Presents
POCATELLO's ELECTRONIC NEWSLETTER
Presents
POCATELLO's ELECTRONIC NEWSLETTER
Volume 2 * Issue 2
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Michael James Johnston, the editor.
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Tip of the Month
Be a trouble-shooter. When you run into a problem, try to think of at least two solutions before you take that problem to your boss. It shows that you're a thinker and problem-solver, as well as a doer.
SOURCE: You Can Find More Time For Yourself Every Day, by Stephanie Culp, Betterway Books, 1507 Dana Ave., Cincinnati, OH 45207
Cartoon
Weather and Climate Summary
Steve Cannon
Weatherman
KIDK TV-3
208-522-5100
Email: stevec@kidk.com
Site: http://www.kidk.com
Although February marks the middle of winter, the season shows signs of giving way to spring. The cold of January, with it's average temperatures of 32.4 and 15.1 show the warming trend of spring in February. The average monthly high temperature for February rises to 38.6, and the average low temperature warms over 5 degrees from January, to a monthly average for February of 20.4. February precipitation totals .86'' for the month.
The extremes for the month of February show that spring is right around the corner (on the high side). The warmest February temperature is 62... and it occurred on three separate occasions... February 4th, 1963... the 19th of February, 1958, and on February 21st, 1982. On the other hand, February still shows the cold of winter. The coldest temperature recorded for the month fell on February 1st, 1985, with a bone-chilling -33! That temperature is also the all-time low temperature recorded for the Pocatello reporting station. The wettest February was back in 1909, when 2.86'' was recorded... the driest month... 1970, with only .12'' of precipitation. During the wet year of 1909, the greatest 24 hour snowfall was recorded for February... with 10'' in one 24-hour period. The most snowfall for the entire month fell in 1922, with 23.4'' recorded.
Astronomically, February is a gem... featuring the last total solar eclipse for the western hemisphere of the millennium... the next one not occurring until the second decade of the 21st century. That's the good news... the bad news is that you will have to travel to the Caribbean to see it! The big event happens on February 26th. For those who can't travel that far, Venus provides a great light show in the eastern sky, during the morning's twilight. The bright planet reaches it's maximum brilliance on the 23rd. For star gazers, there are no less than 8 first-magnitude stars in the heavens... in and around the constellation Orion.
Famous folks with a February birthday include Ronal Regan, born on February 6th, 1911, Hank Aaron, born on the 5th, 1934... Abraham Lincoln, born on February 12th, 1809 and Charles Dickens, on February 7th, 1812. The inaugural flight of Boeing's 727 jetliner took place on February 9th, 1963. Inspired by the success of that great plane, the inaugural flight of Boeing's 747 took place exactly 6 years later... February 9th, 1969! Oh, by the way, there are two other important events in the month... Valentine's Day, on February 14th... and the great day for weather forecasting... Groundhog Day, on February 2nd. (Where's Bill Murray when you need him?
Public Schools
Chris Williams
Public Information Officer
School District 25
208-235-3257
Email: williach@d25.k12.id.us
Site: http://www.d25.k12.id.usSuperintendent receives 1998 Educational Leadership Award
School District No. 25 Superintendent Dr. David A. Peck has been named the 1998 recipient of the ISSA Educational Leadership Award by the Idaho School Superintendents’ Association. The award recognizes a practicing administrator who has modeled a positive effect in promoting public school education in the State of Idaho. Peck, who is a past president of the Idaho School Superintendents’ Association, has served as the Superintendent of Schools in Pocatello since 1987.In the application for the award, Peck responded as follows to a question related to teacher commitment involvement and support of school change:
“As the people who effect the lives of our students directly, teachers play the most important role of all educators. Our commitment must be to provide the support and motivation such that they reach beyond the average.
“To the extent that people feel ownership for ideas and outcomes, they involve themselves in working toward the success of programs, plans and ideas
“To help teachers be a part finding methods to improve, I believe that it is the first essential to reassure them that they are not required to reform because they have failed. A great effort has been made by our district to instill in our teaching staff the belief that they are above average highly qualified professionals. Every opportunity to recognize their efforts is made both publicly and to individuals...”
Dr. Ethel Simon-McWilliams, executive director and CEO of the Northwest Regional Educational Laboratory, wrote of Peck: “The merits and accomplishments of Dr. David Peck which warrant his selection ... come from many viewpoints.
“From the local viewpoint, as Superintendent of the Pocatello School District since 1987, he has piloted its schools through a decade of reform and improvement, exemplified by strong school-community relationships, an effective and productive relationship with the local school board, and strong leadership and support for both administration and instruction.
“From the state viewpoint, he is seen as an educator with vision and innovativeness by his Idaho colleagues.
“From the viewpoint of the Northwest region, I have personally witnessed his ability to look at the big picture, while at the same time attend to the critical details of the educational enterprise.”
In addition to his District post, Peck serves on the Board of Directors of Pocatello Regional Medical Center. He has also served on the Board of Directors of United Way of Pocatello, was a member of the Pocatello Bicentennial Commission and was a member of the ISSA Finance Committee. He also served for six years on the Northwest Regional Educational Lab Board — two as its secretary/treasurer — and served as chair of the board’s compensation committee and finance committee. He is also a prior director of secondary education and director of elementary education in School District No. 25 and a former superintendent of the New Plymouth School District. Peck holds an Ed.D. from the University of Utah, an M.Ed. from Idaho State University and a B.S. from the University of Utah.
Property Ownership
Joe Campbell
Vice-President of Pioneer Title of Bannock County
Pioneer Title Company
208-233-9595
Email: pioneert@nicoh.com
Site: http://
Tips for a Successful Closing
Assure that the purchase and sale agreement and a copy of the listing is sent to escrow closer as early in your transaction as possible! Things that you will need to provide to the escrow closer will be the following information:
- Loan numbers, lenders name and address for loans being assumed or paid off at closing
- Provide the name of the new lender and loan officer. If you change lenders anytime in the transaction, please advise the closer.
- If there is an "owner-carry" in the transaction, provide the closer with exact terms. Let the closer know if there is to be an escrow collection and where it is to be held.
- If the property is a rental, please provide monthly rents, a list of the tenants, when the rent is paid till and the dollar amount of security deposits.
- If there is to be an interim occupancy agreement, please provide the closer with a copy and any amount to be prepaid to the seller.
- If you change the terms of the offer (addendums, counter offers, etc) make sure the closer has a current copy.
- Has any money been advanced from the earnest money deposit for credit report, appraisal, septic or well inspections? Have any amounts been advanced by the agent for which they should be reimbursed at closing?
- Always be certain that the commission amount has been sent to the closer.
- Is either party going to be out of town? Will either party be signing by "Power of Attorney?" Most title companies will have a "Power of Attorney" form, but, in all cases, it will need to be reviewed for sufficiency prior to closing.
- Are there any additional bills to be paid from the closing?
- Review the title commitment upon receipt. Vested owners will be assumed to be signing at closing unless you specify otherwise.
- If there has been a divorce, death or other change in an owners legal status, please let the closer know the circumstance as soon as possible.
- The buyer should have their insurance agent contact their new lender or closer as soon as possible. Some lenders may require the original policy in their office prior to closing rather than just the binder.
- All closing funds should be in the form of a cashier's check, wire transfer or check drawn on a LOCAL financial institution made payable to the title company.
- The buyer, seller and / or their legal counsel (mom, dad, etc) may wish to review copies of the closing documents prior to closing. If so, please notify your closer. Preliminary statements will be furnished whenever possible for all parties to the transaction.
Real Estate
Jim Johnston
Associate Broker, CRS, CRB, GRI, ABR
Coldwell Banker Landmark
208-232-9041
Email: jimj@mykro.com
Site: http://www.HomeSpecialists.comQuestions I am Often Asked...
We want to sell our house and use some of the profit to purchase a larger house. Can we get an estimate of what our profit will be from the sale?
Should we look for the other house before we sell the one we own?
Answer: Serving as your REALTOR ® , we would initially calculate your current home equity - the difference between the value of your house and the balance of your mortgage. This is part of a comprehensive market analysis I use to initially determine your "profit" after the sale of the house.
Pricing is an important part of selling the property. This includes - but is not limited to - knowing the selling prices of houses in your area. With this financial analysis we can discuss the future plan of buying a larger house. You would have a good idea of what you could use for a down payment. Also, we could determine a reasonable mortgage payment based on the monthly family income.
The selling/buying plan requires a kind of "juggling act." If you sell first, you are certain about your equity and profits from the sale, but you may need interim housing - usually a rental space - until you buy your next house. If you purchase the new house but your current home doesn’t sell for several more months, you’ll be stuck with two mortgage payments instead of one. You will also be paying for two hazard insurance policies, two property tax assessments and the cost of maintaining two separate houses.
The clue is to weave the two plans together. Please call - we can discuss the various options.
Want to Sell Your House? Please Call Me.
For various reasons, there are times when a family has to sell their house. The need may hit fast (job transfer) or slowly (a growing family’s need for more space).
If you, or a relative, or a friend are considering selling or buying a house, beware of real estate cliches that too often are stated as truth - such as, "Houses take much longer to sell in the winter months" or "Empty houses are more difficult to sell."
The fact is, a great deal depends on:
- the strength or weakness of the housing market at the time the property is listed;
- the condition of the property;
- the specifics of the neighbor-hood;
- not least, the experience and tenacity of your real estate agent.
Call me and we can discuss what is best for you -here and now - based on your particular house, your neighborhood, and the current statistics related to house sales in your area.
Economic Summary
Stocks and Bonds
Investments
Lynn Baldwin
Manager and Regional Trust Officer
U.S. Bank
208-234-5544
Email: f_baldwin@usbc.com
Site: http://www1.usbank.com/personal/investing/Market Update
The markets in 1997 exceeded the expectations of virtually the entire Wall Street investment community. After the stellar gains of 1995 and 1996, most were concerned that valuations had gotten ahead of earnings. Further, many felt that inflation would reignite, pressuring interest rates higher, and accordingly dampening returns for stocks.
Fortunately, however, such concerns were not realized. The S&P 500, our proxy for larger company stocks, pushed ahead a solid 33.36%. Bond investors enjoyed 1997, with the Lehman Bros. Government/Corporate Bond index up a strong 9.76%. What were the underlying reasons for yet another year of solid performance? Further, given our review, what is the outlook for the markets in 1998? In the following text, we outline both our review and outlook.
ECONOMY
The currency and banking crisis facing many emerging economies continues to have a significant impact on financial markets. Upon review, it appears that the downward pressure on emerging markets was the result of several factors. Chief among them were real estate speculation far above the demand for additional space, governments extending loans to companies which were ill considered on economic merit, and overly aggressive investment spurred by the above, and reinforced by propped-up currencies. The countries of Korea, Malaysia, Indonesia and Thailand have been hit particularly hard.
We have spent much time analyzing the potential impact on the U.S. investment markets from the Asian debacle. It does not appear that the U.S. from a macro export perspective has much at stake with respect to these countries; most analyses we have reviewed indicate that between 3-5% of total U.S. corporate profits depend upon exports to the region.
Fundamentally, we believe that the effects on U.S. profits will be insignificant. Some companies, however, with significant business overseas have already reported disappointing earnings results tied to this so-called "Asian Flu." We believe that in the great majority of cases, they are using this crisis as an excuse to cover for other problems. It is much more difficult to ascertain the impact of these markets’ severe losses on ex-Asian, and particularly U.S. investor sentiment. We have noticed capital flights out of international markets into the U.S. markets, providing a surge of demand particularly for the bond markets.
Domestic employment remains strong. Average hourly earnings have increased by 4.1% year-over-year, which is significantly higher than the rate of inflation, which fell to an annualized rate of 1.7% for 1997. A portion of this increase in hourly wages is a result of the increase in the minimum wage, which was implemented in September.
In spite of wage pressures, there are few signs of inflation. Energy prices have declined due to moderate temperatures and the prospects of renewed Iraqi oil shipments. Analysts expect the recent problems in Southeast Asia to have some sort of dampening effect on future global economic growth. Consumer confidence is at record high levels, spending has been moderately strong, and the surge in mortgage refinancings from lower interest rates will provide additional cash in consumers’ pockets. Upon review of the potential fuel to push inflation back up, the Federal Reserve will likely leave short-term interest rates unchanged at its next meeting. However, if the Fed sees signs that consumer spending and debt are moderating, it may feel that, in the spirit of restoring global economic balance, it should decrease short-term rates. Supporting the push for lower rates is the likely influx of imports into the U.S. at lower prices than those of domestic producers; this additional supply of lower-priced goods may prevent U.S. companies from having much pricing leverage, and consequently keep domestic inflation low. Indeed, bond market investors have largely anticipated such a move.
It will take some time before we can determine how effective the International Monetary Fund (IMF) bailout will be. The IMF is providing billions of dollars to South Korea, but the key question will be what an austerity program (as a result of this IMF bailout) will mean to workers in South Korea and how they will accept the burden. Such austerity measures could cause social unrest and present political problems in the upcoming election in South Korea.
FIXED INCOME
Bond investors have largely ignored the signs of wage pressure because they are convinced that this will be offset by the general disinflationary trends that are occurring worldwide due to the Asian crisis. Disinflation occurs when price levels rise more slowly than they previously did. We have seen some evidence that inflation has been tempered as gold and oil prices have declined since the first of this year. In fact, gold at $290 is as low as we have seen it in 12 years. The low rate of inflation has helped keep interest rates at low levels, in spite of the evidence that our economy generally remains quite healthy. The yield on the benchmark 30-year Treasury bond fell to 5.92%, and has fallen further thus far in 1998 as the demand for fixed-income investments continues to surge. The yield curve has flattened significantly, as long-term interest rates have come down markedly while short-term rates have stayed at relatively high levels due to the Fed’s inactivity. With a more normally-shaped upward-sloping yield curve, investors are rewarded for buying longer-term bonds; however, with a spread of only 27 basis points (0.27%) separating the 2-year Treasury from the 30-year, investors found little incentive to invest in longer-term securities.
Our outlook for bonds in 1998 calls for total returns lower than that in 1997. We do think that rates will continue to float down in coming months, providing capital appreciation on bonds held, but that the percentage decrease will likely be less than that we experienced in 1997. We expect the 30-year Treasury to settle into the 5.25%-5.50% range, and the yield curve to steepen, e.g. short-term rates to fall more than long-term rates, if our expectation of the Fed lowering the key Fed Funds rate holds true.
EQUITIES
Despite the volatility in the stock market, stocks again provided very attractive returns. Large-cap U.S. stocks were again the best place to invest, appreciating over 33%, mid-cap and small-cap U.S. stocks chalked up gains of over 32% and 22% respectively. The finance and healthcare sectors proved to be the most profitable with returns of 45.39% and 41.65% respectively, and we are pleased to report that we overweighted these sectors in your account. Basic materials and utilities were the laggard performers with respective returns of 6.96% and 18.61%, and we again were fortunate to underweight these sectors so as not to detract from your account’s total return. Unfortunately, technology performed weakly last year, and detracted from performance somewhat; however, we offset this with added value through select holdings in transportation and oil services stocks.
U.S. investors in international stocks were disappointed in lackluster returns in 1997, with the Morgan Stanley EAFE index up only 1.78%. The lower returns were caused by a number of factors, namely a continued market drop in Japan, the Asian market fall, and a upsurging dollar. Funds that hedged their foreign currency exposure and were underinvested in Japan did better on a relative basis.
Comment On Market Volatility. Going back in history there have been only a couple of times when the market moved more than 7% in any one month period. Between July 1 and October 7 the S&P 500 rose by 7.7% one month, declined by 6.3% the next, and then rose by 9.3%. Then, between October 7 and October 27 the S&P declined by 10.8% which represents the worst compressed return in the last 10 years. The period from October 27 through December 9 saw the S&P appreciate by 11.2% which was the single best one month return in the last 10 years. We expect this type of volatility to continue.In our positioning for 1998, our cautious outlook calls for increased cash reserves and a rebalance that favors the more defensive stock sectors, such as consumer staples, healthcare and higher-dividend yielding stocks such as real estate investment trusts (REITs). We are paring back our technology stocks, and selectively paring our energy exposure in light of lower anticipated oil prices in 1998. Given our optimistic outlook for interest rates and further consolidation, we remain bullish on the finance group, and will be making additions in this sector with stocks of well-managed firms.
We had expected the small and mid-cap stocks to improve because they are domestically focused and, therefore, insulated from most of the turmoil in Southeast Asia. However, both mid- and small-cap companies tend to be more sensitive to the perception of a slowing economy. When problems such as the Asian crisis threaten economic growth, and thus corporate earnings, investors tend to focus on larger, more familiar growth companies. Some of the increase in growth company valuations may be temporary, and when we see signs of improving investor confidence, we will increase our exposure to these stock sectors in light of their more modest valuations.
We at US Bancorp and First Asset Management wish you all the best for a most prosperous 1998.
The Economy and Finance Update
Larry R. Bell
Senior Vice President, Manager of Mortgage Lending
Citizens Community Bank
208-232-5373
Email:
Site: http://HOT HOT HOT
Yes hot describes the real estate finance market in Pocatello and across the nation. The current market has a near record number of buyers and refinance applications and it appears this trend will continue. The main reason for this activity is near record low rates. The rates as I write this column are 7.0% for a thirty fixed rate at par and 6.625% for a fifteen year fixed rate loan at par.
There are many factors that contribute to these near record low rates. One of the main factors is the economic turmoil in the eastern financial markets. This crisis has caused a great deal of capital to be moved into the United States debt market. This influx of cash has caused rates to fall on long term treasuries and mortgage rates. The other main factor prompting rates to fall is the general perception that inflation is under control. This will preserve the value of long term fixed rate assets such as mortgage loan investments.
The price of mortgage money is right at this time. Combine this with a good selection of houses in the Pocatello market makes this an excellent time to purchase a house. The number of houses listed in Pocatello has been slightly declining over the past several weeks. If you are considering selling your present house now would be a good time to list your house and look for a new house.
Should you decide you like your present house you may want to consider refinancing your present house. Most customers consider a rate savings of 1.5% sufficient to refinance. We are seeing many customers that are refinancing their 30-year loan to a 15-year loan. Often they can do this with little or no increase in their monthly payment and reduce the term of their loan by years.
Should you want more information about purchasing or refinancing a loan please call me at 208-232-5373.
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POCATELLO’S ELECTRONIC NEWSLETTER (Everything Pocatello) is published monthly by Michael James Johnston. Any questions, concerns, ideas or criticisms are to be directed to him via Email at editor@mykro.com
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Copyrighted 1998 by Mykro Computer Company. All Rights Reserved. No part of this material may be used or reproduced in any form or by any means, or stored in a database or retrieval system, without prior written permission of the publisher except in the case of brief quotations embodied in critical articles and / or review.
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