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Category: Financial Analysis
Maverick new book details complexities of finance
Professor Anthony M. Criniti IV offers a fresh look at the science of wealth management in “The Necessity of Finance”
PHILADELPHIA – In “The Necessity of Finance” (ISBN 0988459507), Dr. Anthony M. Criniti IV breaks down the complex details of the financial world into easy-to-digest terms any layman can understand and even master. Finance is a completely separate field from economics and as such, Dr. Criniti sets out to explain real-world topics that investors and “financialists” need to inculcate into their ideological portfolio.
Global wealth accumulation is at its highest levels ever. There are more billionaires and oligarchs living today than at any other time in human history. Yet as the American and global financial system has come under critical scrutiny in recent years, consumers and ordinary citizens are seeking answers about the world of finance. Why is money important? Is it merely ink and paper or digits on a computer screen. Why does finance matter? How might we come to understand its many intricacies which act as a multi-dimensional jigsaw puzzle? The answers will both interest and surprise readers.
“Most of the major theories developed in finance were created by economists, physicists, mathematicians, etc. Finance, although highly interrelated with many other subjects, is a separate field of study that is often confused with others,” says Dr. Criniti. “With world wealth accumulating to its highest point in history, the necessity to understand this subject is more crucial than ever.”
Readers will learn what the difference between money and wealth is and will find answers to many of life’s financial questions. What is risk and return? What kinds of investments exist? What are the different techniques for selecting investments? And what role does ethics play in finance? The author has created a true page-turner able to clarify the definition, purpose and goals of both finance and economics while exploring financial concepts in a straightforward manner.
“The Necessity of Finance” is available for sale online at Amazon.com.
About the Author:
Dr. Anthony M. Criniti IV is a former financial consultant and a current professor of finance at several universities. He earned a PhD in applied management and decision sciences, with a concentration in finance. A native of Philadelphia, he has also received many financially related designations, including CHFC, CLU, REBC, and RHU. Dr. Criniti is an active investor and has traveled the world studying various aspects of finance. He is also the author of the acclaimed finance book, The Necessity of Finance and the newly released The Most Important Lessons in Economics and Finance.
MEDIA CONTACT:
Dr. Anthony M. Criniti IV
E-mail: info@learn-about-finance.com
Web: http://learn-about-finance.com/
REVIEW COPIES AND INTERVIEWS ARE AVAILABLE UPON REQUEST
Nearly 2 Million American Homeowners Freed From Negative Equity In 2012
Phoenix, Los Angeles and Miami Metros Had Most Homeowners Freed Last Year, According to Zillow; At Least 1 Million Additional Homeowners Nationwide Expected To Be Freed In 2013
SEATTLE, Feb. 21, 2013, Negative equity continued to fall in the fourth quarter of 2012, dropping to 27.5 percent of all homeowners with a mortgage, compared with 31.1 percent one year ago, according to the fourth quarter Zillow® Negative Equity Reporti. Almost 2 million American homeowners were freed from negative equity over the course of the year.
Approximately 13.8 million homeowners with a mortgage were in negative equity, or “underwater,” at the end of the fourth quarter, owing more on their mortgages than their homes are worth. That was down from 15.7 million in the fourth quarter of 2011. American homeowners with a mortgage were collectively underwater by more than $1 trillion at the end of 2012.
In 2012, national home values rose 5.9 percent year-over-year, according to the Zillow Home Value Index (ZHVI)ii, to a median value of $157,400. This jump in home values, coupled with sustained high foreclosure rates, were the main drivers for receding negative equity. Among the nation’s 30 largest metro areas, those with the highest number of homeowners freed from negative equity last year were Phoenix (135,099 homeowners freed in 2012); Los Angeles (72,936 homeowners freed in 2012); Miami-Fort Lauderdale (70,484 homeowners freed in 2012); Dallas-Fort Worth (59,461 homeowners freed in 2012); and Riverside, Calif. (58,417 homeowners freed in 2012).
New this quarter, the Zillow Negative Equity Forecastiii predicts the negative equity rate among all homeowners with a mortgage will fall to at least 25.5 percent by the fourth quarter of 2013, freeing more than 999,000 additional homeowners nationwide. Of the 30 largest metro areas, the majority of these newly freed homeowners are anticipated to come from: Los Angeles (72,696 homeowners freed in 2013); Riverside (62,407 homeowners freed in 2013); Phoenix (43,044 homeowners freed in 2013); Sacramento (33,356 homeowners freed in 2013); and Dallas-Fort Worth (31,434 homeowners freed in 2013).
Zillow forecasts negative equity by applying anticipated appreciation or depreciation rates to a home, according to the most current metro and national Zillow Home Value Forecasts, and by assuming all other factors remain constant.
“As home values continue to rise and more homeowners are pulled out of negative equity in 2013, the positive effects on the housing market will be numerous. Freed from negative equity, homeowners will have more flexibility, and some will likely choose to list their home for sale, helping to ease inventory constraints and moderating sometimes dramatic, demand-driven price increases in some markets,” said Zillow Chief Economist Dr. Stan Humphries . “But negative equity is still very high, and millions of homeowners have a very long way to go to get back above water, even with current robust levels of home value appreciation in most areas. As a result, negative equity will remain a major factor in the market for the foreseeable future.”
These results are from the fourth quarter edition of the Zillow Negative Equity Report, which looks at current outstanding loan amounts for individual owner-occupied homes and compares them to those homes’ current estimated values. Loan data is provided by TransUnion®, a global leader in credit and information management. This is the only report that uses current outstanding loan balances on all mortgages when calculating negative equity. Other reports estimate current outstanding loan balance based on the most recent loan on a property (i.e., the original loan amount at time of purchase or refinance).
|
Metropolitan Area |
Q4 2012: % of Homeowners w/ Mortgages in Negative Equity |
# of Homeowners Freed From Negative Equity in 2012 |
Q4 2013: Forecasted Negative Equity Rate |
Minimum # of Homeowners Expected to be Freed From Negative Equity in 2013iv |
|
UNITED STATES |
27.5% |
1,908,732 |
25.5% |
999,601 |
|
19.4% |
17,394 |
19.1% |
6,513 |
|
|
24.3% |
72,936 |
20.0% |
72,696 |
|
|
36.9% |
41,208 |
37.3% |
N/A |
|
|
24.2% |
59,461 |
21.3% |
31,434 |
|
|
23.8% |
1,462 |
23.1% |
7,356 |
|
|
28.0% |
45,207 |
25.8% |
24,911 |
|
|
39.6% |
70,484 |
37.0% |
23,674 |
|
|
49.5% |
49,827 |
47.9% |
17,255 |
|
|
16.9% |
30,495 |
15.6% |
10,765 |
|
|
23.3% |
39,496 |
19.5% |
25,776 |
|
|
43.4% |
57,396 |
41.4% |
17,197 |
|
|
43.8% |
58,417 |
34.5% |
62,407 |
|
|
40.4% |
135,099 |
34.8% |
43,044 |
|
|
33.5% |
32,457 |
29.9% |
23,441 |
|
|
34.6% |
29,518 |
32.8% |
12,808 |
|
|
28.3% |
31,894 |
23.4% |
22,788 |
|
|
41.5% |
34,359 |
40.0% |
7,775 |
|
|
26.9% |
23,348 |
27.0% |
N/A |
|
|
27.7% |
11,529 |
26.5% |
6,265 |
|
|
20.0% |
53,848 |
18.0% |
10,509 |
|
|
14.0% |
8,767 |
13.2% |
3,403 |
|
|
28.0% |
26,355 |
24.7% |
13,799 |
|
|
41.7% |
32,195 |
32.9% |
33,356 |
|
|
45.3% |
32,650 |
43.3% |
7,286 |
|
|
27.2% |
16,034 |
26.8% |
1,830 |
|
|
29.8% |
13,818 |
29.1% |
2,965 |
|
|
59.2% |
36,876 |
56.7% |
8,435 |
|
|
16.1% |
17,330 |
13.2% |
8,062 |
|
|
28.8% |
19,905 |
27.7% |
3,620 |
|
|
33.0% |
13,513 |
32.9% |
325 |
About Zillow:
Zillow, Inc. (NASDAQ: Z) operates the largest home-related marketplaces on mobile and the Web, with a complementary portfolio of brands and products that help people find vital information about homes, and connect with the best local professionals. In addition, Zillow operates an industry-leading economics and analytics bureau led by Zillow’s Chief Economist Dr. Stan Humphries. Dr. Humphries and his team of economists and data analysts produce extensive housing data and research covering more than 350 markets at Zillow Real Estate Research. The Zillow, Inc. portfolio includes Zillow.com®, Zillow Mobile, Zillow Mortgage Marketplace, Zillow Rentals, Zillow Digs™, Postlets®, Diverse Solutions®, Buyfolio™, Mortech™ and HotPads™. The company is headquartered in Seattle.
Zillow.com, Zillow, Zestimate, Postlets and Diverse Solutions are registered trademarks of Zillow, Inc. Buyfolio, Mortech, HotPads and Digs are trademarks of Zillow, Inc.
TransUnion is a registered trademark of Trans Union LLC.
i The data in the Zillow Negative Equity Report incorporates mortgage data from TransUnion, a global leader in credit and information management, to calculate various statistics. The report includes, but is not limited to, negative equity, loan-to-value ratios, and delinquency rates. To calculate negative equity, the estimated value of a home is matched to all outstanding mortgage debt and lines of credit associated with the home, including home equity lines of credit and home equity loans. All personally identifying information (“PII”) is removed from the data by TransUnion before delivery to Zillow. Overall, this report covers over 800 metros, 2,300 counties, and 22,900 ZIP codes across the nation.
ii The Zillow Home Value Index is the median Zestimate® valuation for a given geographic area on a given day and includes the value of all single-family residences, condominiums and cooperatives, regardless of whether they sold within a given period. The Home Value Index at the national level includes data from over 80 million homes in almost 3,000 counties and over 850 core-based statistical areas. It is expressed in dollars and is for a particular geographic region.
iii The Zillow Home Value Forecast is a conservative estimate of what negative equity rates will be a year from now. To forecast negative equity, we take the current home value of a house and appreciate it by the Zillow Home Value Forecast (ZHVF) for the MSA in which the home is located. In cases where there is no ZHVF available, we use the historical rate of home appreciation, and for metros that don’t have a historical rate of appreciation we use the historical rate of inflation at the national level. For homes that are not located in a metropolitan area, we use the forecasted national rate of appreciation. To calculate the level of home equity a year from now, we use the forecasted home value and the current outstanding debt balance, where we make no assumptions about a homeowner’s debt level a year from now. We also make no assumptions about foreclosure activity in the coming year. Therefore, this forecast is a very conservative one, as homeowners will likely continue to pay down their debt throughout the year and homes will likely continue to be foreclosed on, and both of these factors will contribute to a lower negative equity rate. The Zillow Negative Equity Forecast can therefore be considered a higher bound estimate of negative equity.
iv Some metro areas may be marked “N/A” in this column. Home values are expected to continue to fall in these metros, which will lead to a net increase in the number of homeowners with a mortgage who are in negative equity. While some homeowners in this metro will be freed from negative equity, we expect more homeowners to enter negative equity in the coming year when looking strictly at home value changes and not considering pay downs in mortgage principal or foreclosure activity.
SOURCE:
Zillow, Inc.
http://www.zillow.com
CoreLogic Releases Q4 2012 Renter Applicant Risk Index Report
—Default Risk Among Renters Decreased Year Over Year—
IRVINE, Calif., Feb. 20, 2013, CoreLogic® (NYSE: CLGX), a leading residential property information, analytics and services provider, today released its fourth quarter 2012 CoreLogic SafeRent® Renter Applicant Risk (RAR) Index Report, formerly known as the Multifamily Applicant Risk (MAR) Index Report. Published quarterly, the RAR Index Report provides market-based benchmarks for evaluating credit quality and risk of default for renters applying for apartment homes in multifamily housing units. The index also includes data from single-family rentals. Using a mean of 100, an index value above 100 indicates decreased risk, and a value below 100 indicates increased risk.
According to the data, the risk of default among renters nationwide decreased year over year in the fourth quarter of 2012 with an index value of 103 compared to the fourth quarter of 2011 with an index value of 101. On a quarter-over-quarter basis, the risk of default increased in the fourth quarter 2012 compared to the third quarter of 2012 when the index value was 106. The increased risk from the third quarter to the fourth quarter of 2012 reflects a riskier applicant pool that is typical in seasonally slower periods of applicant traffic (See Figure 1).
Renter Trends
- Lower-priced rentals see more significant decreases in rent amounts: Average rent amounts for Class A properties, defined as those with rents greater than $1100, increased 0.3 percent year over year. At the same time, rent amounts for Class B properties, defined as those between $750 and $1100, remained unchanged from one year ago, while rent amounts for Class C properties, defined as less than $750, decreased 0.9 percent year over year.
- Dual applicants increase: In the fourth quarter of 2012, the number of transactions with two applicants increased across property class. On a year-over-year basis, dual-applicant transactions increased 3.9 percent for Class A properties, increased 2.8 percent for Class B properties and increased 0.3 percent for Class C properties.
- Applicant income rises: Applicant income in the fourth quarter of 2012 increased an average of 1.7 percent among all property classes year over year and also increased over the previous quarter by .5 percent.
- Fewer applicants declined: Compared to a year ago, property managers denied fewer applicants in the fourth quarter of 2012. Class A property managers denied 5 percent fewer applicants, Class B managers denied 1.3 percent fewer and Class C managers denied 0.6 percent fewer applicants.
Regional Renter Applicant Risk Index Data
Regionally, the Northeast and West had the highest RAR index value in the fourth quarter of 2012, both at 110, reflecting decreased default risk (see Figure 2). The Midwest had the lowest RAR index value at 98, reflecting increased risk, with a five-point decline from the previous quarter when the value was 103. The increased risk in the Midwest is reflective of increased risk seen in two Midwest Core Based Statistical Areas* (CBSAs) (see Figure 3).
Figure 2: Regional Renter Applicant Risk Index Data
|
Region |
Q4 2012 |
Q3 2012 |
Change from Q3 2012 to Q4 2012 |
Q4 2011 |
Change from Q4 2011 to Q4 2012 |
|
Midwest |
98 |
103 |
-5 |
97 |
1 |
|
Northeast |
110 |
113 |
-3 |
110 |
0 |
|
South |
100 |
103 |
-3 |
97 |
3 |
|
West |
110 |
111 |
-1 |
107 |
3 |
|
U.S. |
103 |
106 |
-3 |
101 |
2 |
The three CBSAs with the largest year-over-year increases in applicant risk were Chicago-Joliet-Naperville, Ill.-Ind.-Wis. (three-point value decline); Cleveland-Elyria-Mentor, Ohio (two-point value decline); and Dallas-Fort Worth-Arlington, Texas (one-point value decline). The CBSAs with the largest year-over-year declines in applicant risk were Denver-Aurora-Broomfield, Colo.; New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa.; and San Diego-Carlsbad-San Marcos, Calif., all with a four-point value increase (see Figure 3).
Figure 3: Core Based Statistical Area & Renter Applicant Risk Index Deltas
|
CBSAs With Largest Decreases |
Q4 2012 |
Q4 2011 |
Change from Q4 2011 to Q4 2012 |
|
|
Chicago-Joliet-Naperville, Ill.-Ind.-Wis. |
110 |
113 |
-3 |
|
|
Cleveland-Elyria-Mentor, Ohio |
98 |
100 |
-2 |
|
|
Dallas-Fort Worth-Arlington, Texas |
94 |
95 |
-1 |
|
|
CBSAs With Largest Increases |
Q4 2012 |
Q4 2011 |
Change from Q4 2011 to Q4 2012 |
|
|
Denver-Aurora-Broomfield, Colo. |
105 |
101 |
4 |
|
|
New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa. |
124 |
120 |
4 |
|
|
San Diego-Carlsbad-San Marcos, Calif. |
124 |
120 |
4 |
|
|
NOTE: CBSAs are selected from the Top 50 CBSAs based on population and applicant volume. |
||||
* The CBSAs referred to within the Renter Applicant Risk Index Report may differ from the CBSAs referenced in other CoreLogic data reports. CBSAs are defined by the Office of Management and Budget (OMB) and CoreLogic may provide data either for the overall CBSA or a Metropolitan Division of a CBSA, depending upon the report. The particular CBSA used is identified in the report.
Methodology
The SafeRent Renter Applicant Risk (RAR) Index Report is published quarterly by CoreLogic. The RAR Index is calculated exclusively from applicant-traffic credit quality scores from the CoreLogic SafeRent statistical lease screening model, Registry ScorePLUS® and is based on an analysis of 39,000 properties representing nearly 6 million apartment homes and single-family rentals. The index provides a benchmark trend of national and regional traffic credit quality scores. The index value indicates the relative risk of an applicant pool fulfilling lease obligations. A risk index value of 100 indicates that market conditions are equal to the national mean for the Index’s base period of 2004. A risk index value greater than 100 indicates market conditions with reduced average risk of default relative to the index’s base period mean. A value less than 100 indicates market conditions with increased average risk of default relative to the index’s base period mean. Registry ScorePLUS is the multifamily industry’s only screening model that is both empirically derived and statistically validated. The statistical screening model was developed from historical resident lease performance data to specifically evaluate the potential risk of a resident’s future lease performance. The model generates scores for each applicant indicating the relative risk of the applicant not fulfilling lease obligations.
To receive local or regional renter applicant risk index data or if you have questions, contact CoreLogic SafeRent at smallon@corelogic.com.
About CoreLogic
CoreLogic (NYSE: CLGX) is a leading property information, analytics and services provider in the United States and Australia. The company’s combined data from public, contributory, and proprietary sources includes over 3.3 billion records spanning more than 40 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, transportation and government. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in seven countries. For more information, please visit www.corelogic.com.
CORELOGIC, the CoreLogic logo, SAFERENT and REGISTRY SCOREPLUS are trademarks of CoreLogic, Inc. and/or its subsidiaries.
SOURCE: CoreLogic
McDonald’s Global Comparable Sales Decrease 1.9% In January
OAK BROOK, Ill., Feb. 8, 2013, McDonald’s Corporation today announced that global comparable sales decreased 1.9% in January. Performance by segment was as follows:
- U.S. up 0.9%
- Europe down 2.1%
- Asia/Pacific, Middle East and Africa (APMEA) down 9.5%
“McDonald’s is focused on satisfying the needs of each and every customer visiting our restaurants in search of great-tasting food and beverages, outstanding service and everyday value,” said McDonald’s President and Chief Executive Officer Don Thompson. “While January’s results reflect today’s challenging environment and difficult prior year comparisons, I am confident that our unwavering commitment to delivering an exceptional restaurant experience will enhance our brand’s relevance and drive long-term results.”
January comparable sales increased 0.9% in the U.S. driven by a balanced offering of premium, core and compelling value options, including the addition of the new Grilled Onion Cheddar burger to the Dollar Menu. Results for the month also benefited from convenience and restaurant modernization strategies designed to provide customers with a better overall experience.
In Europe, comparable sales decreased 2.1% as positive results in the U.K. and Russia were offset by performance in Germany, France and other markets. Throughout Europe, McDonald’s remains focused on appealing to a broad range of customer preferences with seasonal food events and enhanced value and breakfast offerings along with extended operating hours.
In APMEA, January’s comparable sales decreased 9.5% due to ongoing weakness in Japan and negative results in China due primarily to the shift in timing of Chinese New Year and, to a lesser extent, the residual effects of consumer sensitivity around the recent supply chain issue in the chicken industry, which more than offset positive results in Australia.
Systemwide sales for the month increased 0.3%, or 0.7% in constant currencies. For the month of February, comparable sales will be negatively impacted by approximately 3 percentage points as prior year results included one extra day due to leap year.
| Percent Increase/(Decrease) |
Comparable |
Systemwide Sales |
||
|
Sales |
As |
Constant |
||
| Month ended January 31, |
2013 |
2012 |
Reported |
Currency |
|
McDonald’s Corporation |
(1.9) |
6.7 |
0.3 |
0.7 |
|
Major Segments: |
||||
|
U.S. |
0.9 |
7.8 |
1.9 |
1.9 |
|
Europe |
(2.1) |
4.0 |
3.8 |
0.6 |
|
APMEA |
(9.5) |
7.3 |
(8.6) |
(5.1) |
Definitions
- Comparable sales represent sales at all restaurants, whether operated by the Company or by franchisees, in operation at least thirteen months including those temporarily closed. Some of the reasons restaurants may be temporarily closed include reimaging or remodeling, rebuilding, road construction and natural disasters. Comparable sales exclude the impact of currency translation. Comparable sales are driven by changes in guest counts and average check, which is affected by changes in pricing and product mix. Management reviews the increase or decrease in comparable sales compared with the same period in the prior year to assess business trends.
- The number of weekdays and weekend days can impact our reported comparable sales. In January 2013, this calendar shift/trading day adjustment consisted of one less Sunday and Monday, and one more Wednesday and Thursday compared with January 2012. The resulting adjustment varied by area of the world, ranging from approximately -0.9% to 0.8%. In addition, the timing of holidays can impact comparable sales.
- Information in constant currency is calculated by translating current year results at prior year average exchange rates. Management reviews and analyzes business results excluding the effect of foreign currency translation and bases incentive compensation plans on these results because they believe this better represents the Company’s underlying business trends.
- Systemwide sales include sales at all restaurants, whether operated by the Company or by franchisees. While franchised sales are not recorded as revenues by the Company, management believes the information is important in understanding the Company’s financial performance because these sales are the basis on which the Company calculates and records franchised revenues and are indicative of the financial health of the franchisee base.
Upcoming Communications
The Company plans to release February 2013 sales on March 8, 2013.
McDonald’s is the world’s leading global foodservice retailer with more than 34,000 locations serving more than 69 million customers in 119 countries each day. More than 80% of McDonald’s restaurants worldwide are owned and operated by independent local men and women.
Forward-Looking Statements
This release contains certain forward-looking statements, which reflect management’s expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. The factors that could cause actual results to differ materially from our expectations are detailed in the Company’s filings with the Securities and Exchange Commission, such as its annual and quarterly reports and current reports on Form 8-K.
SOURCE:
McDonald’s Corporation