October 2007


UCLA Anderson Forecast/Orange County Outlook for 2008 -- October 29, 2007

In their 2008 Orange County Outlook, UCLA Anderson economists predict that the Orange County economy will be sluggish through much of next year, exacerbated by the area's downturn in the real estate market.  Articles appeared on 10/29 in the Orange County Business Journal and the Orange County Register, and the forecast was reported on KOCE-TV (PBS-LA), KNX-AM (CBS-LA), KPCC-FM (NPR-LA), and KFI-AM (MRN-LA).  

ABC Radio Network
News On the Hour
Stuart Gabriel, UCLA Anderson professor of finance and director of the Ziman Center for Real Estate, commenting on the economic impact of wildfires on the California real estate industry, says an increase in construction will benefit the economy.  This segment aired nationally on Oct. 29.

The Modesto Bee
Real Estate Roller Coaster Plunges After a Thrilling Ride
Too many new homes and too many investors mixed with too many exotic loans created a lethal mix that caused Northern San Joaquin Valley's housing market to crumble.  According to Stuart Gabriel, UCLA Anderson professor of finance and director of the Ziman Center for Real Estate, builders flocked to the area because there was a lot of opportunity amenable to development.  "A tremendous new supply of homes came on the market, and it caused a supply-demand imbalance," says Gabriel.  This article appeared on Oct. 28.

Los Angeles Times
Foreclosures Spread to State's Affluent
In California, foreclosures have primarily hit borrowers with modest incomes who purchased homes in modestly priced neighborhoods, but new data shows the pain is spreading to higher-priced neighborhoods, as well.  With foreclosures expected to continue, the housing market could be flooded with discounted, bank-owned homes -- possibly stalling a recovery for several years.  Even if the Federal Reserve continues cutting interest rates, "it's still going to be shocking," says Edward Leamer, director of the UCLA Anderson Forecast.  This article appeared on Oct. 27.

PBS -- National
Nightly Business Report
Commenting on the recent California wildfires, Stuart Gabriel, UCLA Anderson professor of finance and director of the Ziman Center for Real Estate, says rent for housing in the region will rise as a result of the fires, but as rebuilding begins it will generate new construction jobs and demand for building materials.  This segment aired on Oct. 25.

Reuters
Retail Suffers as California Wildfires Burn
Wildfires in Southern California have only exacerbated a difficult retail environment in a state already hit by declining home sales and mortgage woes that have impacted consumer spending.  "In the wake of a tragedy like this there are forces that would increase retail purchases and forces that would decrease retail purchases, notably a fall-off in tourism," says Jerry Nickelsburg, an economist with the UCLA Anderson Forecast.  This article appeared on Oct. 25 and was reprinted in the Washington Post and on the Conde Nast site Portfolio.com.

Los Angeles Times
Ambitious Designer Should Ask Self: Why Sew Much?
When textile designer Robyn Murgio's business wasn't turning a profit she realized it was because her business required an enormous amount of inventory, both in fabric and finished goods.  Enrolling in UCLA Anderson's Management Development for Entrepreneurs (MDE), a premiere executive training program for entrepreneurs, Murgio devised a business improvement plan that helped her alter some of her current practices, and move her business forward.  This article appeared on Oct. 25.

Associated Press
Homes, Tourism, Infrastructure to Take Worst Hit From SoCal Fires
Losses from the wildfires ripping across Southern California could exceed $1 billion, but the region's diverse economy will most likely weather any long-term economic setbacks.  "All in all, the fires occurred in more remote, residential areas," says Jerry Nickelsburg, an economist with the UCLA Anderson Forecast.  "It will have very little effect on the medium and long-term economic growth and economic health of the region."  This article appeared on Oct. 24 and was reprinted in the Daily News, Orange County Register, Sacramento Bee, Fresno Bee, Seattle Times, Chicago Tribune, Daily Breeze, Las Vegas Sun, San Francisco Chronicle, Baltimore Sun, and the San Jose Mercury News and on Forbes.com, MSNBC.com, and CNNMoney.com.

USA Today
Criticism Rains Down on Mortgage Industry
As the public outcry against the mortgage industry grows louder and foreclosures increase, added pressure will be on the Federal Reserve to cut interest rates again next week.  Yet some economists, like Edward Leamer, director of the UCLA Anderson Forecast, don't think another cut is the answer.  "The (Fed policymakers) need to close their eyes and pray at this point," says Leamer.  "A cut in rates is not going to revive the subprime market."   This article appeared on Oct. 23.

Los Angeles Times
Find a Niche and Let the Game Plan Begin
Most successful small businesses start off using every sales trick in the book to pitch their product, but it is also important to have a solid game plan as sales build.  "You have to be smart about building relationships you hope will pay off," says Robert Foster, an adjunct professor and director of the Global Access Program at UCLA Anderson School of Management.  This article appeared on Oct. 23.

San Gabriel Valley Tribune
Jobless Rate Increases
Los Angeles County's slowdown in construction and manufacturing and the region's recent unemployment rate rise signifies an economy that continues to feel strain and uncertainty.  Stephen Cauley, lecturer with UCLA Anderson School of Management and director of research for the school's Ziman Center for Real Estate, said mortgage lenders like Countrywide Financial Corp. and Pasadena-based IndyMac Bancorp Inc. will likely have some more layoffs in store.  This article appeared on Oct. 20.

Los Angeles Times
Jobless Top 1 Million in California
Though more jobs have been created in Los Angeles County, the unemployment rate rose in September, and many economists expect the joblessness trend to continue in the coming year.  In their most recent forecast, economists with the UCLA Anderson Forecast said the unemployment rate could hit 6%, but this doesn't spell a recession.  "We're going to have a near-miss," says Ryan Ratcliff, an economist with the UCLA Anderson Forecast.  This article appeared on Oct. 20.

The San Diego Union-Tribune
Landlords Reap Rewards in Housing Slump
Tighter lending standards and a recent spike in home foreclosures are benefiting the San Diego region's landlords, as more people opt to rent.  According to Edward Leamer, director of the UCLA Anderson Forecast, this is happening in many Southern California communities, and the shortage of rental housing is driving up rents.  "It is great for the landlords but bad for the rest of us who need a place to live," says Leamer.  This article appeared on Oct. 18.

Daily Bruin
Anderson Promoting Women's Corporate Leadership Roles
Because women sometimes face different challenges than men, UCLA Anderson School of Management offers the Women's Leadership Institute each fall as a way to help women navigate around today's workplace issues.  "When you look at the pressures companies are under to perform every quarter, it's very difficult to create situations in which your executives have good work-life balances," says Laurie Dowling, executive director of UCLA Anderson's Executive Education programs.  The week-long program, designed to help female executives and managers balance work responsibilities with other aspects of their lives, is part of UCLA Anderson's Executive Education Leadership Suite Series.   This article appeared on Oct. 15.

Los Angeles Times
Stuck in a Glut
The crisis in the subprime mortgage industry isn't the only reason why so many homeowners are having trouble selling their homes.  There are three kinds of sellers, says Edward Leamer, director of the UCLA Anderson Forecast: builders of new homes, bankers and owners of existing homes.  Existing homeowners dominate the market, but sadly for them, their fate may be "hitched to the wagons" of the builders and bankers.  This article appeared on Oct. 14.

Los Angeles Times
Professional Grade
According to Dylan Stafford, director of admissions for the Executive and Full Employed MBA programs at UCLA Anderson School of Management, Executive MBA programs offer cutting edge instruction and help executives navigate a rapidly changing and expanding global marketplace.  UCLA Anderson's program offers weekend instruction and hands-on experience, with a focus on global business.  The curriculum is vast and varied, but leadership training is a constant throughout the 22 month duration, and as Stafford says, is perhaps the program's most important aspect.  This article appeared on Oct. 14 in the Times' Education Supplement on Executive MBA Programs.

Boston Herald
Zara: Doing It By the Numbers
Thanks to a newly developed inventory distribution system, customers of Spanish fashion retailer Zara can expect a better shopping experience and increased size selection.  UCLA Anderson School of Management professor Felipe Caro and his collaborators from MIT/Sloan developed a software tool that helps managers more efficiently replenish inventories at Zara's 1,000-plus stores in 68 countries.  By implementing a mathematical optimization model, shipment decisions take into account input from store managers, while also incorporating historical store sales to better distinguish what will appeal to each store's customers.  This article appeared on Oct. 14.

Investor's Business Daily
Presidential Hopefuls, Congress Toss the Housing Hot Potato
The meltdown in subprime loans will be perfect bi-partisan fodder just in time for election season.  David Shulman, a senior economist with the UCLA Anderson Forecast, says he expects "show trials" before Democratic congressional committees to begin this winter, replete with testimony from distressed homeowners.  "Both parties will try and show how sensitive they are to homeowners."   This article appeared on Oct. 12 and was reprinted on Forbes.com and CNN Money.com.

The Sacramento Bee
Dan Walters: California Economy, Mood Sour
With the state bearing far more of its share of the slowdown in residential real estate, will the implosion in the housing industry push California toward recession?  Not according to Ryan Ratcliff, an economist with the UCLA Anderson Forecast, who says even though  California will experience another year of economic doldrums, the state "will not sink into a recession."   This article appeared on Oct. 7 and was reprinted in the Orange County Register, San Jose Mercury News, Oakland Tribune, and the Daily News.

Associated Press
Forecast Dim for Las Vegas Housing Market
For economists and housing experts, Las Vegas has always been a leading indicator of national housing trends, and tumbling home prices in the region will reveal how far and fast U.S. property values will fall in the coming year.  Edward Leamer, director of the UCLA Anderson Forecast, predicts a 20 percent slide in prices in Nevada, California and Florida over the next three or four years.  This article appeared on Oct. 7.

Information Week
Math Whizzes Turbocharge An Online Retailer's Sales
Mathematicians revolutionized Wall Street in the 1970s and now they are using complex equations to make the retail industry more profitable.  UCLA Anderson School of Management professor Felipe Caro and his colleagues from the MIT/Sloan have helped Zara, a Spanish clothing chain, develop an analytical model to optimize the distribution of inventory across its stores around the world.  According to the researchers, the new system has freed up "an army of people" who used to spend most of their time crunching numbers and doing data entry to come up with sales forecasts and shipping logistics.  This article appeared on Oct. 5.

Daily Bruin
Actress Speaks on Behalf of Banking Organization
As ambassador for the Foundation for International Community Assistance (FINCA), actress Natalie Portman visited UCLA Anderson School of Management to discuss microfinance and her work with FINCA's Village Banking program.  Microfinancing can help underprivileged people get access to credit, and many believe it is an effective way to pull people out of poverty.  According to UCLA Anderson professor of finance Bhagwan Chowdhry, who spoke at the event, more people in developing countries would succeed as entrepreneurs if they had access to credit.  The event was co-sponsored by UCLA Anderson student club Net Impact.  This article appeared on Oct. 4.

Inside Higher Ed
Mapping the Indian Business Student Boom
Despite the fact that students from India are applying to business schools worldwide in ever-increasing numbers, U.S. business schools have lost market share relative to Indian and European schools.  "Globally, business schools are growing," says Judy Olian, dean of UCLA Anderson School of Management.  "What that has meant is that the flow of applicants is no longer uni-directional."   This article appeared on Oct. 2.

Builder Magazine
When Will it End?
Because of weak sales and builders getting stuck with more cancellations than anticipated, the nation's housing starts are predicted to stay at a low level through 2008.  According to David Shulman, senior economist with the UCLA Anderson Forecast, builders have cut way back on starts will continue to cut back.  "In a housing down cycle, you typically go down 50 percent from peak to trough, and we're almost there, in terms of starts," says Shulman.  This article appeared in the Oct. 2007 issue.

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