe,and now they have missed the rebound,thats not a big surprise.

Higher prices help homeowners build equity as home prices rise more people will list their house and then when the supply edges nearer the demand the prices will level off. Still the housing market has shown strength that was not evident last year,in addition the rising prices build consumer confidence that helps in other areas,the rising prices have taken 1.3 million people from having their mortgages underwater,it is now estimated that only 20 % of the homeowners are underwater and that number is going down every week.

The private Conference Board index of consumer confidence is at a seven year high,even if consumers are lukewarm about current conditions they are optimistic about the future.business confidence seems to be lagging consumer confidence,but that is not unusual,it always has,but if consumer confidence stays where it is at or improves it is only a matter of time that business confidence catches up.The European problems do not effect consumer confidence but that is not true with business the problems in the European community has a direct effect on our business confidence.

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