Canada Housing Market to Follow U.S./Hawai'i Experience?

Hawai'i, especially on the Big Island, has been experiencing steep deflation in the housing market. Construction jobs are at about 30% unemployment here now. The residential real estate market has been in the doldrums for a couple of years now.

Investment advisor, Mike "Mish" Shedlock, in commenting on the current condition of the real estate market in Vancouver and Calgary, Canada, identifies a post-peak pattern of housing market declines in the U.S. His pattern appears to be very close to what we observed in the Big Island housing drop. It is worth a look for future reference. Here it is:

Housing Collapse Cascade Pattern

- Volume drops precipitously
- Prices soften a bit
- Inventory levels rise slowly
- Higher-end home process remain relatively steady for a brief while longer
- The real estate industry tries to convince everyone it's "business as usual" and homes are affordable because rates are low
- Bubble denial kicks in with media articles everywhere touting the "fundamentals"
- Stubborn sellers hold out for last year's prices as volume continues to shrink
- Inventory levels reach new highs
- Builders start offering huge incentives to clear inventory
- Some sellers finally realize (too late) what is happening
- Price declines hit the high-end
- Increasingly desperate sellers get creative with incentives, offering new cars, below market interest rates, trips, etc.
- Gimmicks do not work
- Price declines escalate sharply at all price levels
- The Central Bank issues statements that housing is fundamentally sound
- Prices collapse, inventory skyrockets and builders holding inventory go bankrupt

Mish notes, "Some of those may happen simultaneously or in a different order, but the whole mess starts with a huge plunge in volume."

Click here for the entire article.

Politicians Orate, and I Go, Huh?

I want to try to get to bed early tonight so I’m going to try to clear my mind here of a few statements by the political leadership of the country that jump the rails of the logic lines most of us are born with.

Today, the president again stated that it is impractical to enforce the country’s immigration laws, given that there are 11 million illegals in the United States and the manpower is just not there to do the job.

Huh? Given that there are about 138 million taxpayers in the country, using the same logic, why wouldn’t he declare that it is impractical to enforce income tax laws in the United States? Presumably, it would take more manpower to enforce these much more complex laws. Oh, right, I just remembered, the government is hiring 16,000 more IRS agents to enforce compliance with the new health care bill. Perhaps that’s why there isn’t the manpower available to enforce immigration laws and provide border security.

Still, that is not the greatest inconsistency in his argument. There are three others:

1.) He supports a system that holds undocumented immigrants “accountable” by having them pay a fine, pay taxes, learn English and become citizens. Huh? If we cannot hold them accountable to existing immigration laws, what logic is there in assuming they will find it desirable to be accountable to a list of requirements they can already ignore? Especially, if enforcement manpower is impractical?

2.) The president further stated regarding immigration reform, “I’m ready to move forward, the majority of Democrats are ready to move forward and I believe the majority of Americans are ready to move forward… Reform that brings accountability to our immigration system cannot pass without Republican votes. That is the political and mathematical reality.”

Huh? Actually, Mr. President your Democratic party holds the Executive branch of the government as well as both bodies of the Legislative branch. You passed a widely unpopular health care bill under the same conditions. How can you say you don’t have the votes? The Republicans have been little more than eyewash since your election.

3.) He asserts that we cannot remove illegal aliens because they have become woven into the fabric of the country. Huh? Couldn’t organized crime syndicates be excused using the same reasoning? Have a look at the movie, The Godfather.

Speaker of the House, Nancy Pelosi is seen here on video stating that unemployment checks are the fasted way to create jobs. Again I say, huh? Do the unemployed use the money to help capitalize new businesses and industries, or apply it through investment to the most market-efficient allocation? That’s how jobs are formed. Otherwise, taking money from A (whether a current earner or one yet unborn) and giving it to unemployed B doesn’t grow the economy one dollar or create new, at least in any sustainable sense, jobs.

I’ve gotten used to politicians lying blatantly. What really disgusts me is when they treat us like morons, which they do when they speak in ignorance, factual error and logically inane statements, and then attack us with ad hominem insults when we disagree with them or call them out on their unsupported assertions.

And by the way, a tax increase at this stage, without iron-clad budget and spending reductions is like tying the economy to an anvil before throwing it off the bridge.

Appliance-dependency Helplessness in Hawai’i

In today’s headlines, the U.S. President continues to tout the “Recovery Summer”, while the most publicly-visible and influential Keynesian economist, Paul Krugman, upon whose analysis and opinions help drive the president’s economic stimulus policy, states that we’re at the beginning of a Third Depression (either to be long or great).

Perhaps to emphasize the point, the Dow Jones industrial average has dropped 428 points (4.2 percent) in the last four days, currently down 14.5 percent from its 2010 high in April. Investors appear to be choosing liquidity over capital investment. This sort of trend generally is taken as not a positive development for architects,

However, this is not my most preoccupying concern. The most vexing problem lately has been getting the laundry done.

Some months ago, various of my progeny and their family members, together with us, their parents, moved into one house to help manage reduced incomes resulting from the contracting private sector economy.

There are eight of us here. Several of us play soccer, some surf, one is a triathlete, training sometimes twice a day, and there is a one year old, and we generate dirty clothes regularly and efficiently. We used to do 2 or 3 washer loads a day, until our 7 month-old Maytag washer broke down in a noisy, grinding and ultimately, irritating, though non-agitating (if you know what I mean), way. That was 6 weeks ago.

Four weeks ago, the repairman came out to fix the washer. He took off the top and front panel to reveal at least part of the damage. Concrete rings around the front and back of the drum, presumably functioning as counterweights or stabilizers, were cracked and chipped. The repairman said he would order the replacement parts and call me when with the date they were expected to arrive.

He never called. After repeated calls to his number, I was told the part would arrive a week ago last Sunday. I called on Monday last. No answer. The next day, his receptionist told me the part was on factory back order and wouldn’t arrive until July 16.

Skipping many uninteresting steps. I called the factory. They located a distributor with the part. It arrived yesterday. There were no stabilizer rings. I’ve called twice to the repairman to ask how to proceed with repairs. Neither call has been returned yet. Week seven begins.

We live on an Island, 3,000 miles from the nearest continent. Obtaining certain goods has always been a patience-building exercise. Usually, we just tally it up as part of the price of Paradise. I don’t know how many more weeks must yet pass before our warranty-covered repairs are completed. Patience-building time and Paradise price inflation are both growing.

In the meantime, the local laundromat is prospering in the down economy from the many bags of dirty clothes we wash and dry there every week at no small cost of time and money (Paradise premium rates).

If only architects provided a service that had to be obtained every week…

Is This Really Necessary?

The U.S., currently fighting in two undeclared wars in the Middle East, now has about a dozen warships being positioned in the Persian Gulf against Iran, presumably to be employed militarily in yet another conflict politicians have neither the will nor strategy for winning.

Senator Alan Simpson has said, viewable on video at youtube.com, that within the last month or so, the Social Security system started paying out more than it is taking in.

The Gulf of Mexico is being destroyed by oil and chemicals jetting out of the ocean floor at pressures that defy current technology’s capabilities to resist.

Joblessness and underemployment continue to weaken the economy and harm families’ abilities to manage themselves, while government “borrowing” reaches forward to enslave yet additional future generations under burdensome debt.

After adding another $3.1 trillion to the deficit, the economy is still faltering. Banks are failing at twice the rate of a year ago and the FDIC has used up its reserve funds.

In the face of this and other national problems of crisis proportions, the U.S. president has pushed for legislation to do what?

Create more walking paths and biking lanes. $1.2 billion dollars worth.

Setting aside whether or not this type of activity necessarily falls under the purview of the federal government, is this really the wisest utilization of resources by a government teetering on the brink of bankruptcy? Will this "investment" contribute to commerce and lasting growth in employment?

Perhaps this strikes others differently, but when I read of fiascos like this, I have to wonder if certain of our leaders are in touch with reality at all. My daughters, serving as babysitters in their early teen years, executed their duties far more responsibly.

Canada Makes Kona Newspaper Banner Headline

Yesterday’s local newspaper, West Hawaii Today, featured the top headline: Oh, Canada! Nation’s Economy Suddenly the Envy of the World.

The story reports: “The 20 world leaders at an economic summit in Toronto next weekend will find themselves in a country that has avoided a banking crisis where others have floundered, and whose economy grew at 6.1 percent annual rate in the first three months of this year.”

The article particularly notes that, “there was no mortgage meltdown or subprime crisis in Canada. Banks don’t package mortgages and sell them to the private market so they need to be sure their borrowers can pay back the loans.”

Grrr! Lucky so-and-so’s, who could've ever thought of running banks like that?

“The banks are stable because, in part, they’re more regulated. As the U.S. and Europe loosened regulations on their financial industries over the last 15 years, Canada refused to do so.”

Well, yearh, if you're gonna cheat! How are U.S. banks supposed to compete with that?

“The banks also aren’t as leveraged as their U.S. or European peers.”

I’m going to go out on a limb here and take a guess that Canadian banking system laws aren’t written by former Goldman Sachs executives now embedded in their nation's government.

“Our banks were better managed and we had better regulations,” says former Prime minister Paul Martin, the man credited with killing off a massive government deficit in the 1990’s when he was finance minister, leading to 12 straight years of budget surpluses.”

World leaders have noticed: President Barack Obama says the U.S. should take note of Canada’s banking system…”

Yeah, well, I wouldn’t recommend anyone holding his breath waiting for that to happen.

I Think I Found Your Problem Here

The U.S. labor department released May employment figures last Friday. The government hired 431,000, mostly temporary, census workers. Private sector employment increased by just 41,000 jobs, a decrease in number from 218,000 in April.

Here’s the problem from my point of view as a professional and businessman:

Government jobs are characteristically regulatory. They don’t produce tangible consumer products, like food, housing, cars or appliances. These jobs generally do not contribute to an increase in the nation’s commerce; they actually subtract from it’s production potential, as regulatory jobs add to the cost of production, which must be paid for by the end-user, or consumer, as part of the product price.

That’s not to say that all government jobs are a waste of money. I believe there is a benefit, for example, in safe food and drug laws and their enforcement, assuming that this is taking place free from corrupting influences. Logically, people employed to oversee the safety of consumable products do add value to the products if they keep the products from poisoning us, yet these still are costs to be paid for and not products in and of themselves.

I do not believe that the more government we have, the better our lives become. Many government jobs are little more than political patronage positions useful to politicians for wielding greater political influence. We’ve had a U.S. Department of Education for over thirty years and educational achievement is worse than before it existed. I don’t see why we wouldn’t benefit from eliminating that multi-tens of billions of dollars department cost.

Government jobs are cost factors, not potential profit centers in terms of business. In business, when costs cause a desirable product to exceed the market value of the product, the product generally does not sell, business activity declines for that product item and people cannot be employed for it’s production. When too many products are priced beyond the market’s ability to purchase them, the economy declines. The bigger the government, the greater the regulation cost, and the higher the product end-user cost.

The U.S. government is already running an unimaginably huge deficit. Is it really in the best interests of the country to hire another 431,000 government employees when their costs (wages, benefits, offices and other operating expenses) must be paid for by taxes from another mere 41,000 producers (more than 10 to 1, “costers” to producers?)

There is a tipping point, the question is, are we there yet? I’ve said this before but, when the regulators overwhelm the producers, a country cannot be sustained economically any more than a healthy body can be sustained when the number of parasites overwhelm the host. Eventually, the death of both must result.

If I were in charge of things, at the very least, I would try to start eliminating Federal Departments of Round Pegs Into Square Holes instead of increasing their number. Increasing the cost and difficulty of producing consumer goods in this country is not a useful policy direction. Especially not if the goal is to increase the employment of producers.

You Get What You Pay For…

…after that you must hire an Attorney to get someone else to pay for what you wished for.

Every now and then, someone comes along who can reveal the big picture in the most cogent way. Today, enlightenment is provided by subcontractor/business owner, Pete Battisti, commenting on the faster, cheaper, better expectations of building project owners, particularly as the process is likely to occur more and more in a dog-eat-dog recession economy.

“In most cases, owners get what they pay for and sometimes more than they bargain for when they select the low or unqualified bidder, and it all starts at the drawing process and continues:

--Owner hires low bid architect, possibly unqualified.

--Owner hires low bid general contractor, possibly unqualified.

--GC hires low bid subcontractors, possibly unqualified.

--Owner enters into contract with GC.

--GC enters into contracts with subcontractors.

--All contracts are written to limit the owner’s liability.

--All subcontracts are written to limit the owner’s and GC’s liability.

--All contracts require special endorsements from subcontractors protecting (defending) the owner and the GC.

--All contracts are written with “no” payment guarantees.

Construction begins

Project is completed.

--Owner is not happy because the job took too long to build, had cost overruns, and was not up to the quality that was expected.

--Law firms clean up the legal issues through litigation and or arbitration.

--Insurance companies settle liability claims.

Project complete."

Battisti summarizes: “If everyone really wants projects built faster, cheaper and better, why isn’t there a delivery method that achieves this goal?

“Why isn’t there a vaccination for cancer, or for that matter the common cold? Why don’t cars get 300 miles per gallon of gas? Why can’t we stop illegal aliens or street drugs from entering our borders? Why have we become a consumer country rather than a producing country?

“The simple answer is, there is more money in the treatment than in the cure in the short term.”

And that, for those who are paying attention to the recent machinations of international finance, is also why the foundational causes of the dire problems that most of the economies in the world today are experiencing are not being properly rectified.

Sharp vision is essential for those working at the front end of the food chain in a shark’s world. Pete Battista has flipped on the light switch and adjusted the focus.

California Confronts Tax Revenue Shortfall

From Bernie:
The financial crisis is forcing California agencies to make some tough decisions.
(click on image to enlarge)

"There's a real risk that we may have to lay off Jose."
via

It’s All Play Money Now

Things to think about on Tax Deadline Day:

1. The U.S. national debt is approximately $12 trillion.

2. The approximate yearly GDP of the U.S. (entire economic output) is around $14 trillion.

3. The “M0” money supply (total of all physical bills and currency, plus the money on hand in bank vaults and all of the deposits those banks have at reserve banks, according to the Fed, was about $908 billion, as of mid-2009 [or about 7-1/2% of $12 trillion].

4. Since the start of the recession, the U.S. has lost $17.5 trillion in household wealth, according to a report from the Secretary of the Treasury.

5. According to the 2008 Financial Report of the United States Government, the total liabilities of the United States government, including future social security and medicare payments that the U.S. government is already committed to pay out, now exceed $65 Trillion, close to the GDP of the entire world. Does anyone else wonder where this money will come from?

6. Subsequent to the report, congress and the president passed the health care reform bill, which will become the biggest tax increase in American history.

7. According to the same report, the budget deficit for 2008 was not $455 billion, which was derived by cash accounting, but $5.1 trillion dollars using the government’s (and Wall Street’s) GAAP accounting. That’s a spending deficit of $5.1 trillion for the one year of 2008!

8. According to the Government Accounting Office, “Absent a change in policy…the interest costs on the growing debt together with spending on major entitlement programs could absorb 92 cents of every dollar of federal revenue in 2019" (nine years from now).

9. In 2008, banks were holding $62 trillion dollars outstanding in credit default swaps alone (I don’t have the current figure).

10. With the fractional reserve banking rules in the U.S. banks have lent out many times more money than they have on deposit or that the FDIC can cover should there be a wave of defaults. As of early this month 41 banks had failed since the beginning of this year.

11. Late last month, Fox News reported that 79% of voters polled (72% of Democrats, 84% of Republicans and 80% of independents) believed it possible that the U.S. economy could collapse.

12. When the Federal Reserve (an elite, private, international banking cartel) creates money (introduces more money into the economy), it is loaned to the U.S. government at interest. To pay for the interest, the U.S. government must borrow more money from the Fed at interest. Every time the U.S. does this, the debt gets bigger. This is, by the Fed’s intention, a perpetual cycle of increasing debt.

The question is when can the debt to the Fed be retired? The answer is NEVER. It is mathematically impossible! The house of debt cards will continue to be built higher and higher until it collapses under its own weight – unless the debt is forgiven by the Fed, or repudiated by the U.S. government. There are no other ways.

Middle Class Tax Cut Increase

Sometime in my early twenties, my dad hired one of his doctoral students with the appropriate job experience to lead us in re-roofing the house he and my mother had recently moved into. I think the three of us completed the entire job in one day, two at most.

This student recounted how in his youth he had worked summers for a man who solicited clients for his re-roofing services by going door to door in the rural south. The student explained to us that this business man-of-one for whom he worked told him it was a waste of time asking people whose roofs were deteriorated if they wanted to contract for a new roof, because obviously, as demonstrated by the condition of their roofs, they were too poor to afford a new roof. It was more profitable, business-wise, to sell someone who already had a decently appearing roof a newer one, since he could likely afford a new roof.

Most people by now have seen the report that 47% of American households pay no income tax - that nearly half of the population rides on the back of the other half, against whose income is charged the costs for the expenditures of the U.S. government.

Columnist Mark Steyn quotes these statistics: “The [mere] top 5 percent of taxpayers contribute 60 percent of revenue. The top 10 percent provide 75 percent. Another 40-odd percent make up the rest. And half are exempt.”

So, where will the money be acquired to fund the increasing cost of entitlements, further compounded by health care obligations?

The poor don’t have enough money to tax significantly. Neither do the wealthy, there aren’t enough of them. You’re probably familiar with the statement that if the government confiscated all of the wealth of the richest 1% of Americans, it wouldn’t even fund the expenditures of the government for one day.

No, the group most capable of providing the means through taxation to fund Washington’s incessant appetite for greater and greater spending is the middle class, let’s call them “new roofers” for the sake of descriptive simplicity.

The President promised that those making under $250,000 per year would not see their taxes increased one thin dime, I believe was his terminology. Since average national income has dropped 3.2% since his election, that promise is helpful, if not entirely reassuring, speaking from a “new roofer’s” point of view.

Health Care as a Command Product

Henry Ford was reported to have said of his Model T car, "Any customer can have a car painted any color that he wants, so long as it's black." This was an economic limitation of assembly line production for reasons of efficiency (and by extension economy): Black was the fastest drying paint color.

Limiting available options of a product is inherently cost-efficient (cheaper & more affordable) since set-up, breakdown and modification, to use fabrication terms, are minimized. It also facilitates maintenance & administration, reducing paperwork and information flow to produce cost savings.

Ford approached the Model T as pretty much of a one-size-fits-all offering, since the assembly line and mass-production brought in the Model T at the most affordable option for the greatest number of people. Ford's early profits were realized through a broad-reaching market strategy, not a specialized one. A black, assembly-line produced car was the most affordable car.

In a free-market economy, as prosperity increases, market demand gives rise to innovative and personalized products as people can afford to obtain desired goods and services beyond mere cost criteria. A product's Increased value can demand an increased price if such value is also affordable to buyers who desire that value. This demand defines specialized markets. Responding to such demand has been somewhat characteristic of private insurance coverage - lots of options in a range of prices.

A commanded, public insurance option must necessarily be the Model T of insurance policies: The most efficient price point with limited options. Why such type of coverage cannot already be provided by private insurance companies is perplexing, unless external regulations make it impossible.

Commanded health insurance products are readily available as examples. Canada has one. So does Cuba. Canada reportedly has long treatment waiting times due to suppressing market supply through regulation and price controls. Castro's approach to caring for poor people has been to make more of them - leveling the playing field, so to speak - and spreading the wealth around until there wasn't any of it left. These are generalizations to be sure, but Canada artificially suppresses the supply of services while Cuba artificially inflates demand.

When governments try to artificially influence the supply of a scarce resource or its demand, over time the outcomes might be expected to vary from unsatisfying to disastrous. In economics, scarcity, like water, naturally seeks it's own level of equilibrium.

Doing the Math

Okay, here's the scenario:

Freewheeling Fred Freeman is 36 years old. He pulls in $36,000 per year, but he's single, has no dependents and has no health care coverage at work. He's been relatively healthy all his life and, having rarely needed to see a doctor, carries no health insurance.

Under the new health care bill, he must pay a no-insurance-coverage fine, which he does. Fred pays federal fines of $695 per year for 10 years, a total payment in fines of $6,950. At age 46, Fred discovers he has cancer and, since he cannot be denied coverage for his pre-existing condition, obtains health care insurance under the government's public option. Fred undergoes multiple surgeries and repeated cycles of radiation treatments. His medical bills total out at over $180,000.

Assignment: Explain exactly how this reduces the cost of government and provides a benefit to the American taxpayer.

Parkinson’s Law

In mid-century last, a man named Cyril Parkinson wrote an essay, the thesis of which was that “Work expands so as to fill the time available for its completion.” It was written as a humorous reflection on an observable phenomenon: People tend to take as much, or as little, time to complete a task as the time available to perform it.

This adage was later quantified as a mathematical equation to explain the rate of bureaucratic expansion over time. This expansion is characterized as two-fold: 1.) “An official wants to multiply subordinates, not rivals” and 2.) “Officials make work for each other.” The result is that the number of employees working in a bureaucracy increased at a yearly rate of 5-7% “irrespective of any variation in the amount of work (if any) to be done.” This expansion is observed in “required” federal budget annual increases.

A corollary to Parkinson’s Law is, “The demand upon a resource tends to expand to match the supply of the resource.”

If this corollary is correct, the more available health care services become, the more health care services will be utilized. If the rate of utilization keeps increasing, say at a 5-7% rate per year, the budget required to provide the services will also increase at that rate. It’s not hard to see how the cost of funding the health care bill could double in 10 to 12 years.

While it’s not hard to see the call for tax increases to pay for the increased future cost of health care, it’s somewhat more difficult to see incomes increasing at the same rate.

Where do you suppose the money to pay for the bill will come from?

Health Care Reform of the Cabrini-Green Variety?

Nearly 39 years ago, I began matriculation as a student at a large Midwestern university in the Urban Planning program. At the introductory lecture of one of my classes, our professor introduced us to the thesis: There is No Free Lunch.

Since most of us freshmen previously had only lived in our parents’ homes and survived largely through their financial support, this was a concept that had never occurred to us. Our professor gave example after example of attempts, under various governing authorities, whereby, usually well-intentioned, planning programs had wrought outcomes with various measures of unplanned, adverse consequences.

His warning to us, as potential future urban planners, was that we must recognize that imposed solutions to problems, whether social or infrastructure-related, would most likely result in unforeseen problems and costs to someone or something.

The most memorable example of failed social planning was the Cabrini-Green housing project in Chicago. In attempting to create post-war, urban renewal, large numbers of poor people were relocated from dilapidated lower-density neighborhood housing into a mega-complex of government subsidized, high-density, mostly high-rise buildings. At its peak, about 15,000 poorer people lived in the housing complex.

Obviously, increasing housing density is a logical, cost-efficient use of land and materials. The thinking was that newer, cleaner, cheaper-to-build, albeit, elevated, housing would produce better living conditions for the poor. I suppose you could say the plan was to bring about hope and change.

Contrarily, people lost their sense of neighborhood and social connectedness. High unemployment was characteristic of the complex. The city found it too costly to provide adequate city services, including the necessary police patrol. Conditions deteriorated and drug-fueled, gang-perpetrated crime skyrocketed. Many residents lived in isolation, fear and increased hopelessness. Some years ago, much of the complex was demolished.

Does the same kind of hubristic thinking that created Cabrini-Green underlie the belief that government control of health care will increases it’s efficiency and economy by administration through a distant and faceless bureaucracy?

Personally, I suspect so, and that a similar fate awaits the public under government-imposed health-care reform. Undoubtedly some parties will benefit. Who they will be will become more evident with time. So will the many of whom new costs and sacrifices must be borne. Regardless of the nobility of motive, or lack thereof, of what anyone chooses to do, build or buy, the cost must be paid for by someone.

There is no free lunch.

The Health Insurance Straw Man

We keep hearing from politicians and reports from the media that the health insurance industry is making intolerably high profits and that therefore we need a government-sponsored plan to bring costs down (like that’s gonna happen).

Newsbusters.org has ranked 53 American industries by profitability. Health Care: Insurance and Managed Care operates at a 2.2% profit (makes 2.2 cents profit per dollar of revenue). This is excessive to our leaders? If so, why are they not going after Public Gas and Electric Utilities at 8.7 % profitability? Wouldn’t the higher rate of return be more highly intolerable?

I’d be interested in seeing a report on the profitability of health-care related litigation services.

Here’s the list:

2008 Industry Rank as % of Revenues
1. Network and Other Communications Equipment 20.4
2. Internet Services and Retailing 19.4
3. Pharmaceuticals 19.3
4. Medical Products and Equipment 16.3
5. Railroads 12.6
6. Financial Data Services 11.7
7. Mining, Crude-Oil Production 11.5
8. Securities 10.7
9. Oil and Gas Equipment, Services 10.2
10. Scientific, Photographic and Control Equipment 9.9
11. Household and Personal Products 8.7
12. Utilities: Gas and Electric 8.7
13. Aerospace and Defense 7.6
14. Food Services 7.1
15. Industrial Machinery 6.9
16. Food Consumer Products 6.7
17. Electronics, Electrical Equipment 6.5
18. Commercial Banks 5.2
19. Telecommunications 5.1
20. Chemicals 5.0
21. Construction and Farm Machinery 5.0
22. Insurance: Life, Health (stock) 4.6
23. Information Technology Services 4.5
24. Computers, Office Equipment 4.3
25. Metals 3.9
26. Wholesalers: Diversified 3.5
27. Insurance: Property and Casualty (stock) 3.3
28. Specialty Retailers 3.2
29. General Merchandisers 3.2
30. Health Care: Pharmacy and Other Services 3.0
31. Packaging, Containers 3.0
32. Beverages 2.9
33. Engineering, Construction 2.7
34. Health Care: Medical Facilities 2.4
35. Health Care: Insurance and Managed Care 2.2
36. Petroleum Refining 2.1
37. Food and Drug Stores 1.5
38. Pipelines 1.5
39. Wholesalers: Health Care 1.3
40. Semiconductors and Other Electronic Components 1.0
41. Energy 0.9
42. Home Equipment, Furnishings 0.7
43. Food Production 0.6
44. Wholesalers: Electronic and Office Equipment -0.3
45. Diversified Financials -0.6
46. Motor Vehicles and Parts -0.7
47. Insurance: Life, Health (mutual) -3.0
48. Hotels, Casinos, Resorts -4.5
49. Automotive Retailing, Services -7.9
50. Forest and paper Products -9.6
51. Entertainment -10.0
52. Real Estate -13.4
53. Airlines -13.5