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May 02, 2013


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...me now? Can you hear me now? Can you... oh, hey!

The Kotkin takedown was pretty shrill.

I really enjoyed it.

Kotkin applies semi-intellectual Shinola to the worst aspects of America's automotive dystopia. He aggregates data, and presto!, proves that suburbs are somehow the robust future of our drive-everywhere nation. If you don't believe his crap, the data is extraneous. Even if it persuaded on its own terms (doubtful, but....), why would anyone care? Do people really think that our highest collective achievement involves the optimal placement of chain restaurants, housing pods, and big box stores around unlimited cars? Kotkin proves really one thing: that there is an ongoing need for the kind of arguments The Wall Street Journal supplies to real-estate grifters. Apparently, these Randian self-actualizers don't like it when we elitists complain about the abysmal visuals of the American streetscape. Kotkin's mission is to sidestep the cultural critique while claiming suburbs attract more buyers. So, the essence of the pro-sprawl lobby's argument is revealed: continue subsidizing this economic Goliath with your tax dollars. Be a winner! And drive, drive, drive!

No one probably remembers, but I once suggested on a Rogue comment thread a desire to start a fund to give guns away to poor, brown-skinned people here in Arizona. It was a form of parody, or as I believe I put it back then, I was trying to "out crazy the crazies".

Since that attempt at trying to out-jackass these jackasses, a Republican in Tucson has started to raise money to give away shotguns to poor people:


Not to worry.
I'm back to try to outstupid Stupid Nation...
Sure it might by futile, but it is worth a "shot":

You know that 5 year old that shot his sister dead? I bet he is feeling pretty traumatized. I suggest we start a fund to help him get past this. I'd like to raise enough money to provide this young boy "free bullets for life" and a new gun every year at Christmas until he turns 18.

What do you say America?
Would you like to contribute to help this young man out?

No, he'll shoot his eye out.

Wolcott had a few things to say about that incident and - bonus! - about Guntucky.

Regarding "Arizona ranks near bottom in jobs per capita", I found the link quite informative.

The gist of the article is that Arizona has a lot of kids (think: fertile Hispanic immigrants) and as a result, a smaller percentage of its population works; and as a result of that, the per capita income is low (since per capita income is total income divided by the resident population).

Some excerpts:

"Arizona’s low standing is driven partly by the relatively low percentage of its population that is of working age. Contrary to perceptions, that condition is not because of the state’s retiree population. Rather Arizona has an unusually high 25.5 percent of its population under the age of 18.

"Those under 18 and those 65 or over added up to 39.3 percent of the population – the third highest rate in the country."


P.S. Yes, the article says that even when working age residents are considered, Arizona is 48th out of 50 in terms of the number of jobs per working age resident.


However, if you read the footnote at the end of the list, you find that the number of working population is based on "Working population from the U.S. Census Bureau “State Resident Population by Age and Sex, 2010".

Now, note that date. In 2010 Arizona had one of the highest unemployment rates in the country. So, it's misleading to look at rankings from that time. Also note that the study by academicians Hoffman and Rex cited by the main article is also dated 2010, though it isn't clear whether they used data from that year or earlier.

Arizona's average unemployment rate in 2010 gave it a rank of 41st out of 50 states:


Drought update: Year 18

White Mountain snowpack - May 5, 2013

0.0 Feet.

I came across yet another "the world is awash in petrochemicals" story claiming that happy days are here again. Note that this is a wire story (AP) not something internal to the Arizona Republic or Gannett:


I may tend to be less gloomy than some Rogue readers on the subject of "peak oil" but even I found myself skeptical of the narrative provided in the article. I was particularly skeptical about the size and extent of some of the new reserves:

"The gushers aren't limited to Texas, North Dakota and the deep waters of the Gulf of Mexico. Overseas, enormous reserves have been found in East and West Africa, Australia, South America and the Mediterranean."

One reason I was skeptical about this is that I've looked at projections by the U.S. Energy Information Administration for U.S. oil production through 2040. Their projection shows an increase in U.S. crude production from about 6 million barrels per day in 2011 to about 7.5 million by 2019, with production declining after that down to 6.1 million in 2040.


Now, an increase of 1.5 million barrels a day in domestic production is nice, but the United States alone used 19 million barrels a day in 2011 according to the EIA.

Yet, the AP article states that "the U.S. is on track to become the largest producer of oil and gas in a few years". So, how big can new foreign reserves be if the U.S. is expected to grow production by a modest 1.5 million barrels a day? True, it does say "oil and gas" but then that suggests the big growth is in gas and in the liquids associated with it.

Still, the EIA did put this in its current FAQ:

Q. Do we have enough oil worldwide to meet our future needs?

A. Yes. As shown in EIA's International Energy Outlook 2011, the global supply of crude oil, other liquid hydrocarbons, and biofuels is expected to be adequate to meet the world's demand for liquid fuels for at least the next 25 years. There is, of course, substantial uncertainty about the levels of future oil supply and demand, and EIA reflects some of this uncertainty by developing low and high oil price cases, in addition to a reference case. The oil resources currently remaining in the Earth's crust, in combination with expected volumes of other liquid fuels, are estimated to be sufficient to meet total demand for liquid fuels in all three price cases of the International Energy Outlook 2011.

An often cited, although misleading, measurement of future resource availability is the reserves-to-production ratio, which given the current rate of consumption and total proved reserves is about 50 years. However, proved reserves are an accounting concept that is based on known projects and is not an appropriate measure for judging total resource availability in the long-term. Over time, numerous additional projects will be developed, which will add to global reserves. Furthermore, reserve estimates at known projects are likely to increase as new technologies are developed.


Note that EIA says the world has enough oil in ALL THREE of its models (the low and high oil price cases and the comparatively moderate reference model).

I'll be looking at this in greater detail, but I wonder if anyone has a comment about any of this?

P.S. 25 years isn't a long time in this context, so the EIA is scarcely putting itself out on a limb in asserting this.

While it may be overly generous of me to say that humanity is sufficiently "aware" of the dangers associated with the disinterment of carbon, I'm going to assume it and...

...I'm also going to momentarily cede these "rosy" petro-prospects and...

...simply say that if we insist on partying on with as much carbon fuel as we can get our hands on, then we really are no more intelligent than yeast in a petri dish. A failed terminus of evolution.

I don't want to believe this, and I will continue to "behave as if true" that we have the ability to detect the edges of that petri dish before it's too late. I hold out hope that the only people who are cheered by these statistics are the usual greedheads who can't or won't look past their own generation. As in, not most of us. I hope.

The National Rifle Association seems to have narrowed its marketing strategy. I saw a two paragraph news bite on page two of the Arizona Republic recently, quoting the NRA's new president from a speech in which he referred to President Obama "a fake president" and calling the U.S. Civil War "the war of Northern aggression". Unbelievable. And this is the organization which has politicians quaking in their boots.

Speaking of the Arizona Republic, they've launched yet another multiple-part front-page story attacking the public pension system, this time the one for emergency response personnel such as firemen and police.

Looking at Monday's edition, the graphic accompanying the Page 1 text shows "Public-safety pension fund earnings" by fiscal year from 2003 through 2012. Changes are shown as a percentage return on investment of the trust fund.

The losses (basically two years) are highlighted in red. Not shown are the gains during all the other years, including some large gains since the stock market returned to health and broke record highs. Nowhere in the text does it mention the size of these gains. The closest it comes is the passing statement that earnings in 2010 and 2011 "surpassed expectations". There is thus no way to put the Great Recession related losses of 2008 and 2009 into context.

The negative return on investment (losses) for the fund in 2008 and 2009 are shown as -7.3% and -17.8% respectively. The fund's own fiscal year 2012 financial report, specifically the "Total Fund vs. Benchmark" graph on page 22, provides some perspective. Not only was the fund "in the black" from 2003 until the financial market crash, but returns were 15% in 2004 and 17% in 2007. The return on investment was about 14% in 2010 and about 18% in 2011. Returns were flat in 2012, and according to the Arizona Republic article the rate of return "this fiscal year" (2013) is 7.85%, though the article does not indicate whether this is an annualized figure or a year to date figure that presages a much larger annual rate of return (I suspect the latter, given recent stock market gains).

The figures given by the Arizona Republic are slightly different than those provided by the fund's financial report, apparently because the fund's return percentages are gross of trading fees whereas (I presume) the Arizona Republic has subtracted fees to derive very slightly different percentage returns.


The "8-9%" target for annual return on investment is, of course, intended to be an average over many years, since markets go up and down.

The total value of the fund (given in the first installment of the series) is given as $6.05 billion as of June 30, 2012, which varies from the "market value" given in the fund's financial report of $6.66 billion (see "Total Fund Changing Financial Status", p. 27 of the financial report). The Arizona Republic reports a loss during 2008-2009 of $1.28 billion; the fund report shows a loss of $1.13 billion. However, the fund's financial report shows a gain of $1.63 billion from 2009 through 2012 (and remember that return is positive for 2013): so the losses associated with the recession have ALREADY been made up for and then some. The Arizona Republic omits this little fact.

No mention is made of the rarity of market losses of the size experienced in connection with the Great Recession.

In short, the reader is simply led by the nose to the conclusion that the funds are unsustainable -- this despite the fact that the article does mention that the fund had a funding ratio of 127 percent in 2001.

I have seldom seen a more blatant hatchet job in any newspaper of record than I have in these public pensions series. I am truly disgusted by the lack of journalistic professionalism and by the editorial bias evident in allowing these kinds of articles to be printed as-is. Heads should roll over this (by which I mean that those culpable for this one-sided propaganda broadside should be fired from their jobs).

Catherine Reagor of the Arizona Republic provided some interesting information about the Metro Phoenix home market (single family houses) in her Sunday, May 5, 2013 column titled "Investors still buying in Valley".

She cites R.O.I. Properties as saying that in April, 41 percent of all houses sold were bought with cash (and were thus, by implication, investor purchases).

This is much higher than the usual figure cited from ASU's W.P. Carey School of Business "Greater Phoenix Housing Market" report. In the March 2013 report, investors are said to have accounted for just 27.5 percent. However, the ASU report figure is for Maricopa County not metro Phoenix, and includes townhouses and condos.

Mysteriously, Reagor's column is nowhere to be located on the Internet. I'm looking at a clipping as I write this.

The ASU report and the investor activity figure (p. 12) can be found here:


Reagor also breaks down cash sales by price of the home:

75 percent of houses priced $99,000 or less.

40 percent of houses priced between $100,000 and $200,000.

29 percent of houses priced between $200,000 and $299,000.

26 percent of "homes" priced between $300,000 and $499,000.

34 percent of "homes" priced above $500,000.

In March (couldn't find April's figures) the median single-family home price was $175,000 according to ASU. Considering only homes priced at the median or less (the bottom half of the housing market), the percentage purchased by investors should therefore be higher than the 41 percent average over the entire home range which was provided by R.O.I. Properties.

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