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July 18, 2011

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Well then, that settles it. Thanks to PBJ and Forbes, I will now leave behind my life of Contrarianism and join the ranks of the Age of Aquarius.
I will live among the animals of the forest and wait for the arrival of the Morlocks, who when they try to harvest me will get an AR-15 surprise. (After all, even in lala land, one must be prepared.

Note: PBJ stands for Phoenix Business Journal, even though in lala land it does stand for Peanut Butter & Jelly.

Peace and Prosperity to everyone !! (But not the Morlocks.)

Ok, here's my first post as a newly minted optomist.

The good times are getting ready to explode here in the VALLEY OF THE SUN. The new fab unit in Chandler is going to employ 4,000 construction workers for three years. After that, the fab will employ 3,000 workers. The new solar plant at Williams gateway will employ 4,000 employees. These will all be high dollar jobs which will fuel the east valley economy. Assuming that each city in the valley adds the same number of workers with similar and easy to arrange manufactuing plants, we optomists estimate that approximately 40,000 new jobs per year will be added to the valley's economy. This is a wonderful time to be alive in this valley as we arise like the phoenix from the ashes of the recession. As it turns out there was no warming of the planet, it was only "summer". Leave it to those silly "lamestreet media" to distort the truth. I'm heading down to my local bookstore so that I can get my picture taken with Bristol Palin. After all, she is our future. God Bless optomism and God Bless the United States of America. Where did I put my flag pin?

The pundit placing Phoenix in the top ten growth cities ignores a fundamental change in the economy. We are now in the era of reducing debt at all levels of the economy and will continue to do so for years.

For Phoenix growth means rising real estate prices and little else. Rising real estate prices are a function of easy access to credit or significant increases in wages. Federal and state economic policies being considered will mostly have the effect of decreasing aggregate demand and real wages.

Just as generals lose the current war by preparing for it as if it were the prior war, economic policies being implemented now are based upon the erroneous assumption that what worked in 1982 and 1990 will be effective in the current economic malaise.

Jon's analysis, as opposed to the pundit's wish list, is spot on.

News flash: Cisco is laying off over 11,000 workers. Cisco has a large operation in Raleigh and there will be significant layoffs in that location.

I have a friend in Raleigh who tells me that there are no jobs there.

I live in Orlando and there are no jobs here either.

That article is GARBAGE.

There are no jobs in the United States. We need to replace our President and Congress with people who are focused on creating jobs for Americans.

We need protests in the streets. There are no jobs.

When I read the PBJ article days ago, after I read each point (as Jon Talton has also broken it down for us), as a Phoenix resident for over 30 years I thought "No, that's not true" or "That can't be right". Thanks for breaking it down and pointing out the real issues here.

Wonder what the net rate of in-migration was in 2009 and 2010? If Martha and Marvin can't sell their home in Rockford, they're not likely to move to AZ . . right? Or will they rent? I wonder!

Notes from an optomists diary.

Dear Diary, 11,000 people laid off at Cisco, 11,000 laid off at Borders. That's 22,000 doors that have closed and 22,000 doors of opportunity which will open for them.

Borders is closing, less books, save more trees. Mother Nature is smiling.

An optomist's secret is to forget everything that happened more than 6 hours ago and not look forward to more than your next meal.

I am noticing that many of the curmudgeons on this blog are avoiding my cheerful postings. To you I say, turn those frowns upside down and enjoy today. The sun is shining in the VALLEY OF THE SUN and we have nowhere to go but UP, UP, UP.

Hugs all around.

AZREBEL I called your doctor and had him cut of your prescriptions and I told the Guv not to give you and medical MJ card.
You will soon be back to your usual old guy cranky pessimistic self. However I am loving this heat and all the complaints I hear about how hot it is. Go back to Ohio you fools.

Dear cal Lash: Maybe Mr azrebel ALREADY has the MJ card! And where can I get one? The rain here in Seattle is kinda depressing!
Sure looks like the Phoenix economy is destined to be a tourism/snowbirds service economy. Where are those research dollars in Arizona to attract grad students and businesses? UW has been a major research center for over 30 years! It's going to take much more than a collapsed housing market and cheap housing for Phoenix to save itself. (But thankfully, there are the beloved Phoenix Suns to look forward to!)

You may be right cal, but in the meantime you should try these rose-colored glasses. They are amazing. I'll give you a couple of examples. You know how the BMI challenged people at Walmart upset soleri? Not a problem to an optomist. I see people able to store and use body fat reserves in the event of a food shortage. A very long food shortage. Plus, calorie challenged people are jolly, right? Also, retail shops aren't hurting for business. They just have shorter lines for you to stand in. Why, I was in a store yesterday and I was the only customer. Goody for me. I hate lines. My brother in law is in real estate and he told me we have hit bottom and prices will start to go up. He would know. He's in real estate. He's so smart. I'm telling you, things are looking up here in Arizona. Now that I no longer watch the news and only watch HGTV and the cooking channels, I feel so happy and so light headed. And those cooking ladies, they have some pretty nice haboobs. ( I can say that, it's a weather term). Bye Bye from Happy land, where all news is good news and facts only cloudy up our bright sunshiny days.

This latest blog entry can be writ to the country at large. I read articles at "respected" financial sites, like Kiplinger's, and then I make the mistake of reading the comments section, where people write things like: "Jobs won't recover until new housing construction recovers." Seriously, people are waiting for 2004 or 1998 to return. Even some of the articles, particularly from more conservative writers, seem to think that the key to returning to prosperity is to return to the grand Post War sprawlfest that defined at least two generations' notion of the "American Dream."

Joel Kotkin is particularly noxious. His cherry-picked stats are purposefully, maddeningly misleading. Since I have a foundation of knowledge about many of things he writes, especially when he talks density or transit, many of his falsehoods are glaringly noticeable and easily refuted, but no doubt for the person who doesn't pay close attention to urbanity issues, he can make a semi-compelling argument.

The American people are headed for a disaster--economically, politically, socially, environmentally--you name it, but you can't tell them to prepare for it, because they'll have to FEEL it, and new generations will have to respond accordingly. The generations currently in charge are in the tank for the "American Dream" that Dick Cheney said was non-negotiable: e-z motoring, drive to qualify, cheap gas, a social contract shredded by the consumer ethos, and no duties of citizenship required of anyone.

This is what Joel Kotkin has spent his academic reputation defending, and what no doubt has earned him a handsome living. It's no wonder he's doubling down on this vision--what choice does he have? Admit everything he's staked his professional life on has gone horribly wrong?

Here's what I found on Maricopa & Pinal counties and their recent population growth. One word comes to mind . . . MALIGNANT!

"Maricopa County’s growth, for example, peaked with 144,000 new residents and a growth rate of 4.12 percent from July 2004 to July 2005. It added about 44,000 residents from July 2009 to July 2010, just over 1 percent, and had an estimated population of 4.06 million.


Pinal County added 190,600 residents during the period, according to the estimates. After its annual growth rate peaked at nearly 12 percent from July 2006 to July 2007, Pinal’s percentage growth dipped before rebounding to 9.16 percent from July 2009 to July 2010, leaving the county with an estimated 371,680 residents.

AZREBEL, I saw you in a movie last night. You were getting on a space ship with a boat load of previously old pessimistic people that had discovered the fountain of youth in a Bahamas indoor swimming pool.
I truly think a spaceship might not be a bad idea, (Read “City” by Clifford Simak, 1946. “And the dogs sat around the campfire and debated the possible existence of man?”) Or as many of my acquaintances are waiting for, the big lift off by God’s kid, Jesus and the Holy Ghost... Of course that would just leave us heathens to figure out how to continue ruining the planet “EEarth.” (Author Bill Mckibben. )
I got here in 1950 when Phoenix and the Valley of the Sun was a nice place (read 186,000 people). Privately I think Phoenix went down the rabbit hole about 1985. And it aint coming back except as a giant fireball. In Arizona I like the High Plain North of Sierra Vista and south of I-10 and East of HIway 90 and west of Tombstone. I am not a fan of snow and ice or a forest dweller but Kohl’s Ranch to Showlow has some good year around temps. If I were young and had to live in urban AZ, I would probably pick Flagstaff.
I am optimistic about some things, a good novel by Jon Talton, a fan club meeting of the blog, having my 20 year old Dog companion, good political cartoons, good books, scientific research that interest me, good Flan and of course even at 71, good sex.

I'm hoping azrebel will share that "Maui Wowie" he brought back from vacation!

Jon, your column is not a downer for me, If I didnt have your blog and the things below life would be a bummer. A good novel by Jon Talton, a fan club meeting of the blog, having my 20 year old Dog companion, good political cartoons, good books, scientific research that interest me, good Flan and of course even at 71, good sex.
Keep writing it, gets me up and going each day at a time

Just reading Azreb cheers me up; we could all use some of that "Cocoon" spirit. And, Cal, did I read you right; does reading Jon's stuff really "get you up"? Better bottle it.

Thanks, Cal mi amigo. And. Happy Birthday, Spot.

Hi all, your local optomist here.

Did you all see the heart warming story out of Dallas yesterday? A young man found a loophole in Texas law and obtained possession of a $300,000 house for the price of a $16 filing fee. Yes-sur-ree Bob. Now that is what I call the optomist/Republican way of doing things. It fits right in with our optomist/republican three point plan to the American Dream.

Step one: You don't have a job.

Get one.

Step two: you are homeless.

Get a home.

Step three: you need transportation.

Get a car.

Don't worry about the details, we don't.

Some naysayers here in the VALLEY OF THE SUN have been mentioning that our heat island is keeping the monsoon from bringing rain to the valley. How do I see it? Lots and lots more FREE vitamin D for all of us.

Who needs healthcare when health shines down on you for free.

All of the jobs whitewash was washed away when the statistics were revised. The facts as we now know them:

* Arizona's rate has been higher than the national jobless rate for 31 of the 32 months from June 2008 through January 2011.

* Arizona's unemployment rate had been in double digits for 12 consecutive months, hitting 10 percent or higher for the 12 months from July 2009 through June 2010.

* From January 2010 to January 2011, the number of jobs in the state basically remained flat.

http://www.azcentral.com/business/articles/2011/03/03/20110303arizonas-job-loss-worse-2009-2010.html?source=nletter-business

And though the state may (or may not) be "poised to gain jobs", job growth remains stubbornly flat. Though there are lots of ways to massage the data (a month to month comparison using seasonally adjusted figures can, if selected at the right month, makes Arizona third in the nation for jobs growth), a year over year comparison (May 2010 to May 2011) places the state in a rather lackluster 36th spot nationally for jobs growth.

http://www.azcentral.com/arizonarepublic/business/articles/2011/06/26/20110626biz-insider0626beard-jobs-rank.html

Arizona's economy has also been premised on population growth, but the revised data is gloomy there, too. The problem is exacerbated by a lack of mobility: job seekers cannot easily move from place to place if their homes are underwater; half of Arizona homes are, and in California, about a third. California is important because, as Marshall Vest notes in the first article linked to above, about half of our migrants come from California.

(Incidentally, data from California before the recession shows that they are overwhelmingly likely to be low wage workers, not wealthy individuals fleeing high income taxes, as the conservative meme claims, hence likely to strain social services even more, not contribute to a new model of economic growth in high-tech industries.)

No discussion of the fundamentals would be complete without mentioning real estate and banking.

Commercial real estate exposure in Arizona may be the next aftershock from the Great Recession. About $37 billion in commercial mortgage-backed securities were issued in Arizona and of those about 60 percent were issued at the height of the boom when commercial real-estate was heavily overvalued. That was in 2005-2007 and most don't mature for 10 years. This means that, just as Arizona is "poised" for recovery by 2015-2017, a new wave of foreclosures may be due to hit.

"That means the foreclosures seen so far among commercial properties barely scratch the surface of the problem. Absolutely, the worst is yet to come," says Jeff Boyd, director of the Dallas-based 1st Service Solutions, a commercial foreclosure prevention firm.

Boyd is scarcely a disinterested party and may be hoping to drum up customers, but his company is unlikely to do more itself than "scratch the surface" of the problem, even if it successful.

http://www.azcentral.com/arizonarepublic/business/articles/2011/07/17/20110717expert-says-commercial-loan-modifications-possible.html

A recent article in the Wall Street Journal titled "Pain Prolonged in Suburban Office Market" had the subheading "Flat vacancy rates and trailing prices create a widening divide with recovering central business districts".

Huh? Central business district? What's that? ;)

I don't know the percentage of Arizona bank assets constituting distressed real-estate loans, and I don't want to overstate the problem in general terms: nationally, these make up about 1 percent of assets; but I do know that 7.4 percent of the nation's banks hold 80 percent of the distressed assets, and that the smaller the bank, the larger percentage of bank assets distressed CRE loans generally constitute. One would also expect local banks in a state like Arizona to hold more CRE loans since it was an epicenter both of the real-estate boom and of metropolitan Arizona's once vaunted development model.

http://www.costar.com/News/Article/LESS-DISTRESS-CRE-Taking-Less-of-Toll-on-Nations-Banks/130041?ref=100&iid=238&cid=AA0443381EB95D75736F1729C6A0DC11

Note also, however, that this rosy assessment relies heavily on near-zero interest rates. If for any reason (and there are a variety possible) interest rates were to climb substantially the banks' books likely would take a catastrophic nosedive.

Meanwhile, today's Arizona Republic (July 20, 2011) has an article showing that Arizona has the highest concentration of capital starved banks among states, according Invictus Consulting Group. The national average of undercapitalized banks is 26 percent; Arizona's is 53 percent. Florida, Maryland, Washington, D.C., and South Carolina round out the top five of the worst states for bank capitalization.

http://www.azcentral.com/arizonarepublic/business/articles/2011/07/19/20110719analysis-banks-arizona-need-cash.html

Talton is a bit like the dog in the Coppertone ad, only instead of pale little girls he targets for exposure the pale humbug of real-estate developers and other sweaty bigshots trying to usher in the next boom.

What a Negative Nellie Emil is.

Who has time to read all his facts and articles.

I did however notice that he used the word "rosy" in his comments and that was good enough for me.

So, another positive outlook is on record for the greatest state in the history of the world.

With bells on.

WOW !!!!

That did it. Emil's "SHORTEST POST EVER" snapped me out of the optomist trance I was trapped in.

Thank goodness and thank you Emil.

The grumpy contrarian azreb will return tomorrow.

Being an optomist is very hard work, especially in this state.


Good night.

Well, azrebel, if your "optomist" jag is truly coming to an end, it is time for me to thank you for the belly laughs these last few days!

azreb: I always thought it was optImist!? Whatever the spelling, the syndrome is probably the same. It seems that the most ardent boosters return with the good weather. Maybe we'll call them "booster birds". As long is the golf is good and the camraderie of like-minded folks is predictable, life is good.

On the vitamin D/sun connection, our friends the dermatologists have sharp instruments with which to address a life of sun exposure. I've had 1 melanoma, 4 squamous, 3 basals, 2 new ears and many go-rounds with the liquid nitrogen zapper. Finally got smart and retreated to the Pacific Northwest marine layer!

An optimist is someone with a positive OUTLOOK on life.

An optomist is someone with a positive VIEW of life.

I can't believe you all let me go so long without correcting my spelling.

Also, it's already hot and miserable here in the valley of hell.

Boy, when you take off the rose colored glasses and look around, this is a rotten, hot, dusty place to live.

I'm out of here. Headed for the burned out White Mountains.


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