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    Economists worry cheap oil is hurting the economy

    Since when are high prices a good thing?

    You, as a consumer, no doubt think cheap oil is great. It has reduced the price of gasoline to levels not seen in nearly a decade.

    But perhaps nothing so perfectly illustrates the gulf between the interests of Wall Street and Main Street as falling oil prices, because Wall Street definitely doesn't see it the way you do.

    In recent weeks, stock prices have moved in tandem with oil prices. Oil prices plunge, so does the stock market. Oil prices rally and stocks surge.

    Bloomberg News does an excellent job of explaining why Wall Street has such a different view of oil prices, and it boils down to this: too many institutions made big bets that oil prices would keep going higher. You could say they bet the bank on it.

    Shale producers had to borrow a lot of money to fund their operations. That debt paid high interest rates and was eagerly purchased on Wall Street. Sound familiar?

    Remember the housing bust?

    A similar thing happened during the early 2000s housing boom, when subprime mortgages in particular were prized for their high interest rates. At the time, very few people thought home prices could actually go down. But they did.

    In 2008 bad mortgage bets nearly sank the economy. Today's nervousness is due in part to the fear that bad oil bets pose their own systemic risk. So when oil prices get so low that U.S. producers can't be profitable, the people who have bought their debt get very nervous.

    Making matters worse, in Wall Street's eyes, consumers are saving lots of money at the gas pump but aren't spending it. Instead, they're saving it for heaven's sake, or paying off their credit cards. So the complaint is that consumers are benefiting from low oil prices but aren't “sharing the wealth,” so to speak.

    Economists rightly point out that this can be a problem. Since the Great Recession, the one area where the U.S. economy has enjoyed strong growth has been in the oil industry. Now that industry appears to be going down for the count, and with it the huge contributions it has made to the nation's economy.

    It was hoped that the extra money flowing to consumers through lower gas prices would get spent elsewhere, providing a lift to the economy. That isn't happening, so the net effect is the slowdown in the oil industry has produced a drag on the overall economy.

    Weak growth

    But instead of blaming consumers for socking away the money they are saving at the gas pump, perhaps economists might better explain why the U.S. economy, absent the recent contribution from the oil industry, is so weak. Why haven't other sectors recovered? And why is it up to consumers to take up the slack?

    Maybe one of the reasons Wall Street has been so volatile this month is the realization that there doesn't seem to be much there to backstop the economy when the oil industry isn't providing the economic growth it has over the last few years.

    Was it always this way? Definitely not. But in the first quarters of the last two years, the U.S. economy has contracted. Will it be the same this year?

    If so, there may be a lot of blame to go around. But it may not be fair to blame American consumers who have finally caught a break in the form of lower gas prices.

    You, as a consumer, no doubt think cheap oil is great. It has reduced the price of gasoline to levels not seen in nearly a decade.But perhaps nothing s...
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    Stanford study finds T-Mobile's 'Binge On' promotion is likely illegal

    The program sounds good but violates key net neutrality principles, report says

    T-Mobile's "Binge On" promotion has perhaps been popular with consumers but, as we reported in November, critics are increasingly expressing doubts about its legality, 

    Now a Stanford Law professor who is a recognized net neutrality expert has weighed in with her opinion. Barbara van Schewick says Binge On is "aptly named – it feels good in the short-term but harms consumers in the long run.”

    Schewick's report, “T-Mobile’s Binge On Violates Key Net Neutrality Principles," offers the first comprehensive analysis of the "zero-rating" aspects of Binge On. Zero-rating, which simply means that selected content doesn't count against a user's monthly data cap, has come under scrutiny at the FCC. Policymakers are debating whether this and other "zero-rating" programs violate the Open Internet rules.

    “The program limits user choice, distorts competition, stifles innovation, and harms free speech on the Internet. If more ISPs offer similar programs, these harms will only grow worse,” Schewick's report finds.

    The report could be a game changer. It finds that Binge On violates key net neutrality principles and most likely violates the FCC’s general conduct rule and the transparency rule. In a moment when the FCC is evaluating the question of zero-rating on a case-by-case basis, these findings could move the agency to open a federal investigation.

    Picking winners

    The basic problem, as Schewick sees it, is that T-Mobile is picking winners and losers online by making Binge On video more attractive than all other video. Research shows that consumers, not surprisingly, strongly prefer zero-rated content over content that counts against their cap.

    In one survey cited by Schewick, 74% of users said that they would be more likely to watch videos offered by a new provider if the content did not count against their monthly bandwidth caps. By making Binge On video more attractive than other video, T-Mobile gives the video providers it adds to Binge On a competitive advantage.

    And although consumers generally seem to feel that T-Mobile is doing them a favor, Schewick says that, in fact, T-Mobile is constraining consumer choice. 

    Net neutrality protects peoples’ ability to use the applications of their choice, but through Binge On, T-Mobile makes additional bandwidth available to consumers without allowing them to choose how to use that bandwidth. Instead, T-Mobile reserves it only for Binge On video.

    For example, customers on T-Mobile’s lowest qualifying plan can watch “unlimited” video from Netflix and other Binge On providers, but not more than 4 1/2 hours of video per month from other providers like Amazon Prime, a Netflix competitor.

    Schewick also cites T-Mobile's requirement that Binge On content providers spend "substantial" sums of money to make their feeds technically compatible with T-Mobile's system and says that discriminates against small providers and start-ups. 

    "Binge On changes innovation on the Internet as we know it. Until now, innovators could reach people all over the world at low costs. But Binge On requires video providers to work with T-Mobile to join on the program and, in many cases, to change their service to meet the ISP’s technical requirements," she said. "As more and more ISPs develop similar programs, innovators will need to work with ISPs around the world to join their zero-rating programs – all just for an equal chance to compete. Small players, non-commercial speakers, and start-ups without the resources to work with numerous ISPs will be left behind."

    T-Mobile's other zero-rating program, Music Freedom, does similar damage to the usic industry, Schewick said. 

    Schewick also notes that Binge On video is not actually “unlimited:” If customers reach their monthly data cap through other Internet uses, they won't be able to watch any more video that month.

    "T-Mobile’s advertising misleads customers and likely violates the FCC’s transparency rule," she concludes.

    T-Mobile's "Binge On" promotion has perhaps been popular with consumers but, as we reported in November, critics are increasingly expressing doubts about i...
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    New study shows that many e-cigarette products may contain a potentially dangerous chemical

    In particular, cherry flavoring compounds carry the largest doses of said chemical

    The e-cigarette industry has been taking a lot of flak recently in the U.S. Earlier this month, we reported on a study that showed that the products actually make consumers less likely to quit smoking – a major discrepancy in claims that many companies in the industry had made. Perhaps even more worrying is that the products are becoming more and more popular amongst middle and high school-aged children.

    Now, a new study is backing up a previous study that the flavoring compounds used in many e-cigarettes pose major health hazards. Researchers at the Roswell Park Cancer Institute (RPCI) have completed an analysis of nearly 150 e-cigarette flavoring products and found that many contain a potentially harmful chemical.

    May cause throat irritation

    The research team, led by Doctor Maciej Goniewicz, found that one chemical, benzaldehyde, was particularly potent in some e-cigarette flavoring compounds. Benzaldehyde is not particularly dangerous under normal circumstances – in fact, it is used in many different foods and cosmetic products. However, that fact changes under certain conditions.

    It has been shown that benzaldehyde can cause airway irritation when it is heated up and inhaled, much like it would be when smoking or “vaping” it. Out of 145 e-cigarette products that were tested, researchers found that benzaldehyde was found in 108 of them. One flavor, though, stood out from the rest. The research team found that benzaldehyde levels were 43 times higher in cherry-flavored e-cigarette products than any other type.

    While the research does show that there may be signs for concern, Dr. Goniewicz remained non-committal, stating that more research would need to be done before any solid conclusions could be drawn on the products.

    “This analysis reveals some very important implications. .  . Health care professionals should be asking patients not just whether they smoke tobacco cigarettes but also whether they vape e-cigarettes, and whether they are using flavored products,” he said. “For e-cigarette users, it’s important that they pay attention to how the products are affecting them. If they notice irritation, maybe a cough or sore throat, when they use e-cigarettes, they might want to consider switching to a different flavoring.”

    The team has published a research letter on their work in the journal Thorax

    The e-cigarette industry has been taking a lot of flak recently in the U.S. Earlier this month, we reported on a study that showed that the products actual...
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      Urban areas see home values rise as a result of consumers' shifting preferences

      New data suggests suburban living is becoming much less coveted

      Suburban living used to come with a higher price tag than city living. The split-level home with a porch and a big backyard may as well have been the spokesperson for the American dream.

      But it seems more home buyers are coveting city life these days, favoring condos in walkable, amenity-rich neighborhoods over the quiet life in suburbia. This shift in preferences has led to a two percent increase in the value of urban homes, according to Zillow.

      As homes in urban areas become increasingly more desirable, experts believe we may soon see the very nature of the suburbs changing.

      Reflects shifting desires

      Particularly in top-tier cities with young populations -- such as Boston, Seattle, and Washington, D.C. -- home buyers are looking to be part of a dense, walkable neighborhood close to their workplace.

      Experts say this trend may lead to the urbanization of suburbia.

      “In the future, this lifestyle trend will change some suburbs as we know them,” said Zillow Chief Economist Dr. Svenja Gudell. “They'll start to feel more urban as buyers move further from city centers in search of affordable housing in communities that still feel urban."

      Recent phenomenon

      Since 2000, home prices in urban centers have grown 50% faster than in their surrounding metro area, notes City Observatory.

      In 2013, the average urban home was worth 1.2 percent less than the average home in the suburbs, according to Zillow data. The recent shift, analysts note, may have something to do with the aging population. 

      Older people are far less likely to live in urban neighborhoods (just 17% of the largest segment of Boomers do, according to Trulia). And millennials, who are entering peak age for urban living while also delaying starting families, have also contributed to the rise in urban home prices. 

      With city homes becoming more sought after, new data indicates that people are willing to pay much more for much less if it's where they want to live.

      On a per-square-foot basis, home values in urban areas are way up, according to new data. In Washington, D.C., for example, urban homes in 1996 cost 6% more per square foot than suburban homes. Today, they cost 41% more per square foot.

      Suburban living used to come with a higher price tag than city living. The split-level home with a porch and a big backyard may as well have been the spoke...
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      Nine out of 10 tax refunds are issued in under 21 days

      When will you get yours?

      How fast do you want your federal income tax refund -- assuming you get one? Does three weeks work for you?

      According to the Internal Revenue Service (IRS), 90% of refunds are issued in less than 21 days.

      The best way to check the status of yours is online through the “Where’s My Refund?” tool on the IRS website or via the IRS2Go phone app.

      "As February approaches, more and more taxpayers want to know when they can expect their refunds," said IRS Commissioner John Koskinen. "There aren't any secret tricks to checking on the status of a refund. Using IRS.gov is the best way for taxpayers to get the latest information."

      Patience

      Many taxpayers are eager to know precisely when their money will be arriving, but checking "Where's My Refund" more than once a day will not produce new information. The status of refunds is refreshed only once a day, generally overnight.

      "Where’s My Refund?" has the most up-to-date information available about your refund. Taxpayers should use this tool rather than calling. You can use the tool to start checking on the status of their return within 24 hours after IRS has received an e-filed return or four weeks after receipt of a mailed paper return. It has a tracker that displays progress through three stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent.

      Try the app

      The IRS2Go phone app is another fast and safe tool taxpayers can use to check the status of a refund. In addition, users can use it to find free tax preparation help, make a payment, watch the IRS YouTube channel, get the latest IRS news, and subscribe to filing season updates and tax tips.

      The app is free for Android devices from the Google Play Store or from the Apple App Store for Apple devices. Users of both the IRS2Go app and “Where’s my Refund” tools must have information from their current, pending tax return to access their refund information.

      There's really no advantage to calling about refunds. IRS representatives can research the status of your refund only in limited situations: if it has been 21 days or more since you filed electronically, more than six weeks since you mailed your paper return, or "Where’s My Refund?" directs you to contact the agency. If the IRS needs more information to process your tax return, you'll be contacted by mail.

      The IRS continues to encourage the use of e-file and direct deposit as the fastest and safest way to file an accurate return and receive a tax refund. More than four out of five tax returns are expected to be filed electronically, with a similar proportion of refunds issued through direct deposit.

      Free File offers free brand-name software to about 100 million individuals and families with incomes of $62,000 or less. Seventy percent of all taxpayers are eligible for Free File.

      All taxpayers regardless of income will again have access to free online fillable forms, which provide electronic versions of IRS paper forms to complete and file. Both options are available through IRS.gov.

      How fast do you want your federal income tax refund -- assuming you get one? Does three weeks work for you?According to the Internal Revenue Service (I...
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      Front crash prevention technology works well

      An IIHS study finds autobrake has slashed police-reported rear-end crashes

      In the first study of its kind, the Insurance Institute for Highway Safety (IIHS) has found vehicles equipped with front crash prevention are much less likely to rear-end other vehicles.

      Systems with automatic braking reduce rear-end crashes by about 40% on average, while forward collision warning alone cuts them by 23%, the study found. The autobrake systems also greatly reduce injury crashes.

      If all vehicles had been equipped with autobrake that worked as well as the systems studied, there would have been at least 700,000 fewer police-reported rear-end crashes -- 13% of police-reported crashes overall -- in 2013.

      "The success of front crash prevention represents a big step toward safer roads," says David Zuby, IIHS chief research officer. "As this technology becomes more widespread, we can expect to see noticeably fewer rear-end crashes. The same goes for the whiplash injuries that often result from these crashes and can cause a lot of pain and lost productivity."

      Still optional -- for now

      Front crash prevention is steadily becoming more prevalent, but in most cases it is offered as optional equipment. That may soon change, however. In September, the National Highway Traffic Safety Administration (NHTSA) and IIHS announced an agreement in principle with automakers to make autobrake standard on all models.

      Using police reports allows researchers to identify front-to-rear crashes in order to gauge front crash prevention systems' effectiveness specifically for the type of collision they are designed to address.

      The study

      For the study, researchers looked at police-reported rear-end crashes in 22 states during 2010-14 involving Acura, Honda, Mercedes-Benz, Subaru, and Volvo vehicles with optional front crash prevention.

      The crash rates of vehicles equipped with the technology were compared with the crash rates of the same models without front crash prevention. Individual vehicles with the technology were identified using trim level information or, in some cases, lists of vehicle identification numbers supplied by the manufacturers.

      A separate analysis of City Safety, Volvo's standard low-speed autobrake system, was conducted by comparing the S60 model with other midsize luxury four-door cars and the XC60 with other midsize luxury SUVs. Unlike the City Safety-equipped Volvos, none of the comparison vehicles had standard front crash prevention.

      Only rear-end crashes in which the study and comparison models struck other vehicles were considered. Crashes in which those vehicles were struck from behind but didn't strike a vehicle in front were left out since front crash prevention wouldn't be expected to prevent them.

      The analyses show that forward collision warning alone reduces rear-end crashes by 23%, while forward collision warning with autobrake reduces them by 39%. The reduction for City Safety is 41%.

      The study also shows that autobrake reduces injuries. The rate of rear-end crashes with injuries decreases by 42% with forward collision warning with autobrake and 47% with City Safety. Forward collision warning alone is associated with a 6% decrease in rear-end injury crashes, though that finding isn't statistically significant.

      "Even when a crash isn't avoided, systems that have autobrake have a good chance of preventing injuries by reducing the impact speed," says Jessica Cicchino, the study's author and the IIHS vice president for research. "Still, it's surprising that forward collision warning didn't show more of an injury benefit, given that the Highway Loss Data Institute (HLDI) has found big reductions in injury claims with the feature."

      Caveats

      One difficulty in studying optional front crash prevention systems is that they often are packaged with other crash avoidance technologies. For example, all of the study vehicles except for some Honda Accords and most of the City Safety-equipped Volvos had adaptive cruise control. Adaptive cruise control works like regular cruise control but uses sensors to track the vehicle in front to maintain a safe following distance.

      It is possible that some of the observed benefit for front crash prevention systems in avoiding rear-end collisions is actually a result of adaptive cruise control. However, unlike front crash prevention, drivers must activate adaptive cruise control every time they use it, and the feature generally isn't used for all types of driving.

      Lane departure warning was packaged with front crash prevention on the Hondas, Subarus, and some Volvos included in the study, but it is unlikely to have affected rear-end crashes.

      Speed a factor

      Cicchino performed an additional analysis of City Safety vehicles to see how the effect of the system varied depending on a road's speed limit. The study vehicles had a version of City Safety that works at speeds up to 19 mph. (A newer version works at speeds up to 30 mph.)

      Despite its speed limitation, City Safety had the biggest effect on roads with speed limits of 40-45 mph. The equipped Volvos rear-ended other vehicles 54% less frequently than comparable vehicles on those roads. The reduction was 39% on roads with speed limits of 35 mph or less and 25% on roads with speed limits of 50 mph or higher.

      "At first blush it's surprising that this low-speed system was most effective on 40-45 mph roads," Cicchino said. "However, these roads tend to have many traffic lights, which reduce actual travel speeds in places. In addition, City Safety can come into play whenever there is congestion on a higher-speed road."

      In the first study of its kind, the Insurance Institute for Highway Safety (IIHS) has found vehicles equipped with front crash prevention are much less lik...
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      Nissan recalls model year 2013-2015 Altimas

      The secondary hood latch may remain in the unlatched position when the hood is closed

      Nissan North America is recalling 846,000 model year 2013-2015 Nissan Altimas manufactured March 6, 2012, to December 31, 2014.

      The secondary hood latch may bind and remain in the unlatched position when the hood is closed.

      If the primary latch is inadvertently released and the secondary latch is not engaged, the hood could open unexpectedly while the car is being driven, increasing the risk of a vehicle crash.

      These vehicles were recalled previously recalled, however the remedy plan may not have been performed consistently to remove the safety risk. To correct this issue, Nissan will re-notify all affected owners and dealers will replace the hood latch with a new one, free of charge. The recall is expected to begin in mid-February.

      Nissan North America is recalling 846,000 model year 2013-2015 Nissan Altimas manufactured March 6, 2012, to December 31, 2014. The secondary hood ...
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      New car sales fall off this month

      Did the demand for trucks and SUVs catch the industry off guard?

      The month is not quite over, but Kelley Blue Book (KBB) says the trend is clear. After a series of monthly sales records in 2015, the red-hot U.S. car industry is starting off the new year with a sales dip.

      The analysts at KBB say they expect new-vehicle sales to fall 3% from January 2015. However, the company suggests the sales decline could be temporary.

      “This month’s new car sales were impacted by the historic blizzard Jonas that covered much of the East Coast in snow late in January,” Tim Fleming, analyst for Kelley Blue Book, said in a release. “Since the blizzard hit densely populated areas during a weekend, when dealerships see the most foot traffic, Kelley Blue Book anticipates sales to dip slightly; however, any lost sales will likely be postponed until February.”

      Fleming points out that January is typically the slowest month of the year for automotive sales, with consumers recovering from the holiday season. That said, January's expected decline is in comparison to last January, which presumably faced similar headwinds.

      Something else at work?

      Mike Jackson, CEO of Auto Nation, a major dealership chain, says something else may be at work. Low gasoline prices have led consumers away from the high-mileage, fuel efficient compacts that have been the focus of automakers, and toward trucks and SUVs.

      “The American people, left to their own desires, really enjoy big, comfortable, luxurious, vehicles,” Jackson said on CNBC's “Squawk Box.”

      While he also suspects a late 2015 slowdown in consumer spending is also a factor in the sales dip, Jackson said sales of trucks drove the market in 2015 and, while automakers scrambled to produce more trucks and SUVs, by the end of the year consumer demand for these vehicles was outstripping supply.

      Conflicting data

      The KBB data, however, sees a somewhat different picture. It suggests consumer demand may be slowing for Jeep, which epitomizes the SUV. Meanwhile, it also shows Honda increasing its market share with the newly redesigned Civic, a compact.

      “Low gas prices and growing consumer interest in utility vehicles helped Jeep grow nearly 25% last year, and 2016 should also be strong for the brand,” said Fleming. “However, incentive spending for the brand has been growing in addition to days to turn, indicating that consumer demand may be slowing to some degree.”

      Fleming says Honda could report 9% year-over-year strength in January. Not only is there growing demand for the model, he says, but dealerships now have more of them in stock.

      The month is not quite over, but Kelley Blue Book (KBB) says the trend is clear. After a series of monthly sales records in 2015, the red-hot U.S. car indu...
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      Mayo Clinic study urges more aggressive lung cancer screening

      Researchers say people who quit 15 years ago should be included

      So you quit smoking, maybe decades ago. That's great. But it still might be a good idea to get regular screenings for lung cancer.

      While many former smokers don't get regular screenings, researchers at Mayo Clinic want to expand lung cancer screening to include people who quit smoking more than 15 years ago.

      Doing so, they say, would find more cases, find them early, and reduce lung cancer deaths.

      “A decline in smoking rates has been, and continues to be, a critical step to reduce lung cancer risk and deaths,” lead author Ping Yang said in a release. “But, it also means that fewer people have benefited from early detection of lung cancer, because more patients don’t qualify for low-dose CT scans.”

      Who gets screened

      A medical authority, the U.S. Preventive Services Task Force (USPSTF), sets lung cancer screening criteria. Currently, CT screening is recommended only for older adults who smoked for 30 years and are still smoking, or have quit within the last 15 years.

      So last year Yang and her colleagues took a close look at all the newly-diagnosed lung cancer cases in the U.S. They found two-thirds of those patients did not fall within the criteria for lung cancer screening – meaning they didn't get screened. Yet, they got lung cancer.

      Now, Yang and her team are trying to identify specific populations who are at risk but falling through the cracks of the system. Their current study found that, compared to other risk categories, patients who quit smoking for 15 to 30 years accounted for the greatest percentage of patients with lung cancer who didn’t qualify for screening. Yet this group made up a significantly large portion of the study group.

      “We were surprised to find that the incidence of lung cancer was proportionally higher in this subgroup, compared to other subgroups of former cigarette smokers,” Yang said. “The common assumption is that after a person has quit for so many years, the lung cancer rate would be so low that it wouldn’t be noticeable. We found that assumption to be wrong.”

      More attention on former smokers

      Yang says the lesson is the need to pay attention to people who quit smoking more than 15 years ago, because they are still at higher risk for developing lung cancer.

      Yang believes screening may not be as aggressive as it should be because lung cancer rates in the U.S. are falling. They're falling because fewer people are smoking, and quitting will reduce the chances of developing the disease.

      Reduce, but not eliminate. Some people who quit years ago will still develop lung cancer. Detecting those cases early, Yang says, will save lives.

      So you quit smoking, maybe decades ago. That's great. But it still might be a good idea to get regular screenings for lung cancer.While many former smo...
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      An uptick in pending home sales

      The falling stock market could be a problem in the months ahead

      It wasn't by much, but pending home sales, which are based on contract signings, were on the rise in December.

      The National Association of Realtors (NAR) reports its Pending Home Sales Index (PHSI) inched up 0.1% last month to 106.8. It's now 4.2% above December 2014, and has increased year-over-year for 16 months in a row.

      The Northeast led the way in what little increase there was. “Warmer than average weather and more favorable inventory conditions compared to other parts of the country encouraged more households in the Northeast to make the decision to buy last month," said NAR Chief Economist Lawrence Yun. "Overall, while sustained job creation is spurring more activity compared to a year ago, the ability to find available homes in affordable price ranges is difficult for buyers in many job creating areas. With homebuilding still grossly inadequate, steady price appreciation and tight supply conditions aren't going away any time soon."

      However, Yun thinks overall demand could be somewhat curtailed in coming months with the stock market's sizeable losses since the start of the year could cause some to hold off on buying.

      "The silver lining from the market turmoil in recent weeks is the fact that mortgage rates have slightly declined," says Yun. "Buyers looking to close on a home before the spring buying season begins may be rewarded with a mortgage rate at or below 4 percent."

      Regional sales

      • The PHSI in the Northeast increased 6.1% in December to 97.8, and is now 15.3% above a year ago.
      • In the Midwest the index dipped 1.1% to 103.6, but is still 3.6% above December 2014.
      • Pending home sales in the South slipped 0.5% to an index of 119.3, but are 1.0% higher than the same time last year.
      • The index in the West was 97.5, a decline of 2.1%, but still 3.4% above a year ago.

      Looking ahead

      Existing-homes sales this year are forecast to rose 1.5% to around 5.34 million. The national median existing-home price for all of this year is expected to increase between 4 and 5%. The median is the point at which half the homes sell for more and half for less. Existing-home sales rose 6.5% last ear, while prices jumped 6.8%.

      Rents -- which have far outpaced wages in recent years -- are expected to slightly slow to 3.3% growth in 2016 from 3.6% a year ago. Multifamily housing starts are expected to reach 420,000 units this year -- the highest level since 1987.

      Jobless claims

      Switching gears, there's a report this morning from the Department of Labor (DOL) showing a substantial decline in the number of first-time applications that were filed last week for state jobless benefits.

      After an increase to a six-month high the previous week, initial jobless claims fell 16,000 in the week ending January 23 to a seasonally adjusted 278,000. The prior was revised up by 1,000 to 294,000.

      Total initial claims have ranged between 250,000 and 300,000 since July 2014.

      The four-week moving average, which many economists consider a more accurate barometer of the labor market as it lacks to volatility of the weekly headcount, fell by 2,250 to 283,000.

      The complete report is available on the DOL website.

      It wasn't by much, but pending home sales, which are based on contract signings, were on the rise in December. The National ...
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      Feds sue DeVry University, charging its ads were deceptive

      Promises that students would find jobs in their field didn't pan out, FTC suit alleges

      DeVry University is the latest for-profit college to run afoul of regulators. The Federal Trade Commission has sued DeVry, alleging that its advertisements deceived consumers about the likelihood that students would find jobs in their fields of study and would earn more than those graduating with bachelor's degrees from other colleges or universities. DeVry said it will "vigorously fight" the complaint.

      “Millions of Americans look to higher education for training that will lead to meaningful employment and good pay,” said FTC Chairwoman Edith Ramirez. “Educational institutions like DeVry owe prospective students the truth about their graduates’ success finding employment in their field of study and the income they can earn.” 

      In its complaint, the FTC says DeVry claims that 90% of graduates landed jobs in their field within six months -- a claim the feds say is deceptive. The suit also alleges DeVry's claim that its graduates had 15% higher average incomes one year after graduation than the graduates of all other colleges or universities was deceptive.

      Melanie of Suamico, Wisconsin, recently recounted her experience with DeVry in a ConsumerAffairs review. 

      "When I graduated in 2010 with a computer bachelor's degree I was excited to get my job and start my career. Well I was fooled," she said. "I got no help from the school (even though I asked for help), I put in hundreds of resumes/apps on my own and got nothing. It is almost like the companies look at the degree that says DeVry on it and they run the opposite direction. I was thinking that I was doing something wrong, but the only thing I did wrong was trust that DeVry would help me get a job."

      DeVry says it will "vigorously fight" the charges. "DeVry University measured the employment and earnings results of its graduates in a sound, rational and transparent basis," the company said in a prepared statement

      "DeVry Group believes that the FTC’s complaint – filed 40 years after DeVry University began publishing accurate graduate employment statistics – is without a valid legal basis. In addition, the FTC’s complaint contains anecdotal examples that exaggerate the allegations but do not prove them," DeVry said. "DeVry University measures the employment and earnings results of its graduates on a sound, rational and transparent basis, and has published these results in a consistent manner over the years to provide students meaningful information." 

      Hundreds of offers

      Consumers rate Devry University

      The FTC's suit notes that a DeVry television ad showed people in business attire hanging hundreds of “offer letters” on a wall, with a voiceover that said all of the offer letters seen came from just the last year – followed by the 90% claim. The complaint alleges that DeVry counted numerous graduates as working “in their field” when they were not.

      That might sound familiar to Gary of Wappingers Falls, N.Y., who said that despite getting his degree and going $62,000 in debt, he has been unable to find a job.

      "When I joined the college they stated that they had a 92% placement for graduates within 6 months in their field of study," he said. "If I could trade my worthless degree for satisfaction of my student debts, I would do it in heartbeat."

      "The college was no help in setting me up with any interviews, they only looked at my resume and made suggestions. I have been on my own since I graduated and have had no luck," Gary added. "I currently work as a courier to pay my bills, which I could have done without a college degree."

      DOE action

      In a related action, the U.S. Department of Education is also taking action against DeVry for its marketing practices.  It is providing notice to DeVry that it will be requiring the institution both to stop certain advertising regarding the post-graduation employment outcomes of its students and to take additional steps to ensure that DeVry can substantiate the truthfulness of its post-graduation employment outcomes.

      “As required by the law and expected by the public, institutions need to be accurate in their marketing and recruiting to prospective students. And we confirm this truthfulness of advertisements through the backup information schools provide upon request,” said Under Secretary of Education Ted Mitchell.  “The Department and the FTC’s related announcements today are the result of much collaboration and cooperation. We are grateful to our partners at the FTC for their hard work and dedication on this matter.”

      DeVry University is the latest for-profit college to run afoul of regulators. The Federal Trade Commission has sued DeVry, alleging that its advertisements...
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      Researchers intrigued with idea Alzheimer's might be transmissible

      If true, however, it might only explain a few cases

      Researchers aren't completely sure what causes Alzheimer's disease. That said, an intriguing theory has emerged and gained a little more traction after a series of autopsies. Information about it has been published in Swiss Medical Weekly.

      The autopsies were performed on a small number of people who had died from a brain disease known as Creutzfeldt-Jakob disease (CJD). They all had one thing in common.

      Long before their deaths, the victims had all undergone a rare procedure in which the membrane covering the brain and spinal cord is taken from a cadaver and grafted onto a healthy brain. It turns out the grafted material was contaminated with the prion protein associated with CJD.

      Signs associated with Alzheimer's

      During these autopsies, the researchers noticed something. Five of the brains being examined also had some of the signs that are associated with Alzheimer's disease.

      What does it mean? The researchers conclude that the presence of the protein in young people is “highly unusual” and suggests a causal relationship to the grafts from the cadavers. The researchers further said it is possible the transplanted material was contaminated with small traces of the protein which possibly could have also been a trigger for Alzheimer's.

      Though far from conclusive, the results fit with a few researchers' theory that, in a few cases, Alzheimer's disease might be transmissible.

      September study

      Back in September, the journal Nature published a study suggesting the abnormality that triggers Alzheimer's could, at times, be transmitted to a healthy person by transplanting tissue containing the abnormality. But even the study authors were careful to point out they were not suggesting Alzheimer's is contagious.

      However, the Swiss findings may cause further study in this area. Currently, the research into Alzheimer's is focusing on earlier diagnosis and a possible cure.

      According to the National Institute on Aging, current research ranges from the basic mechanisms of Alzheimer's to managing the symptoms and helping families cope with the effects of the disease.

      As we reported in September, Johns Hopkins has received a major grant to run clinical trials on an epilepsy drug that researchers believe will show promise as a way to prevent Alzheimer's.

      Researchers aren't completely sure what causes Alzheimer's disease. That said, an intriguing theory has emerged and gained a little more traction after a s...
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      Study finds social media a powerful tool in promoting e-cigarettes

      Researchers say new regulations must take that into consideration

      The Food and Drug Administration (FDA) is in the process of finalizing rules to regulate e-cigarettes, and just about everyone who has been following the process assumes the rules will ban sales to people under 18.

      When that happens, the focus will next shift to whether e-cigarette marketing is targeting young people who aren't allowed to buy the product. In fact, it already has.

      You may recall that tobacco companies were accused of using youth-oriented marketing gimmicks during the 1980s and 90s. A new report suggests e-cigarette marketers are turning to social media to reach their most lucrative market.

      Unfortunately for health officials, researchers at Drexel University and the University of Southern California suggest it is next to impossible to contain social media marketing.

      Influential tweets

      "As public health researchers our job is to figure out whether people are seeing messages that might lead them to make unhealthy decisions," Kar-Hai Chu, the study's author, said in a release. "If an e-cigarette tweet reaches underage users and makes them curious about trying e-cigarettes, that is something we would want to know. The results of the study could help provide guidelines and advice for many potential regulations."

      Social media has changed the game for all marketers, not just those selling e-cigarettes. Companies can easily used social media platforms to extend the reach of their advertising. Not only that, they can more narrowly target their message to a specific audience and track its reception.

      The problem the study authors see is that once an ad message goes beyond its primary target and is picked up by social media, anyone can see it, regardless off their age. It doesn't have to “go viral” to have major impact. Policymakers, the study says, need to understand that before finalizing regulations governing advertising.

      Internet a major advertising medium

      The Centers for Disease Control and Prevention (CDC) has noted that 39.8 percent of teens who are exposed to e-cigarette advertising see it on the internet, especially on social media sites like Twitter.

      "We chose Twitter because hundreds of millions of people all over the world use it to express their opinions about important topics, so it's a huge source of information and a quick and efficient way for researchers to learn about those opinions," Chu said. "A fascinating thing about Twitter is that users choose which messages they think are important to pass on to their friends. From a marketing perspective, companies and brands are very active on Twitter, including Blu, the brand we chose for this study."

      The study followed three months of Twitter traffic, originating with tweets from the Blu e-cigarette company's official handle "@blucigs." As researchers expected, followers of @bluecigs spread the messages to others within their networks through retweets.

      "The retweet network in our data demonstrated how rapidly and widely messages diffused--reaching an exponential number of users," said Christopher Yang, a professor in Drexel's College of Computing & Informatics, who was a co-author of the paper.

      More important, he said, by the second level of followers, researchers saw a big shift in the types of users who were seeing the messages. After three months, a single tweet that originally went out to just 214 followers ended up through retweets reaching 2,600 unique users.

      The Food and Drug Administration (FDA) is in the process of finalizing rules to regulate e-cigarettes, and just about everyone who has been following the p...
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      Freddie Mac: Housing market continues to improve

      There's still a long way to go, though

      Things are looking up for the U.S. housing market as we enter the new year.

      The Freddie Mac Multi-Indicator Market Index (MiMi), shows one additional state -- Missouri -- entering its outer range of stable housing activity, along with four metro areas: Rochester, N.Y.; St. Louis, Mo.; Birmingham, Ala.; and Milwaukee, Wis.

      The national MiMi value stands at 82.5, indicating a housing market that is on its outer range of stable housing activity, while showing an improvement of +0.82 percent from October to November and a three-month improvement of +2.09 percent.

      On a year-over-year basis, the national MiMi value has improved +7.23%. Since its all-time low in October 2010, the national MiMi has rebounded 39%, but is still significantly below its high of 121.7.

      Strong improvement

      "We saw another strong year-over-year improvement at 7.23 percent in this month's MiMi, the best 12-month showing in a year,” said Freddie Mac Deputy Chief Economist Len Kiefer. “The regional variation of housing activity continues to become more pronounced.

      For example, he points out, “we're still seeing declines in oil-dependent housing markets, whereas the hardest hit metros from the Great Recession continue to see some of the best improvement as they recover.

      At the same time, Kiefer notes, “other markets are seeing even stronger improvement because of robust home sales fueled by strong local economies that remain largely affordable for the typical homebuyer.”

      In the short-term, he said “we expect homebuyer affordability to remain strong with mortgage rates continuing to look very attractive to prospective homebuyers."

      Report highlights

      • Thirty-three of the 50 states plus the District of Columbia have MiMi values in a stable range, with the District of Columbia (101), North Dakota (96.5), Hawaii (95.9), Montana (95.7), and Utah (93.3) ranking in the top five. Compared with the same time last year, 21 states and the District of Columbia had MiMi values in a stable range.
      • Fifty-seven of the 100 metro areas have MiMi values in a stable range, with Austin, Texas (97.5), Fresno, Calif. (102.9), Honolulu, Hawaii (97.1), Salt Lake City, Utah (96.7), and Denver, Colo. (96.5) ranking in the top five. At the same time last year, 28 of the top 100 metros had MiMi values in a stable range.
      • The most improving states month-over-month were Oregon (+2.04%), Colorado (+1.90%), Nevada (+1.88%), Florida (+1.66%) and Maine (+1.55%). On a year-over-year basis, the most improving states were Florida (+15.72%), Oregon (+14.03%), Colorado (+13.54%), Washington (+12.73 %) and Nevada (+12.26%).
      • The most improving metro areas month-over-month were Orlando, Fla. (+2.21%), Denver, Colo. (+2.01%), Portland, Ore. (+2.00%), Albany, N.Y. (+1.87), and Phoenix, Ariz. (+1.86%). On a year-over-year basis, the most improving metro areas were Orlando, Fla. (+19.48%), Cape Coral, Fla. (+18.27%), Tampa, Fla. (+17.65%), Denver, Colo. (+16.97%), and Portland, Ore. (+16.54).
      • In November, 49 of the 50 states and 95 of the top 100 metros were showing an improving three-month trend. At the same time last year, 34 states and 69 of the top 100 metro areas were showing an improving three-month trend.
      Things are looking up for the U.S. housing market as we enter the new year.The Freddie Mac Multi-Indicator Market Index (MiMi), shows one additional st...
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      Three gains in a row for new home sales

      Sales for all of last year were up 14.5%

      Sales of new single-family homes posted their third advance in as many months during December.

      A joint release from the Census Bureau and the Department of Housing and Urban Development puts sales last month at a seasonally adjusted annual rate of 544,000, up 10.8% from November and a year-over-year gain of 9.9%.

      For all of 2015, new home sales were up 14.5% from 2014 to 501,000.

      Can it continue?

      Stifel Fixed Income Chief Economist Lindsey Piegza says the new home sales increase, following a 14.7% advance in sales of existing homes, suggests housing market activity appears to be on relatively firm footing, -- at least for now.

      But she points out that heading into the new year, "amid rising uncertainty and still modest income gains, not to mention rising rates, consumers face potentially more difficult times affording and financing a large ticket purchase such as a new home."

      Pricing and inventory

      The median sales price of new houses sold in December 2015 was $288,900, down $13,100 from December 2014, while the average sales price was $346,400, a year-over-year decline of $27,100 .

      The seasonally adjusted estimate of new houses for sale at the end of December was 237,000, representing a supply of 5.2 months at the current sales rate.

      The complete report is available on the Commerce Department website.

      Sales of new single-family homes posted their third advance in as many months during December.A joint release from the Census Bureau and the Department...
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      Mortgage applications continue their rise

      Falling interest rates are said to be a big factor

      As interest rates continue to fall, applications for mortgages continue to rise.

      According to the Mortgage Bankers Association (MBA), applications were up 8.8% in the week ending January 22, including an adjustment to account for the Martin Luther King holiday.

      It was another strong week for refinancings, which jumped 11% after rising 19% the previous week. Despite that increase, the refinance share of mortgage activity slipped to 59.0% of total applications from 59.1% a week earlier.

      The adjustable-rate mortgage (ARM) share of activity was 6.9% of total applications, the FHA share was 12.7%, the VA share was 11.1%, and the USDA share 0.7%.

      Contract interest rates

      • The average contract interest rate for 30-year fixed-rate mortgages (FRMs) with conforming loan balances ($417,000 or less) fell to its lowest level since October 2015, dropping to 4.02% from 4.06%, with points decreasing to 0.40 from 0.41 (including the origination fee) for 80% loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
      • The average contract interest rate for 30-year FRMs with jumbo loan balances (greater than $417,000) was down four basis points, from 3.93% to 3.89%, with points decreasing to 0.25 from 0.31 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
      • The average contract interest rate for 30-year FRMs backed by the FHA dropped to 3.83% from 3.86%, with points increasing to 0.38 from 0.36 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
      • The average contract interest rate for 15-year fixed-rate mortgages slipped one basis point to 3.28%, with points decreasing to 0.37 from 0.39 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.
      • The average contract interest rate for 5/1 ARMs plunged from 3.20% to 3.09%, with points increasing to 0.34 from 0.18 (including the origination fee) for 80% LTV loans. The effective rate decreased from last week.

      The survey covers over 75% of all U.S. retail residential mortgage applications.

      As interest rates continue to fall, applications for mortgages continue to rise.According to the Mortgage Bankers Association (MBA), applications were ...
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