Executive Edge

Despite bumps, consumers views improve in ‘13

Jeff Brown, Special to CNBC.com

Recapping the day's news and newsmakers through the lens of CNBC.


Let's end the year on a positive note: an unexpected spike in consumer confidence.The Conference Board's December report Tuesday morning showed a leap to 78.1, from 72.0 in November. Economists had forecast 76.0. The report, along with new data on healthy home-price gains, pushed stocks up, putting a cherry atop the year's stunning returns.

Confidence now matches its level before the fall government shutdown. Consumer expectations were up as well, as were there views of the labor market.


"Despite the many challenges throughout 2013, consumers are in better spirits today than when the year began."—Lynn Franco, director of economic indicators at The Conference Board.

Homebuyers: think small, close to work

Vsotck LLC | Getty Images


What will the housing industry of the future look like? Recent trends to smaller homes nearer to city centers may continue, says Yale economist Robert Shiller, co-founder of the S&P/Case-Shiller index of home prices.

The latest Case-Shiller figures show prices up a whopping 13.6 percent over the past 12 months, but up a less-than-expected 0.2 percent in October. Topping the list were the 27.1 percent gain in Las Vegas and 24.6 percent in San Francisco. Despite the slowing pace of gains this fall, Shiller says housing is in the very early stages of another bubble.


"Things are changing fundamentally, and it seems people are less excited about big homes. The financial crisis kind of put a damper on that enthusiasm, especially big homes far away from the city center. There's this new urbanism afloat. Housing is not one thing. It's not monolithic. I think there might be a trend toward more urban living."—Shiller.

Beloved tax breaks enter D.C. limbo


Take this as a gentle reminder: If you count on cherished tax breaks for your business or personal return, don't count your chickens before they're hatched. Some 55 tax breaks are expiring at midnight Dec. 31, and there's no way of knowing whether Congress will renew them as it has so often in the past.

The list ranges from the big—like credits for research and development, to the small—such as credits for racetrack owners. In between are things like exemptions for financial institutions doing business overseas and accelerated write-offs for capital investments.

Of course, we've been through this before. Congress often renews breaks months into the New Year, making them retroactive to Jan. 1, and in 2012 it stalled for the entire year. But there's no way of telling for sure which breaks will be renewed, trimmed, expanded or allowed to expire.


"The best thing I would say is, budget accordingly. As the saying goes, hope for the best but plan for the worst. Then if you get it, great, that's a nice perk. But don't count on it."—Jackie Perlman of H&R Block.

Yes, it’s gold, but the glitter’s gone

When it comes to gold, views are always passionate. Naysayers think it's a lousy investment for the long term, believers think it's the only true hedge against inflation and catastrophe. Barring the inconceivable, 2013 will be a winning year for the naysayers, as gold has suffered its biggest annual loss in three decades.

Gold has fallen about 28 percent, while the has gained nearly 30 percent. In fact, gold was undermined by falling demand as investors switched cash to equities. From a high of around $1,900 an ounce in 2011, when the European debt crisis made it attractive, gold has fallen to less than $1,200 as improving economic conditions reduce investors' hunger for a safe haven. Many experts think gold will keep falling.


"It's going down further. We think next year gold could hit $1,000 an ounce and that will just be a continuation of a trend which is forced and forced and forced by more people wanting to get back into equities and out of commodities."— Nick Hungerford, chief executive of Nutmeg

—By Jeff Brown, Special to CNBC.com.