Best In

Our Supreme Court will soon rule on the right of a University to deny a Christian group status as a registered student organization because in its rules it excludes non Christians as well as homosexuals.

http://www.washingtonpost.com/wp-dyn/content/article/2010/04/16/AR201004...

Here is the million dollar question...

Should this Christian group get special exemption because they worship "Our God?" Or should we hold all religions to the same legal standards that we hold all other organizations?

Remember, the University did not tell the group it could not continue to meet on school property or require any other change, just denied it the ability to spam the entire student body and access to school funding.

What great news the head of the corrupt union SEIU is stepping down! Glad to see you go Andy!

Bloomberg

Job Hunters Slack Off When Given a Helping Hand: Amity Shlaes
April 12, 2010, 9:20 PM EDT
More From Businessweek

April 13 (Bloomberg) -- Time was when you could rely on taxes to be the topic in the U.S. come mid-April. No longer. This year it’s jobs, jobs, jobs.

In Washington, Democrats want to extend expiring unemployment insurance. They see their plan as action in the spirit of Franklin Roosevelt, who put forward so many programs for the worker with his New Deal. Republicans are muttering about what the benefits do to individual initiative. But they are also going along with the plan to extend jobless payments.

The emphasis on extension sounds humane and necessary. Hundreds of thousands of families are losing benefits. Yet that emphasis is counterproductive, because it overlooks the problem that is making it hard for the jobless to get work in the first place.

Part of the problem is the relationship between the cost of hiring for employers and the cost of being unemployed for workers. By making hiring expensive through mandates such as health care, the administration is discouraging hiring. By extending benefits for the jobless, the same government is making unemployment less painful -- cheaper -- for workers. The combination sustains unemployment at higher levels, not lower.

One economist illuminating this dynamic is Casey Mulligan at the University of Chicago. Mulligan points out that many industries aside from manufacturing are now recovering. But many companies are finding ways to do so with fewer workers. This isn’t a general recession any longer. It is becoming a jobs recession where the incentives for employer and employee are out of whack.

Perfect Timing

Mulligan also notes that there is specific evidence of the counterproductive force of making unemployment less expensive. Two scholars, Stepan Jurajda and Frederick Tannery, looked at Pittsburgh in the first half of the 1980s, a period when the nation had two temporary increases in unemployment benefits. They determined that one third of those claiming unemployment found work within weeks of the expiration of their benefits, but not before.

Apply that Pittsburgh experience to today, when insurance is also running out. What it tells you is that jobs will come back faster if Washington doesn’t extend insurance benefits.

The Pittsburgh data are merely a tiny part of a large body of evidence. In policy discussions we make a big deal about the differences in payments to the unemployed, treating “relief” as different from “welfare” and “welfare” as different from “unemployment insurance.” Effectively, they all function the same way: they damp the incentive to find a job.

U.K. Record

The ultimate evidence here is from the 1920s, when the Labour Party came to power in the U.K. for the first time. Labour passed laws that gave unions power to demand higher wages and to create unemployment benefits. The result was that employment became more expensive for companies. Unemployment, meanwhile, became relatively less expensive to workers because the workers now received relief payments.

As scholars Daniel K. Benjamin and Levis Kochin pointed out in the Journal of Political Economy paper as far back as 1979, the moment was one in which “unemployment benefits were on a more generous scale relative to wages than ever before or since.”

The result was the mother of all jobless recoveries. For almost two decades, from 1921 to 1938, U.K. unemployment averaged 14 percent, and never got below 9.5 percent. For two decades Britons talked of the tragedy of “idleness” and the “dole.” The bitterness of the experience was so strong that both words fell out of use. “Dole” actually became a pejorative. You don’t hear Harry Reid, or any other leader in Washington, saying “2010, time for a dole.”

Today’s Hero

One New Deal politician who grasped at least part of what was happening in Britain was that hero of today’s Democrats, Roosevelt. Roosevelt understood that relief payments in the U.K. weren’t necessarily helping workers find employment. He appalled his progressive colleagues by disparaging the dole whenever he could. Rather than pay the unemployed, Roosevelt preferred creating jobs through the public sector.

Still, Roosevelt and his colleagues replicated other U.K. errors. FDR signed laws that put upward pressure on wages, the most dramatic example of these being the 1935 Wagner Act. This in turn led to real increases in wages, leading to slower hiring.

More recently the U.S. repeated the pattern in the Aid to Families With Dependent Children program, which made life worse for those families. They never got work. “Welfare,” the word we used for the program, likewise became stigmatized. President Bill Clinton signed the law that abolished the program, sending a signal that work is better for the country and individual than a dole, relief, or insurance.

Lawmakers now are reversing that progress, perhaps without being aware of what they’re doing. Eventually, they will understand. And eventually those phrases we utter now -- “insurance extension,” “mandatory health care at the workplace” -- will also be dropped from the language in shame. But of course, by then the damage will have been done.

Click on {LETT } to send a letter to the editor.

--Editors: James Greiff, Steven Gittelson

To contact the writer of this column: Amity Shlaes at amityshlaes@hotmail.com

To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net.

I primed two dozen fir beams today to get ready to basecoat tomorrow.  What it is, they have got a lot of outside space with a roof over it and they have these big fir beams.   A dozen are 4 by 10 - twelve feet long and  a dozen are longer almost 16 feet long and they are 6 by 12's.   The 4 x 10's I pick up by myself only because they are fir and that is a light wood.  but the bigger ones forget it.
So on the ones I can lift I have them leaning up against the garage walls.  The walls are like 14 feet high.  that way I can paint all the way around them at once.  But the big ones I have laying down and I can only paint three sides at once then have to let them dry.
 
So I primed them all today but of course its more involved that just priming.  After I primed them and it dried I had to sand all sides on them because with such a soft wood the grain raised a lot.  So... sand it down and then fill in all the knot holes and cracks, which are a heck of a lot.  Tomorrow I will sand down the filler for the holes and basecoat them but I don't think I can get all that in one day.
 
The reason they are using fir is because its outside and fir will hold up much better than pine and with pt you can't paint it.  We are painting instead of staining for two reasons.  One, painting will last about ten times longer than staining and the desired color can't be obtained on fir with a stain, so...

Leader of Supreme Court's liberal bloc says he is stepping down, giving President Obama a new chance to shape the court. I'm sad to see that Justice Stevens is retiring but I'm so happy that he did it during Obama's watch.

Apr 7, 2010 2:27 PM, By Sibley Fleming, NREI managing editor
Under pressure from federal regulators and weighed down by an unhealthy exposure to commercial real estate, small banks or those in the $1 billion to $100 billion asset range are making haste to clean up their balance sheets, according to Oakland, Calif.-based Foresight Analytics, a unit of Trepp LLC.

In the fourth quarter alone, the nation s small banks cut the total outstanding balance of commercial real estate construction and land loans by about 13%, while large banks with assets of $100 billion or more only trimmed back by about 4%, says Matt Anderson, managing director for Foresight.

The contrast in the outstanding balance of construction and land loans is even greater when comparing the fourth quarter of 2008 to the fourth quarter of 2009. Small banks held $121.7 billion and $83.4 billion respectively, a 31.5% decline over one year.

Given that there s not much in the way of other financing out there right now, to the extent that they re shedding exposure, it s more through selling off the loans to someone else or potentially through foreclosures, says Anderson. The buyers of this debt have generally been private equity players that want to expand into commercial real estate, particularly if there s a discount involved.

However, Anderson points out that many small banks claim the haircuts on the sales haven t been as severe as they had originally anticipated.

Given that the volume of non-performing loans has continued to grow, I m guessing the ones that are selling are the ones where the bank isn t having to take as big of a loss, he says. They re choosing which ones to sell and they re picking the ones that can get somewhat better pricing.

The loans selected for disposition, in fact, may even be performing loans or less bad non-performing loans. For example, the discount on a loan for a piece of land far from an urban center and the discount on a loan for a project already under way in an urban setting is vastly different.

Bad rep

Over the past year, small banks have gained the reputation for not only being over-weighted in construction loans and mortgages but for holding loans of a lower quality than their larger bank brethren.

In February, the Congressional Oversight Panel, established by Congress in 2008 to oversee expenditures of the $700 billion Troubled Asset Relief Program, said that of the approximately 8,100 banks in the U.S., 2,988 are small banks that are dangerously exposed to commercial real estate.

In addition to the lack of diversification, these community and mid-sized banks also hold high concentrations of the riskiest and least sought-after loans, including transition properties and construction loans in secondary or tertiary markets, according to the panel.

The one plus, many small banks contend, is that on the mortgage side of the business they have a significant exposure to owner-occupied properties, which have performed better than income-producing properties. It s better but not problem free, says Anderson.

Owner-occupied properties made up 43% of total loans outstanding for small banks at the end of the fourth quarter, and had a delinquency rate of 4.8%. That compares with 57% of loans backing income-producing properties, which had a delinquency rate of 6% over the same period.

No going back

Despite paring back their commercial real estate exposure, small banks are unlikely to be making room on their balance sheets for new commercial real estate loans. [They are] cleaning up the risk and not planning on coming back anytime soon, says Anderson.

With $1.4 trillion in commercial real estate debt maturing over the next five years and no obvious source of funding to soak it up, Anderson does not foresee any major improvement for commercial real estate lending in the near term, even if commercial mortgage-backed securities issuance continues to recover at a healthy pace. Even if it doesn t end incredibly badly for everyone, at best [the commercial real estate industry] is essentially treading water.
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This week I have been working on samples for two different jobs.  I hope to start on one tomorrow or Friday at the lastest.  No pictures yet but as soon as I start I'll be able to share more what I am working on.

Apartment rents rose during the first quarter, ending five straight quarters of declines and signaling the worst may be over for the hard-hit sector.

Nationally, the apartment vacancy rate stayed flat at 8%, the highest level since Reis Inc., a New York research firm, began its tally in 1980.

Reis tracks vacancies and rents in the top 79 U.S. markets, and rents rose in 60 of them, led by Miami, Seattle and New York—all cities that have notched big rental declines in the past year.

Rents increased 1.6% in the first quarter in Miami and 0.9% in New York. The gains came during what is usually a seasonally weak period for apartments and suggested that landlords may have some momentum heading into the peak spring and summer leasing season.

"Deterioration seems not to have just been arrested but reversed," said Victor Calanog, director of research for Reis. "Several markets have bottomed and may be on track to recovery," he said.

Nationally, effective rents, which include concessions such as one month of free rent, rose 0.3% during the quarter compared with a 0.7% decline in the fourth quarter of last year and a 1.1% drop in the first quarter of 2009. Vacancies are tied to unemployment, because many would-be renters move in with family members or double up during a downturn.

"We clearly hit an inflection point in all of our markets in January and February," said Jeffrey Friedman, chief executive of Associated Estates Realty Corp., which owns and operates 12,000 units in the eastern U.S.

Renters are also staying put longer: the average renter now stays for 19 months, up from an average of 14 months, said Mr. Friedman, and despite low mortgage rates and greater home affordability, fewer renters are leaving to buy homes.

"This is the first time in many, many years that it feels like even people who could afford to buy are making the investment decision not to," Mr. Friedman said.

Difficulty in obtaining financing for new apartment construction, meanwhile, has limited the supply of new units that will be added in the coming years. Those fundamentals have landlords and investors excited about the potential for rents to pop once the economy gathers steam.

Biggest Annual Rent GainsRank Metro Market 12-month Effective Rent Growth
1 Colorado Springs 2.5%

2 District of Columbia
2.0%

3 San Antonio
1.5%

4 Dayton
1.4%

5 Little Rock
1.3%

6 Chattanooga
1.2%

7 Austin
1.0%

8 Suburban Maryland
1.0%

9 Louisville
0.8%

10 Pittsburgh
0.8%

.
Still, Mr. Calanog said that a "slow recovery" was likely and that landlords shouldn't expect "galloping rental growth" until the job market firms up, particularly because younger workers that are more likely to rent have borne the brunt of job losses.

Others warned that gains were fragile and that landlords could continue to offer concessions to fill units.

"Rent reductions are not over yet," said Hessam Nadji, managing director at real-estate firm Marcus & Millichap. He said he didn't expect to see sustained rental growth until the second half of the year.

Barely half of the 22,000 units in buildings that opened their doors last quarter were filled, and landlords may cut deals because they face deadlines to pay back construction loans. "That's where renters are going to find deals," Mr. Calanog said.

Portland, Ore., posted the largest rent decline, at 0.7%, followed by Las Vegas, San Diego, and Southern California's Inland Empire. Those three markets have all seen an uptick in home-buying activity, particularly among the low end from first-time buyers and investors.

South Florida, meanwhile, appears to show signs of stabilizing after a painful years-long slump prompted by heavy overbuilding. Rents gained 1.1% last quarter in Palm Beach and 0.8% in Tampa-St. Petersburg.

"That market has been so bad for so long that many people had started to forget about it," said Alexander Goldfarb, an analyst at Sandler O'Neill & Partners LP.

Write to Nick Timiraos at nick.timiraos@wsj.com
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Money
Brian S. Wesbury and Robert Stein 04.06.10, 12:01 AM ET
With evidence of a self-sustaining economic recovery now hard to deny, many pundits are finding new reasons to be bearish. The most recent is that the Federal Reserve has officially ended its massive ($1.25 trillion) mortgage purchasing program. This, some say, will lead to another downturn in housing, which could drag the economy down all over again.

Although the end of the Fed's purchases will certainly not help the housing market, we do not believe it will result in a "double-dip" for housing or the economy. Instead, we expect home building, home sales and home prices to all be up a year from now vs. where they are today. Not on every street or in every community, but for the nation as a whole.

First, it's important to recognize that while the Fed has stopped buying mortgage-backed securities, it is not planning on suddenly selling its holdings. Most likely, the Fed will hang onto the vast bulk of them for at least several years and allow the natural process of refinancing and principal repayment to gradually reduce the size of its portfolio.

Second, we do not expect mortgage rates to suddenly spike as the Fed exits the market. The Fed announced the eventual end to its mortgage purchases back in September 2009, when long-term mortgage rates were about 160 basis points above the yield on the 10-year Treasury (roughly the 20-year average). But today, even though the Fed has ended its program of purchases, the "spread" between mortgage rates and the 10-year is only 120 basis points. If mortgage lenders are suddenly having extra trouble finding the funds they need to lend, they sure have a funny way of showing it.

Third, watchful observers of the mortgage market know that the total amount of lending necessary to support the housing market in the next year is not particularly large by historical standards. Lower home prices, relatively low levels of sales and the high loan-to-value ratios that prevailed during the bubble years mean that the capital needed to support housing in the next year is not that substantial.

The average price of an existing home sale right now is roughly $220,000. Meanwhile, the typical homeowner now has a mortgage worth 62% of their home's value. So, if a buyer has to make a 20% down-payment (which means the new mortgage equals 80% of the home's value) and the debt that is retired by the previous owner is 62% of value, the demand for mortgage credit goes up by only 18% of $220,000, or approximately $40,000.

So if existing homes sell at a 5.75 million rate in the next 12 months (a 10% increase vs. the previous 12 months), that should require about $230 billion in net new lending. Meanwhile, new home sales should require about another $90 billion. (New homes average $275,000, and we're assuming 20% down and sales equal to 400,000.)

In other words the total new lending needed to support a 10% increase in housing activity over the next 12 months is just $320 billion. Compare this to the $150 billion to $200 billion in principal repayments over the next year and you can see that mortgage lenders do not need a large increase in their loan book to finance a rise in home sales.

Fourth, housing prices have fallen below fair value. Relative to rents, national average home prices are about 10% below fair value and have been the lowest relative to replacement cost in more than 30 years.

Markets are efficient and participants in the housing market are well aware of its problems, so we believe these prices already reflect the "shadow inventory" of foreclosures and short sales in the pipeline. Buyers and sellers are not blind, they don't have to wait to see homes pop up on the MLS to factor them into the price they are willing to bid or ask. That's why in the past three months some of the places with the largest excess inventories have seen the biggest gains in prices, including San Diego, Phoenix and Las Vegas.

Fifth, and perhaps most important, the labor market--the last of the lagging economic indicators--has finally fallen into place as a positive for the economy. Private sector payrolls increased 123,000 in March (198,000 including upward revisions to prior months). Meanwhile, civilian employment, an alternative measure of jobs that includes the self-employed and startup businesses, is up 1.36 million in the past three months, the most for any three-month period since 1994.

Yes, the housing market has taken it on the chin. And, yes, the Fed is finally backing out of the market. But for the five reasons above, we think the battered and bruised housing market is going to be in better shape one year from now than it is today.

Brian S. Wesbury is chief economist and Robert Stein senior economist at First Trust Advisors in Wheaton, Ill. They write a weekly column for Forbes. Brian S. Wesbury is the author of It's Not As Bad As You Think: Why Capitalism Trumps Fear and the Economy Will Thrive.

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