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Will the U.S. Housing Market Crash in 2022? (Hint: It’s Unlikely)

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Many people are still concerned about the prospect of a U.S. housing market collapse over the horizon. The questions vary, but the overall theme is the same: Will the U.S. real estate market crash in 2022?

The short answer is that no one knows. As the past year has shown us, there are some things we just can’t predict. But based on past and current trends, it seems highly unlikely that the U.S. housing market will crash in 2022. The reasons for this are outlined below. Mainly, it comes down to a supply-and-demand imbalance.

Will the U.S. Housing Market Crash in 2022?

According to most analysts, a real estate market collapse or crash is not likely to happen during 2021 or 2022. The more likely scenario, according to some industry watchers, is that home prices will begin to rise more slowly in the months ahead. And that’s something we actually need at this point.

To understand the reason why a housing market crash is unlikely, we have to look at what that term means:

A real estate market collapse or crash usually follows a steep increase in prices. This price growth is often driven by the strong demand for homes, along with the speculation that demand will continue. Builders and developers then increase production to meet the demand, with more homes being built. At some point, demand begins to decline while supply is still rising. This leads to a steep drop in home values.

But that’s not where we are right now. Not even close. As of spring 2021, housing market inventory remains very low in most U.S. cities. The demand from home buyers, on the other hand, continues to soar all across the country. Low mortgage rates and other factors have increased demand among buyers, at a time when supply is seriously constrained.

While we are seeing some “overheated” conditions on the demand side (bidding wars, offers above list price, etc.), the supply side does not reflect a typical market crash scenario. Instead of having too much supply relative to demand, we currently have too little. In most real estate markets across the U.S., there just aren’t enough homes listed for sale to satisfy the demand.

Our view is that it would take a significant, unprecedented, and unforeseen economic event to cause a U.S. real estate market crash in 2022. If we learned anything from housing trends over the past year, it’s the fact that home buyers are largely undeterred by the ongoing pandemic. They’re buying homes in such numbers that inventory has fallen to record lows in many U.S. cities.

Home Prices Predicted to Keep Rising into 2022

A housing market crash in 2022 seems far-fetched at this point. Current real estate trends simply don’t support that kind of scenario. That doesn’t rule it out entirely. It just means that a price collapse appears highly unlikely.

In fact, many housing market analysts and economists have recently predicted a continued rise in home prices through the end of 2021 and into 2022. Some experts believe house values will keep rising over the coming months, but possibly at a slower pace than in 2020 and early 2021.

Earlier this month, the property data and analytics company CoreLogic published a housing market update that focused on prices. According to their report:

“Nationally, home prices increased 10.4% in February 2021, compared with February 2020 … Home prices are projected to increase 3.2% by February 2022.”

Some perspective would be helpful here. The 10.4% gain over the past year or so is much higher than the average annual increase in home values, going back 40 years or so. That’s an unsustainable level of price growth, because it far exceeds wage and earnings growth. In other words, prices can’t rise at the pace forever. Eventually, house values will level off as more and more buyers get priced out of the market.

CoreLogic’s long-range forecast calling for 3.2% price growth is a more “normal” level of appreciation. That is, it more closely resembles the annual averages of the past 40 years. So, essentially, they are predicting a return to “normalcy” as we move into 2022 — not a housing market crash.

Chart: Median home value in the United States | Source: Zillow.com

But not everyone is predicting a slowdown in price growth. In April of 2021, the real estate data company Zillow issued the following statement: “United States home values have gone up 10.6% over the past year and Zillow predicts they will rise 10.4% in the next year.” See their chart above.

Mortgage Delinquencies and Foreclosures Decline

Here’s another positive sign that makes a 2022 real estate market crash seem even less likely. Mortgage delinquencies (which occur when people fall behind on their monthly payments) have declined month after month since August of 2020. This is according to a recent report from CoreLogic.

According to Frank Martell, president and CEO of CoreLogic: “This is a good sign, and considering the improving picture regarding the pandemic and climbing employment rates, we are looking at the potential for a strong year of recovery.”

Going into the housing market crash of 2008, mortgage delinquencies and foreclosures were soaring all across the U.S. But things have changed since the better since then. Mortgage lenders are no longer offering some of high-risk products that were common during the early-2000s housing boom.

Market Conditions Vary Widely at the Local Level

It’s also worth mentioning that real estate conditions can vary widely from one housing market to the next. For example, consider the glaring difference between these two major U.S. cities:

  • The median home value in San Francisco, a city that experienced a kind of exodus last year, dropped by -2.6% over the past year or so.
  • The median price in Boise, Idaho — a city that gained a ton of new residents before and during the pandemic — rose by a shocking 30% over the past year. (Numbers provided by Zillow.)

San Francisco is a bit of an outlier here. In most U.S. cities, home prices rose over the past year to some degree.

While they probably won’t “crash” in 2022, overheated housing markets like Boise, Sacramento and Seattle will likely see slower home-price growth later this year and into next. Other markets, where prices are rising more gradually, could see a continuation of that trend going into 2022. It varies.

It’s a Different Kind of “Boom” This Time

The last housing market crash of 2008 was brought on by a combination of builder speculation, overbuilding, and reckless mortgage lending practices. “Easy” mortgage loans led to a surge in demand from newly qualified borrowers. This in turn caused a sharp rise in construction, especially in places like the Phoenix and Las Vegas metro areas.

But here again, the past does not reflect the present. Instead of overbuilding, developers have been doing the exact opposite over the past decade. They haven’t been building enough homes to meet the demand from buyers. There are many reasons for this, including labor shortages and rising material costs.

Jeffrey Mezger, CEO of the national builder KB Home, recently told CNN Business that the company has been “under-building for the last 15 years.”

According to a recent analysis from the research team at Freddie Mac, the U.S. real estate market is about 3.8 million homes short of meeting the demand from buyers nationwide. In the words of Sam Khater, chief economist at Freddie Mac: “We should have almost four million more housing units if we had kept up with demand the last few years. This is what you get when you underbuild for 10 years.”

Additionally, housing market inventory levels have plummeted over the past year in many U.S. cities. Supply was tight to begin with, going into the pandemic, and it has since gotten tighter.

According to an April 2021 report from Realtor.com: “Although the trend of sellers putting their home on the market improved slightly from February, 20.0% fewer homes were listed for sale in March [2021] than a year ago.” In some of the hottest housing markets, like Austin and Tampa, the total number of active listings dropped by 70% or more during that 12-month timeframe.

It’s hard to imagine a real estate market crash in 2022, with such an imbalance between supply and demand.

Disclaimer: This story contains housing-related forecasts and predictions that are the equivalent of an educated guess. The Home Buying Institute makes no claims or guarantees about future conditions within the real estate market or broader economy.

Originally Appeared On: http://www.homebuyinginstitute.com/news/housing-market-crash-in-2022-unlikely/

Cooling economy a worry

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Federal Reserve officials are just as worried about an inflation rate that runs too cold as one that runs too hot.

While rising prices are in the spotlight now as the economy reopens and demand surges, the longer-run trends that have suppressed costs globally could re-emerge as the pandemic ends, some policymakers warn. That would make it harder to deliver on their new strategy of running inflation above their 2% target for a time in order to achieve that goal in the long term.

“We are probably more likely to be successful with the new monetary policy regime than if we didn’t have it,” Boston Fed President Eric Rosengren said in a Bloomberg News interview last week. But based on the experience of the past decade “you have to take seriously the idea that it is not going to be that easy to get 2% inflation.”

Policymakers at the central bank have been pressed in recent weeks about whether an expected spike in prices — as the U.S. rebounds from pandemic shutdowns — will be a temporary blip or something more permanent and dangerous to the economy after a wave of unprecedented monetary and fiscal stimulus over the past year.

For years, major economies including the U.S., Japan and the euro zone have struggled to raise inflation to 2% despite aggressive monetary policy actions. Aging populations, the impact of new technology and the disinflationary force of globalization are not things central banks can wish away, while rates stuck at zero — or below — telegraph the limits of their power.

Inflation pessimism shows up in forecasts released by Fed officials’ at their March meeting as well. Even after taking account of the passage last month of President Joe Biden’s additional $1.9 trillion stimulus package in their forecasts, more than half of the 18 Fed officials estimated inflation would be around 2% or slightly below next year. A majority also forecast prices in a range of 1.9% to 2.2% for 2023.

On the other hand, a sharp jump in consumer prices last month is a reminder that the risks are two-sided. Both goods and services prices rose last month with the consumer price index rising 0.6% after a 0.4% gain in February as the end of pandemic lockdowns drove up the cost of gasoline, car rentals and hotel rooms, according to data released Tuesday.

Rosengren said the Fed has never tried to shift to a new policy regime while exiting a pandemic amid aggressive fiscal stimulus. “We have to be pretty humble about how confident we are about what the inflation outcomes are going to be,” he said.

Some indicators of longer-run inflation are starting to move higher, a sign that the Fed is at least getting the public’s outlook pointing in the right direction. The rate on the five-year, forward swap contract for consumer-price inflation is hovering around 2.4%.

That is up from a low last year of just under 1% during the peak pandemic lock down period. When adjusting for measurement differences between CPI and the Fed’s preferred measure — the personal consumption expenditures price index — it puts longer-run inflation pricing in at just a touch over the central bank’s 2% target.

However, some market watchers — like Fed policymakers — see an enduring rise in inflation as a challenge.

Interest-rate derivative markets don’t foresee the Fed lifting its policy rate beyond about 2% during the upcoming tightening cycle. That’s below the 2.5% Fed officials forecast last month for their long-run policy rate. This backdrop signals that traders don’t see much risk of inflation unmooring or growth getting too robust before the next downturn.

“We are looking for a core CPI running closer to 1.9% or so,” after temporary base effects filter through the data, said Phoebe White, interest-rate strategist at JPMorgan Chase & Co. “That’s still pretty soft and we think the underlying trend in inflation is going to be pretty gradual to build as we look into 2022.”

There are a range of forces that are likely to keep inflation low from the Fed’s perspective, including the millions of still-unemployed Americans. Slow changes in pandemic behavior — even as vaccines roll out — weak wage-bargaining power and an aging workforce could also keep overall demand moderate and prices muted.

“We are of the view that we are going to continue to be in a lower inflationary environment both in the U.S. and globally,” said Steven Oh, head of fixed income at PineBridge Investments. “We are not necessarily going to be successful in reaching inflation targets on a sustainable basis.”

The Fed also has limited tools. In its recent statement, the Fed pledged to keep rates at zero until “inflation has risen to 2% and is on track to moderately exceed 2% for some time.”

But a pledge to do nothing also raises questions about the potency of policy. The U.S. central bank has a legacy of missing its 2% inflation target consistently since it was installed in 2012.”Really it’s about changing peoples’ mindsets and experience for the last ten years,” said Tiffany Wilding, economist at Newport Beach, California-based Pacific Investment Management Co.”You are going to need several periods, maybe several years, of inflation that is running above the Fed’s 2% target to really anchor those expectations, because they have moved down.”

Originally Appeared On: https://www.nwaonline.com/news/2021/apr/18/cooling-economy-a-worry/

Jobless claim numbers are improving — but the pandemic isn’t over yet

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Economic data released Thursday shows some hopeful signs of a strong post-pandemic recovery, five weeks after the federal government implemented a sweeping Covid-19 recovery bill — and as increased rates of vaccinations continue to push more Americans back into their local economies.

According to the Department of Labor, US jobless claims totaled 576,000 last week, the lowest number since the beginning of the pandemic in March 2020. That’s far below the 710,000 jobless claims economists polled by the Wall Street Journal experts expected to see this week, and the first time the Labor Department has reported under 600,000 unemployment claims in over a year. It’s a sign that the economy is recovering after months spent languishing in pandemic-induced recession.

“We’re gaining momentum here, which is just unquestionable,” Grant Thornton chief economist Diane Swonk told the New York Times, while also noting that so many unemployed people is no cause for celebration. “You’re still not popping champagne corks.”

Nevertheless, the numbers are vastly different than those that came at the beginning of the pandemic. When the US locked down for the first time last March, jobless claims skyrocketed, peaking at 3.3 million a week. Before that, the highest total was 700,000 in 1982. In 2021, 700,000 jobless claims has been taken as a good sign, down from 900,000 in early January.

Other economic indicators are also pointing to a potential recovery. For instance, retail spending rose nearly 10 percent in March. Double-digit gains in restaurants and bars suggest that the distribution of vaccines are at least partially responsible for the economic growth, as more people return to public settings with coronavirus protections in place.

But other economists and business leaders attribute much of this economic growth to the $1.9 trillion American Rescue Plan signed by President Joe Biden in March. While the rollout of a massive child tax credit and billions spent on housing assistance are aiding the overall economy, the $1,400 stimulus checks sent out to many Americans are seen as having led directly to the current retail spending boom, now at its highest point since May 2020. Shoppers spent more on clothing, sporting goods and electronics in March than in any month in 2021, the Commerce Department found.

“Spending will almost certainly drop back in April as some of the stimulus boost wears off,” Michael Pearce, senior US economist at Capital Economics, told NBC News. “But with the vaccination rollout proceeding at a rapid pace and households finances in strong shape, we expect overall consumption growth to continue rebounding rapidly in the second quarter too.”

The economy is still a long way from the heights of February 2020, when 8.5 million more Americans had jobs than they do today. A full recovery could take up to three years, though it’ll likely happen sooner, according to the Pew Research Center — getting there will require curbing the Covid-19 epidemic, a goal the US is making progress toward, but has not yet reached.

The economy likely needs herd immunity to fully recover

Good economic news doesn’t mean the pandemic — and all the problems it has created — are over. A full economic recovery is likely incumbent on the US reaching herd immunity (generally seen as when 70 to 85 percent of the public has some immunity to Covid-19), ensuring the country is no longer at the mercy of coronavirus-induced shutdowns.

At the moment, Covid-19 cases nationally are on the rise, especially in Michigan, where children and adults under age 30 now make up 30 percent of Covid-infected patients statewide and hospitalizations are at highs not seen since last fall. Overall, the US is averaging more than 70,000 cases per day. The rate of vaccinations has also been increasing, with the CDC regularly reporting record-breaking days; at the moment, the US is vaccinating an average of 3.3 million people per day, according to the New York Times. This has led to a situation that Dr. Anthony Fauci, chief medical advisor to the president, has described as “a race between the vaccine and the virus.”

Despite this, there is some concern herd immunity may be further off than it could be, especially in regions with low levels of vaccine confidence and demand. A Quinnipiac University poll released Wednesday found that roughly 45 percent of Republicans do not plan on getting vaccinated, suggesting the inroads Biden has tried to make to depoliticize the vaccine haven’t worked. Some states are already seeing a surplus of vaccines relative to demand. As of early April, Alabama had administered just 61.4 percent of its doses, an Axios analysis found.

If that lack of uptake is due to concern about the vaccine’s safety or efficacy, those number may change. Some research, including polling by the Kaiser Family Foundation, has found the number of Americans who want to see how the vaccine affects others before taking it declining as the pandemic goes on — and the number of people willing to take it increasing. As of March 2021, Kaiser’s pollsters found 62 percent of adults saying they’d gotten the vaccine or would as soon as possible, up from 55 percent in February.

Like the economic numbers, these figures are promising, and could usher in even further economic gains. These are badly needed, as unemployment remains elevated at 6 percent, as of March, (though less than half of its pandemic high of 14.8 percent). Within that unemployment figure is a reminder that the absence of a total economic recovery is affecting workers of color the most.

The unemployment rate for Hispanic workers is almost 2 percentage points higher than the overall unemployment rate, currently standing at 7.9 percent. For Black workers, it’s even higher, 3.6 percentage points above the overall unemployment rate at 9.6 percent. White workers, meanwhile, were under the topline number, at 5.4 percent.

Overall, however, economists remain bullish. Morgan Stanley is forecasting a 6.4 percent increase in global GDP this year, and a slightly more modest 5.9 percent increase in the US. It would be a stunning reversal of fortunes for a world economy that plunged to record depths in 2020.

“This was the deepest, swiftest recession ever, but it’s also turning into the fastest recovery, ZipRecruiter labor economist Julia Pollak told the New York Times. “And I don’t think we should lose sight of that just because some of the measures are a little stubborn.”

Originally Appeared On: https://www.vox.com/2021/4/15/22385989/april-unemployment-numbers-economy-improving-pandemic

Where To Buy Rental Property in 2021

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Where should you invest next? There’s never a hard-and-fast answer for that one, but good data and a pulse on local trends can certainly help.

Another great place to look for guidance? That’d be your fellow investors. Where are other experienced real estate investors buying? What places are they avoiding? What markets are they eyeing most?

A new survey from RealtyMogul answers just those questions and more. Here’s what the survey of 1,000-plus active investors revealed.

The best states to invest in this year

In general, investors think interior states are a better bet than coastal ones this year. It’s not an overwhelming majority by any means (56% versus 43%), but it probably has something to do with the rise in natural disasters seen in coastal states over the last few years. In 2020 alone, these events caused more than $119 billion in damages in the U.S.

Investors also favor red states over blue ones — and by a bigger margin, too. Over 60% of those surveyed said red states present a stronger buying opportunity. Could lower property taxes in these areas be part of the reason?

Finally, the survey also asked investors to weigh in on the best individual state to invest in (at least out of the nation’s top five most populated). Texas won by a landslide, with nearly half of all those surveyed ranking it No. 1. Florida came in second, followed by Pennsylvania, California, and New York. New York and California were nearly tied for last.

Market-level guidance

Investors also dug deeper and weighed in on market types, as well as specific cities, too. According to their insights, suburban areas are the clear winner when it comes to investing this year. Nearly 64% said they believe suburban markets offer a stronger buying opportunity in 2021, versus just 29% for urban and a mere 7% for rural.

This one’s not too surprising given the urban exodus we’ve seen since the pandemic began, but investors are torn on whether those urban/dense metro areas are in long-term trouble, though. Half said these markets will be declining for the long haul, while another 50% said the downturn will be limited.

If you want more specific market recommendations, investors seem to think Dallas is your best bet. Other Southern cities like Phoenix and Houston also rank highly, with many investors putting them at the No. 1, 2, or 3 spots.

High-cost markets like San Francisco, New York, and Los Angeles rank worst. Nearly a third of all respondents put the Bay Area as dead-last in their best-places-to-buy rankings.

The bottom line

It’s hard to decide where to invest next, but factoring in recent data (like our housing market hubs!) and other investor recommendations can help. You can also tune into our monthly real estate trends update for even more updated guidance.

Originally Appeared On: https://www.fool.com/millionacres/real-estate-market/articles/heres-where-investors-say-you-should-buy-property-this-year-and-where-you-shouldnt/

Return to office push could create CRE hiring spree

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When the COVID-19 pandemic’s impact on the commercial real estate industry is discussed, it’s often in terms of building vacancies, store closings and uncollected rents. The health crisis has impacted another sector of CRE as well however—the workforce. Companies were forced to lay off employees during the past year, but that trend could be turning around Rastegar Property Co. CEO Ari Rastegar recently told Bisnow. The executive is confident his hometown of Austin, TX is on the rise from a CRE perspective and is hiring like it. Rasetgar’s firm recently hired former Newmark executive Neal Golden.

“It’s going gangbusters,” Rastegar told Bisnow. “There’s so much talent in the marketplace from layoffs and COVID-19, unbelievable people. We’ve never seen this much talent out there. We’re bringing in seasoned C-suite execs and junior middle management.”

It will likely take a while for the CRE industry to completely rebound from the pandemic. But the combination of vaccine rollouts, decreased restrictions, more travel and companies plotting their returns to their offices has added up to the market getting closer to pre-pandemic times. Real Capital Analytics’ data showed that CRE prices in the U.S. increased 6.8% year-over-year in February. The boost has led to more hiring, re-staffing and office re-openings.

“Starting at the end of February, it seemed like hiring exponentially ramped up, and companies are continuing to hire at a faster pace,” Carly Glova, president of Building Careers, a commercial real estate talent firm told Bisnow. “We’ve also seen compensation packages increase as well, because now that companies are committed to hiring again, the desire to attract high-quality talent is paramount.”

Talent demand has been especially high at the executive level, according to CRE Recruiting founder and principal Allison Weiss. COVID-19-related layoffs and furloughs have made the industry talent pool quite deep.

“The pace of business has started to change, and companies realize they need those people back,” Weiss said. “I wouldn’t call it a frenzy, but it does feel more like pre-COVID hiring levels.”

Some uncertainty remains within CRE industry

The potential CRE hiring spree is great news for those who work in the industry. There are no guarantees of a full rebound however; some companies are still hesitant to hire more people due to another possible Coronavirus wave. They don’t want to re-staff their teams only to have to shut operations down again. Plus, the Green Street Commercial Property Price Index has not changed, Bisnow reports. As of early March, the, the index was just below pre-COVID-19 levels. The CRE industry is making slow progress however, with particular roles and skills in higher demand.

Along with executives, CRE workers with support and analytics expertise like acquisitions, investments knowledge and creative deal thinking are what companies are seeking most now. Looking ahead, people with property management skills will soon be sought after as states begin to pick up their re-openings, according to CCIM Institute Chief Economist Kiernan Conway. Brokerage is still up in the air, especially for office space, however.

“We’re still waiting to see what the model will be,” Conway told Bisnow. “Office brokers in suburban markets are in the middle of a mad dash to find and lease vintage office parks from the ‘80s and ‘90s. Urban downtowns, not so much.”

More markets are accelerating their hiring

Sectors like industrial and life sciences are still seeing high demand for experienced workers, Bisnow reports. Susie Harboth, Executive Vice President of Business Operations at Breakthrough Properties, which specializes in life sciences real estate, noted that firms in areas like Boston, San Diego, Los Angeles, New York City and Philadelphia have increased their hiring.

Meanwhile, the increase in travel and in-person events has allowed for more networking and in turn, hiring, according to Weiss. The International Council of Shopping Centers recently announced it is restarting live events later this year.

Vaccinations and company announcements about their returns to the office will dictate if these recently increased recruiting practices turn into more hires. Weiss advised that companies should take their time and think about how they rebuild their teams. The pandemic has given corporations time to step back and rethink both office and remote work models.

“My concern with the return to the office is the impact on retention and companies not being thoughtful about how they transition,” Weiss told Bisnow. “I’ve heard from a lot of candidates recently who know what’s coming and are anxious about what’s coming, and companies who do this well will increase loyalty and retention in the long run.”

Originally Appeared On: https://connectedremag.com/real-estate-news/cre/office/return-to-office-push-could-create-cre-hiring-spree/

Restaurants struggle to find workers despite gains in U.S. economy

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Restaurant owners said workers are not applying for open jobs, and some are still not back to full staff.

As more people receive vaccinations for COVID-19 and consumers reportedly regain confidence, some Knoxville restaurants said they’re struggling to find workers.

Owners said that there is demand from customers, but some are still not back to full staff. The owners of Sweet P’s and Northshore Brasserie said they are not receiving applications for open jobs.

“Some people are not wanting to get back into the workforce, which is understandable,” said Chris Ford, a co-owner of Sweet P’s. “You’ve got a lot of stimulus money out there and quite frankly, we’re all competing, all these restaurants, for the same pool. There’s just a lot of options for people.”

The restaurant is in the process of opening a new location in Fountain City, set to be open for business this summer.

Around 744,000 people applied for unemployment benefits across the U.S. last week, an increase of 16,000. They remain high by historical standards, since dropping from their record highs towards the start of the COVID-19 pandemic.

Despite the rise in unemployment benefits, the U.S. unemployment rate dropped to 6% during March. Consumer confidence also increased, according to reports.

“We’re running a smaller crew right now,” said Brian Balest, the owner of Northshore Brasserie. “We’re running kind of a core group of people. We’re focused on dinner right now. So we’re getting through it. And I do think it’ll get better. I think it’s going to be a minute though.”

Most economists said they think the still-high level of unemployment applications should gradually fade.

Originally Appeared On: https://www.wbir.com/article/money/business/some-knoxville-restaurants-struggle-to-find-workers-despite-gains-in-us-economy/51-6ee4bf85-f51b-4f07-b9ff-ca68b84817fe

Facebook faces formal Irish privacy probe into data leak

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Facebook Inc. faces a formal probe by its main privacy regulator in the European Union following the leak of the personal data of more than half a billion users of the social media service.

Ireland’s Data Protection Commission on Wednesday opened an inquiry following media reports earlier this month showing “that a collated dataset” of Facebook users’ personal data “had been made available on the internet,” the authority said in a statement.

Personal information on 533 million Facebook users reemerged on a hacker website in early April. The information included phone numbers and email addresses of users, the Irish regulator said in a statement earlier this month. Facebook has said the data is old and was already reported on in 2019.

Facebook said it’s “cooperating fully” with the Irish authority and that the probe “relates to features that make it easier for people to find and connect with friends on our services.” It said the features “are common to many apps and we look forward to explaining them and the protections we have put in place.”

EU Hubs

The EU’s General Data Protection Regulation, or GDPR, took effect in May 2018, paving the way for national authorities in the 27-nation bloc to levy fines on companies of as much as 4% of annual sales. Facebook is among a number of big U.S. tech giants that have set up an EU hub in Ireland.

According to the Irish agency’s last annual report, the regulator has 27 open privacy probes targeting companies such as Apple Inc. and Google, nine of which focus on Facebook.

The probe will determine “whether Facebook Ireland has complied with its obligations, as data controller, in connection with the processing of personal data of its users by means of the Facebook Search, Facebook Messenger Contact Importer and Instagram Contact Importer features of its service,” the regulator said in its statement said.

Originally Appeared On: https://tech.hindustantimes.com/tech/news/facebook-faces-formal-irish-privacy-probe-into-data-leak-71618426797480.html

U.S. economy rebounding, helped by stimulus and vaccines

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The survey credited a range of factors, from vaccinations to the payments of up to $1,400 for individuals from the $1.9-trillion relief package that President Joe Biden pushed through Congress last month.

The survey, known as the beige book, will form the basis for discussions when Fed officials meet on April 27–28 to discuss what to do about interest rates.

Gus Faucher, chief economist at PNC Financial, said the message from the beige book is that business activity is picking up but “the economy still has a lot of room to strengthen further.”

While private forecasters have been busy boosting their economic projections for this year, Fed Chairman Jerome Powell has continued to stress that the central bank is not close to raising rates. The Fed released projections last month that indicated it will hold off raising rates until after 2023.

The beige book report, based on information from business contacts supplied by the Fed’s 12 regional banks, said that manufacturing activity continued to expand, with half of the Fed districts reporting robust manufacturing growth. Those gains came despite supply-chain disruptions in such critical areas as computer chips.

The survey found that the Fed’s regional bank in New York is seeing growth for the first time since the pandemic shut down the economy a year ago and that the expansion is “broad-based across industries.”

The Fed’s Philadelphia regional bank found that demand for goods and services is “on fire” but myriad severe supply constraints are continuing to hamper various industries.

Cleveland reported improvements in the hard-hit hotel and restaurant sectors. Similar improvements were reported by the Fed’s Atlanta regional bank, which covers tourist destinations in Florida.

Dallas reported that supply-chain disruptions have led to sharp increases in prices of goods, while the San Francisco district reported that residential construction remains strong.

The Fed survey found that many of its districts are seeing moderate price increases, specifically for materials such as metals, lumber, food and fuel.

The beige book reported that employment growth picked up as economic activity increased. It noted strong job gains in manufacturing, construction, and leisure and hospitality.

In an appearance Wednesday before the Economic Club of Washington, Powell acknowledged rising concerns about inflation following a report Tuesday that consumer prices rose 0.6% in March, the biggest one-month gain since 2012.

But Powell, who has been predicting a temporary spike in inflation this spring, repeated the view that the central bank wants to see inflation rise “moderately above 2% for some time” to make up for a decade when inflation has failed to reach the Fed’s 2% inflation target.

Originally Appeared On: https://www.advisor.ca/news/economic/u-s-economy-rebounding-helped-by-stimulus-and-vaccines/

JPMorgan 1Q profit up sharply, helped by improving economy

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JPMorgan Chase saw its first-quarter profit jump nearly five fold from a year earlier, as the improving economy allowed the bank to release roughly $5 billion from its loan-loss reserves that it had stored away in the early weeks of the pandemic.

The nation’s largest bank by assets said Wednesday that it earned $14.3 billion, or the equivalent of $4.50 per share, in the year’s first three months. That’s compared to a profit of $2.87 billion, or 78 cents per share, in the same period a year earlier.

Excluding the loan loss releases, the bank earned $3.31 per share. The results were significantly better than the forecast from analysts, who were looking for JPMorgan to report a profit of $3.10 per share, according to FactSet.

A significant chunk of JPMorgan’s profit gain came from its ability to release $5.2 billion from its loan-loss reserves this quarter. Banks such as JPMorgan set aside billions to cover potentially bad loans during the early months of the coronavirus pandemic. With the economy improving, and trillions of dollars of government stimulus being injected into the U.S. economy, those loans are no longer considered at risk of failing.

“With all of the stimulus spending, potential infrastructure spending, continued quantitative easing, strong consumer and business balance sheets and euphoria around the potential end of the pandemic, we believe that the economy has the potential to have extremely robust, multi-year growth,” said Jamie Dimon, the bank’s CEO and chairman, in a statement.

JPMorgan still has $26 billion stored away in its loan-loss reserves, which Dimon said is a “appropriate and prudent” amount for the bank currently.

JPMorgan also had a surge in revenue and profits in its investment banking division, which helped its overall bottom line. The investment banking division had revenues of $14.6 billion in the quarter, up from $10 billion a year earlier. The bank saw significant gains in the revenues from its trading desks, reflecting the healthy volatility last quarter in both the bond market and stock market.

Total revenue across the entire bank was $33.12 billion, up from $29.01 billion a year earlier.

Originally Appeared On: https://apnews.com/article/coronavirus-pandemic-economy-906e9d109f1732d097d5ab16e5ed96bf

Bernie Madoff, the author of the millionaire financial fraud, has died at the age of 82

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American Bernard “Bernie” Madoff, author of the biggest financial fraud in history, has died today at the age of 82. This information was confirmed by the United States Federal Prison Agency, which has not yet assessed what caused the financier’s death.

Madoff was sentenced in 2009 to 150 years in prison for planning a $ 25 billion to $ 63 billion Ponzi project. The financier worked part-time at a detention center in North Carolina, USA.

Born in New York on April 29, 1938, Modoff opened his first company in 1960, investing $ 5,000 he had saved while working as a beach lifeguard.

Throughout his life, the financier was chairman of Nasdaq, the world’s first electronic stock exchange, and attracted companies such as Apple. Google And Cisco for the financial market.

Financial pyramid reaching over 30 thousand

Modoff’s position on Wall Street has earned him a reputation and confidence in the market, which are essential tools for his fraudulent scheme, which has killed more than 30,000 investors worldwide, leading many of them to bankruptcy.

Madoff planned this type of fraud Pyramid scheme, It only works as new investors continue to enter the system – and when investors stop entering, this function fails to make up for the promised positive returns and gaps.

While the plan was in place, Madoff did not invest a single cent of the money given to him by customers. Instead, the financier used the new investor’s resources to pay off previous customers.

The earthquake that toppled the Modof pyramid was the subprime crisis of 2007, which foreshadowed the economic crisis of 2008, when the financier was unable to cope with the demand for withdrawals from his investors.

Between the 1970s and 2000s, U.S. judicial authorities confiscated nearly $ 4 billion from Modof to compensate tens of thousands of people who lost their finances.

Earlier last year, prosecutors sought to reduce Madoff’s 150-year prison sentence, saying the financier suffered from “terminal kidney disease” and wanted to get out of jail, but that request was denied by a U.S. court.

Profit by hot chocolate in prison

In prison, according to podcast presenter journalist Steve Fishman “Ponzi Supernova” The financier, who had been in contact with Madoff at the detention center, monopolized the sale of hot chocolate.

“He bought all the Swiss Miss (hot chocolate brand) packs in the warehouse and sold them profitably in the prison yard,” Fishman said in January 2017. To the US financial news site MarketWatch.

* With information from AFP and Ansa in New York (USA)

Originally Appeared On: https://www.biologyreporter.com/bernie-madoff-the-author-of-the-millionaire-financial-fraud-has-died-at-the-age-of-82/