Economic Green Shoots

[Pete_C]

Yes, I am aware that the new job figures for last month are out and they are not good; but I have recently noticed a lot of things that give me hope.

First off, the DOW is back up over 8000, after four weeks of positive movement.

http://www.wikinvest.com/wiki/Dow_Jones_In...Average_(.DJIA)

From low of 6626 to todays high of 8017.59 today That is a run up of 1391 or 20% in one month; more than normally occurs in a year.

Sure there will be ups and downs and we are a long way from the high of over 14000 but still it was a nice month.

But that is not what sparked my interest.

Back in October / November last year when everything was crumbling; many construction projects were canceled, downsized or put on hold. The number of tower cranes on the downtown skyline plummeted to just a handful (five?) . Today I was downtown and noticed that there were more than 12 and all busy. There are also lots of new projects which do not require tower cranes underway and that is just in the inner core of the city.

When the second round of TARP was made available to smaller regional banks; I noticed that a street that had long been just rundown old shops most of them closed was suddenly bustling with construction activity and banners proclaiming which bank was funding the project. They did gut and remodels and complete rebuilds in record time due to the availability of contractors, labor and material. As soon as one project was completed another seemed to begin. Now the street has a new grocery store (new chain's first store in Dallas) which is always busy; new restaurants and shops all seemingly doing booming business. New condos and townhomes nearing completion and ones which have finished already full.

I have also noticed as I drive around the City the largest amount of road repair I can recall, and new water and sewer lines being run to replace aging ones that are long overdue replacement.

It seems that everywhere I go they are hard at work and doing good work and getting it done in record time. Cracked or sunken concrete slabs in major thoroughfares (surface streets ) are being torn out and replaced ; additonal turn lanes at intersections are going in and the intersection repaved; in some locations they have crews working night and day (multiple shifts).

On my block six older homes are undergoing total renovations (including two duplexes being converted to single family homes) ; not low quality flipper crap like you see on TV, the real deal where they gut it down to studs, do any structural repair that is needed, gut all the plumbing and electric and put in all new and do a proper insulation job and all.

So have any of you noticed any hopeful signs? What are they working on in your neck of the woods?

[bozodog]

Ohhh man, Pete. Things here are still sliding. I see more empty commercial spaces everyday. Houses for sale everywhere, the signs are sprouting like dandelions. There hasn't been much new construction going on around here for over a year. I will say I've seen several dilapidated buildings in prime locations being torn down, but who knows whats going to happen with the lots. Road construction in the spring is a given around here. The major project was funded several years ago, adding new lanes to I-94 in six years from Battle Creek to Paw Paw.

Our county does well over all, with three hospitals, three college campus', and a downsizing Phizer operation. The poor are still getting poorer. Our Community Center's food bank is really bare and they are scrambling for donations. The volunteers there say folks who used to donate have stopped by for a bag of handouts.

I don't know about any recovery, but gas is still too high. Milk at $3.50 a gal? Pork loin that sold for 99 cents a pound last summer is now $1.79? It goes on and on... Even Little Caesars Hot 'n Ready pizza went up to $5.55 from $5. Perhaps when the season breaks things will begin moving.

[flashh4]

Hey Pete, Wyoming is still booming with the discovery of Methane Gas here about 3 yrs ago. Wages are starting around $25 an hour. But the hard part is finding places to stay, even the camp spots for RV's are full. But they are saying that it will last about another 5 to 10 yrs.

The local people wish it would go away sooner because they loved their towns when it was less populated and not so many vehicles. So we are one of the lucky ones, if you want to call that lucky, me, i can take it either way.

I have lived in ST. Louis Mo. for a long time, and was borned in the hills of Kentucky but Wyoming with its wide valleys,trees, rivers and creeks and mountains are just like heaven on earth. I hope that never changes.

Oh, one more thing is Wyomings population is only around 500,000 most cities in other states are larger that that.

Just my take from how Wyoming is doing !!

Chuck

[Pete_C]

Yeah Chuck I know what you are talking about in regards Natural Gas. Just to the west of us is the Barnett Shale deposit. At first there was all this fervor for explanation when they started signing leases and paying royalties. Then a small group of noise makers got lots of coverage for protesting drilling in urban and suburban settings and tried to get communities to raise the distance from a dwelling that wells and drilling rigs must be (I think from 300Ft to 600 or 1000ft). The latest is challenges to the Texas pipeline regulations which basically give the utility companies the right to claim eminent domain for pipelines if land owners refuse to negotiate in good faith and take a reasonable negotiated offer for right of way.

On the retail front; I have seen some restaurants and chain stores close over the last year; but the burst of new openings in the last month and ones that should open soon is amazing.

Looks like they are beginning to anticipate recovery starting in the second quarter (April - June) with a good summer and fall ahead. Sure would be nice.

Yes, I have seen some locations remaining derilict and vacant; but it generally seems to fall into one of two catagories; really poor location and design or a greedy landlord who wants more than what the property can bring in.

We just got a new Whole Foods market a half mile away (not that I would buy their overpriced crap) with "green design" built to LEAP specifications and winner of a bunch of awards.

Also two weeks after they opened we got a Newflower market http://www.newflowermarkets.com/

http://www.sfmarkets.com/saleflyer/40109/pdf/dal4109.pdf

Just a little further away (about a mile or mile and a half)

Now that is shopping, 69Cents for a third pound tray of blackberries (gonna make cobbler today).They had fresh leaks for $1.19 a pound last week (no typo).

$3.97 a pound for all natural NY strip steaks and ribeyes.

$2.97 a pound for Large headless shrimps.

49 cents a pound for Acorn squash.

Then there is the "hispanic" oriented store, which has the biggest in store butcher department I have ever seen. They have a glass sided meat locker with whole sides of beef, pork, goat, sheep hanging there (like a scene out of Rocky) and real butchers with real knives cutting them up.

They have ground beef (the standard 70/30 stuff) for 99 cents a pound day in day out.

This weeks specials are huge (ripe and juicy and smelly and beautiful) beefsteak tomatoes four pounds for a dollar, beef shortribs for a dollar a pound, pork chops 88 cents a pound, ten pounds of baker size russet potatoes for a dollar, Pollack filets and immitation crab $1.49 (a normal pice for both there and they sell all white meat chicken nuggets for the same price) . Romaine lettuce 59 cents a bunch and they are big and fresh and top of the line, red onions 3 pounds for a dollar, yellow and brown 5 pounds. Fresh spinach 77 cents a bunch and the bunches are easily 2-3 pounds (maybe more since that is how much I got when it cooked down).

Gotta love Dallas when it comes to grocery stores and restaurants we probably have more options than just about anywhere.

Still have the dollar cinema with 50 cent tuesdays and mondays 50 cents each if you have three or more people (family night) . We do that on a weekly basis taking our former neighbor who is now in an assisted living community (he has alzheimers) and the mother of a friend who died of cancer last year ( her husband died the year before and we promised him we would look after her for him) out to catch a movie together and give them a jar of home made soup or other home cooking to enjoy.

[JDoors]

I haven't noticed any changes locally, though I live far from "the city" so I might be missing the signs.

Pete, how much of this activity is just seasonal? It's Spring, of course you're going to see more activity.

[Pete_C]

Here in Texas, there is not really any such thing as seasonal. We have two short growing seasons spring and fall separated by a hot dry summer and winter that isn't bad but can have enough frosts to kill plants. But the only thing which slows roadbuilding and construction in general is when it is to wet to pour concrete.

No, I discount seasonality as an issue here. And like I said, more road repair than I can recall seeing and projects which had languished for the last year are suddenly going full steam ahead.

Just hope it does not raise the price of gas to much.

[JDoors]

Since I doubt stimulus money's been distributed to the point where IT can explain the activity, it must be your state's finances have recovered or are expected to with certainty. How's your state's finances anyway?

I practically never shop on weekends, but friends and family who do say they never saw any thinning of the crowds, regardless of what's been in the news. During my weekday trips I noticed some signs that could be economic in nature (fewer items stocked, some out of stock items, few shoppers, etc.), but that seems to have cleared right up. Don't know if that's due to the economy or is just the normal ebb and flow of business.

[Pete_C]

State still presumably has a budget surplus since they have a big "rainy day fund" (technically the Emergency Economic Stabilization Fund estabilshed in 1988 by Democratic governor Marl White and a Constitutional ammendment approved by voters and had a value of 1.1 Billion in 2003 ) which has very strict restrictions on how it can be invested (only in Aa1 or better bonds, the second highest possible).

Art. 3, sec. 49-g requires the comptroller to transfer

to this fund, no later than the 90th day of each biennium,

“one-half of any unencumbered positive balance of general

revenues on the last day of the preceding biennium.”

Unencumbered revenue has no constitutional or statutory

restriction and has not been obligated to be spent in the

future. No such transfers have occurred since 1991, as

the state’s biennial budgets have left no unencumbered

general revenues at the end of fiscal biennia

Art. 3, sec. 49-g requires that the fund

receive 75 percent of any oil or

natural-gas production tax

revenue that exceeds the

amount collected in fiscal 1987.

The remaining 25 percent of the

excess revenue goes into

general revenue

The fund cannot exceed an amount equal to 10 percent

of the general revenue (minus certain types of income

and funds) received during the previous biennium. The

current cap would be roughly $5 billion,

So yes, we can go ahead and fund things now even when sales tax revenues are short because we the voters created this reserve twenty years ago.

Side note the House and Senate both passed the 2010 budget resoluiton

http://www.commondreams.org/newswire/2009/04/03-13

http://www.sltrib.com/ci_12063179

Sure is nice to see them already working on stuff that is that far in the future.

Increasingly there appears to be optimism; although some prefer to refer to them as seeds of hope and not green shoots of new growth.

http://www.cnbc.com/id/29949849

Even internationally

http://www.telegraph.co.uk/finance/5095371...mists-hope.html

http://www.koreatimes.co.kr/www/news/biz/2.../123_42548.html

[JDoors]

Well, regardless of how bad things COULD have gotten, or how worried people are or have been, things were bound to return to normal at some point. Thank goodness it appears the worst isn't going to happen -- though it's still early.

Texas had surpluses? Not TOO surprising what with oil revenue and all, but you'd think with politicians being politicians all that money would have been squandered. How'd you like to have California-style government? Or the astounding corruption in Illinois?

Now if we can just have a recovery without runaway inflation.

[Pete_C]

Actually the surpluses began during the Oil Bust days; and the fear that Oil revenue would be worse in days to come was one factor in establishing the rainy day fund.

Of course the Texas Constitution is really well written and does a good job of restricting what the legislature and governor and State can do without prior approval by the people.

It is normal to have several bond issue approvals on the ballot, along with funding approvals for high dollar items and any change in state agencies.

The secretary of State even maintains a list online (nothing there just now)

http://www.sos.state.tx.us/elections/voter...theballot.shtml

http://www.sos.state.tx.us/elections/laws/may9.shtml

Next election is May 9

Example of what gets put on the ballot

• Prop. 1: Governance of Angelo State University

was moved from the Texas State University

System to the Texas Tech University System. This

amendment ensured that previously allocated

appropriations would follow the transfer and

future allocations would continue without

interruption. In favor were 696,426 voters (66.30

percent); against were 353,922 (33.69 percent).

• Prop. 2: This amendment would provide $500

million for student college loans. The loans are

paid for by the students who borrow the money

and while private loans are available they often

carry higher interest rates and are sometimes sold

to other lenders. Six times since 1965 Texas

voters have approved the use of general obligation

bonds for low-interest student loans. In favor were

718,282 voters (65.84 percent) and opposed were

372,659 (34.15 percent).

• Prop. 3: In 1997 voters approved the limitation

on increases in appraised value of residential

homesteads with the intent of prohibiting the

appraised value of a homestead from increasing

more than 10 percent from year to year. However,

many appraisal districts that do not appraise

property annually enforced increases of up to 30

percent in the year in which a residence

homestead was reappraised for tax purposes.

Proposition 3 conforms the language of the Texas

Constitution to the legislature’s intent when it

enacted the original appraisal. In favor were

and maintenance of equipment and facilities

for a number of state agencies, including Parks

& Wildlife, State Health Services, School for

the Blind, Youth Commission, Criminal

Justice, and Public Safety. In favor were

627,609 voters (58.16 percent) and against

were 451,440 (41.83 percent).

• Prop. 4: This amendment would

veterans from property taxes, on a

provide funding for construction, repair

and maintenance of equipment and facilities

for a number of state agencies, including Parks

& Wildlife, State Health Services, School for

the Blind, Youth Commission, Criminal

Justice, and Public Safety. In favor were

627,609 voters (58.16 percent) and against

were 451,440 (41.83 percent).

• Prop. 5: This amendment would allow the

legislature to give small cities a local option

tax relief tool that can be used to preserve and

protect the historical buildings in their

downtown areas through the cooperative

efforts of the city and its downtown property

owners. In favor: 690,650 (66.01 percent) and

against: 355,583 (33.98 percent).

• Prop. 6: This amendment would remedy

the inconsistency in the taxation of a

personal motor vehicle that is also used for

the production of income so that tax relief

would be extended to small business owners

and contractors who use their personal

vehicles for incidental commercial purposes.

In favor:

800,005 (73.69 percent) and

against: 285,537 (26.30 percent).

• Prop. 7: This amendment allows property to

be sold back to property owners whose

property was acquired through eminent

domain under certain conditions at the price

the condemning entity paid for the property. In

favor: 867,973 (80.32 percent) and against:

212,555 (19.6 percent).

• Prop. 8: Recent disasters suggest that

flexibility is needed so that borrowers can

access the equity in their homes to finance

repair of damages caused during a declared

state of emergency. This amendment

addresses uncertainty in home equity lending

laws and more closely reflects the actual

business practices of lenders while protecting

borrowers from unscrupulous practices. In

favor: 823,189 (77.56 percent) and against:

238,136 (22.43 percent).

769,908 voters (71.50 percent) and

against were 306,830 (28.49 percent).

• Prop. 9: This amendment will

exempt homesteads of disabled veterans

from property taxes, on a

sliding scale tied to the level of

disability. Under current law the exemption is

only up to $12,000 of the value of the person’s

property. In favor: 932,418 (86.19 percent) and

against: 149,275 (13.80 percent).

• Prop. 10: In 2003, the Legislature changed the

Agriculture Code to abolish the offices of

inspectors of hides and animals. Proposition 10

would bring the constitution in line with the

legislation. In favor: 806,652 (76.56 percent) and

against 246,914 (23.43 percent).

• Prop. 11: This amendment would require the

Legislature to record final votes on bills, except

those that are ceremonial or local-interest, and

make those votes available to the public on the

Internet. In favor: 893,686 (84.53 percent) and

against: 163,553 (15.46 percent).

• Prop. 12: This amendment would allow for $5

billion in highway improvement projects. In favor:

670,186 (62.60 percent) and against: 400,383

(37.39 percent).

• Prop. 13: When a defendant has violated a court

order, this amendment would allow judges to

evaluate the danger he or she poses to the victim

and community and then deny bail in appropriate

cases. The measure only applies to family

violence cases and to defendants who violate a

previous court order. In favor: 916,173 (83.87

percent) and against: 176,189 (16.12 percent).

• Prop. 14: This amendment would allow judges to

serve out their terms even if they hit the

mandatory retirement age of 75 while in office.

However, judges who become 75 in the first four

years of a six-year term would have to leave after

the fourth year. In favor: 814,148 (75.00 percent)

and against: 271,245 (24.99 percent).

• Prop. 15: This amendment creates the

Cancer Prevention and Research Institute of

Texas and would provide the cancer research

and treatment community with up to $300

million each year for 10 years. In favor:

673,763 (61.45 percent) and against: 422,647

(38.54 percent).

• Prop. 16: This amendment would allow the

Water Development Board to issue up to $250

million in bonds to help distressed

communities. In favor: 650,533 (60.77

percent) and against: 419,914 (39.22 percent)

Yep, we don't let those fat cats make all the decisions; anything major goes to the voters.

Well I needed two new tires , but decided to do my bit and go for a set of four new GoodYears.

The others would probably have lasted another year; but hey it makes sense to get a full set all at once. Got some high pressure low rolling resistance ones in hopes that they will improve my mileage and pay for themselves over the lifetime of the tires. Prediction is that they will give about a 3-4% improvement in mileage so that looks like a good investment. If they save one penny per mile then I will save double what they cost over the life of the tire. That would be about a 1% mileage improvement.

My preliminary results for the first half tank look like it may well be much more than that (maybe as high as 20% improvement but I did get a new timing belt a month ago too and the computer takes 300 miles or so to fully recalibrate things).

I saw a couple more "townhouse / apartment" projects which had been languishing as vacant lots for about six months up and booming with construction workers and going up so fast I was surprised at how fast they are getting completed. They seem to have completed as much work in a month as projects normally get accomplished in three or four. Whereas in the past normally they build one unit at a time finishing it out and selling it before the next is even started; these have staggered crews working on every site on the lot.