National industrial production rose a solid 0.4 percent in August

Photo from the Associated Press

U.S. industrial production rose by a healthy 0.4 percent in August, boosted by gains in the production of autos, oil and natural gas.

The Federal Reserve said Friday that industrial production, which includes output at factories, mines and utilities, has climbed 4.9 percent over the past 12 months. Industrial production appears on track for its strongest annual growth since 2010, when it jumped 5.5 percent as the economy began to recover from the Great Recession.

Factory production increased 0.2 percent last month, lifted by a 4 percent rise in the making of vehicles and parts. Automakers assembled vehicles at their strongest pace since April.

Still, factory production has slowed over the past two months as trade conflicts have created uncertainty for the sector. The Trump administration is seeking to revamp the North American Free Trade Agreement with Mexico and Canada, has imposed tariffs on imported steel and aluminum and has slapped tariffs on goods from China.

The recent slowdown in factory output might stem from an 8 percent increase since April in the value of the U.S. dollar against foreign currencies, said Michael Pearce, senior U.S. economist at Capital Economics, an economic research firm. A higher-valued dollar makes U.S. exports less affordable overseas.

“The more modest 0.2 percent gain in manufacturing output provides further evidence that the appreciation of the dollar over the past six months is now beginning to weigh more heavily on output in the factory sector,” Pearce said.

Mining output posted a 0.7 percent monthly gain in August. A sharp increase in the production of oil and natural gas has caused mining output to soar 14.1 percent over the past 12 months. Increased oil and natural gas production can support factories that make pipelines, machinery and other equipment.

Production at utilizes advanced 1.2 percent in August, powered by a surge in electricity usage during the hot month.

Other reports suggest that manufacturing is healthy, despite signs that its job growth is slowing. U.S. factories grew at a faster pace in August as American industry continues to show robust health.

The Institute for Supply Management said its manufacturing index jumped rose to 61.3 in August from 58.1 in July. Anything over 50 points toward expansion and economic growth. The manufacturing index has pointed toward growth for the past two years.

Still, job growth at U.S. factories has decelerated in recent months. Manufacturers added just 36,000 factory workers for the three months that ended in August, according to the Bureau of Labor Statistics. That’s down from three-month gains of as many as 90,000 earlier this year.

From the Associated Press.

For homebuyers, mortgages are safer but tougher to come by

Keri Weishaar lives in a spacious, four-bedroom house near Tampa, Florida, thanks to the easy financing that prevailed during last decade’s housing boom.

“It was basically nothing to get into this house,” said Weishaar, 48, who bought the house in the spring of 2003 after obtaining a no-money down, adjustable-rate mortgage.

Then again, Weishaar and her husband are fortunate to still have their home. That same mortgage eventually morphed into a financial albatross and, for a time, the house in the suburb of Tarpon Springs was on a countdown to foreclosure.

As home values plummeted after the housing bubble burst in 2007, many borrowers with exotic types of loans were stuck, unable to refinance as lenders began to tighten their lending criteria. That set the stage for cascading mortgage defaults that eventually took down Lehman Brothers, Wall Street’s fourth-biggest investment bank at the time, 10 years ago this week. Lehman and other financial institutions were big buyers of securities backed by some of these dicey mortgages.

Today, getting a mortgage is tougher—and less risky. For one thing, no-money down mortgages and their ilk, which enabled many borrowers to initially lower the costs of buying a home but often saddled borrowers with far higher balances or steep monthly payment increases, have vanished.

Banks also remain a bit gun-shy after racking up billions in losses stemming from mortgages gone bad. That means homebuyers, especially those with less-than-stellar credit, face more hurdles qualifying for a mortgage than they did in the housing boom years. But the loans are safer, more transparent and actually take into account whether a borrower can afford to keep up with payments.

“The banks have certainly loosened underwriting criteria for low-risk borrowers; they haven’t loosened underwriting criteria for low-credit score borrowers,” said Aaron Terrazas, senior economist at Zillow. “The types of lending that we saw leading up to that crash in 2008, for the most part, we’re not seeing nowadays.”

When interest rates began to plummet at the start of the 2000s, lenders rushed in to make nontraditional loans that could be sold for hefty profits to Wall Street banks, as well as government-sponsored mortgage buyers Freddie Mac and Fannie Mae.

These riskiest of these loans required little proof that the borrower could afford to pay them back and an initial period of low payments and interest rates. Some let borrowers defer interest payments. Ultimately, these loans overwhelmed many borrowers’ ability to keep up with payments.

That’s what happened with Weishaar’s mortgage. The loan was scheduled to adjust to a higher rate after three years, but she was able to refinance it with another adjustable-rate mortgage. The next time it reset, however, was late 2007, as the housing downturn accelerated. Her husband had lost his job and she was making less money. The couple’s loan jumped from a 6.2 percent interest rate to 11 percent, jacking up the monthly payment from $2,101 to $3,417.

The easy financing, which had enabled the couple to buy their $346,800 house, backfired.

“We bought probably about $120,000 more home than we should have,” Weishaar said.

After missing a few payments, the lender agreed to modify the loan. The interest rate dropped to 6.2 percent and the couple’s missed payments and fees were tacked onto their unpaid principal.

The Weishaars rode out the turbulent economy and housing market in the years after the financial crisis and were able to refinance again in late 2014 into a 3.5 percent, 20-year fixed-rate loan. Now their payment is around $1,500, without taxes and insurance.

“I only have 15 years left on my house now and I’m in a good place,” said Weishaar, now director of sales for an IT consulting company. “The next house I buy will be paid for in cash.”

The private market for mortgage-backed securities, which helped fuel so much easy lending during the housing boom, is now a sliver of what it was back then.

Mortgage-backed securities issued by private firms now represent about 4.5 percent of the market, according to data from Inside Mortgage Finance and the Urban Institute. In 2006, the peak of the housing boom, it was nearly 60 percent.

Government-sponsored enterprises such as Fannie Mae and Freddie Mac now account for about 95.5 percent of the market.

Legislation aimed at averting another financial crisis set out certain guidelines that lenders must follow if they want to make their home loans eligible to be guaranteed by the government. The biggest change is a rule requiring lenders to establish the borrower’s ability to repay the loan.

In the case of a five-year adjustable-rate mortgage, that means ensuring the borrower can afford to pay the loan should it reset to a higher interest rate.

The law, known as Dodd-Frank, also nixed the types of risky loans offered during the housing bubble, among other changes.

“For the average consumer, the biggest thing that has changed is it’s a lot clearer at the closing table what kind of loan you’re getting and what you can expect to pay over the life of the loan, and that’s a very good thing,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition, which advocates for fairness in housing, banking and business.

The guidelines may offer lenders a clear path on how to gauge qualified buyers, but in many cases banks have overlaid stricter qualifying requirements, like higher credit scores.

That’s one reason the average FICO score on home purchase loans has drifted about 21 points higher over the past decade, according to data from the Urban Institute. The trend is more pronounced in metropolitan areas with high home prices. Consider that in San Francisco, the average FICO score for borrowers is around 774. In the Riverside-San Bernardino metropolitan area east of Los Angeles, FICOs average 717.

The average FICO score in America was 700 last year. A score of 740-799 is considered “very good.”

“The pendulum has swung too far in the other direction,” Van Tol said. “When you look at a Fannie Mae or Freddie Mac-backed loan with an average credit score in the high 700s, homeownership at a 50-year low, and a lot of people boxed out of the mortgage market, certainly credit is too tight. Too few people have the opportunity to become homeowners today.”

Buyers are seeing some relief from nonbank lenders such as Quicken Loans, United Wholesale Mortgage and Carrington Mortgage, which are growing players in the residential lending market.

The share of loans issued by nonbank lenders and backed by the government has been climbing since 2013. The median FICO scores for loans issued by nonbank lenders and sold to Fannie Mae and the other government mortgage buyers are lower than those of loans from banks, according to the Urban Institute.

Unlike many homebuyers enticed by the frenzy of easy lending during the housing boom, Christian Ray resisted pushing the limits of what he could afford when he became a homeowner last month.

A logistics manager for a beverage company, Ray bought a two-bedroom, two-and-a-half bath townhome in Tampa for $158,000, even though his lender qualified him for a $240,000 mortgage.

“I’m not going to be married to the house,” said Ray, 23. “I literally would just come home, pay the bills and just stay here and barely feed myself.”

Ray also opted for just about the most unexotic, vanilla home loan around: A 30-year, fixed-rate mortgage at 5 percent interest. And he put up a 10 percent down payment.

“I’m not going to take 30 years to pay it,” Ray said.

From the Associated Press.

Puerto Rico marks 1 year since Maria

Photo by the Associated Press

Clapping and raising their hands to the sky, hundreds of people clad in white gathered at an 18th-century fort in the Puerto Rican capital on Thursday to remember the thousands who died in the aftermath of Hurricane Maria as the U.S. territory struggles to recover one year after the Category 4 storm hit.

Religious leaders and government officials recalled how Puerto Rico was ravaged by the storm that killed an estimated 2,975 people and caused more than an estimated $100 billion in damage.

Tens of thousands remain without adequate shelter or reliable electrical power, a sad fact that Gov. Ricardo Rossello noted on Thursday.

“After that catastrophic experience, we acknowledge how complex and difficult it is to prepare for a hurricane of that magnitude and fury,” Rossello said. “The best tribute we can give these people, these brothers that we’ve lost, is to build a better Puerto Rico for their sons, their grandsons and their families.”

While the U.S. government has invested billions of dollars to help clean up and repair the U.S. territory, much work remains. Major power outages are still being reported, tens of thousands of insurance claims are still pending and nearly 60,000 homes still have temporary roofs unable to withstand a Category 1 hurricane.

“I think it’s inexplicable,” Kumi Naidoo, Amnesty International’s secretary general, told the Associated Press during a visit to the island Thursday. “There’s no justifiable reason I can see for this gross level of negligence.”

Across the island, people marked the one-year anniversary with gatherings large and small, solemn and anger-tinged—and at times, even hopeful.

In the coastal fishing and farming village of Yabucoa, the strains of one of Puerto Ric’’s most beloved songs filled the air at 6:15 a.m., the exact moment the storm made landfall there one year ago.

Tarps still covered many homes that have yet to be rebuilt in the town of 37,000, even as the nostalgic strains of “Amanecer Borincano”—”Puerto Rican Daw” — resonated at the spot where Maria first unleashed its fury.

“I am the light of the morning that illuminates new paths,” a choir sang as dozens of local officials and residents gathered there. “I am the son of palm trees, of fields and rivers.”

In San Juan, the crowd of worshipers gathered at the 230-year-old San Cristobal fort sang and prayed along with pastors and musicians on stage, with music echoing through the fort’s heavy walls as the sun slowly sank into the sea behind them.

Pastor Elder Gonzalez said he and other volunteers who flew to Puerto Rico after the hurricane to help were shocked at what he saw from up high.

“To see the island of enchantment was a deep and painful experience,” he said. “No one on the plane said a word.”

Government officials argue that many changes have been made to better prepare Puerto Rico for future storms, but they acknowledge that significant obstacles remain.

Jose Ortiz, director of Puerto Rico’s Electric Power Authority, told reporters that 20 percent of repairs made to the power grid need to be redone. He said crews didn’t have access to the best materials at the time or were forced to rely on temporary fixes, such as using trees as makeshift power polls after Maria destroyed up to 75 percent of transmission lines.

In addition, municipal officials have complained that reconstruction efforts are too slow. Ariel Soto, assistant to the mayor of the mountain town of Morovis, said that 220 families there remain without a proper roof.

“W’’re still waiting for help,” he said. “This hit us hard.”

In San Juan, among those still living under a blue tarp during the peak of hurricane season was Sixta Gladys Pena, a 72-year-old community leader.

“You worry, because you think it’s going to fly off like it did before,” she said. “We’ve lost an entire year and nothing has been resolved. You feel powerless.”

On Thursday, Ben Carson, secretary of the U.S. Department of Housing and Urban Development, announced in San Juan that $1.5 billion was being released to Puerto Rico as part of the overall $20 billion pledged for rebuilding, the largest in the agency’s history.

Officials said the priority is to help people still living under tarps, as well as those in low- and middle-income housing. The money will be used to repair and rebuild homes, relocate people and help them obtain property titles if needed.

“The path forward is challenging and will be measured not in months, but really in years,” Carson said.

In recent weeks, Puerto Ricans have become increasingly angry and frustrated as President Donald Trump touted what he said was a “fantastic” response to Hurricane Maria, calling it an “unsung success” as he denied the official death toll without presenting any evidence.

On Thursday, Trump issued a one-sentence statement on the one-year anniversary of Maria. “We stand with Puerto Rico, and we are helping them to rebuild stronger and better than ever before,” it said.

Nivia Rodriguez, a 60-year-old retiree whose uncle died a week after Maria, is among those disgruntled by Trump’s comments, as well as by videos of rescue crews responding to Hurricane Florence in North Carolina.

“They saved five dogs that were drowning,” she said of the rescue effort after Florence hit, adding that she feels Puerto Rico didn’t get the same treatment. “That hits you.”

Like many, Rodriguez hoped that after Thursday, she would no longer be bombarded by photos and videos that make her feel like she’s reliving Hurricane Maria.

“It’s too much,” she said.

But others felt that Maria’s tragic legacy still needs to be acknowledged, even long after the anniversary has passed. Among them was a group of artists unveiling an exhibition called simply, “6:15 A.M.”

Artist Omar Banuchi, who organized the exhibit, said he was reluctant at first, in part because he didn’t know how to approach the subject. “It’s something that affected all of us and keeps affecting us,” he said.

He said the exhibition walks a fine line, with some paintings showing beautiful landscapes alongside trailers set up by Puerto Rico’s forensics institute as part of the effort to try to identify the bodies of those who perished in the storm. There also will be live music that will incorporate sounds of the hurricane hitting the island.

“The point is for people to have a good time,” Banuchi said. “But there will be certain uncomfortable moments,” he continued. “Maria is still a difficult topic.”

From the Associated Press.

Kavanaugh’s accuser may testify ‘under right terms’

Photo by the Associated Press

Kavanaugh’s accuser, Christine Blasey Ford, who has alleged sexual assault, may testify against Supreme Court nominee Brett Kavanaugh, her attorney said Thursday, but not without conditions set.

The preference would be for Ford to testify next Thursday, and she doesn’t want Kavanaugh in the same room, her attorney told Judiciary Committee staff in a 30-minute call that also touched on security concerns and other issues, according to a Senate aide who wasn’t authorized to discuss the matter and spoke on condition of anonymity.

Ford is willing to tell her story to the Judiciary Committee, whose senators will vote on Kavanaugh’s confirmation—but only if agreement can be reached on “terms that are fair and which ensure her safety,” the attorney said in an email earlier Thursday. In the call, she said Ford needs time to secure her family, prepare her testimony and travel to Washington. No decisions were reached, the aide said.

The discussion revived the possibility that the panel would hold an electrifying campaign-season hearing at which both Ford and President Donald Trump’s Supreme Court nominee could give their versions of what did or didn’t happen at a party in the 1980s. Kavanaugh, now a judge on the powerful U.S. Court of Appeals for the District of Columbia Circuit, has repeatedly denied her allegation.

Two of Kavanaugh’s former girlfriends also denied the allegation. They said the allegation doesn’t match up with his character.

Judiciary Chairman Chuck Grassley, R-Iowa, has scheduled a hearing for Monday morning, and he and Senate Majority Leader Mitch McConnell, R-Ky., have indicated it would be Ford’s only chance to make her case. Republicans are anxious to move ahead to a vote by the committee, where they hold an 11-10 majority, and then by the full Senate, which they control, 51-49.

Taylor Foy, spokesman for Republicans on the panel, said after the call that Grassley “will consult with his colleagues on the committee. He remains committed to providing a fair forum for both Dr. Ford and Judge Kavanaugh.”

How Apple’s Safari browser will try to thwart data tracking

Photo by the Associated Press

New privacy features in Apple’s Safari browser seek to make it tougher for companies such as Facebook to track you.

Companies have long used cookies to remember your past visits. This can be helpful for saving sign-in details and preferences. But now they’re also being used to profile you in order to fine-tune advertising to your tastes and interests.

Cookie use goes beyond visiting a particular website. As other sites embed Facebook “ike” and “share” buttons, for instance, Facebook’s servers are being pinged and can access your stored cookies. That means Facebook now knows you frequent celebrity gossip sites or read news with a certain political bent. Ads can be tailored to that.

Here’s how Safari is getting tougher in dealing with that.

NO MORE GRACE PERIOD

Safari used to wait 24 hours from your last visit to a service before blocking that service’s cookies on third-party sites. That effectively exempted Facebook, Google and other services that people visited daily. Now, Safari will either block the cookie automatically or prompt you for permission.

Apple says Safari will still be able to remember sign-in details and other preferences, though some websites have had to adjust their coding.

THWARTING FINGERPRINTING

Browsers typically reveal seemingly innocuous information about your device, such as the operating system used and fonts installed. Websites use this to make minor adjustments in formatting so that pages display properly.

Browsers have historically made a lot of information available, largely because it seemed harmless. Now it’s clear that all this data, taken together, can be used to uniquely identify you. Safari will now hide many of those specifics so that you will look no different from the rest.

It’s like a system that digitally blurs someone’s image, said Lance Cottrell, creator of the privacy service Anonymizer. “You can tell it’s a person and not a dog, but you can’t recognize a person’s face,” he said.

For instance, Safari will reveal only the fonts that ship with the machine, not any custom fonts installed.

MASKING WEB ADDRESSES

When visiting a website, the browser usually sends the web address for the page you were just on. This address can be quite detailed and reveal the specific product you were exploring at an e-commerce site, for instance.

Now, Safari will just pass on the main domain name for that site. So it would be just “Amazon.com” rather than the specific product page at Amazon.

CLOSING A LOOPHOLE

Some ad companies have sought to bypass restrictions on third-party cookies—that is, identifiers left by advertisers—by using a trick that routed them through a series of websites. That could make a third-party cookie look like it belonged to a site you’re visiting. Safari will now try to catch that.

The changes come Tuesday as part of the iOS 12 update for iPhones and iPads and a week later in the Mojave update for Mac computers.

Many of the safeguards will be limited to cookies that Apple deems to be trackers. That’s being done to reduce the likelihood of inadvertently blocking legitimate third-party cookies.

From the Associated Press.

New York City to add ‘X’ designation to birth certificates soon

In a move by the leftists and liberals—saying “I can identify as whatever I want because this is a free country”—and their over-inclusive supporters, men and women born in New York City who don’t identify as a male or female will soon have the option of changing their birth certificates to “X”.

The legislation was passed Wednesday by the New York City Council.

The bill adopted by a 41-6 vote will also allow parents to choose the “X” designation for their newborns, and it will permit adults to change their already-established gender on their birth certificates without an affidavit from a doctor or mental health professional.

“Today is a historic day for New York in its role as a worldwide champion for inclusivity and equality,” said City Council Speaker Corey Johnson, a Democrat. “New Yorkers will no longer need a doctor’s note to change their gender on their birth certificates, and will no longer be treated as if their identity was a medical issue,” he continued.

Johnson further said it’s important “to show our constituents that we see them, we have their backs and we respect them for who they are,” though the issue is one should be evaluated for identifying as something they’re not instead of handing them a participation trophy and “hugs and kisses”.

Some states including California, Oregon and Montana allow individuals to change the gender on their birth certificates without a note from a doctor, but it is unclear how many jurisdictions allow parents to select a “non-binary option” for their newborns. The option could be used by parents of intersex children (an actual, acceptable instance) or by parents who want their child to be able to choose a gender at a later date, other than what was already established from the beginning.

Democrat Mayor Bill de Blasio is expected to sign the bill, which will go into effect on January 1, 2019.

Officials work to pinpoint cause of ‘Armageddon’-like blasts

Photo by the Associated Press

Investigators worked Friday to pinpoint the cause of a series of dramatic natural gas explosions that killed a teenager who had just gotten his driver’s license and was sitting in his car, injured at least 25 others and left dozens of homes in smoldering ruins.

Authorities said an estimated 8,000 people were displaced at the height of Thursday’s post-explosion chaos in three towns north of Boston that were rocked by the disaster. Most were still waiting, shaken and exhausted, to be allowed to return to their homes.

The National Transportation Safety Board sent a team to help investigate, saying pipelines are within its jurisdiction.

The rapid-fire series of gas explosions that one official described as “Armageddon” ignited fires in 60 to 80 homes in Lawrence, Andover and North Andover, forcing entire neighborhoods to evacuate as crews scrambled to fight the flames and shut off the gas and electricity.

Gas and electricity remained shut off Friday in most of the area, and entire neighborhoods were eerily deserted.

Authorities said Leonel Rondon, 18, of Lawrence, died after a chimney toppled by an exploding house crashed into his car. He was rushed to a Boston hospital and pronounced dead there Thursday evening.

Rondon, a musician who went by the name DJ Blaze, had just gotten his driver’s license, grieving friends and relatives told The Boston Globe. “It’s crazy how this happened,” said a friend, Cassandra Carrion.

The state Registry of Motor Vehicles said Rondon had been issued his driver’s license earlier Thursday.

Massachusetts State Police urged all residents with homes serviced by Columbia Gas in the three communities to evacuate, snarling traffic and causing widespread confusion as residents and local officials struggled to understand what was happening. Some 400 people spent the night in shelters, and school was canceled Friday as families waited to return to their homes.

Gov. Charlie Baker said state and local authorities were investigating but that it could take days or weeks before they turn up answers, acknowledging the “massive inconvenience” for those displaced by the explosions. He said hundreds of gas technicians were going house-to-house to ensure each was safe.

Columbia Gas was sued in 2014 after a strip club was destroyed in a natural gas explosion two years earlier.

The November 2012 explosion in Springfield, Massachusetts, was caused when a Columbia employee accidentally punctured a gas line while probing for a leak. The blast leveled the Scores Gentleman’s Club, injuring about 20 people and damaging dozens of other buildings. The club owner and the gas company eventually settled the case.

John Fluegge said he came home Thursday to find a note on the door of his apartment building saying everyone had to leave. A police officer directed him to North Andover’s high school, where he slept on a cot.

Fuegge, 58, called the situation “confusing more than frightening.”

“You don’t know if your house is going to go up or your apartment,” he said. “It happened all of a sudden, no one knew how it started and everything.” His apartment was not damaged but he has still not been allowed to return because there is no power.

The three communities house more than 146,000 residents about 26 miles (40 kilometers) north of Boston, near the New Hampshire border. Lawrence, the largest of them, is a majority Latino city with a population of about 80,000.

Lawrence Mayor Dan Rivera reassured immigrants who might not be living in his city legally that they had nothing to fear.

“Do not be afraid. Stay in the light. We will support you and your family,” Rivera said at a news conference Friday, speaking in English and Spanish. “Lawrence is one community.”

Authorities said all of the fires had been extinguished overnight and the situation was stabilizing.

Hours earlier, Andover Fire Chief Michael Mansfield described a starkly different situation.

“It looked like Armageddon, it really did,” he told reporters. “There were billows of smoke coming from Lawrence behind me. I could see pillars of smoke in front of me from the town of Andover.”

The Massachusetts Emergency Management Agency blamed the fires on gas lines that had become over-pressurized but said investigators were still examining what happened.

From the Associated Press.