POCATELLO’S ELECTRONIC NEWSLETTER

November 1997

Volume 1 * Issue 11

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WELCOME to the eleventh edition of POCATELLO’S ELECTRONIC NEWSLETTER.

This FREE newsletter is provided to you FREE by

Michael James Johnston, the editor.

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POCATELLO'S ELECTRONIC NEWSLETTER will soon be made available to Pointcast users. Pointcast is a program that can keep you up to date with weather information, late breaking news stories, sports scores and more. Pointcast 2.0 is available for FREE at http://www.pointcast.com and our channel will be made available for FREE by the end of the year. Watch for updates to be announced here soon!

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Please contact us if you have any ideas on how we can expand our newsletter. We would like to expand by providing you information on heath related issues and tips as well as information on gardening tips, cultural activities, and movies in review. Please contact the editor if you know someone that would qualify to participate with our newsletter. mailto:editor@mykro.com

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OUR CONTRIBUTORS:

Economic Summary (Investments, Stocks & Bonds)- Lynn Baldwin

Weather History- Steve Cannon

Real Estate- Jim Johnston

Public Schools (School District #25)- Chris Williams

Economy & Finance Update- Larry Bell

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This month's POCATELLO LINKS:

If you have a link that deals with Pocatello and you want it to be considered as one of our monthly links… email the editor at mailto:editor@mykro.com and please give us a description of the site.

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THE ECONOMY & FINANCE UPDATE

by Larry R. Bell with Citizens Community Bank

Senior Vice President, Manager Mortgage Lending

Phone: (208)232-5373

Email:

Site Address:

A WILD WILD MARKET

The financial markets have been on a wild ride the last week. The value of stocks has gone up and down every day. Each of the major financial markets appears to watching the other markets to try to develop a sense of direction. The United States markets react to the developments of the Far Eastern markets and the eastern markets react to the western markets. The big question is where will the markets settle.

The drop in the values of the Far Eastern markets has resulted in money being moved from those markets into U. S. Treasury securities. This inflow of money has lowered the yield on treasuries and this has resulted in already low real estate rates going lower. Real estate rates were very low before all the movement in the markets. Now rates are approaching five-year lows. This is very good news for people considering buying or selling a house. This will make the purchase of a house more affordable and allow a buyer to qualify for a larger house. It will also allow a seller to sell their house faster as the lower rates will move more buyers into the housing market.

Some people will look at today’s rates and wonder if they will go lower. Most market watchers doubt if rates will go lower than the present levels. The real estate rates are being held at these low levels by a large influx of money from foreign markets. This will not continue for an extended time. If rates are going to move the chances that they will move upward is much greater than they will move lower.

What does this mean for somebody considering purchasing a house? Now is the time to act. Rates are very favorable and there is a good selection of house to choose from. There is a window of opportunity for people in the housing market that may not be open for a long time.

Today’s rates present an excellent opportunity to refinance. Many people had loan applications to refinance in process several years ago and did not get the loan closed before rates moved up and now is a good time to get those applications going again. We can offer a refinance that allows us to pay the borrowers closing cost. This means they will not have pay a lot of closing cost when they refinance.

Should you have any questions concerning a loan to purchase or refinance please call me at 208 232 5373. Citizens Bank is the third mortgage lender in the Bannock County market and we have only been open four months.

The rates as of today (November 1, 1997) are 7.25 for a thirty year fixed rate and 6.75 for a fifteen-year fixed rate loan. Adjustable rates start as low as 5.625%.

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PUBLIC SCHOOLS

by Chris Williams, Public Information Officer

School District #25

Phone: (208)235-3257

Email: mailto:williach@d25.k12.id.us

Site Address: http://www.d25.k12.id.us

Students pitch in to make technology come alive in district.

If one quietly walks down the hallway at New Horizon High School, the hum and glow emanating from Ruth Griffith’s classroom is unmistakable.

The presence one feels isn’t necessarily the students however. It emits from 16 Pentium computers gracing her classroom.

Griffith’s classroom isn’t the the only place with a glow either. The other three classrooms at New Horizons also emit a certain radiance.

And if it wasn’t for a handful of very talented seniors from Highland and Pocatello high schools, such a glow may not exist at all.

A total of 41 computers were all installed by high school seniors; remarkable considering most homeowners wouldn’t dare run Windows 95 alone for the first time.

"I didn’t know I’d know this much about computers this fast," said 17-year-old Jason Hooker as he put component parts into a 486 machine. "And I don’t want to know this much," he quipped.

Hooker was one of 30 students who took advantage of a two-week summer technical assistants program (TAPS) offered free-of-charge by School District No. 25.

The goal of TAPS was to expose students — who already had some familiarity with computers — to as much software and hardware applications as possible and to delve into the bowels of the computer. That involved word processing, a presentations program, Windows 95, Internet training, and working with both Apple and IBM platforms.

At the conclusion of the training, selected students were given the opportunity to install computers at New Horizon High School.

"When someone told me we were putting together about 40 computers, it was like ‘Cool,’" said 17-year-old Chris Johnson. "To be able to be a part of that is pretty cool."

So prior to the start of school, the group marched into the new home of New Horizon — the National Guard Armory — and began an assault on the boxes of computer parts and pieces.

"What we really have is a salvage operation," said Bill Knickrehm, School District No. 25’s technology trainer. "I had to buy new cases, but the components, by and large, were from machines we upgraded because the curriculum demands exceeded the quality of the machines that existed. So I have components from the rest of the district that this group is now assembling and making into ‘new’ machines. Otherwise, these (New Horizon) kids would not have machines."

A fundamental basis for this year’s New Horizon program was an almost $90,000 technology grant which gave the alternate high school an opportunity to afford the technology program. But Knickrehm is quick to point out that the contribution of the students installing the computers was just as huge.

"The grant would not have afforded this many machines," Knickrehm said. "But by doing this process and getting the students to help, and by salvaging parts, we’ve extended our budget another 30 percent probably. That’s a substantial impact."

Another aspect of the computer setup was that efforts were made to match the computer hardware with the curriculum for which it would be used.

"The analogy is that we’re driving to the grocery store and we don’t need a Ferrari," Knickrehm said. "So for our English lab, we’re trying to use trailing edge (486) technology that matches curriculum needs."

Knickrehm explained he had "any number of kids" who wanted to participate in the summer program, but that he had a limited enrollment and focused on students who already had the skill sets he wanted.

But the future looks brighter for others who also wish to dive into technology with both hands. Knickrehm said the district now offers a one credit repeatable elective class for ninth- to twelfth-graders who will actually be able to work in the schools in which they are educated. In that role, the students will be able to provide software support for students and staff and assist with minor computer repairs in their building.

Come next spring, the district is planning a two-credit technology prep class for seniors. The class prerequisite is that students must have participated in a TAPS class prior to becoming a senior.

And like the Pentiums and 486s at New Horizon, Knickrehm also glows when thinking about TAPS.

"We’ve proven our point to some degree," he said. "We could not have done this. The candid truth is that without students, could we have done this job this year? No. And that’s not a negative. That’s a matter of priorities.

"Our repair staff, our training staff and everyone we can entice into helping with this program is scheduled through 2000," he continued. "And that’s just putting the initial materials in all of our schools."

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REAL ESTATE

by W. James "Jim" Johnston, Associate Broker, GRI, CRS, CRB, ABR

Coldwell Banker Landmark

Phone: (208)232-9010

Email: mailto:jimj@mykro.com

Here are some statistics that you might find interesting about single family homes in the Pocatello area as of October 31, 1997:

Currently there are 374 "active" single family homes on the market.

Within the past two weeks:

Average sales price for single family homes: $98,826

Average days a home is on the market: 106

The percentage of list price to sales price: 95.5%

Total sold volume: $3,063,620

Within the past month:

Average sales price for single family homes: $96,295

Average days a home is on the market: 113

The percentage of list price to sales price: 95.9%

Total sold volume: $5,007,320

Within the past year:

Average sales price for single family homes: $92,032

Average days a home is on the market: 101

The percentage of list price to sales price: 97.5%

Total sold volume: $66,999,315

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WEATHER & CLIMATE SUMMARY

by Steve Cannon, weatherman

KIDK TV 3

Phone: (208)522-5100

Email: mailto:kidktv3@msn.com

November marks the end of the fall season and the beginning of winter, even though the official beginning of winter waits until December 21^st at 1:07 pm. Temperatures take a tumble in November, falling from an average high in October of 62.8 to a November average high temperature of 45.6. Overnight, temperatures drop from an October overnight average of 33.3 to a November average low temperature of 24.8. Precipitation for November stands at an average of .91'', compared to October's average of .81''. A lot of November's precipitation falls in the form of snow… with the heaviest snowfall for November occurring in 1985 (an El Nino year, by the way), when 27.5'' of snow was recorded in Pocatello. Temperature extremes for November include a record high temperature for the month of 71, on November 5^th, 1975. The extreme low temperature for the month fell to -13, on November 17^th, 1955.

Despite the gloom of the early darkness, the night sky contains a great display of planets in November. Every planet in the solar system is visible in November. Pluto requires a powerful telescope and a good chart of the heavens, but the other far-out planets, Uranus and Neptune can be seen with a less powerful telescope, or high powered binoculars. The rest, however, can be seen easily in the night sky. Venus is the brightest, and lowest of the planets, in the southwestern sky; Jupiter is far to the left of Venus, but fairly bright as well… Saturn, less bright, rises in the southeast. For those looking for a show in the sky, on November 3^rd, the Moon, Mars and Venus form a triangle in the southwest about an hour after sunset.

For those looking for a bright spot in the almanac, November 7^th marks the anniversary of the sighting of the Pacific ocean by the Corps of Discovery, led by Merriwether Lewis and William Clark, back in 1805. Ford Motor Company discontinued production of the Edsel on November 19^th, 1959… "peanuts" creator Charles M. Schultz was born on November 26^th, 1922, and the first attempt at democracy in the New World, the Mayflower Compact, was signed by the Pilgrims in Massachusetts Bay, on November 21^st, 1620.

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ECONOMIC SUMMARY- STOCKS & BONDS- INVESTMENTS

By Lynn Baldwin

Manager & Regional Trust Officer

U.S. Bank of Idaho

120 N. Arthur * Pocatello, Idaho 83204

Phone: (208) 234-5544

Email: f_baldwin@usbc.com

SUMMARY

· Federal Reserve Chairman Alan Greenspan’s testimony to Congress on October 8 surprised the financial markets by suggesting that the growth of the economy might be too rapid. Greenspan appeared to be forecasting that the best of the inflation news may be behind us, although we don’t believe he is ready to tighten credit or raise short-term interest rates in the immediate future.

· Consumer confidence, particularly the positive expectations for the future, remain near record levels. Personal income has been growing. The "wealth effect" from the rising stock market has given consumers the optimism to spend this additional income as their net worth increases.

· The comments of the Federal Reserve Chairman, the expectation of rising inflation, and an outflow from the US dollar as tensions in the Persian Gulf have eased, have all caused the current yields on long-term Treasury bonds to rise to the 6.4% level. We expect interest rates to stabilize but to eventually rise toward the 7% level.

· The stock market continues to be volatile. We still have an adequate flow of funds into equities, and the earnings outlook is expected to remain positive.

ECONOMY

Federal Reserve Chairman Alan Greenspan’s testimony to Congress on October 8 surprised the financial markets by suggesting that the growth of the economy might be too rapid. He stated that inflation had not been a problem but that economic growth was to be monitored closely.

According to Greenspan, the growing demand for scarce labor could drive up wages and eventually increase consumer prices. This could lead to a re-emergence of inflation that could threaten the balanced economic expansion. Greenspan appeared to be forecasting that the best of the inflation news may be behind us, although we don’t believe he is ready to tighten credit or raise short-term interest rates in the immediate future.

Most of the economic numbers were somewhat slower in August, but some early indications for September showed strength in manufacturing and housing. Consumer confidence, particularly the positive expectations for the future, remain near record levels. Personal income has been growing.

The "wealth effect" from the rising stock market has given consumers the optimism to spend this additional income as their net worth increases. This could be a concern looking forward. If consumers become conditioned to saving less and expecting the stock market to continue to increase to offset their reduced savings, both consumers and the economy could be negatively impacted. If the stock market should have a sustained period of decline or just underperformance, consumers could end up with an acute savings shortage.

The economy could also suffer due to a lack of available capital in the future if consumers continue to save less.

FIXED INCOME

We have been saying for some time that the combination of on-going economic expansion and a tight labor market could lead to higher wages and eventually to higher consumer prices. However, the inflation numbers as measured by the Consumer Price Index (CPI) remain at low levels. Rising productivity and worldwide competition continue to keep consumer prices in check. In addition, rising worldwide manufacturing capacity has some analysts more concerned about the prospects of deflation than inflation. Going forward, there may be too few dollars chasing too many goods.

Analysts continue to watch the CPI closely, because the most recently reported Producer Price Index (PPI) figure was surprisingly strong. The wholesale price increase, which usually forecasts an increase in costs for consumer goods later on, has helped to push up interest rates. We also could see some upward pressure on the CPI from higher energy prices, and when the next 40 cent increase in the minimum wage goes into effect. However, there has been very little pricing power at the retail level up to this point, as manufacturers and service providers have had to absorb cost increases during most of the 1990s.

Bond were unusually volatile on October 3rd as prices rallied sharply in reaction to the report that new jobs added were fewer than most economist had expected. This drove the interday yield on the 30-year Treasury bond to 6.16%. But, later that day news of rising tensions between Iran and Iraq pushed oil prices higher and renewed inflation fears among traders. In retrospect, the 6.16% yield on the 30-year Treasury bond (which has traded in 1997 at yields as high as 7.17%) may prove to be the low water mark for the year. Since that low yield, Greenspan’s comments and the PPI report have caused a slight crack in the facade of the previous rosy scenario of continued moderate economic growth with no signs of significant inflation.

The comments of the Federal Reserve Chairman, the expectation of rising inflation, and an outflow from the US dollar as tensions in the Persian Gulf have eased, have all caused the current yields on long-term Treasury bonds to rise to the 6.4% level. We expect interest rates to stabilize but to eventually rise toward the 7% level.

Although yield spreads of various sectors relative to US Treasury bonds are still very tight, we have added some imbedded yields to our fixed income funds by purchasing some well structured, high quality (AA and AAA rated) commercial mortgage issues in the four to ten year maturity range. The interest rate spreads on these issues are wider than corporate securities, and mortgage investments provide very stable durations and cash flows.

Although spreads are narrow, they have been narrow for over a year and may stay narrow until the economy starts to weaken enough to cause investors to again become concerned about credit risk and quality.

EQUITIES

The stock market continues to be volatile. The market reacted negatively to Greenspan’s comments, tensions in the Persian Gulf, disturbing trade negotiations with the Japanese, and earnings disappointments, particularly in the technology sector. Overall, smaller capitalized stocks held up better than the larger companies. We still have an adequate flow of funds into equities, and the earnings outlook is expected to remain positive. If earnings reports come in as forecasted rather than providing positive surprises as they have in the past several quarters, then we can’t see much room for further multiple expansion to occur. In addition, at the current high valuation levels, possible rising interest rates cloud the outlook for equities.

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