Harvard Sees Home Improvement Slump Through First Quarter 2009

The Leading Indicator of Remodeling Activity (LIRA) from Harvard's Joint Center for Housing Studies sees a slumping economy and struggling housing sector continuing to hold down remodeling spending, a trend which will continue and intensify at least through the first quarter of 2009.

Remodeling spending was down 5.6% in the second quarter of 2008 from the level in the third quarter of 2007. Harvard predicts spending will slump 7.1% from that third quarter in the third quarter of this year, decline another 9.2% by year's end, and be down 11.1% by the end of the first quarter of next year.

Starts Down 30% Through First Half 2008

About 512,000 homes were started in the first half of 2008, down 30.0% from the same period of 2007, according to the Census Bureau. Single family starts plummeted 40.3% to 353,500 units over the first six months.
The seasonally adjusted annualized starts rate for the month was 1.07 million units, down 26.9% from the rate for June, 2007. The single family start rate was 43.0% behind the pace for June of 2007, at just 647,000 units. It was the weakest performance for single family starts since January, 1991.
Through the first six months of 2008, some 515,900 permits had been issued, 33.2% below the total for the same period last year. Over that span, single family permits fell 41.1% to 332,300 permits.

Rueful Laughter Ensues

From the wicked sinners at The Onion:

“The current economic woes, brought on by the collapse of the so-called "housing bubble," are considered the worst to hit investors since the equally untenable dot-com bubble burst in 2001. According to investment experts, now that the option of making millions of dollars in a short time with imaginary profits from bad real-estate deals has disappeared, the need for another spontaneous make-believe source of wealth has never been more urgent.

"Perhaps the new bubble could have something to do with watching movies on cell phones," said investment banker Greg Carlisle of the New York firm Carlisle, Shaloe & Graves. "Or, say, medicine, or shipping. Or clouds. The manner of bubble isn't important—just as long as it creates a hugely overvalued market based on nothing more than whimsical fantasy and saddled with the potential for a long-term accrual of debts that will never be paid back, thereby unleashing a ripple effect that will take nearly a decade to correct."”

Scenes From the Mortgage Crisis, Part Next

From the Los Angeles Times:

"The Federal Deposit Insurance Corp. took over Pasadena-based IndyMac late
Friday and has assured depositors that accounts with $100,000 held in a single
name or $250,000 in a retirement account are safe.But many customers have said
that when they checked their balances online, tens of thousands of dollars
appeared to be missing. And when they went to branches in search of answers,
they encountered lines hundreds of people deep and unhelpful staff members. On
Tuesday, reports of unruly crowds brought police to branches in Encino and
Northridge, although there were no arrests or injuries.Noelle Gabay of
Northridge, a budget analyst for the state of California, said FDIC officials
acknowledged that she was owed $213,500 but provided her access only to $99,000.
"My trust in the FDIC is gone," said Gabay, 49. "The question is now, where do
we put our money? Do we buy a bigger mattress?""

June Kitchen Appliance Shipments Dip 10%

Shipments of kitchen appliances for June totalled 4.1 million units, down 10.3% from levels for the same month in 2007, according to the most recent figures from AHAM.
Through the first half of 2008, kitchen appliance shipments lag behind shipments for the same period last year by 10.3%, with 19.9 million units shipped. The chart below gives first half breakdowns by category:

FDIC Halts IndyMac Forecloasures

From Reuters: "The Federal Deposit Insurance Corp has temporarily halted any foreclosures on the $15 billion of bank-owned mortgage loans found in IndyMac's portfolio, FDIC Chairman Sheila Bair said on Monday."

Sign of the Times

Which is sadder? That the Fed actually had to order this, or that this is news?

"...the Federal Reserve Board on Monday voted unanimously to bar lenders
from making higher-priced mortgages without regard to a consumers' ability to
repay."

Robot Chef Works in Wireless Kitchen

The Technical University of Munich puts us one step closer to living like the Jetsons.

Beat the Summer Doldrums

The Retail Contrarian has tips for small businesses to keep employees motivated and productive during the Dog Days.

FDIC Takes Over Failed IndyMac Bank

California-based IndyMac Bank, which had specialized in risky mortgages, was seized by the Federal Deposit Insurance Corporation. It is the second largest bank failure in U.S. history and the fifth bank this year to fail.
The bank reopens today under Federal control.
FDIC says 90 banks are currently at risk of failing.

Fed Acts to Prop Up Fannie and Freddie

From the Wall Street Journal:

"In a statement timed to precede the opening of Asian markets Monday, as well as
a closely watched auction of debt by Freddie, the Treasury said it plans to seek
approval from Congress for a temporary increase in a longstanding Treasury line of credit for the two companies.
The Fed's Board of Governors met Sunday in Washington and voted to grant the New York Fed authority to lend to Fannie and Freddie "should such lending prove necessary," the central bank said in a statement. The move would effectively give the two companies access to the Fed's discount window if necessary, providing a backstop in case the firms were to face a short-term funding crisis down the road."

GE to Spin Off Entire Industrial Unit

From AFP:

"As we explored our options for appliances, it became clear that the
fastest, most efficient step we could take in completing the transformation of
our industrial portfolio would be to focus on a possible spin-off of the entire
unit," GE chairman and chief executive Jeff Immelt said.