Nood-ling (nōōd’lĭng) n. 1. Fishing for catfish using only bare hands, practiced primarily by crazy people who cannot afford proper fishing gear. 2. The intentional annoyance by this blogger who is skeptical of the news as it’s reported, as in “Noodling bureaucrats is more fun than fishing bare hand for catfish and a lot more surprising.” This is now an end of the month feature.
In the latest foolery regarding the electric car, or should I say, electric school bus the Wall Street Journal exposed a fascinating debate over the viability of an electric bus over a diesel powered bus (HERE). While there is much to try and understand about the bus, such as its recharge schedule (easy during the day when not in use) and its “green” footprint, the fundamental issue is cost. They cost at least 60% more (for the hybrid gas-electric), the all electric is more. The premium is at least $30,000 or more for the vehicle. The fuel economy is between 30% and 65% better. To make it work, the schools need grants or fed money; ah … there’s the rub.
High Speed Rail
The costs for the HSR in California just keeping climbing. First $33 billion, then $45 billion, now $99 billion (I think they intentionally kept the published number below $100 billion). My early estimate was at least $100 billion (HERE), now the sky is the limit. It is a project that is now doomed in this financial cycle and should be put on a siding for at least twenty years. There will be finger pointing and foot stomping but at a cost of at least $5,000 for every man, woman, and child in the state it is completely unacceptable – just shut it down.
I am a believer in demographics: population growth equals economic growth. For the last fifty years California has exploded from legal and illegal population growth, and with it its economy expanded exponentially. Immigration has added significant bodies and brains to the economic mix, just look at the number of Silicon Valley firms run by immigrants. But now it’s growth is slowing to less than 1% growth per year, much of this is due to folks leaving the state (HERE). They are fleeing due to lack of jobs, high taxes, housing costs, and the collapse of the education system. California is not alone; New York and Florida are seeing the same exodus. Texas is smiling.
And Now From the U.S. Census Bureau
NEW RESIDENTIAL CONSTRUCTION IN NOVEMBER 2011
The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for November 2011:
Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 681,000. This is 5.7 percent (±1.6%) above the revised October rate of 644,000 and is 20.7 percent (±1.8%) above the November 2010 estimate of 564,000.
Single-family authorizations in November were at a rate of 435,000; this is 1.6 percent (±1.6%) above the revised October figure of 428,000. Authorizations of units in buildings with five units or more were at a rate of 224,000 in November.
Privately-owned housing starts in November were at a seasonally adjusted annual rate of 685,000. This is 9.3 percent (±13.1%)* above the revised October estimate of 627,000 and is 24.3 percent (±20.1%) above the November 2010 rate of 551,000.
Single-family housing starts in November were at a rate of 447,000; this is 2.3 percent (±8.0%)* above the revised October figure of 437,000. The November rate for units in buildings with five units or more was 230,000.
Privately-owned housing completions in November were at a seasonally adjusted annual rate of 542,000. This is 5.6 percent (±11.5%)* below the revised October estimate of 574,000 and is 1.6 percent (±15.8%)* below the November 2010 rate of 551,000.
Single-family housing completions in November were at a rate of 440,000; this is 0.7 percent (±8.9%)* below the revised October rate of 443,000. The November rate for units in buildings with five units or more was 99,000.
While all this looks promising remember that during normal times (not the bubble period) we were averaging almost twice these numbers. And existing home re-sales are not doing much better. It is these fundamental issues of new home and existing home sales that drive the economy, growth is required along with access to affordable loans. We have a long way to go.
I have just finished John Mauldin’s book Endgame: The End of the Debt Supercycle and How it Changes Everything (HERE). This is one of the best books to describe what just happened, why it happened, and how we can get of this mess. Well written and easy to understand (for most parts), this should be required reading for every graduating senior in high school. It will prepare them for the rough road ahead until we reach 2020. I also recommend John’s web site, he is the best economic analyst writing today (HERE it’s FREE) .
Have a happy and safe New Year, I look forward to 2012 with excitement and trepidation, may we all be here a year from now wealthier and wiser with great stories to tell (assuming that Mayan Calendar thing doesn’t, like, happen).
Stay tuned . . . .