Look Out Judy Jetson

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Space-age stovetop eliminates pots, pans and cookbooks

Electrolux plans to make pots and pans seem so last century. Henrik Otto, world renowned director of Global Design for Electrolux in Sweden envisions smart kitchens of 2050 as a cross between the Sci-Fi channel and the Food Network.

Designed to address a population the UN predicts will live mainly in cities (74%) and exceed 9 billion world wide, Otto and his team believe the future lies in appliances that are energy efficient, serve multiple functions and relate to the architecture of the home in a symbiotic (read networked) way.

Heart of the Home is Electrolux's high-concept answer to what might happen in 2050 after we buzz home in our jet packs from our fulfilling, clean energy jobs.

Domestic gods and goddesses of the future will use their fingers to outline the desired size and shape of a pot on its surface, next they will press down with their hand to determine the depth of the bowl or pan. It's like 3D shapes moving under a skin. The cooking recesses can also be moved around on the counter to accommodate changing need. Similar to how the screen on an iTouch can expand or contract with the flick of a finger.

The rockin' range will also provide cooking counsel, literally at your fingertips. When ingredients are placed into the cooking holes on the countertop, the smart stove will suggest recipes and preparation ideas. The feature provides a way for people to try new flavors, herbs, and ingredients. Not sure what to do with those turnips, throw 'em on the stove and let technology be your muse.

Otto wants to make it clear, however, that they are definitely in the development stage. "I want to explain that it is a concept," says Otto, "I'm a strong believer that a concept triggers reactions ... and like any concept, it is based on what we know today." He points out that 30 years ago, people would have had a hard time imagining a cell phone without a dial or push buttons that can play music, movies and more. The idea, says Otto, "is to provoke a discussion."

Bottom line, how will we clean this thing. Spaghetti sauce? Chili? Otto points to current nano-covered surfaces, fabrics and windows that don't require washing. I'm all ears. He also suggests that we may not have the "luxury" of using water to wash our dishes and clothes in 40 years, but may instead use special cloths or products.

If Electolux's vision of the future is true, copper pots and cook books could go the way of rotary phones, card catalogs and privacy. It begs the question, WWMD (what will Martha do?)!

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One Response if the Lender Turns Down Your Modification

Recession Over? Fed Actions Seem to Reflect So

Industrial production bottomed out last summer, woohoo! Seeing this, the Federal Reserve, it seems, is marking the end of the recession as of the end of the second quarter of last year. Now it thinks it's time to start takng action by tightening lending. The Fed announced it's raising the discount rate (to 0.75% from 0.5%) charged on short-term loans to banks, signaling the beginning of the end of the central bank's extraordinary stimulus measures.

But, the official word proclaiming the end of this lousy, stinking recession doesn't come from the Fed. A recession isn't officially over until the National Bureau of Economic Research (NBER) says it's over, and they're not at the party yet. Why not? Well, industrial production is just one of the variables the NBER takes into account -- and the indicators are at odds.

For the record, the primary indicators the NBER looks at are industrial production, real manufacturing and trade sales, real personal income less transfer payments, and nonfarm payrolls. One indicator is consistent with an economic recovery. The second indicator is not strongly at odds with a recovery, and the two remaining indicators imply that the economy is still in a recession.

If the NBER still places 'particular emphasis' on personal income and employment, it's difficult to confidently conclude that the recession is over. Besides, with real gross domestic product numbers still down more than 3% from its peak, it would be unprecedented for the NBER to declare an end to a recession with these mixed signals.

Apart from the fact that it's of little solace to the unemployed if the recession did indeed end last summer, we probably won't know for sure until next year. How's that? The last two recessions weren't pronounced over by the NBER until more than a year-and-a-half after the fact.

The Fed appeared to try to dampen the impact on the masses by stating: "These changes are intended as a further normalization of the Federal Reserve's lending facilities. The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy." Got that?

Yeah, yeah, we're to close our eyes and just listen to them? Whatever, it is the first upward rate move from the Central Bank since the meltdown. It's not likely to be the last.

Home Affordability: Prices (Nationally) Still out of Whack?

According to the old truism, the only arbiter of price is what a buyer is willing to pay. But when it comes to a home -- there's another time-tested way to reckon fair value: the home's cost divided by the buyer's income. This ratio is a broad measure of home affordability. 

The average house price in 1975 was $39,500. Using the Bureau of Labor Statistics inflation calculator, we find that comes to $158,000 in 2008 dollars.

The average (mean) house price in December 2008 was $301,200 -- almost twice the 1975 cost. To be exact, 90.7% higher. In other words, in an "apples to apples" comparison adjusted for inflation, homes cost almost twice as much as they did in 1975.

But can we afford them?

* 1975: Home price/income ratio: 3.46

* 2008: Home price/income ratio: 4.87

The fact is that the national ratio of average home costs to average income is far higher than historical norms.

As for the balance of supply and demand, the Census Bureau recently counted a staggering 18.8 million vacant homes in the U.S. (almost 15% of the nation's housing stock) suggesting a massive oversupply, which in classic free-market economic theory should depress prices to the point that demand rises to meet supply.

If average house prices were to return to the 1975 ratio of approximately 3 times average household income, the average (National) price would drop from $290,000 to around $195,000.

Keys Home Sales Up, Prices Down

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Stats

Homes sales in the Florida Keys were up 34 percent in 2009 compared with 2008.  It's the first time sales have increased over the previous year since 2004, when sales rose 4 percent. About 1,560 Keys homes were sold in 2009 -- roughly 400 more than in 2008. Key West retained the largest share of the market with 533 sales, a 25 percent increase over 2008.

The largest increase in sales activity occurred in the Lower Keys, where 65 percent more homes were sold in all of 2009 over 2008, for a total of 361 sales. The Middle Keys saw a 44 percent increase, while the Upper Keys saw a 21 percent increase.

The Lower Keys have the lowest average sales price, at $391,000. 110 more homes sold in the second half of the year than in the first half, a reversal of the usual pattern in which winter and spring sales outpace those of summer and fall. Activity in the second half of 2009 was partially bolstered by the first-time homebuyer tax credit. The $8,000 tax credit was supposed to expire Nov. 30, but was extended until this April. The greatest amount of activity has been on homes priced under $250,000, which are becoming harder to come by.

Key West saw a 25 percent decline in the average sales price in 2009, decreasing from $612,000 this time last year, to $460,000 currently. The trend was reflected throughout the Keys, where the average price decreased about 23 percent, to $453,000. At the end of 2008, the average sales price was at $588,000, a decrease from $731,000 in 2007.

Despite the large increase in the number of homes sold, the Middle Keys was hardest hit by the decline in prices, experiencing a 35 percent decrease. The average Middle Keys sales price in 2009 was $429,000, compared with $661,000 in 2008.

Multiple Listing Service (MLS) reports don't capture sales at the Ocean Reef Club, nor do they include properties that were not listed with a Realtor.

Upper Keys

Housing prices and the amount of inventory remain higher in the Upper Keys than most other parts of the island chain, an ominous sign that recovery could still be a ways off. The average sales price in the Upper Keys for open-water homes dropped 17.5 percent in 2009. Closing prices on canal-front homes dropped 22.3 percent, dry-lot homes went down 16.4 percent and condos plummeted nearly 30 percent. Inventory dropped at a slower rate than elsewhere in Monroe County. At the end of 2009, there were 35 months of properties on the Upper Keys real estate market, down 12 percent from the end of 2008. Inventory throughout the Keys was 28 months, a 26 percent improvement from a year earlier. Both figures remain well above the three to 10 months of inventory that could be found on the market during the boom years of 2002 to 2005.

Fix Everything Computer Guide xxxxxxxxxxxxxxxxxxx from Martha's Tech Crew

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Forget the Mortgage, I'm Paying My Credit Card Bill

Amid high unemployment and sliding home prices, a growing number of struggling consumers are doing what was once considered unthinkable: paying their credit card bills instead of their mortgages. A recent study developed by TransUnion found the percentage of Americans who were current on their credit cards but behind on their mortgage increased to 6.6 percent in the third quarter of 2009, up from 4.3 percent in the first quarter of 2008. Meanwhile, the share of consumers making mortgage payments on time but behind on their credit cards moved in the opposite direction, sliding from 4.1 percent to 3.6 percent over the same time period.

The data reflects a "fundamental paradigm shift" in the way consumers prioritize payment of debt obligations, says Ezra Becker, of TransUnion. "This is dramatically different," he says. "It is a clear manifestation of the dynamics that lead up to the recession and the recession itself."

Before the housing crisis, bankers typically operated under the assumption that homeowners would do whatever possible to remain current on their mortgage--even if that meant falling behind on other bills. But a combination of factors linked to the current economic mess--falling home prices, high unemployment, and tight consumer credit--have lead many consumers to prioritize credit card payments above mortgage bills.

The development is rooted in the housing bust. When home prices turned south--falling roughly 30 percent from their peak in the second quarter of 2006--a great deal of borrowers watched the value of their homes drop below what they owed on their mortgages. Today, roughly one in four homeowners finds himself in this position, which is also known as being "underwater." Without equity in their homes, such borrowers are more likely to default. "They don't see any value in putting money into an asset that has lost that much value and will probably never regain that value to offset the mortgages," says Celia Chen, of Moody's Economy.com.

Walking away from a mortgage--even, at times, when borrowers can afford it--has become a less radical prospect. Credit cards can be used to pay for basic necessities, like food, gas, or clothes. And with the unemployment rate remaining near double digits, purchasing such items with credit has become more and more essential. At the same time, the tighter credit environment has made credit cards more difficult to obtain.

Still, another key factor is the disparate consequences associated with defaulting on a mortgage versus those for falling behind on a credit card. National anti-foreclosure efforts have worked to significantly extend the time period between a borrower's initial mortgage default notice and the foreclosure itself, says Edward Pinto, a former chief credit officer at Fannie Mae. "The last thing you have to worry about at this juncture is paying your mortgage because by the time they foreclose it could be six months, 12 months, or a year and a half down the road."

A credit card's ability to finance basic necessities make the trends highlighted in the TransUnion study less startling, especially in a time of high unemployment and widespread negative equity. For a borrower who has got a significant cash shortfall, it is a completely rational decision to pay off a credit card bill while defaulting on a mortgage.

Still none of these decisions are simple. When you hear about strategic defaults, and people choosing to walk away from their mortgages, nobody is flip or carefree about that. Decisions about who you are going to pay and who you are not going to pay are incredibly stressful.

Now a word from the Atlanta Federal Reserve Bank

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With last week's capital orders data giving signals of renewed growth in business fixed investment in equipment and software in the fourth quarter, the question turns to whether this growth will be sustained. So lets go to the Fed Reserve map for a survey of Southeastern businesses on what they plan to spend on capital orders within the next six months compared to the last six.

Of note, 36 percent of respondents indicated that they planned to increase spending over the next 6–12 months relative to actual spending over the past 6–12 months. Another 42 percent said they would leave their spending at about the same level (unchanged), and 22 percent indicated that their spending would fall. The difference between those planning to increase spending and those planning to decrease spending equals a net positive of 14 percent.

For those who planned to increase spending on new plant and equipment, the most commonly given reasons (respondents could select more than one reason) were that they expected growth in sales to be high (37 percent of those respondents), or they needed to replace information technology equipment (37 percent of those respondents). Also, 61 percent of those planning to increase spending indicated that at least some of that spending reflects investment that had been postponed because of the recession. Not surprisingly, for those who did not plan to increase spending, the most commonly cited reasons were the expectation of low growth in sales (cited by 47 percent of those respondents) and heightened economic uncertainty (cited by 39 percent of those respondents).

So where does that leave things? Probably with more questions than answers. For instance, the fact that about two-thirds of the firms that are planning on increasing spending are doing so because they had postponed capital expenditures during the recession would be consistent with some bounce in capital spending by businesses following the most recent recession. But how sensitive are firms to changes in economic conditions? Currently, we hear a lot anecdotally that cash is a high priority on firms' balance sheets as a precaution against economic uncertainty. If sales were to increase more than expected, how fast would firms rethink their investment spending plans?

Based on responses from 320 businesses across Alabama, Florida, Georgia, Mississippi, Louisiana, and Tennessee.

The groundhog has spoken

Punxsutawney (puhnk-suh-TAW'-nee) Phil has emerged to see his shadow before chilly revelers in Pennsylvania, meaning winter will last another six weeks.

FannieMae's Loan Workout Hierarchy

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The steps followed by the loan processors in examining what Loss Mitigation Options are available to you (the borrower).

Fannie Mae's loan workout hierarchy requires that you first determine if the Home Affordable Modification Program (HAMP) is appropriate. If the Home Affordable Modification Program is not appropriate, then consider other foreclosure prevention alternatives to resolve delinquencies.

View the Loan Workout Hierarchy fact sheet, which includes descriptions of each loss mitigation option.

Servicers Profit More by Foreclosing rather than Modifying

A new report from the National Consumer Law Center (NCLC) discloses that mortgage servicers – including many large banks – have found it cheaper to foreclose on homeowners than to offer loan modifications that would benefit homeowners and investors.

The result: Americans who might be able to stay in their homes under a loan modification plan are being moved right past that option and on to foreclosure.

The new NCLC report, “Why Servicers Foreclose, When They Should Modify, and Other Puzzles of Servicer Behavior,” reveals that servicers, unlike investors or homeowners, generally don’t risk losing money on foreclosures. In fact, servicers usually make money on foreclosures.