Starwood Inhospitably Says Buh-Bye to CEO; US Homebuilders Have No Loss of Confidence Over Latest Digits; Higher-Debt Education

Paasschen pit…

Image courtesy of Salvatore Vuono; FreeDigitalPhotos.net

Image courtesy of Salvatore Vuono; FreeDigitalPhotos.net

Starwood Hotels & Resorts, which also owns Sheraton and the “W” hotels, had its CEO, Frits Van Paaschen, do his final checkout (note the two a’s and two s’s). Apparently his resignation was a mutual decision (aren’t they all?) between van Paasschen and Starwood. But in a statement, Chairman Bruce Duncan said: “The board believes now is the right time to take steps to accelerate Starwood’s growth, improve performance and sharpen our focus,”  What are you really saying, Mr. Duncan? That growth slowed under Paasschen’s leadership? Actually, it did. News of the resignation sent shares up 4.3% hitting $81.07. But to be fair, and you have to be fair to a guy with a name as fun as Frits Van Paasschen, under his leadership the company pulled in $234 million and $1.33 per share for the fourth quarter when analysts predicted Starwood would only pull in 76 cents. Now that’s Paasschen! Just sayin’. Don’t feel too sad for the guy, though. He is getting a severance package upwards of $12 million. The company will be now helmed by interim CEO Adam Aron until a permanent replacement is found. But one thing is for sure…there will never be another Frits Van Paasschen  – with two a’s and two s’s. So there.

Show me the confidence…

Image courtesy of cooldesign/FreeDigitalPhotos.net

Image courtesy of cooldesign/FreeDigitalPhotos.net

So today we get some info from the National Association of Homebuilders/Wells Fargo builder sentiment index telling us exactly how builders are feeling. Well, they’re feeling about a 55. Which is good news because a number above 55 is good. It means confidence. Optimism. Money. Happiness…you know all the things that matter, except for health, which isn’t measured in this index. Whatever.  Not to be a downer, but this is the second month in a row that that number fell – last month it was 57 – and the lowest number it has been in four months. By the way, those economists who spend their days away forecasting what that number might be guessed it would be closer to 58. Ah, well. You can’t win (predict?) ’em all. So why, exactly, are builders still so optimistic? Because those numbers, which are not awful anyway, are probably the result of this painfully annoying, snowy frigid winter which isn’t exactly sending people running out of the warm comfort of their cozy homes to look for new ones.  Once the weather begins to cooperate, builders expect to see more traffic. Add to that low mortgage rates and major job gains and you get home-builder confidence, my fiscal-loving friends.

But probably not buying a house anytime soon…

Image courtesy of ddpavumba/FreeDigitalPhotos.net

Image courtesy of ddpavumba/FreeDigitalPhotos.net

The Federal Reserve Bank of New York just regaled us with some thoroughly disheartening new information that puts a damper on the American dream. It seems that the amount of loans due over at least 90 days has grown by over 11%. But wait…there’s more…a lot more. Like $1.16 trillion more. That’s how much money has been borrowed by students in the name of education this year and is more than 7% higher than last year. All those educated young Americans who are eager to scoop up jobs in the workforce may not be among the buyers for all those new homes that all those US homebuilders are building, no matter how reasonably priced they are. That’s because that newly highly educated contingent will be thrilled just to be able to pay down some of that mammoth debt.

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