Five Things You Need to Know: Saved by iPod, Housing Trouble, Iranian Triple, Also "One Who Refuses to Pay an Obligation"
What you need to know (and what it means)!
Minyanville's Five Things You Need to Know to stay ahead of the pack on Wall Street:
1. Saved by the iPod
An interesting recent report brought to our attention by the Wall Street Journal this morning is the Bureau of Labor Statistics report: "100 Years of U.S. Consumer Spending."
- The report looks at trends in how consumers have spent their income since 1901.
- According to the report, in 1901 42.5% of annual family expenditures went toward food, 14% for clothing and 23% for housing.
- On average, in 1901, household spending exceeded income by 2.5%.
- By 2002-2003, expenditures for food had declined to a mere 13%, while expenditures for clothing had decreased to 4.2%.
- Housing, on the other hand, had risen to 32.8%.
- In 1901 the average US family's income was $750. In 2002-2003, expressed in 1901 dollars, the average US family's income was $2,282.
- An interesting factoid at the end of the report notes that during the Great Depression, US households alloted 5.4% of their spending toward entertainment. By 2002-2003 that figure remains at about 5% at 5.1%.
- The report triumphantly concludes that "computers, televisions, iPods, DVD players, vacation homes, boats, planes, and recreational vehicles," most of which were unknown and undreamt of a century ago, "are tangible proof that U.S. households today enjoy a higher standard of living."
- But ever skeptical, we ask isn't today's iPod simply 1901s pocket-sized "scurvy chaw stick"? And what about all the lost whittling time?
2. Housing Trouble
US mortgage applications fell 0.8% last week. Good, bad or indifferent?
- The Mortgage Bankers Association's index of applications to buy a home or refinance an existing loan declined 0.8 percent to 567.6 from 571.9 the prior week.
- Meanwhile, the average rate on a 30-year fixed mortgage rose to 6.73 percent, the highest since May 2002.
- Applications to refinance last week were down 43 percent from the same time last year.
- The mortgage bankers group's measure of refinancing fell 2.2 percent to 1466.1 last week from 1499.4.
- Refinancing's share of all loan applications dropped to 35.5 percent last week from 35.7 percent.
- The report follows yesterday's housing starts data, which showed a jump of 5% in new production and which sounds good... except housing starts have still declined at a 30% annual rate over the past three months.
- As well, unsold housing inventory has hit an all-time high and is 35% above levels of a year ago.
3. Iran Hit Potentially a Triple
The Saudi Arabian government has warned that world oil prices could triple if the standoff between the U.S. and Iran over its nuclear program escalates into a full-fledged war.
- "The idea of somebody firing a missile at an installation somewhere will shoot up the price of oil astronomically," Prince Turki told a conference hosted by the United States Energy Association, according to the BBC.
- At risk is the Strait of Hormuz, through which most of the oil in the Middle East is shipped.
- The International Energy Agency says as many as 17 million barrels of oil a day are transported through the strait.
- Iran is the Opec cartel's number two oil producer.
- Meanwhile, Iran says it will reply to the international package of proposals seeking a compromise on its program by August 22.
4. World's 15th Richest Man Apparently World's Number One Welsher
"Oracle of Oracle" (See: Minyanville Oracle Index) Larry Ellison has reportedly failed to come up with a $115 million donation to Harvard University pledged more than a year ago, according to the Financial Times.
- The donation was to fund the Ellison Institute at Harvard to study health policies around the world.
- The "Ellison Institute" would have employed 130 staff by next summer.
- Three senior managerial staff who had been hired have now been dismissed.
- Professor Christopher Murray, who was to run the institute, said he was still awaiting $115 million first promised by Ellison in March 2005 and set to be paid last September.
- The idea was to spend the money over three years, after which Ellison said if he was satisfied he would donate a further $500 million over the following decade.
5. The Welsh Respond
Dear Sir -
As a Welshman, I am highly offended by your "Thing" number 4 and the use of "Welsh" as a word to indicate "one who refuses to pay an obligation."
Charles of Wales
While it is commonly believed by some (the Welsh) that the verb "to welsh" is related to the Welsh, there is no evidence that the word is indicative of a slur against the people of Wales. According to some word origin scholars, the word's origin is actually related to certain English racetrack bookmakers who reportedly fled to nearby Wales to avoid making good on money owed on winning wagers. The bookmakers were said to have "gone to Wales" or "gone Welsh." Nevertheless, as we respect your right to be offended, we will in the future refer to one who "refuses to pay an obligation" as an "Ellison."
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