ABRAHAM GULKOWITZabe@gulkowitz.com917-402-9039

2014 issue 20November 13, 2014

Is it Safe? Markets would have you believe that it indeed is… The volatility and gyrations of recent weeks have since been overshadowed by significant recoveries.Previous nervous market conditions were driven by global growth concerns; and since have been followed by a robust rebound rally in many marketsegments. The turn has been so significant that it’s resulted in some of the biggest swings in years. But note that global growth will remain woefullyinadequate even into 2015. While Japan recently announced a massive easing program to battle deflationary prospects, China weakness is truly a biggerproblem. A critical review of its statistics has China also edging closer to deflationary tendencies, with outright weakness in prices across a wide swathe of theeconomy. Producer prices have been declining for nearly three years and consumer price inflation is mired at its lowest level since 2010. And then there isthe Europe problem. Very low growth in the Euro Area could have deep repercussions for financial markets, for geopolitics and for many other economies,regardless of whether the slowdown is deemed secular stagnation or not… We know that the Euro Area accounts for one-sixth of global GDP and a quarterof global trade and cross-border banking system assets. Numerous sectors will be found to have substantial overcapacity. Should European banks find theircapital cushions eroding as borrowers struggle in a low-growth environment, financial repercussions will also be significant. Even though the U.S. has hadsome vibrant indicators of growth recently, a careful review of the underlying data reveals signs of possibly slower expansion, with inflows of new businesshitting a six-month low. There is a risk that even the powerful U.S. growth engine may underperform…

The Bank of Japan (BOJ) surprised the global financial marketswith stimulus boost as the Japanese economy struggles evenafter the unprecedented monetary stimulus introduced 18months ago. The BOJ announced that it would expand thecountry's monetary base to 80 trillion yen per year, from the 60-70 trillion yen it has targeted since last April in what wasalready an aggressive asset purchasing scheme.

Oil prices are dropping but the fracking revolution rolls on

The high-yield market has followed stocks higher onthe back of another central banker ‒ the Bank ofJapan’s - plans to expand its stimulus program.

Investors face hangover as policy party fadesEquities await vindication in strong growth, but Treasury yields signal vulnerability

The Republican party won control of the Senate in theNovember 4 mid‐term elections, performing better thanexpected at the federal and state levels. Republicans willbe emboldened with control of both houses of Congress.The question is whether the White House will be morewilling to cooperate with Congress or boldly act alone in2015 and 2016.

U.S. added 214,000 jobs in October, jobless rate dipped to 5.8%More than 200,000 jobs have been added each month for nine straight months, the longest stretch since 1995.

U.S. employers added 214,000 jobs in October, extending thehealthiest pace of hiring in eight years, according to theDepartment of Labor. The burst of hiring lowered theunemployment rate to 5.8 percent from 5.9 percent, thelowest rate since July 2008. The agency also said that 31,000more jobs were added in August and September than it hadpreviously estimated.

Eurozone retail sales fall for fourth straight monthMarkit’s Eurozone Retail PMI signaled a drop in retail sales for thefourth successive month in October, highlighting the ongoingweakness of consumer demand in the single currency area. Thesurvey also showed wholesale price pressures running at their lowestsince 2010.

China's industrial production andretail sales growth slowedunexpectedly in October, whilefixed investment grew less-than-expected, data from the NationalBureau of Statistics showed

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November 13, 2014

In This Issue

Headlines and data appearing in The Punch Line came from widely available publications including national and international newspapers, trade journals, economic and industrial bulletins and news websites.

• Engines of GrowthU.S. recovery’s strength, the additional easing in the EU and Japan, serious geopolitical concerns, and the timing of the Fed’s policy shift continue to dominate across the globe. A more robust growth trajectory still cannot be widely assumed for all regions. Deep-seated weaknesses have also become more evident. Very obvious financial vulnerabilities, repercussions from various regional political stalemates and serious geopolitical flareu ps are aggravating the problems of clearly insufficient growth in the world economy. And let’s not forget that many of the challenges cannot be resolved easily … (pg 7)

• The Likelihood of Unlikely Events... (pg 8)

• Household (pg 9)

• You Can’t Handle the Truth… (pg 10)

• Credit… (pg 11)

• A New Geography of Business… (pg 12)

• The DNA of Business… (pg 13)

• Pumping Iron … (pg 14)

• Real Estate and Construction… (pg 15)

• Will Life Ever be the Same? (pg 16)

• Is It Safe? Markets would have you believe that it indeed is… The volatility andgyrations of recent weeks have since been overshadowed by significantrecoveries. Previous nervous market conditions were driven by global growthconcerns; and since have been followed by a robust rebound rally in manymarket segments. The turn has been so significant that it’s resulted in someof the biggest swings in years. But note that global growth will remainwoefully inadequate even into 2015. While Japan recently announced amassive easing program to battle deflationary prospects, China weakness istruly a bigger problem. A critical review of its statistics has China also edgingcloser to deflationary tendencies, with outright weakness in prices across awide swathe of the economy. Producer prices have been declining for nearlythree years and consumer price inflation is mired at its lowest level since2010. And then there is the Europe problem. Very low growth in the EuroArea could have deep repercussions for financial markets, for geopolitics andfor many other economies, regardless of whether the slowdown is deemedsecular stagnation or not… We know that the Euro Area accounts for one-sixth of global GDP and a quarter of global trade and cross-border bankingsystem assets. Numerous sectors will be found to have substantialovercapacity. Should European banks find their capital cushions eroding asborrowers struggle in a low-growth environment, financial repercussions willalso be significant. Even though the U.S. has had some vibrant indicators ofgrowth recently, a careful review of the underlying data reveals signs ofpossibly slower expansion, with inflows of new business hitting a six-monthlow. There is a risk that even the powerful U.S. growth engine mayunderperform… (pg 1)

• In This Issue (pg 2)

• Which Way is Up?… (pg 3)

• Go Figure… (pg 4)

• The Return to Normal… (pg 5)

• Dislocation, Dislocation… (pg 6)

Contact information:

Abraham Gulkowitz

phone: 917-402-9039 email:   abe@gulkowitz.com

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November 13, 2014

Which Way is Up?

Concern that markets have been under-pricing risk

U.S. GDP Jumps Last quarter's strength was due to trade deficitimprovement and firm growth in government spending.Growth in the price index moderated. Governmentspending purchases grew at a 4.6% rate (0.4% y/y), thequickest growth since Q2'09. Defense spending firmed ata 15.9% rate (-0.1% y/y), nondefense grew 0.5% (-1.5%y/y) and state & local buying rose 1.3% (1.0% y/y).

Stricter leveraged corporate Lending – How much will it hurt?Easier mortgage rules – will it help household home buying? 

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November 13, 2014

Go Figure…Where Now?

Japan’s stocks surged, with thebenchmark gauge closing at a 7-yearhigh, as the yen fell to a 7-year lowagainst the dollar and corporateearnings reports surpass estimates.Amid speculation that Prime MinisterShinzo Abe is likely to delay a plannedsales-tax increase to 10% next year, theyen slid 0.7% to 115.63 per dollar andtouched 116.10 earlier, the weakestlevel since October 2007.

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November 13, 2014

The Return to Normal ?

Wider U.S. trade deficit, weak exports point to slower growth

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November 13, 2014

Dislocation, Dislocation, Dislocation

Global oil markets in 2015Strong US oil supply growth and weaker global demand will keep pressure oncrude prices in 2015. Companies are reassessing their view on long‐term oilprices, but this should not impact significantly the supply/demand balancenext year. The most powerful OPEC members are accepting oil prices below100 dollars per barrel, suggesting that 2015 will see the lowest average oilprice since 2010. With weak demand, the competition for market sharebetween non‐OPEC and OPEC producers ‐‐ and among OPEC membersthemselves ‐‐ will intensify. Recent cuts in the official selling prices (OSP) ofMiddle Eastern producers, halted in early November with Riyadh raising itsOSPs for Asia, is a reminder of how damaging a lack of internal cohesion canbe to OPEC.

Slowdown is part of China’s new narrativeGov’t no longer supports boom growth pathShifts in investment patterns and internal constraints signal end to super-strong growthRising costs put squeeze on profits; Local consumers are not prepared to pay the prices that foreign customers will

German factory orders climbed less than forecast in a sign the euro area’s largest economy may struggle to grow in the second half of the year.Orders, adjusted for seasonal swings and inflation, rose 0.8 percent in September after a reviseddecline of 4.2 percent in August, data from the Economy Ministry in Berlin showed today.Economists predicted an increase of 2.3 percent, according to the median of 39 estimates in aBloomberg News survey. Orders fell 1% on the year. The European Commission cut itseconomic forecasts for the euro area this week, including its outlook for Germany, France andItaly, as the legacy of the debt crisis lingers in high unemployment and weak demand.Germany’s economy contracted in the second quarter, and the Bundesbank predicts little, if any,growth in the rest of the year, in part because of trade disruptions from sanctions on Russia.

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November 13, 2014

Engines of Growth…

Global growth fears spur emerging market volatilityThe anticipated divergence in monetary policy between the USFederal Reserve (Fed) and the Bank of England (BoE) on onehand -- expected to raise rates next year -- and the ECB and theBank of Japan (BoJ) on the other -- which could provide furtherstimulus -- is being questioned following the 'growth scare'which has contributed to volatility in financial markets aftermid-October. The minutes of the BoE's October rate-settingmeeting show that the majority of members believe anypremature rise would leave the UK economy vulnerable, whilesome Fed governors have proposed delaying the end of assetpurchases. Although emerging market (EM) equities arebenefiting from easing fears of an early rise in US rates, furthervolatility should keep 'risk assets' under pressure.

German exports to Russia tumble as sanctions bite

Japan Talk to Boost QE and the Nikkei Explodes to a 7-Year High

Prospects for the global economy in 2015Economic trends weakened during the second half of 2014, depressing 2015prospects. Low global demand growth lies behind falling commodity pricesand sluggish world trade. This poor outlook is reviving fears of economic andsocio-political instability in the euro-area, which risks another recession.Consequently, financial markets have become more volatile and sentimentmay remain poor despite easing fears of early rate rises by major centralbanks. Major institutions remain quite optimistic of a 2015 recovery, partlybecause the United States has been relatively unaffected by deterioratingexternal conditions. However, this could change as key trade partners weakenand deflation risks rise. Asia, including China, is already affected by the globaltrade slowdown -- raising the probability of a 'perfect storm' for the globaleconomy.

CHINA OUTLOOK: Recent indicators establish China's economy firmly on aslowing trajectory. At 7.3%, year-on-year GDP expansion in July-September wasthe slowest since the global financial crisis, and annual growth will probably bethe slowest since 1990. Although an aggressive stimulus initiative can be ruledout for now, Beijing seems likely to opt for narrower stimulus measures in thefinal quarter of 2014. Nevertheless, it is almost certain that China will miss its7.5% annual growth target, with GDP likely to grow by just 7.3%. The keyquestion is how far Beijing can accommodate slowing growth without recourse tointerventionist policies that could precipitate a hard landing.

French Manufacturing Continued to Contract In OctoberThe French manufacturing sector continued to contract in October but the paceof decline was slower than initially estimated, final data from MarkitEconomics showed . The headline seasonally adjusted Purchasing Managers'Index fell to 48.5 in October from 48.8 in September. The flash score forOctober was at 47.3. Output at French manufacturers fell further in October,extending the current period of decline to five months. Lower productionreflected a continued drop in new orders. Manufacturers continued to makecutbacks to staffing levels.

DEM DISASTER... GOP Seizes Senate... Governors Bloodbath...

Prospects for France in 2015France is stuck in prolonged economic stagnation and a sombre political mood. Theappearance of relative stability in 2014 has been deceiving: two major electionshave taken place (municipal elections in March and European Parliament electionsin May), leading to political changes that have not produced any significant effecton the country's harmful economy policies since 2011. Next year is likely to be abrutal reality check for the country's fading political class.

The current index of the Japanese Economy Watchers Survey, a measure ofpeople's assessment of the Japanese economy, fell to 44 in October from47.4 in September. Economists had forecast a marginal drop to 47.2. Ascore above 50 indicates optimism and a reading below 50 suggestspessimism. October's score is the lowest since April, suggesting that theeconomic downturn since April ‐ when Japan raised the sales tax from 5% to8%, causing consumers to become thrifty ‐ is becoming more prolonged thanpolicymakers had anticipated. Meanwhile, the expectations index alsodeclined, coming in at 46.6, down from 48.7 in September.

At the same time, the monthly Japanese consumer confidence index from thecabinet office also unexpectedly decreased in October to 38.9 from 39.9 inSeptember. Economists had expected the index to tick up to 40.5 inOctober. Since early this year the readings have been dipping in and outof the 30s, their lowest levels for more than a year, presumably onconsumer fears that Japan's first sales tax rise in almost two decades ‐implemented in April ‐ will hurt their spending power.

EU autos sector needs to restructure in presence of massive global capacity and weak growth Markit’s automobiles & auto parts PMI for Europe showed a decrease inproduction for the first time in 18 months in October. The contractionrepresented a marked turnaround from the strong performance seen inthe sector at the start of the year when output growth was the fastest forover two-and-a-half years. These latest gloomy PMI figures follow datafrom the ECB showing new passenger car registrations rising at theslowest annual rate for 12 months in September.

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November 13, 2014

The Likelihood of Unlikely Events

The Grand Experiment

BUBBLE THEORYAs a consequence of the 2008 financial crisis, major globalcentral banks embarked on a new monetary policy era, cuttingofficial rates to almost zero and drastically expanding theirbalance sheets. These measures helped prevent a globaldepression and a worldwide deflationary spiral. However, themost prominent side effect has been a substantive drop in yieldsof almost every fixed-income category to historic lows. Somemarket players now worry that central banks' policy responsehas generated another bubble; if it bursts, this might underminethe stability of the global economic and financial system.

US and Russian nuclear policy hinges on ChinaElections were held in the Ukrainian Donbas region on November 2 by pro-Russian separatists, which the White House on October 31 opposed and labelled"illegitimate". Relations between the United States and Russia have deterioratedover the past year, as President Vladimir Putin has ignored opposition to theannexation of Crimea and exchanged rounds of sanctions with the West.Washington has accused Moscow of violating the 1987 Intermediate-RangeNuclear Forces (INF) Treaty, which prohibits both countries from possessingland-based missiles with ranges of 500-5,500 kilometres (km), creating doubtsabout whether the two largest nuclear powers can cooperate on the issue.

Investors are being urged to ‘stress test’ fixed income funds

Gulf states in 2015Rising domestic fiscal pressures and growing regional volatility will confront the GulfCooperation Council (GCC) states in 2015. Military intervention and counter-terrorismmeasures will dominate the regional security agenda, although the spat between Qatar andthe United Arab Emirates (UAE) will prevent the formation of a united front against theIslamic State group (ISG) in Iraq and Syria, and against other external threats.

Home Depot Says 53 Million E-Mail Addresses Taken in Breach

The world is on the brink of a new Cold War, and trust should berestored by dialogue with Russia, former Soviet leader MikhailGorbachev has said. At an event to mark the 25th anniversary ofthe fall of the Berlin Wall on Sunday, Mr Gorbachev expressed

alarm about recent Middle Eastern and European conflicts.

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November 13, 2014

Households – Brave New World

As voters were coming out of the polls on election day Tuesday, pesky reporters were asking why they voted the way they did — and what was going through their heads?The most popular response — from 45 percent of the voters — was the economy. Only 28 percent said their families were doing better financially.

Digital to influence half of holiday buying- Deloitte

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November 13, 2014

YouCan’t Handle the Truth…Let's Take the “Con” out of Economics

China’s Changed One-Child Policy Doesn’t Give Baby BoostRelaxation of China’s One-Child Policy Has Led to Fewer Baby Applications Than Expected

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November 13, 2014

Credit Matters-Know RiskMany Excel in Strategy, Few in the Management of Risk

Credit conditions in the eurozone eased in thethird quarter of this year and demand for loansamong companies strengthened by the most since2011, according to a survey that will nurture hopesof a thaw in the bloc’s lending markets. TheEuropean Central Bank’s quarterly lending surveyshowed a small net percentage of euro area banksreported an easing of terms on loans to enterprises– the second quarter in a row this has happened.There was also an increase in net demand for creditfrom both businesses and households.

Italian bank Monte dei Paschi emerges as the loser after ECB stress tests

FEAR OVER LEVERAGED LENDDINGThe Fed’s policy of keeping interest rates at record lows has prompted investorsto buy riskier and riskier investments to obtain some sort of return. Theregulators fear that the stampede into less conventional assets, includingleveraged loans, could create bubbles that will later pop, harming the banks andthe wider economy. In recent months, the Federal Reserve and the Officer of theComptroller of the Currency have intervened to tamp down the market. Leveragedloans are made to companies with low credit ratings that could suffer high lossesin a downturn. As a result, the regulators have tried to stop the banks theyregulate from arranging certain types of leveraged loan deals. Officials at bothagencies contend that the crackdown is part of their core mission to ensure thesafety and soundness of the banking system. But with this onslaught, they arealso trying to have their regulatory cake and eat it, too.

Russia’s $10 Billion Repo Plan to Ease Cash Crunch for Banks The Russian central bank’s plan to inject as much as $10 billion into the financial system this month will ease a dollar shortage facing the nation’s banks

Russian ruble slid to a fresh low on Wednesday as the country’s central bankmoved a step closer to free-float exchange rate, seeking to reduce speculativepressure on the currency. The Bank of Russia said it would significantly scaleback its foreign currency intervention to support the ruble, spending no morethan $350 million a day. The change was viewed as a big step toward allowingthe ruble to trade freely. The ruble plunged to a record low of 44.98 per dollaron the news, before bouncing back slightly to 44.45. Russia’s currency hasdepreciated about 25% against the dollar so far this year, battered by Westernsanctions against the country, a deteriorating economy, and the tumbling oilprice.

The Financial Stability Board (FSB) proposed that the world’s largestbanks may be required to have total loss‐absorbing capacityequivalent to as much as quarter of their assets, as regulators tacklethe threat posed by banks that are too big to be allowed to fail. Theplans envisage big global banks such as Goldman Sachs and HSBCshould have a buffer of bonds or equities equivalent to around 16% to20% of risk‐weighted assets from January 2019. Proposed new rulesare the latest attempt by global regulators to ensure that bankcreditors rather than taxpayers bear the majority of losses when a biglender fails.

Alternative EU bank stress tests hint at hidden risksThe comprehensive assessment of the euro-area banking sector by the ECB and EuropeanBanking Authority (EBA) gave an all-clear to the largest banks, requiring only 25 relativelysmall lenders to increase their capital. Accounting for capital raised so far this year, additionalaction was required for only 13 banks. However, research by the Volatility Institute at NewYork University's Stern School and the Center for Risk Management at Lausanne Universityfinds that the largest banks are less capitalised than it would appear and lack equity towithstand an economic crisis and related severe stock market sell-off. The difference betweenthese two kinds of stress tests highlights the shortcomings and self-defeating purpose ofregulatory capital ratios.

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November 13, 2014

A New Geography of Business

Canada’s Dollar Falls Most Since 2011 as Economy ShrinksCanada’s dollar weakened the most since 2011 after data showed the economy shrank inAugust for the first time this year, adding to bets the central bank will lag behind theFederal Reserve in raising interest rates. The currency approached a five-year low afterthe unexpected decline in growth contrasted with a report yesterday showing theeconomy in the U.S., the nation’s largest trading partner, expanded more than forecast inthe third quarter. The Fed ended a bond-purchase stimulus program this week, moving astep closer to raising U.S. interest rates, while Canada’s central bank left its benchmarkrate unchanged this month.

Italy downgraded its economic outlook sharply for 2014 citing subdued domestic demand and weaker-than-expected world trade. The statistical office Istat said that the economy will shrink 0.3 percent this year, instead of 0.6 percent expansion projected in May. For 2015, gross domestic product is expected to grow 0.5 percent, slower than the prior estimate of 1 percent. The outlook for 2016 was lowered to 1 percent from 1.4 percent. The recovery will be mainly driven by domestic demand.

The European Union cut its already low economic growth forecasts further, indicating therecovery will remain sluggish amid problems for the bigger countries, particularly Franceand Germany. The official forecast for growth this year in the 18-country eurozone was cutto 0.8 percent from a prediction of 1.2 percent made in the spring. Indicating little goodwas expected next year too, it reduced the 2015 prediction from 1.7 percent to 1.1 percent.South-eastern Europe in 2015: All the region's economies are expected to grow,including those most severely hit by recession -- Greece and Croatia -- but much dependson the EU's economic health, since all these countries are integrated economically withEurope and have been seriously affected by the euro-area crisis and the poor prospects foroverall growth.

Central Asia in 2014 has been marked by worsening macroeconomicfundamentals in most countries of the region. The IMF announced onNovember 3 that economic growth in the region will decline in 2015largely as a result of the slowdown in the Russian economy. The EurasianEconomic Union (EEU) will also come into force in 2015, which will shouldlead to increased economic cooperation. While Central Asian states havenot experienced any major instability this year, new labour strikes haveoccurred in Kazakhstan's Mangistau province and violence broke out inTajikistan's Gorno‐Badakhshan province. Meanwhile, the Fergana Valleywill continue to be a source of concern.

India's slowing profits growth offers wake-up call for record-high shares

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November 13, 2014

The DNA of BusinessReconfiguring Industries to Define Growth

Gold hits four-year low as dollar ralliesBoJ easing and US midterm results boost dollar and weaken bullion

Why innovation matters Technological change can erode competitive advantage

Third-quarter results at big U.S. media companiesare pointing to an ominous trend: The television admarket is on shaky ground—especially in cable—asmarketers pull back amid economic uncertainty andshift dollars to digital outlets.Two major sporting events — the Sochi WinterOlympics in February and this summer's FIFA WorldCup in Brazil — also soaked up more than $1.5billion in advertising dollars this year, leaving fewerdollars in the upfront market.

Struggling Sears Explores Sale-Leaseback Deal of BuildingsSears said that it was considering selling200 to 300 stores to a newly formed real-estate investment trust, the first step in aplan that could offload most of the chain’s1,800 locations.

DirecTV loses subscribersThe satellite TV provider's earnings beat forecasts, but it unexpectedly lost subscribers in the latest quarter.

Pressures at Supermarkets… Last month, Walmart issuedan “urgent agenda” memo to managers across the countrypushing them to improve performance on “Chilled andFresh” items in its dairy, meat and produce departments,part of an effort by Walmart to stem long-sluggish sales.

Measures to Raise Local Minimum Wages Are Gaining in Popularity US Minimum Wage Increases Pose Risks for Restaurant Whole-Business The growing trend of states and municipalities raising localminimum wages, including ballot initiatives passed by fivestates last week, as well as the potential increase in the federalminimum wage, are credit negative for quick servicerestaurant whole-business securitizations. Thesesecuritizations pool cash flows from franchisee royaltypayments into securities. In some cases, the securitizationsalso pool the profits from company-owned (non-franchiseeowned) restaurants into securities.

On Monday, the US Department of Health and Human Services(HHS) revised downward the Congressional Budget Office’s(CBO) projected number of enrollees on the healthcareexchanges for 2015 to 9.1 million from 13 million. A lowerprojection of enrollees is credit negative for healthinsurers that had invested in participating on theexchanges with the anticipation of sizable membershipgrowth. This lower projection, along with the increase inthe number of insurance companies competing on theexchanges, reduces the possibility of any insurancecompany substantially increasing its market share.

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November 13, 2014

Pumping Iron…The Old Economy Revisited

Monthly U.S. car sales of the six largest automakers asmeasured in U.S. market share rose 6 percent from a year ago,matching analysts' expectations. Declining gasoline priceshelped boost demand for SUVs and crossovers. Ford MotorCo said utility vehicles and trucks accounted for 72 percentof its sales, up from 68.5 percent a year ago.

And also Russia…

Expansion in Natural Gas Production Spurs Big U.S. Export PlansThe U.S. shale revolution has spurredconstruction of many types—remote-siteroads, natural-gas processing plants,pipelines, storage-tank farms andpetrochemical projects, among them—butfew, if any, projects are as challenging todevelop, permit, finance and build as themultibillion-dollar plans to liquefy naturalgas and load the resulting LNG forshipment overseas.

Russia’s HSBC Purchasing Managers Index(PMI) for the service sector fell to 47.4 inOctober from 50.5 in September, below the 50mark that separates expansion from contraction.The Service sector accounts for about 60% ofRussia’s GDP. New business received byRussian companies fell for the second straightmonth, while outstanding work and employmentalso dropped. Firms reported weaker demand,including from international markets, and a lackof funds at clients.

EU autos sector moves into reverse gear at start of final quarterMarkit’s automobiles & auto parts PMI forEurope showed a decrease in production for thefirst time in 18 months in October. Thecontraction represented a marked turnaroundfrom the strong performance seen in the sectorat the start of the year when output growth wasthe fastest for over two‐and‐a‐half years. Theselatest gloomy PMI figures follow data from theECB showing new passenger car registrationsrising at the slowest annual rate for 12 monthsin September.

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November 13, 2014

Real Estate and Construction Outlook

US Construction Spending Down for Second MonthU.S. construction spending fell for asecond straight month inSeptember as a slight rebound inhousing was offset by furtherdeclines in nonresidential buildingand in government projects.Construction spending dropped 0.4percent in September compared toAugust when spending fell 0.5percent, the Commerce Departmentreported Monday. After fourstraight monthly declines, housingconstruction edged up 0.4 percentin September but nonresidentialbuilding fell 0.6 percent withweakness in construction ofhospitals, power plants andfactories. Government constructionwas also down, falling 1.3 percentas spending on projects at thefederal and state and local levelsdeclined. The overall declines inthe past two months weredisappointing but economists saythe weakness will be temporary.They are looking for constructionactivity to support economic growthin coming months. The Septemberdrop pushed construction spendingdown to $950.9 billion at aseasonally adjusted annual rate,still a modest 2.9 percent higherthan the level a year ago.

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November 13, 2014

Will Life Ever Be the Same?

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