U.S. Consumer Confidence Soars to 16 Year High

According to a report from New York- based Conference Board, consumer confidence surged to a 16 year high. This means Americans are increasingly more confident about the current and future prospects of the economy. This is the highest level since December 2000.

Data from the Conference Board showed the Consumer Confidence Index reaching 125.6 this March while consensus economists estimates was only 114.

Lynn Franco, director of economic indicators at the Conference Board said, “Consumers’ assessment of current business and labor market conditions improved considerably. Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects. Thus, consumers feel current economic conditions have improved over the recent period, and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months.”

The consumer confidence survey found that 32.2% of respondents said that business conditions are good. This is an increase from last month’s 28.2% who said that business conditions are good. Those that said business conditions were bad dropped to 12.9% from the previous month of 13.4%.

Consumer confidence is highly monitored because it can give some indication of where household spending is going. Household spending makes up 70% of America’s economic activity.

In February, there were 235,000 jobs created. Current gasoline prices is at $2.29 per gallon which remains generally unchanged since February. The survey also revealed that there were 14.1% respondents were thinking of purchasing a car over the next six months. Last month only 13.7% of the respondents were thinking of doing so.

As for purchasing a major appliance, 52.9% of the respondents were planning to do so compared to 49.9% from last month. 24.8% of the respondents also were optimistic that more jobs will be created in the latter part of the year.

There were also more optimism in the households that believed their incomes would increase in the next six months. 21.5% of the households surveyed were optimistic of income increases.

The labor differential measures the share of those who believe that jobs are abundant minus the share that believes that they are scarce. The labor differential surged to 12.2 points. It had 7 points last month.

However, the respondents seeking to purchase a house dropped to 6% from 6.5%. Mortgage interest rates has been rising for the previous months and this is a major deterrent for housing loan applications.

Ian Shepherdson, an economist at Pantheon Macroeconomics, said, “This astonishing result wasn’t foreshadowed by other consumer surveys, so our first thought is that it can’t last. But if we’re wrong, and sentiment really is as strong as these numbers suggest, then you should expect a sharp fall in the unemployment rate over the next few months, as signalled by the 8.7 point jump in the current conditions index, and a surge in consumers’ spending, as signaled by the 9.9 point leap in the expectations component.”

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Ford Ready to Invest $1.2 Billion for 3 Michigan Plants

Ford Motor Co. has announced that it will open up three Michigan plants that will produce the all-new Ford Ranger and Bronco. The total investment in these three facilities will be $1.2 billion.

$850 million will go to the Wayne Michigan Assembly plant that makes its trucks and SUVs while $150 million will go to its Romeo Engine Plant to boost its capacity. The Flat Rock Assembly plant will have a new data center worth $200 million. Its Flat Rock facility will produce electrified and autonomous vehicles with the help of a $700 million infusion.

The data center at the Rock Assembly plant will collect data on connected and autonomous cars. This will allow Ford to capitalize on the data by creating more applications and features to boost their revenue streams.

The investment at the Romeo plant will boost capacity for engine making such as for Ford Super Duty, and Ford Shelby GT350 Mustang.

A Ford spokeswoman said that the Wayne Michigan Assembly plant investment would secure 3,600 jobs. The Wayne Michigan Plant builds the Ford Focus. The reason for the massive $850 million investment is that U.S. consumers are purchasing bigger vehicles rather than small vehicles.

Ford figures show that trucks and SUVs comprise around 60% of Ford’s sales in 2016. Since big vehicles have high margins, Ford can produce them in the U.S. and still make a profit. Small cars, on the other hand, have lesser margins, and so Ford builds them in countries where labor is cheaper so they can still make a profit.

Ford is optimistic about its future and encouraged by Trump’s economic agenda. Joe Hinrichs, Ford President of the Americas, said, “It is a mixed bag here for what’s new. We think we are well-positioned…we are very excited about the future.”

According to Steve Arwood, CEO of Michigan Economic Development Corporation, the investments that Ford is making are huge. Arwood said, “That probably nets out to be the biggest day ever in Michigan. That is all good news. There’s not a discouraging word.”

Ford executives expect that the Trump administration will favor policies that benefit the automobile industry. Trump has recently announced that he will ask that the fuel efficiency standards be reviewed. Trump told auto workers earlier this month that his administration will not allow regulations to become a threat to auto jobs and factories.

Hinrichs said, “It reinforces how important manufacturing jobs are in America and as the leading producer of vehicles in the U.S., we think it is very consistent with the pro-growth initiatives that hopefully the White House and Congress will be able to bring forward to the economy.”

United Auto Workers (UAW) praised Ford Motor Co’s. investment plan. UAW said, “Thanks to collective bargaining, the hard-working men and women at each of these locations will now reap the full fruits of their labor. We look forward to celebrating more product investment and job growth at each of our UAW-represented facilities in the months and years to come.”

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Elon Musk Starts Yet Another Company, Neuralink

Billionaire Elon Musk is starting a new company called Neuralink. This is a medical research company that will allow human brains and computers to interface.

This company will be completely funded by Musk or by the venture capital firm of Peter Thiel, the Founders Fund. Neuralink will be categorized as a medical research company.

One of the co-founders of Musk at Neuralink will be Max Hodak. Hodak was a research assistant at Duke University Medical Center. Hodak researched and made brain-machine interfaces for monkeys. Hodak also co-started a company called Transcriptic.

Sources show that Neuralink has already three employees. One of which is Vanessa Tolosa who is an expert in flexible electrodes. Another is Philip Sabes, a professor at the University of California in San Francisco who is an expert on brain controls movement. Finally, there is Timothy Gardner, a professor at Boston University who is well known for studying how birds sing through the implantation of tiny electrodes in their brains.

Musk is fascinated with the idea of a neural lace that allows direct human and computer interfacing. This will lessen the risk of humans being unable to evolve rapidly along with artificial intelligence.

Musk said, “I don’t love the idea of being a house cat. I think one of the solutions that seems maybe the best is to add an Al layer…A third, a digital layer above the cortex that could work well and symbiotically with you.” Musk describes it this way, “You have your limbic system, the cortex, and then a digital layer, sort of a third layer above the cortex that could work well and symbiotically with you.”

One of the practical applications of this technology that Musk will be developing is to help treat people with spinal cord injuries to allow them to control artificial limbs. Another possible use of the technology is for treatment of neurodegenerative diseases like Parkinson’s.

Charles Lieber, a Harvard researcher, said, “We’re trying to blur the distinction between electronic circuits and neural circuits. We have to walk before we can run, but we think we can really revolutionize our ability to interface with the brain.”

One of the first objectives of the company is to create a working prototype that will prove the viability and safety of the technology. The prototype is most likely to be brain implants which can help in the treatment of epilepsy and even depression.

Musk admits that the technology for a partial-brain interface is just four for five years away. However, the odds of plugging an AI directly into our brains remains a long shot.

Musk said that this technology is necessary for humans to remain relevant. Musk said, “Some high bandwidth interface to the brain will be something that helps achieve a symbiosis between human and machine intelligence and maybe solves the control problem and usefulness problem.”

Elon musk is one of the principal sponsors of OpenAl project, a nonprofit. Its mission is to make artificial intelligence that is safe and to make sure that all research related to artificial research are widely distributed.

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China Southern Airlines Seeks Tie-up with American Airlines

China Southern Airlines is seeking a financial tie-up with American Airlines, with American Airlines buying a stake in the state-owned China Southern Airlines. If it pushes through, American Airlines will become the second U.S. carrier to have a stake in a Chinese airline. Regarding passenger numbers, China Southern Airlines is the largest in China.

American Airlines is looking to invest around $200 million to purchase shares of China Southern Airlines. If the deal materializes, the stock of American Airlines will get a boost from its current struggles like the Winter Storm Stella. In the last three months, its stock has declined 12.44% while the industry has gained 1.65% over the three months.

In 2016, Delta Air Lines Inc. spent $450 million to own 3.55% of China Eastern Airlines Corp. Delta also has an observer seat in China Eastern board. It cooperated with China Eastern on areas such as frequent flyer plans and improvement of lounges.

The tie-up would involve share issue and other programs of cooperation. The benefits of this partnership would give consumers more flights overseas and allow them to pool resources and share flights particularly in second-tier cities in China and the United States.

Geoffrey Cheng, head of transportation and industrial research at Bocom International in Hong Kong, said, “The share purchase is cosmetic in a way because the whole thing is about code sharing and putting passengers from China onto the U.S. aircraft.”

This tie-up is being sought by China Southern Airlines as the Beijing wants to improve the efficiency and competitiveness of its state-owned assets by pursuing mixed-ownership reforms and the introduction of private capital in its assets.

According to Corrine Png, a transport analyst in Singapore, Chinese airlines make up for more than 60% of the flight routes between America and China. American Airlines has a route share of 8% while United Airlines has a route share of about 20% due to its partnership with Air China.

Traffic from China to U.S. has more than doubled between 2010 and 2015. As such, it would make sense for American Airlines to invest in China Southern Airlines as the Chinese airlines are in a good position to take advantage of this trend. Cheng said, “The point is there are more Chinese travelers heading to the U.S. than in the U.S. and heading to China.”

This deal would help American Airlines compete better with Delta. China Southern flies to New York, Boston, and Chicago from Guangzhou. China Southern also does code-sharing with Virgin America and Delta. As for China Southern, partnering with American Airlines will help it catch up with its local rivals like Air China and China Eastern, both of which have bigger earnings from overseas routes.

Numbers by the U.S. government show that Chinese visitor arrivals to the United States are forecasted to more than double by 2021. By then, China would be the third largest overseas market for America.

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Many People in the US Unclear about Their Claims for Social Security

Social Security Benefits

Many people do not receive the maximum social security benefit they are entitled to when they retire. The confusion begins with the basic rules established for Social Security. Just under 40% of the populace knows that 62 is the earliest age that benefits can be claimed. This finding came from a survey conducted among 45 to 64-year-olds by the AARP and Financial Planning Association.

Both organizations surveyed 1,215 participants or future beneficiaries of social security. The respondents were asked how much income they expected and how well they understood the Social Security program. The research also included a survey that included 1,279 certified financial planners. The CFPs were asked if their clients had a reasonable level of knowledge about Social Security.

Most of the participants, or close to 90%, know that waiting until their full retirement age (66 or 67 years old) gets them a larger monthly check. However, only 5% know just how much more money they will receive by waiting until they are 66 or 67 years old. People tended to underestimate, rather than overestimate, the increase they received by waiting. Also, just one-third of the pre-retirees knew that they can max out their social security benefits by waiting to claim the money until after 70.

Most of the pre-retirees, or 84%, know that if they claim benefits before their full retirement age, the earnings they make will lessen their benefits. The amount retirees can earn before they see their benefits reduced is $15,720 for the 2015 tax year.

Also, the report adds that if you are married to your spouse for 10+ years and are unmarried when she or he dies, you can make a claim on the work record of your ex-spouse, assuming their benefits are higher than your own benefit amount.

About half of the respondents, who have been married, know they can collect social security benefits, based on the work record of their spouse, even if their spouse is still alive. Many, however, did not know that the level of their widow benefits is connected to the age of the spouse, when he or she began collecting benefits.

According to the report, referring to sources, such as the books, Social Security or Dummies or Get What’s Yours, by Laurence Kotlikoff, Philip Moeller, and Paul Solman, can de-mystify some of the confusion in the collection process.

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Delaware Legislators Tackling Payday Loan Companies

Helene Keeley

You can add Delaware to the list of states looking to take aim at the payday loan industry.

According to the Delaware State News newspaper, several lawmakers will introduce new legislation in January that would restrict or curb payday loan businesses operating within the state of Delaware.

The proposed legislation was put forward on the very last day of the state session this year. This means that not only will public officials be required to debate the legislation next year, but it will also serve as a warning shot to the unscrupulous payday loan establishments.

One of the lawmakers is Wilmington Democratic State Representative Helene Keeley, who states that there needs to be a cap on interest rates. She pegs the number at 100 percent for short-term, small-dollar loans.

Today, critics say, payday loans in Delaware come with exuberant rates of interest that hurt low-income consumers who are trying to get by. The interest rates and other charges can cause some borrowers to roll over their loans because they can’t afford the previous amount.

Kelley attempted to reassure the industry and its proponents that her legislation isn’t trying to take them down or prohibit them from operating across The Diamond State. Instead, she says, she wants in place a number of consumer protection laws that ensure people do not enter a state of perpetual debt.

Sponsors of the bill are hoping that they can come to a consensus over the next six months that will create an environment of fairness and a “more reasonable” marketplace for impoverished families that sometimes rely on payday loans.

Proponents of the payday loan industry say that it’s the bad lenders that ruin it for the rest of the industry that tries to be honest. Pike Creek Republican State Representative Michael Ramone believes that you can’t paint everyone with the same brush, but noted that laws may be needed.

“There is also a point at which people are absolutely desperate and they’ll do whatever they can obtain money, and unfortunately some of these predatory lenders are taking advantage of that and making it a devastating environment for these people,” Ramone said.

“That’s not the way the system is supposed to work. There’s a lot of room for great online payday loans for bad credit to work within the parameters of reasonableness and help people and then there’s the ones trying to take advantage of people.”

This isn’t the first time that the state has tried to rein in the payday loan industry. In 2012, the state passed a law that would limit the number of payday loans a borrower can take out. The legislation at the time limited it to five over the course of one year.

The Consumer Financial Protection Bureau (CFPB) has been trying to incorporate this into its proposed federal regulatory framework. Other states have also emulated the same kind of thing. Eighteen states have outright prohibited payday loans altogether.

Payday lending costs surpassed $2.6 billion in Delaware, according to Responsible Lending. Nationwide, the payday loan industry is valued at $45 billion as millions of Americans take out a payday loan every year.

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Photoelectric Alarms Are Safer and Offer a Lower Risk of Liability or Injury

alarm

Certain hidden hazards in the home can result in fires or other hazards if they are not checked or found. For example, the wrong smoke detector can potentially be deadly. The report states that two kinds of smoke detectors are available – ionization and photoelectric alarms. Ionization detectors are the most commonplace. The National Fire Protection Association (NFPA) asserts that approximately 90% or 100 million of the alarms used are ionization detectors.

However, research shows that ionization detectors, which employ a small amount of radioactive material to trip the alarm when it detects burning particles, are less able to detect smoldering or slow-burning fires, or those fires that are triggered by such common ignition sources as frayed wires, cigarettes, or fireplace sparks.

According to Joseph Fleming, who works as a deputy fire chief for the Boston Fire Department, approximately 30,000 people in the US, have lost their lives by relying on ionization detectors. An ionization alarm may sometimes take 50 minutes longer to become activated when compared to a photoelectric smoke alarm.

Ionization alarms often are placed in homes because they are more affordable, or about half the price of a photoelectric smoke alarm. Also, the battery on an ionization alarm lasts longer. In addition, fire damage and injury from fast flaming fires is greater while smoldering fires have a lower number of injuries. However, the death rate is higher from smoldering fires because of carbon monoxide poisoning.

Ionization detectors also have a high false alarm rate, causing them to respond to such daily activities as showering or cooking. Photoelectric alarms, which employ a beam of light to detect burning particles, have a lower number of false alarms.

Firefighting experts suggest investing in photoelectric detectors in hallways and bedrooms and placing the ionization alarms in the kitchen, if they are placed at all. In 2008, the International Association of Fire Firefighters recommended the placement of photoelectric alarms only. Several states, such as Maine, Vermont and Massachusetts, also require photoelectric alarms in new home construction.

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