Friday, June 14, 2013
Miami County Home Buyers Guide
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Maximize Your Home Storage Western Ohio Home Builders Association As summer approaches and people shed their layers of clothing from the cooler months, many want to also lighten the load their homes are carrying—or at least make it look neater. Before you toss the tools in a garage corner or stuff the down jackets into a box and toss it in the attic, why not evaluate your needs and make your storage both effective and attractive? The first thing you should do is make a list of everything you want to store. This list will both help you determine how much storage space you need and ensure that nothing gets lost once you start putting things away. Shelving is one of the easiest ways to
create more storage. It can be portable in the form of free-standing units, or permanent that is attached to your walls. Easy-to-install, heavy-duty shelving can be purchased at just about any major home supply store. Many of these units are designed so that you can leave as much room between the shelves as you like, making it easy to get larger and smaller items onto the same unit and saving you space. Heavy winter clothing can take up lots of closet space, leaving you with little room for your entire four-season wardrobe. One solution for storing out-ofseason clothing is under the bed. Under-the-bed storage containers come in a variety of sizes and styles, including ones with wheels for easy access and to
protect hardwood floors from scratches when you pull them out. You can also buy simple risers that elevate your bed off the floor additional inches to create even more space. Garage storage has also gotten much more efficient. You can get built-in storage cabinets with doors so the space looks clean and orderly. There are also modular systems that enable you to choose what features are best for your needs; including hanging racks for sports equipment, hooks for tools, and more. Most garages have pitched roofs to keep rainwater or snow from collecting on top, and this space is ideal for items you don’t use on a daily or weekly basis. Store these things on platforms or racks that lower and raise either electronically
at the touch of a button, or with an easyto-use pulley system. In newer or renovated homes, a mudroom or drop zone is a popular feature. This area often has built-in benches, hooks and bins to neatly tuck away boots, jackets, gardening equipment and other items your family uses frequently. Finally, if your family is as tied to their portable internet and communications devices as many modern families, get rid of the tangle of charger cords on your counters by buying or building a home charging station with multiple outlets and pockets for storing and charging cell phones, tablets, laptops and more. For more information about home maintenance or design trends, visit nahb.org/forconsumers.
Interest Rates Yield No Recession By Elliot Eisenberg, Ph.D., President of GraphsandLaughs, LLC While first quarter GDP growth was 2.5%, it will probably be the best performing quarter of the year. Add to that continued contractionary fiscal policy in the form of both the sequester and the Fiscal Cliff deal, continued weak employment growth, declining exports and a lackluster manufacturing sector and suddenly recessionary fears are palpable. After all, a recession will inevitably come and it has been almost six years since the start of the last one. Aren’t we kind of due? Turns out, the answer is no, no and no! If history is any guide - and it’s a very good one in this case - there is no recession in sight. Since 1970 there have been seven recessions, and interestingly enough, each one has been preceded by an inversion in the yield curve, a situation where short term interest rates are higher than long term interest rates. Rarely is there an indicator that is seven for seven over a period of 44 very dissimilar years. The last time the yield curve inverted and a recession did not follow was in 1966-67, and though there wasn’t a recession, the economy slowed substantially with GDP growth of less than 1% for 21 straight months. Normally, interest rates are higher the longer the period of time money is lent. For
example, today a one-year Treasury bill yields 0.15%/year, a 10-year Treasury note pays 2%/year and a 30-year Treasury bond pays 3.125%/year. After all, the longer you lend someone money, in this case the government, the more interest rate risk, inflation risk and credit risk you incur, and investors must be compensated for these risks. However, from time to time this normal relationship breaks down. One explanation for this phenomenon is that by raising shortterm rates (to slowdown an overheating economy with rising inflation), the Federal Reserve discourages bank lending, as banks generally borrow short and lend long. And when the yield curve is inverted, banks have much-reduced profit margins, and this re-
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duction in lending causes a recession. A second explanation for an inverted yield curve is that investors expect future short-term interest rates to decline because they expect a recession. As a result, investors expect the central bank to lower interest rates to counteract the expected recession. And when this happens, investors plow into low-yielding long-bonds to lock in yields they expect will be still lower in the future. Regardless of the reason, from time-totime the yield curve inverts. Today, the difference between ten-year Treasury notes and one-year Treasury bills is 1.85%. Assuming the Federal Reserve felt compelled to start raising short-term interest rates soon (and let’s be clear, it does not), it would take, based
on history, about two years before yields on one-year Treasury bills were higher than yields on 10-year Treasury notes. And again using history as our guide, it generally takes another 12 months after the yield curve inverts before a recession begins. This suggests that we have at minimum three years before the next recession. Of course, given the expansionary state of monetary policy and the laser-like focus of the Fed in preventing a recession, my bet is we have quite some time before the recession of 2018! Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70 word economics and policy blog can be seen at www.econ70.com.
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