All Things in Moderation

August Case-Schiller came in at 142.84, down 3.8% from a year ago. Home prices are back to Summer 2003 levels. Certainly the chart gives no indication of gathering strength, if anything it looks like we have had a meager (at best) dead cat bounce off the bottom, and are now in a decling channel with lower highs and lower lows. Detroit and Washington DC were the only MSAs that were up while the worst performers were Portland, Phoenix, and Minneapolis. June and July numbers were revised down as well.

Certainly there is nothing to indicate strength in the housing market. We are going into a seasonally weak period and the consumer is in a foul mood as evidenced by the Conference Board Consumer Confidence reading of 39.8, which takes us back to late 08 / early 09 levels.

Obama’s new housing plan will probably be as successful as his earlier ones at stanching the decline in the housing market. It may help a few marginal homeowners stay in their home, but it isn’t going to do anything for troubled homeowners as they have to be current in their payments to refinance. As I discussed before, we have a demographic issue here, with the older first time buyer prematurely entering the market and the younger first time homebuyer not in a position to buy. That leaves the professionals, and they aren’t going to get interested in housing until prices are dirt cheap and we are not there yet. Against that, we have an army of baby boomers who need to downsize empty nests, or simply bought too much home and need to get out. The government is probably powerless to change this dynamic – all they can do is try and redistribute the losses.

Chart: Case-Schiller:

Filed under: Uncategorized | 23 Comments »

In  IUOE, Local 513 v. NLRB, 635 F.3d 1233,  the Court stated the facts as follows:

Overton, one morning, noticed that a piece of machinery was not properly deployed (an outrigger was not fully extended), which was a safety violation. Ozark’s safety rules — which are incorporated into the National Maintenance Agreement — oblige any employee to report to a supervisor safety violations. Indeed, an employee who does not do so is subject to discipline. Overton did report the safety violation  [***3] and sought to determine who was responsible. After an investigation, another employee and Local 513 member was suspended for three days.

That led the union’s business agent to file charges against Overton for gross disloyalty and conduct unbecoming a union member. (Apparently the union also objected to Overton’s desire to bring in other experienced operating engineers rather than train the union’s members.) The union fined Overton $2,500, which prompted Ozark to file an unfair labor practice charge against the union. The Board’s general counsel issued a complaint alleging that the union violated section 8(b)(1)(A). HN1That section precludes a union from “restrain[ing] or coerc[ing]” an employee in the exercise of his section 7 rights, with the proviso that a union may continue to “prescribe its own rules with respect to the acquisition or retention of membership therein.” 29 U.S.C. § 158(b)(1)(A). And section 7 protects an employee’s right to “to engage in . . . concerted activities” [or] “. . . to refrain from . . . such.” Id. § 157.

****
From this background, the case proceeded not on section 7, but on 8(b)(1)(A) grounds.  The NLRB has held for thirty years that  a union violates that provision if a union disciplines an employee member for reporting a safety violation, which he has a duty to report.  The DC Court says that without tying this to section 7 rights the NLRB cannot keep a union from disciplining a member for reporting a safety violation he is under a valid duty to report.  

We are thus on the brink of creating a union workplace where an individual employee dare not report a safety violation he is under a duty to report, save through the channel of his union foreman.  I think this is messy and bad, and may take the Supremes to reverse.

Filed under: Uncategorized | 15 Comments »

GAO is out with a report on the difficulty of making health care pricing transparent to consumers. I haven’t ready it yet, but I know this is of interest to several of you, so I’d thought I’d pass it along. I also know I’m way late on a MedPAC post, which I’m working on simultaneously with my client work.

GAO Report on Health Care Price Transparency

Filed under: Uncategorized | 8 Comments »

Filed under: Uncategorized | 26 Comments »

Taking advantage of the pension system

I’m quoting liberally here from the story:

Two lobbyists with no prior teaching experience were allowed to count their years as union employees toward a state teacher pension once they served a single day of subbing in 2007, a Tribune/WGN-TV investigation has found ….. The legislation enabled union officials to get into the state teachers pension fund and count their previous years as union employees after quickly obtaining teaching certificates and working in a classroom. They just had to do it before the bill was signed into law.

… His pay for one day as a substitute was $93, according to records of the Illinois Teachers Retirement System … based on his salary history so far, he could earn a pension of about $108,000 a year, more than double what the average teacher receives …. stand to receive more than a million dollars each from a state pension fund …. A spokesman for the Illinois Federation of Teachers emphasized that the lobbyists’ actions were legal and that they made “individual decisions.”

End quote.

Here are two guys who clearly took advantage of a situation. What I don’t get is the defense from the union. The tone-deafness of that quote is astounding to me.

Filed under: Uncategorized | 14 Comments »

Vital Statistics:

Futures are flat this morning as the market waits to see what comes out of Europe. The WSJ has a story this morning about the brightening outlook for Corporate America. It raises an interesting point regarding consumers – what they actually do can be different from what they say. Consumers can feel tapped out and miserable, but when the 10-year old car has had it, they buy a new one. Consumption can only be deferred for so long, and we have had a retrenching consumer for 3 years now.

The Obama administration is working on a new housing plan – one which eases the requirements for refinancing. Credit is so tight right now that borrowers who are current but have little or no equity are unable to refinance. This move is intended to break that dynamic. Will it prevent home prices from dropping? Probably not, as the first-time homebuyer is not really in a position to buy a house, and prices aren’t cheap enough to entice professional investors to take the liquidity risk and step into the market.

Merger Monday is back upon us with a bear hug in the pipeline space and a deal in the cloud computing space. CAT reported better than expected earnings.

No major economic data today – Case-Schiller comes out tomorrow.

Filed under: Uncategorized | 18 Comments »

The other day lms pointed out that an unknown person named “Kite” had become a “Follower” of our little blog here (see the list of avatars in the sidebar). I was curious, so I chased him down to ask how he had discovered us. Apparently there is some application out there called Stumbleupon which somehow tracks your own interests and recommends sites that you may find interesting. One of our own blog posts turned up in Kite’s stumbleupon, and he thought it interesting enough to start to follow us. But what I really wanted to pass on about his response to me was this:

Not really much intent to post with anything resembling consistency, but your blog is an interesting read. One of the few times I’ve ever read a political blog that wasn’t a shouting matching within five posts.

Hey…that’s what we were trying to do! Nice to have an outside observer confirm that we have achieved some measure of success. Well done, all.

Filed under: Uncategorized | 10 Comments »

Filed under: Uncategorized | 25 Comments »

Can’t embed it, but I do recommend Full Metal Disney. Very strange, but well-executed.

If you’re not listening to the My History Can Beat up Your Politics by Bruce Carlson, you’re making a profound error. Here, he discusses the effectiveness of stimulus spending in a historical context.

He quotes Herbert Hoover as saying: “No one is starving. The hobo eats better than ever before.”

That Herbert Hoover was a man after my own heart. If you’ve never read it, you should consult John Hodgman’s Compleat List of Hobo Names. Myself, I am partial to Chicken Nugget Will and Persuasive Fredrick. And Cthulhu Carl. Then, you too, will be an expert on hobos.

Steve Jobs new biography includes a bit on warning Obama that he was going to be a one-term president. It also included the interesting observation that it’s too damned hard to build factories in America, while it’s easy to do in China.

Louisiana law bans cash transactions for second hand goods. Holy crap, why does every politician want to make me a frothing-at-the-mouth libertarian?

According to The Transom, David Frum is not a serious person. You have to scroll down to read it. But it’s there.

 — KW

Filed under: Uncategorized | 33 Comments »

A sure sign that home prices have stopped falling:

A San Francisco insurer will roll out coverage against falling housing values in Ohio, the first state where it is selling policies for owners of single-family houses and condos.

Home Value Insurance Co. will use calculations by the Case-Shiller Home Price Index to decide payouts if homeowner policyholders sell their houses below the insured values. The company, founded in 2009 and headed by former investment banker Scott Ryles, will sell its Home Value Protection policies through independent agents.

Filed under: Uncategorized | 3 Comments »