One gas line, and it was cut

14. November 2010 · Comments Off · Categories: Economy, Home, naples, News, Tech · Tags: , , , , , , , , , , ,

Natural gas service in Southwest Florida was shut down Thursday because there is only one line in which to route the fuel’s flow through most of Lee and Collier counties.

When it was severed by a construction worker, it carried a multimillion-dollar price tag and sent another dagger into the hearts of business owners struggling to stay afloat in the worst recession since the Great Depression.

Graphic: Southwest Florida’s gas network
Related: Gas restored to about 500 customers

Gas, which powers everything from dryers to water heaters to residential and commercial ovens, was turned off when the main supply pipe that runs from the Caloosahatchee River in northern Lee County to Fiddler’s Creek in southern Collier County was hit by a road worker.

Lance Horton, a senior project manager with Tampa-based TECO who headed up the building of the system in the late 1990s, said Saturday alternate supply lines have not been built.

“There is yet no redundancy,” Horton said. “As systems go, this one is immature.”

Gas service to this area began in 1998.

“We don’t have ways to reroute the gas as yet,” he said. “Those will come based on customer growth.”

Horton said in older systems – such as in St. Petersburg, Tampa and Miami that have used natural gas for almost 100 years – time has allowed TECO to develop work-around routes so only small sections of homes and businesses are affected if there is a line break.

In a newly developed area such as Southwest Florida, building alternate routes where there are few customers is usually cost-prohibitive.

“Since the system is originally designed based on where the customers are located,” said TECO spokesman Rick Morera, “it is difficult and costly to build redundancy not knowing the direction of future growth.”

Area businesses continued to suffer Saturday.

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“My business was barely surviving in this grim economy,” said Mike Lavin, owner of Gulf Gate Laundry in Naples. “It is possible this shutdown will do me in.”

For some, though, better times were at hand.

Service to the company’s highest priority customers – hospitals and elder care centers – was restored Friday night. By Saturday evening, crews working 15-hour shifts, had an estimated 500 users up and running.

And Morera said “work in the Fort Myers Beach and downtown areas has gone well.”

For others, however, it could take the better part of a week before gas service resumes.

Restoring service is a complicated and lengthy process, Horton said. It includes a representative visiting each customer.

“Our goal is one visit. That’s a tough objective,” he said. “A business might be closed and we can’t get in touch with them. Or someone’s not home. That’s why it takes a week to get all the service back.”

Those visits include turning the gas off at the meter, turning it back on and reigniting a pilot light.

“We work on a mandated protocol for safety,” he said. “We don’t want our customers turning the gas on or off.”

TECO’s assault on the problem resembles, in many ways, how a utility company goes about getting the lights back on following a hurricane.

The company has set up a large staging area at its Fort Myers headquarters just west of Interstate 75 near Luckett Road. More than 200 technicians and repair personnel have come from all over Florida to help.

Horton said the trouble here has not presented insurmountable problems.

“All situations are unique,” Horton said, “and all are similar. You have different geographics, and in this situation, it is a little more difficult because our 7,200 customers are spread out across 50 miles.

“But we know what to do, and how to handle it.”

One gas line, and it was cut

Obama surprised by political cost of health law

08. November 2010 · Comments Off · Categories: Economy, Health, News · Tags: , , , , , , , , , ,

9:34 A.M. — WASHINGTON ? President Barack Obama says the political cost of overhauling the health care system turned out to be higher than he had expected. And he admits that he gets discouraged at times when dealing with the economy.

In an interview airing Sunday night on CBS’ “60 Minutes,” Obama said the health care system itself is huge and complicated and that changing it eluded previous presidents because it was so difficult.

“I made the decision to go ahead and do it, and it proved as costly politically as we expected ? probably actually a little more costly than we expected, politically,” he said.

Obama said he thought that he would find common ground with Republicans by advancing health care proposals that had been introduced by Republican administrations as well as potential presidential candidate Mitt Romney when he was governor of Massachusetts.

“I couldn’t get the kind of cooperation from Republicans that I had hoped for,” he said. “And that was costly, partly because it created the kind of partisanship and bickering that really turn people off.”

Obama said the danger of a second major recession is “much reduced” and a great depression is not on the horizon. Still a danger, he said, is the nation being “stuck in a new normal where unemployment rates stay high.”

“I do get discouraged. I mean, there are times where I thought the economy would had gotten better by now,” he said. “One of the things I think you understand as president is you’re held responsible for everything. But you don’t always have control of everything, especially an economy this big.”

However, Obama sounded optimistic about the nation’s economic future.

“I am constantly reminded that we have been through worse times than these, and we’ve always come out on top,” he said. “And I’m positive that the same thing is going to happen this time.”

Obama said his two years as president haven’t changed his ideals.

“But I think that in terms of how I operated on a day-to-day basis, when you’ve got a series of choices to make ? I think that there are times where we said let’s just get it done instead of worrying about how we’re getting it done,” he said. “And I think that’s a problem. I’m paying a political price for that.”

The “60 Minutes” interview was taped at the White House on Thursday, before Obama left for a four-nation tour of Asia.

Obama surprised by political cost of health law

His and hers lists help market couple’s home

18. September 2010 · Comments Off · Categories: Cars, Economy, Family, Home, News, Real Estate, Tech, Video · Tags: , , , , , , , , , , ,

Tina Haisman needed to stand out.

Her family’s home at 11471 Persimmon Court had been on the market for three months and had been shown to about 10 prospective buyers with little fanfare.

“We’ve had people come to look at our house two and three and four times and tell us they loved it but they would go back to Canada or something and say ‘Oh, we’ll be back in a month,’ ” Haisman said.

Haisman, 37, her husband Paul and their two young children moved to the Chicago area for Paul’s information technology job. The family became frustrated with the failed attempts to sell their 2,280-square foot, four-bedroom home, which is located in Gateway and listed for sale at $269,900.

“The problem is there are so many homes,” Haisman said. “People have plenty of time to search and that sense of urgency that used to be there when you were shopping for a home – that you better make a bid on it if you want it or you’ll lose it – that sense of urgency is not there.”

So Haisman, owner of Tina Haisman Public Relations, did what any PR pro would do. She began strategizing ways to draw attention to the 19-year-old dwelling.

To help them come up with a marketing idea, Haisman and her husband decided to first create a list of what they liked about their home – a brainstorming technique some real estate agents suggest to sellers prior to showing a property.

Paul typed up his ideas and e-mailed his version of the list to his wife. When she read his top 10 selling points, Haisman completely disagreed with her husband on the home’s best features.

“As I was reading it I thought, ‘Oh my gosh. I would change half the things on here.’ It was not what I thought at all,” she said.

The couple realized how differently men and women sometimes view a home’s attributes and decided to each create their own top 10 list. Whereas stellar landscaping, a split floor plan and vaulted ceilings made the cut for Haisman, her husband focused on technical aspects such as the new roof, cable wiring and hurricane panels.

“My top 10 list is more about the beauty of the home,” Haisman said. “My husband’s list is more of the functional, practical, manly man’s list. I don’t think a woman would care as much that you get free hot water from the air conditioning as a guy would.”

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The real estate agent the Haismans were working with at the time posted their dueling top 10 lists to their home listing on Realtor.com. The agent created a flier about the husband and wife’s selling points for the home and e-mailed it to agents on the Lee County Multiple Listing Service. Several local agents applauded the creativity and asked if they could use the husband-wife list idea with their clients.

Haisman then sent press releases to news outlets near Boston, Minneapolis, Detroit, Chicago and Columbus, Ohio – areas traditionally home to Southwest Florida snowbirds.

The day she sent the release, 30 people viewed Haisman’s home listing on Realtor.com. More than 70 people interacted with the media release – meaning they saved it to their computers, printed it or clicked on links within it. It received approximately 40,000 headline impressions, or the number of times people viewed pages that included the headline for the release.

In addition, Haisman – who was reading Daniel Pink’s “A Whole New Mind” at the time, which discusses, among other things, the importance of storytelling in business and marketing – created a blog in an attempt to create a personality for the home she and her family lived in for nine years. On her blog, Haisman posted home photos and has written about everything from winds the home withstood during hurricanes Charley and Wilma to the fun of neighborhood block parties on Persimmon Court.

“I wanted to tell the stories so maybe people can envision their family living there and creating their own memories,” she said.

The mother and public relations professional tweets about her home and blog, posts information about it on Facebook and has asked some friends to post the information on their Facebook pages as well.

Marla Martin, spokeswoman for the Florida Association of Realtors, called the Haisman top 10 lists “very creative” and she said she hadn’t heard of that tactic before. Still, Martin said she is not surprised by the family’s marketing efforts.

“During the boom years, you almost didn’t have to do anything because the homes were moving so fast,” she said. “Now, our members report lots of creative things for sellers.”

Those efforts include holding signs along roadways to promote open houses and an increased use of social media sites and YouTube videos to advertise homes on the market. Sunni Hammermeister of Sellstate Realty Systems Network, who signed on as agent for the Haismans last week, has even seen people offer cars and boats with the sale of their home.

As they continue to aggressively market the home on Persimmon Court, Hammermeister said it has a good chance of finding the right buyer. Haisman, who plans to create a second media release soon, also remains optimistic.

“Hopefully, these things will help us stand out,” she said of her PR efforts. “We’re trying to be positive in this economy and proactive and take action instead of just complaining about how horrible things are.”

His and hers lists help market couple’s home

Haynes Corporation planning expansion bringing 20 jobs to Collier County

28. July 2010 · Comments Off · Categories: Economy, Money, naples, News · Tags: , , , , , , , , , ,

Haynes Corp. is revving up for an expansion in Collier County.

The company is the only independent domestic manufacturer of precision diesel fuel injection systems for heavy-duty engines.

Collier County commissioners on Wednesday voted unanimously to allow the manufacturer to tap county incentives for an expansion here, though the jobs it will create won’t meet the average wage requirements for the government assistance programs.

With the vote, the company plans to move its California operations here, bringing 20 jobs to the Naples area.

The county’s incentive programs are designed to diversify the local economy and create high-wage jobs.

Tammie Nemecek, president and CEO of the Collier County Economic Development Council, urged commissioners to approve the assistance, saying the jobs wouldn’t come here otherwise.

“But for this incentiv they are not going to bring this California operation here,” she told commissioners.

The company’s headquarters currently has 45 employees. After consolidating its operations in Norwalk, Calif., Haynes would have 65 employees in the Naples area.

To support the expansion, the company plans to put up a new 30,000 square foot building next to its headquarters off Mercantile Avenue. The investment is estimated at $1.85 million, including the purchase of new manufacturing equipment. Construction is expected to start next spring.

The new jobs in Naples will be offered to the company’s California employees and outsiders, with preference given to applicants who agree to live in Collier County.

David Jackson, the county’s executive director of business and economic development, said the incentive programs as they’re currently designed aren’t working and need to be updated to reflect today’s economy. A plan for change is in the works and will come to commissioners for approval this fall, he said.

He said every job that’s created tickse, away at the county’s high rate of unemployment, which hovers above state and national averages. In June, Collier had a jobless rate of 12.3 percent, up from 11.3 percent in May, according to the Florida Agency for Workforce Innovation.

Without the county incentives, Haynes would have considered relocating to California or Jackson, Mich.

The new jobs in Collier would pay an average wage of $34,320. The rules for the county’s incentive programs require an average wage of $58,928, or 50 percent above the county’s average private sector wage, which is estimated at $39,258.

The 45 retained jobs pay an average of $42,078. These are corporate jobs, as well as jobs in manufacturing and production.

Haynes would receive $161,550 in county incentives after creating the new jobs. That money will come back to the county in property, gas and sales taxes, with most – if not all – of the company’s employees living in Collier, Jackson argued.

At first, Commissioner

Jim Coletta said he was reluctant to approve the waiver allowing Haynes to get the incentives, fearing it would set a bad precedent. But he felt more comfortable with it after hearing that changes to the incentive programs are in the works and will be brought to the board in September or October.

In today’s economy, Coletta said he understands the goal is “just trying to provide jobs for people.” But when the economy improves the focus should be more on attracting high-wage jobs, as it has been for years.

“The economy fluctuates, whatever we have has to be able to meet the conditions as it changes,” Jackson said.

County commissioners have only granted a waiver one other time.

Haynes will get $2,000 for every job it creates, $79,550 to offset impact fees for the construction of its new building, and $1,000 for every job that’s kept by a Collier County resident.

Haynes was founded in Jackson, Michigan in 1960 by Laurance Haynes as a manufacturer’s representative for diesel engines and related parts. It grew through a series of acquisitions.

In 1988, the company acquired the Bendix diesel fuel injection product line. That included a manufacturing plant in Naples, which greatly enhanced its manufacturing and engineering capabilities.

The company’s products include fuel injection pumps, injector assemblies, plungers and barrels. Its customers include John Deere and General Electric.

A few years ago, Haynes’ owners looked at bringing the California operations to Naples, but they didn’t because of a bad business climate, Nemecek said.

“There has been a significant change in the attitude of the community toward business,” she said.

That helped change the company’s mind about expanding here.

Connect with Laura Layden at www.naplesnews.com/staff/laura_layden.

? 2010 Naples Daily News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Haynes Corporation planning expansion bringing 20 jobs to Collier County

Athletes, families help Lee County economy

04. July 2010 · Comments Off · Categories: Economy, Family, International, News · Tags: , , , , , , , , ,

Sasha Ratliff charges after the basketball, her ponytail bouncing high.

From the bleachers at Estero Recreation Center, her family cheers. Later, they’ll talk about where to go for dinner after the last tournament game of the day.

The 7-year-old from Atlanta is the kind of visitor Lee County tourism promoters earnestly pursue this time of year: A young, amateur athlete playing on a team – with family members tagging along. Many of these athletes and their families fly in to Southwest Florida International. They sleep at local hotels, eat at area restaurants, maybe shop at the malls, and visit a local attraction.

Sasha played on the Atlanta Pistol’s team last week in the Amateur Athletic Union President’s Cup for girls age 8 and younger that ended Thursday. It was a small tournament this year, drawing just four teams and an unknown number of family members.

A larger prize, however, is just ahead: the Perfect Game USA Baseball Championship Series. It’s a program designed to showcase top ballplayers ages 14 through 18.

Between today and July 26, three different age brackets will arrive, compete for a week and then depart. Altogether, more than 10,500 visitors are expected over the three weeks. Most of them will stay in paid lodgings.

“It makes our July,” said Joan Jenkins, sales director for Crowne Plaza in south Fort Myers.

Athletic entourages big and small pumped an estimated $63.8 million into the local economy last year, according to the county Sports Authority.

“For inland properties, amateur sports are huge,” said Jack Copeland, general manager for SpringHill Suites by Marriott in south Fort Myers.

Sasha’s family stayed at Embassy Suites. “This was over $3,000 just for this trip: airfares, hotel, rental car and food,” said Kristina Ratliff, Sasha’s mother.

“The area is very nice. I’m from Miami; this is less-congested and a nice change of scenery,” said Sasha’s aunt, Felicia Joseph. The family group, which totaled 10, drove out to Fort Myers Beach for part of a day, and also dined at Firepit City Grill in Gulf Coast Town Center.

Team sports tourism helps local hotels and other businesses survive long, hot and humid months when other visitors typically are scarce.

If anything, this sector is even more coveted during the economic downturn and the region’s hotel-building boom: More than 2,600 new rooms opened in Lee County alone over the past three years.

Hotel-building appears to have abated.

However, the glut of rooms still presents a problem: The county Visitor & Convention Bureau estimates guests using paid lodgings must increase in number by 5 percent this year just to maintain the county’s average 2009 occupancy rate.

It’s another hurdle to clear for the Lee County Sports Authority, an agency funded through bed tax dollars, which courts amateur sporting events to fill local hotel rooms.

Said Executive Director Jeff Mielke: “We’re projecting 16,500 total (hotel) room nights for July. That’s about even with last year.”

Athletes, families help Lee County economy

Unemployed volunteer to get jobs, boost resumes

19. June 2010 · Comments Off · Categories: Economy, News · Tags: , , , , , , , , , , , , , ,

They are tour guides, airport greeters, hospital helpers, fund-raisers and more. They provide hundreds of thousands of dollars worth of work for free.

They are volunteers. And, neither the struggling economy nor summer doldrums have taken a lasting toll on their numbers or hours of service.

But they aren’t always easy to find: Some area organizations have worried about finding enough help this year.

Yet help has come from a strange place: the ranks of the unemployed. Many people who have lost their jobs are volunteering to stay busy and fill gaps on their resumes.

At the Bonita Springs Chamber of Commerce, “We’ve struggled getting people to volunteer in the summer. Fortunately, we’re less busy now,” said Tiffany Esposito, communications manager.

Esposito aims to recruit five or six volunteers for the busier months of November through March. Meantime, she’s fielding inquiries from local high school students, who need service hours to graduate and who are having trouble finding summer jobs.

Margaret Baugher directs the Retired & Senior Volunteer Program at Senior Friendship Centers. The center recruits and refers volunteers to more than 60 agencies in Lee County.

When the local economy hit the skids, “we initially lost volunteers – about 200,” Baugher said of the volunteer corps of nearly 2,000 people today. Then, as Lee County’s unemployment soared – to a peak of 14.2 percent in January – “we got droves of people coming in to volunteer: people who’d lost their jobs. … Quite a few got jobs through volunteering.”

Debra Olvera, 56, is one of them. She started as a volunteer at Senior Friendship Centers headquarters in Fort Myers last July, after months of job-hunting and skills-upgrading at the Career and Service Center.

“When we moved from Texas two years ago, we thought the employment situation here was OK, but it wasn’t,” Olvera said.

After 25 years in clerical work for insurance and construction firms, a church and other organizations, office work at Senior Friendship seemed a good match. Also, Olvera lived within walking distance to center headquarters.

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Olvera volunteered as a part-time receptionist from July till November, when she was hired for that position, full-time.

Even if unpaid work doesn’t evolve into a paid job, “volunteering fills in those gaps on your resume,” Olvera said.

According to Bureau of Labor Statistics surveys, one in four Americans volunteer, a rate that’s been static for 40 years. The Corporation for National and Community Service, the federal agency that oversees service programs, says volunteering rose 1.5 percent in 2008, the most recent year for which data was available.

Volunteer recruitment and training occurs year-round at the Edison & Ford Winter Estates. Over the past two years, the volunteer crew has risen from about 170 to 250. They include full-time people employed in professions as well as retirees and people between jobs, said Chris Pendleton, estates CEO. High school and college students assist in the summer day camps.

After 100 hours of service, volunteers are awarded free estates membership, which can be used for free or discounted admission to allied cultural attractions and museums.

Pendleton, however, said a thirst for learning drives most volunteers: “They want to learn about history, science, how to garden. They’re attracted to the history.”

Unemployed volunteer to get jobs, boost resumes

Health bills fail to block illegals from coverage

30. November 2009 · Comments Off · Categories: Economy, Politics · Tags: , , , ,

illegalaliens

By Stephen Dinan

Hundreds of thousands of illegal immigrants could receive health care coverage from their employers under the bills winding their way through Congress, despite President Obama’s explicit pledge that illegal immigrants would not benefit.

The House bill mandates, and the Senate bill strongly encourages, businesses to extend health care coverage to all employees. But the bills do not have exemptions to screen out illegal immigrants, who usually obtain jobs by using false identities and are indistinguishable from legal workers.

A rough estimate by the Center for Immigration Studies suggests that the practical effect of the mandates would be that about 1 million illegal immigrants could obtain health insurance coverage through their employers.

Democrats who wrote the House bill said that employer coverage for illegal immigrants is not intentional, but rather the outcome of people breaking the law.

“It’s possible an employee could deceive an employer with a fraudulent document, just as under current law, to gain employment, just as it’s possible for all sorts of criminal activity to occur, and why we have law enforcement,” said Nadeam Elshami, a spokesman for House Speaker Nancy Pelosi, California Democrat, who wrote the final House bill.

Republicans said that loopholes in the bill could allow coverage to just about any illegal immigrant who wants to cheat the system.

“This is a complete cover-all-the-gaps federal health insurance for illegals, whether it be under Medicaid, the refundable tax credit or whether it be under their employers who would not be able to verify their employers unless we fix E-Verify,” said Rep. Steve King of Iowa, the top Republican on the House Judiciary Committee’s immigration subcommittee.

How to deal with immigrants, both legal and illegal, remains one of the thorniest issues in the health care debate. In his address to a joint session of Congress in September, Mr. Obama specifically challenged Republicans who said his plans would extend coverage to illegal

“This, too, is false — the reforms I’m proposing would not apply to those who are here illegally,” Mr. Obama said.

That statement elicited an outburst of “You lie” from Rep. Joe Wilson, South Carolina Republican.

Most of the focus has been on whether the bills in the House and Senate go far enough to screen out illegal immigrants applying for public benefits. The Senate bill is generally considered to have stronger provisions than the House version to exclude participation by illegal immigrants.

The employer mandate could play a major role in coverage for illegal immigrants, but the effect has not been widely understood.

Steven A. Camarota, research director for the Center for Immigration Studies, said about 6.5 million illegal immigrants work in the United States, though nearly half do so off the books and wouldn’t be counted for purposes of employer-sponsored health insurance.

Of those who work on the books, about 2.3 million already have insurance through their employers. That leaves at least 1 million who would need insurance and could obtain it from an employer under the proposed mandates.

“It’s definitely significant,” Mr. Camarota said.

Democrats said their bill doesn’t change eligibility for benefits for illegal immigrants but it does change laws on who must provide insurance. Any employer with a payroll higher than $500,000 would be required to provide insurance for employees.

The House bill offers tax credits for two years to help small businesses provide insurance, including businesses that hire illegal immigrants.

But Mr. Elshami said businesses are already prohibited from hiring of illegal immigrants.

The Senate bill is more complex. It would urge companies to provide insurance, then penalize them for each employee who applies for credits for the health care exchange.

Jim Manley, a spokesman for Senate Majority Leader Harry Reid, Nevada Democrat, said the bill includes a screening process to keep illegal immigrants from getting credits in the health care exchange. But even illegal immigrants would be counted in the penalty against employers, so companies would be paying for having hired them.

“In this scenario, an employer would have to provide a responsibility payment for an undocumented worker. But that undocumented worker wouldn’t be getting coverage through the exchange,” Mr. Manley said.

Robert Rector, a senior research fellow at the Heritage Foundation, called the debate “an absolute charade” because Mr. Obama and Democratic leaders have signaled their intent to try to pass a bill legalizing illegal immigrants next year.

Once their legal status is secured, Congress would have to decide their eligibility for public benefits. Democrats have been pushing for broad inclusion, and their health care proposals give equal treatment to legal immigrants and citizens.

Republicans say the government should do more to push for a legal work force in the first place.

“If it was not bad enough that illegal immigrants take jobs that rightfully belong to citizens and legal immigrants, now they will get health care benefits that should go to Americans,” said Rep. Lamar Smith of Texas, the top Republican on the House Judiciary Committee. “If they were not in the country, we wouldn’t have to worry about emergency room or health insurance costs at all. And Americans would have these jobs.”

A Congressional Research Service report notes that the House Democrats’ bill does not expressly prohibit illegal immigrants from getting health insurance and, in fact, would mandate that they obtain insurance if they meet the “substantial presence test.”

That test calculates U.S. residency based on the number of days per year a person is in the country.

Understanding the Dow’s 10,000 Peak

15. October 2009 · Comments Off · Categories: Economy, Politics · Tags: , ,

Dow3-DJIA1

By Max Fisher on October 14, 2009 3:22pm

Understanding the Dow's 10,000 Peak Artemuestra/Flickr This has been a big day in finance, with bankers raking in $140 billion in compensation and the Dow cracking the five-digit mark. Today, the Dow Jones Industrial Average momentarily surpassed 10,000, a symbolic watershed that rekindles hope in the financial sector’s recovery and boosts optimism for further economic growth. The Dow–which peaked at 14,000 in late 2007, slipped below 10,000 a year ago, and bottomed out around 6,550 this March–is only one, singularly totemic financial indicator. But, as both a financial and symbolic measurement, it still carries weight.

  • Not Yet Out of The Woods CNN Money’s Chris Isidore explains why we have a long way to go. “Lately, there has been a growing consensus among both investors and economists that the battered U.S. economy hit bottom and turned around earlier this year, and is now in a recovery,” he writes. “But even economists who agree the economy is in recovery say that growth will be slow and difficult, with continued job losses, tight credit and further declines in home prices. And even some who believe that the current Dow 10,000 level is justified say there’s still a significant risk that the economy will take a step backward.”
  • Industry Not Optimistic NPR’s Kevin Whitelaw suggests businesses are far from confident, which means employment may not yet catch up. “It is bound to boost confidence in the short run, but it won’t extinguish the lingering doubts about how strong that recovery is going to be,” he writes. “There’s also the question of how the Fed and other institutions will unwind the massive efforts they have undertaken to prop up the nation’s economy, including keeping interest rates hovering near record lows. [...] More broadly, there is a sense that the economy is in uncharted waters, which makes businesses, consumers and economists alike leery of taking risks.”
  • Same Greed That Drove The Crash Forbes’s Stanley Bing thinks it’s bad news. “It shows that no matter what’s really going on underneath our economic system, investors want to make money and think they can still do so by buying and selling stocks and sometimes even bonds. Yay for those cockeyed optimists! They make the world go ’round!” he scoffs. “All hope for ridiculous future wealth for each of us resides with the rampant, uncontrolled, irrational exercise of organized greed that drives the markets. It looks like we’re well on the way to total recovery in more ways than one, ladies and gentlemen.”
  • What About Jobs and Sales? Joe Gandelman sees the Dow climb as little more than a symbol overshadowed by more concrete economic indicators. “The good news is that the Dow has approached 10,000. The bad news is that retail sales are still lousy,” writes Gandelman, the editor of the Moderate Voice. “In general it looks like it will be a s-l-o-w recovery…particularly with jobs loss persisting as a national problem (and notable problem for Democrats heading into 2010).”
  • Not a Political Marker Steve Benen cautions that the Dow is not a gauge of Obama’s success. “Of course, using the markets as some kind of financial approval rating for the administration is foolish,” he writes in his Washington Monthly blog. “The value of Wall Street indexes is hardly the best metric for measuring the strength of the economy. Dow 10,000 is just a symbolic milestone.”
  • Compare to March ’09 Low Discover Magazine’s Chris Mooney is optimistic. “Wow, it was only a year ago when the whole financial system seemed on the brink of collapse; today, by contrast, if only briefly (so far), the Dow topped 10,000, a huge rebound from its March 09 low of 6,547. Do folks think the nightmare is finally coming to an end?”
  • Compare to 1999 High Peter Boockvar of the Big Picture asks us to “reminisce about 1999, the year it first passed that magic level.” He recalls, “Karl Malone, Pudge, Chipper Jones, Jagr and Kurt Warner won MVP awards and the average price of a gallon of gasoline at the pump was about $1.20. US nominal GDP ended at $9.6b vs $14.1 as of Q2 ’09. Also, on March 29th 1999, the DXY was at 100.36 (now 75.60), the CRB was at 192.40 (now 269.15), gold was at $280 (now $1,060), oil was $16.44 (now $74.80), corn was $2.32 (now $3.85), copper was $.62 (now $2.83), the 10 yr yield was 5.19% (now 3.38%), and the fed funds rate was at 4.75% (now 0-.25%). Oh, how time flies.”

How a Smart Grid Will Spur Energy Entrepreneurship

08. October 2009 · Comments Off · Categories: Economy · Tags: , , , , ,

energy

How a Smart Grid Will Spur Energy Entrepreneurship

Posted by: John Tozzi on October 06

BW’s Rachael King explains the details behind a buzzword we hear a lot now, the smart grid. In essence, the smart grid would do for power what the Internet did for information: replace a one-way distribution system with a two-way, interactive network.

Government bodies and utility providers are in the early stages of this multibillion-dollar upgrade to transform the existing grid into a two-way network where power and information flow in both directions between the utility and the customer, not just from the provider to the user.

The tech sector’s interest is fitting considering the similarities between the energy-grid upgrade and the computing revolution of the 1980s that saw hulking, centralized mainframes give way to PCs. The existing U.S. power grid dispenses electricity but is limited in its ability to gather intelligence from end users—hence the monthly visit from a meter reader. Now utilities are replacing outmoded meters with so-called smart meters that foster a back-and-forth between customer and utility. In much the same way PCs opened the door to third-party software and services and use of the Internet, smart meters are paving the way for tools and services that make the system more responsive to shifts in energy demands.

Energy entrepreneurs are developing new technologies for generating, storing, and conserving power. Cleantech investing is beginning to recover from the hit it took last year. But changing the underlying energy infrastructure from a one-way power grid to a smart two-way grid could open the gates for more energy entrepreneurs, at different scales.

If the grid is something more like an open network, small producers can sell energy back to utilities. So maybe local farmers have an incentive to generate their own power with solar panels or wind turbines. As King notes, smart meters create opportunities for new technology as well: Software that helps households and businesses reduce their usage at peak times, for example.

The broader point here is that this is the kind of shift entrepreneurs should be attuned to. Any major systemic change — in this case to a piece of infrastructure that everyone uses constantly — opens up opportunity. Not everyone recognized the shift in the early days of the Internet (and a lot of those who didn’t — think industries like news and music — paid dearly). Don’t miss the story and special report on the smart grid.

Banks 1, America 0

06. October 2009 · Comments Off · Categories: Economy, Money · Tags: , , , ,

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Last Friday’s job report showed that most of the US is experiencing enormous economic pain, even if America’s economy is now in a recovery. Overall unemployment rose to 9.8%, with the unemployment rate for men hitting a new post-depression high. The economy shed another 260,000 jobs in September and the previous figure for jobs lost in the recession was revised up by more than 800,000. The average workweek continues to shorten. With real wages falling, this ensures that most workers will be taking home shrinking wages.

For the vast majority of people in the country, who derive the vast majority of their income from working, the economy looks really awful. But the economy is not looking bad for everyone.

As we are constantly reminded, the financial crisis is behind us and the banks are back in their feet. In fact, they are more than just back on their feet. In many ways they are doing better than ever. The most recent data from the commerce department shows that the financial industry profits now account for more than 31.5% of all corporate profits. This is a higher share than at any point during the housing bubble years.

Of course, it is not that hard to make profits when you get to borrow money from the Fed at almost no interest and then lend it back to the government at 3.5% interest. Suppose the state of California was given the privilege of not only borrowing $1 trillion from the Fed at near zero interest but also using the money to buy Treasury bonds paying 3.5% interest. The $35bn in annual interest rate subsidies would take care of California’s huge budget deficit pretty quickly.

But hey, California is just a big state. It’s not a Wall Street bank. Congress is not going to tolerate special treatment for state governments.

The “save the banks” crew continues to peddle a seriously misleading story, mostly without challenge. They tell us that we had no choice. If we didn’t give the banks trillions of dollars in their hour of desperate need, then the situation would be even worse.

There is no doubt that a complete collapse of the financial system would have complicated the recovery. However, handing the banks trillions, no questions asked, was not the only alternative.

Last year we faced a situation in which nearly every major bank faced bankruptcy: they could not pay their debts without the help of the government. Rather than just make below market loans, with few or no conditions, we could have made loans conditional on changing the way the banks did business. This would mean prohibiting them from dealing in complex derivative instruments, limiting leverage and seriously cutting executive compensation. (How does a $2m absolute cap – counting bonuses, stock options and other perks – sound?)

We could have done this because the US government held all the cards. If they didn’t get money from us they would have been out of business. We could have told them to run around Wall Street naked, to walk on hot coals, to wear stupid looking hats, the choice was shutting down their banks and looking for new jobs.

Instead, we just handed them the cash, no questions asked. Now the banks are bigger and badder than ever and paying out big bonuses, just like before. As things stand, they will be an even bigger drain on the economy in the years ahead than they were in the years leading up to crash.

And, if anyone thinks that the banks have learned something about safe business practices, they have not been paying attention. What the banks have learned is that if you wreck your bank, and incidentally bring down the economy in the process, you can just send your lobbyists to Congress and the White House with empty bags and ask to have them filled up with money. The lesson is that Congress will say yes.

The politicians and the media can be counted on running to protect the banks in their hour of need. While tens of millions of people losing their jobs or their homes is just an unfortunate aspect of the modern economy, the collapse of Citigroup, Goldman Sachs, or Bank of America is a tragedy that our elites just can’t fathom.

So, be prepared to endure many more years of high unemployment, under-employment and declining real wages. Upwards of two million people are likely to lose their homes in 2010 and 2011. But the good news is that the economy is recovering and the banks are alright.