Jobs, Consumer Sentiment, China Vanke, Follow-Up on the Fires and Iris Critchell, Updated.
This Week, Economically
The jobs report is out and…
Job openings fell from 8,200,000 to 7,600,000. The expectations were 8,000,000.
That’s more than expected. Hmm.
The ADP report was higher than expected – good news.
183,000 vs. 150,000 expected and 176,000 last month.
The U.S. Department of Labor report came in lower than expected – not so good news, but not terribly bad either.
143,000 vs. 169,000 expected and 307,000 last month; that would be December
And the unemployment rate fell to 4.0% from 4.1%.
One more thing: hourly wages were up 0.5%. In a month. That’s really good, but it can lead to higher spending, which can lead to higher prices, which can lead to…
Consumer sentiment, as reported by the University of Michigan, dropped. Ouch.
It fell to 67.8, down from 71.1 in the prior month. Many factors drive this, but the one that got the attention was the expectation that inflation would be higher in six months.
As a reference point, the highest was 112 in January 2000, before the dot com bubble burst.
The lowest was 50 in June 2022.
From 2015 to 2020, it was consistently between 90 and 100. There is still some work to be done to bring up the optimism level.
Next week:
CPI – Consumer Price Index – comes out on Wednesday.
That is one of two key measures of inflation, the other being PCE – Personal Consumption Expenditures
The headline CPI gets the attention and includes everything – that is expected to come in at 2.8%, down from 2.9%.
The Core CPI excludes gas and food costs and is expected to come in at 3.1%, down from 3.2%.
If expectations are met, that will make the Fed happy.
What is China Vanke, and how do you say 2008 in Chinese? 二零零八年
China Vanke is one of China’s biggest property companies.
Kind of like Evergrande, only smaller. And yes, Evergrande went belly up in 2023 with over $300,000,000,000 in liabilities.
And they just reported a $6,200,000,000 loss for 2024.
Both the CEO and the Chairman submitted their resignations.
That way, they won’t be affiliated with the company when they are arrested. And they will be arrested; that’s how communism works.
Vanke was looked upon as the conservative developer that really didn’t get into risky investments.
That’s good because they have total liabilities of $136,000,000,000. That kind of makes the $6.2 billion loss not that bad by comparison.
Sounds like a liquidity issue will be happening soon…
In 2008, mortgage-backed securities in the United States were being questioned, but everything was fine until Lehman Brothers went belly up on September 15.
Hmmm. Maybe some of these guys really should be arrested. Sorry; I digress.
Folks, no matter how the Chinese Communist Party tries to hide it, there are some issues going on in China.
Maybe they should ask DeepSeek what to do. It might say to Deep Six the whole property development thing.
The Fires – a Follow-Up
A friend of mine lost her house in the Alta Dena fire, so I talked with her to get some insight on what other fire victims can expect. These are some key takeaways:
She evacuated on Tuesday, January 7, and learned her house was destroyed on the 8th.
That same day, she files a total loss to get the process going.
She saw what remained on Thursday (by walking from outside the fire zone a couple of miles to where her house used to be), took pictures, and sent them to her insurance company. She also contacted FEMA and learned that someone had already filed fraudulently online. She had to work her way through that, working with a FEMA employee over the phone.
On Friday the 10th, she received her first phone call from the California FAIR Plan adjustor and confirmed the total loss.
She worked with FAIR to determine a monthly rental stipend based on what her house would have rented for.
A key thing was that she had pictures of the house before the fire, inside and out.
They very recently found an apartment in Pasadena that was a two-bed, two-bath. With a $100,000 loss of use limit, the $3500 apartment in Pasadena will last just over two years.
And these were the main things. Other things that came up:
Contact the county assessor’s office to get the property reappraised for tax purposes (her CPA suggested that). That will reduce her property tax bill.
Airbnb offered a $1000 credit/person for fire victims.
Many companies provided significant discounts for fire victims, but you had to ask if they would do so.
You can negotiate how much of your rental credit you get up front, whether 30 days, six months, or a year.
She also set up a separate account for all fire-related expenses. That is always important for any project.
Iris Critchell continued…
I had the privilege of being emailed by one of Iris’ sons. It turns out a reader forwarded my email to him. He provided some clarifications and anecdotes, making her life story even more amazing. In his words…
“You got it very right that she never learned to process the word NO. She was a flight instructor in the Civil Pilot Training Program 1941-1942 and joined the WAFS at its formation; it was merged into WASP later. She got her degree from USC in Science and Math in 1941, before her WAFS/WASP service. She ferried most of the high-performance fighter aircraft of WW2. She died in Claremont, California.”
And one last story…
“…we lived very close to the beach. She would go swimming regularly - she would swim out beyond the swells and breakers and swim a mile or so back and forth in the clear waters. A lifeguard on duty thought she was in trouble and swam out to help her and could not catch her until she turned around to swim back.”
And that’s how you live to 104. Click here to learn more about this remarkable woman.
