Friday, July 25, 2008

One Quick Article for the Road...

We've discussed how the Las Vegas business model (air-centric travel with millions of feet for conventions and thousands more rooms) is pretty much doomed in the new era of expensive energy.

Well, to a lesser but still troublesome degree, Orlando is facing similar problems.

Granted, unlike Las Vegas, at least Orlando does have rail access to much of the population-heavy Northeast corridor. However, even that access is limited and, of all things, comes in the form of a car train (what a strange creation that will one day be looked back on as).

This recent Orlando Sentinel column discusses how one major portion of Orlando's tourism empire--International Drive--is facing major viability problems:
The north stretch of International Drive is crumbling into blight.

Empty storefronts spread in the strip shopping centers. The Festival Bay Mall was supposed to lead a revitalization but also has succumbed to a growing cancer of vacant spaces.

As a Category 4 recession approaches, you have to wonder how far the contagion will spread along one of the nation's top tourism strips.

Daily Sprawl on Vacation...

...that's right readers, Daily Sprawl is taking a vacation trip until August 2nd.

Depending on Internet access at this super-secret location (no, it's not the NSA HQ in MD, but close...), I'm not sure how frequent updates will be.

Of course, if something big breaks (which is entirely possible in these times), Daily Sprawl will blog it. Short of that, if you don't see any updates between now and August 2nd, you can rest assured that we're safe from the depression-inducing affects of sprawl for at least one more week in the Summer of '08.

See you soon,

Your Daily Sprawlster.

A "Worldwide Hard Landing"...


Mish's Global Economic Trend Analysis is predicting just that in the most straightforward terms yet:
A worldwide recession is coming. China, India, Brazil, and third world economies simply cannot pick up the slack for the US, UK, EU, and now New Zealand. For more on the situation in the US and UK please see Deflationary Hurricanes to Hit U.S. and U.K.

Admittedly New Zealand is just a tiny cog in the global economy. Nonetheless it offers confirmation of things seen elsewhere.

Australia and Canada will follow in a mind boggling drop once the air is let out of the China commodities balloon. Brace for a worldwide hard landing. One is coming.

Thursday, July 24, 2008

A good summary of the Fannie Mae mess from Bloomberg News.

Plus, one commentators view of "everything you need to know" when it comes to Peak Energy:
A student in my class asked me for a list of skills we need to get ready for peak oil, prioritized. I admit, it took me about a day after she asked to stop thinking “Holy Crap, how do I figure that all out!” But it is an interesting question. And while it isn’t all just about food preservation, I thought I’d take a shot at it. I will, of course, be relying on my fearless readership to point out gaps in my thinking.

Wednesday, July 23, 2008

The Demise of the Domestic...

...commercial airline carriers continues:
The decrease in overseas flights is a potentially troubling sign for the major airlines, which traditionally make more money on tickets for trips outside the United States.

But with the price of jet fuel nearly double what the airlines paid in 2007, “the economics of many routes just don’t make sense,” Mr. Tague said during a conference call.
Daily Sprawl is not the type of blog to brag too much. But, so far, almost all of our predictions have proved accurate.

So, we'll now predict that, by 2010, at least 50% of the U.S. commercial airline carriers will be defunct--either by merger or just going out of business. And, add to that prediction the extreme likelihood that UPS and FedEx will have to merge to make any economic sense.

Just repeat after us: "I like the train. The train is good. The train works for me...I like the train. The train is good. The train works for me...I like the train..."

Got An Extra...

...Heavy Duty Sleeping Bag? One Merrill Lynch economist (is that an oxymoron?) thinks heating bills might burn a hole in your pocket this winter:
“The federal government is going to have to step in and heavily subsidize this winter,” Mark Wolfe, executive director of the National Energy Assistance Directors’ Association, told last month. NAEDA represents the state directors of the federal government’s Low Income Home Energy Assistance Program (LIHEAP). President Bush cut LIHEAP funding and, despite experts’ dire warnings, the U.S. may enter the winter heating season with less money available to help people than last year.

Tuesday, July 22, 2008

Peak Water Hits California...

...bad news for the Sunny Cal-a-forn-eye-eh:
Gov. Arnold Schwarzenegger's recent executive order certifying that California is in a drought and directing state agencies to start thinking about what to do about it is only the latest sign that a way of life built on cheap and readily available water is coming to a close. For much of the state, June was the driest month on record, according to the National Climatic Data Center. The continuing water crisis raises the question of whether we are approaching the limits of growth in California.

For the last century, it seemed there was no limit. More than any other state, California's economy and population exploded, a growth spurt fueled in large part by abundant water supplies. Now we may be at a turning point, especially in Southern California.

Monday, July 21, 2008

Headline: "Is America too big to fail?"

It is almost beyond belief that the mainstream media has reached the point where it is asking this question. Not because this result was unexpected, only that it happened so swiftly.

Clearly, 2008 will mark the historical date where the sprawl-centric ponzi scheme finally caved in.

The Death of the Strip Mall...

...continues to accelerate:
The vast majority of these failed companies are among the nation's 23 million small businesses, with fewer than 100 employees. Their fortunes have tumbled as the national economic downturn has deepened.

"The climate is turning desperate for small businesses," said George Cloutier, founder of American Management Services, a consulting firm that helps small companies increase profits. "They are in crisis, and, as these numbers show, it's getting worse and worse."
Daily Sprawl keeps hearing more and more reports about a pending boom in the desertion of strip malls. Expect to see many stores in your typical sprawl strip flashing "For Lease" and "Vacancy" signs soon. A big question is whether strip mall landlords will actually evict tenants or seek compromises. After all, an empty store is often worse than a filled one that isn't paying full rent.

If only we would have developed like this from the outset...

Friday, July 18, 2008

The Airlines are Actually Recommending Reason...

...but the Las Vegas elected officials don't seem interested in listening:
Airlines serving McCarran International Airport have issued the bleakest economic forecast yet for Las Vegas, recommending that officials reconsider the need for a terminal that is under construction because there may not be sufficient tourism traffic to justify it.

The airlines also have asked the airport to cancel its $114 million Heliport project and to reevaluate all other capital projects in McCarran’s five-year plan.

The airlines’ message to Las Vegas: The industry will not quickly recover from the tourism decline wrought by a combination of higher fuel prices and a sputtering economy.

County officials scoffed at the airlines’ pessimism, saying the region’s economy depends on an airport built to support more tourism traffic. The Clark County Commission on Tuesday voted to stay the course with construction of the terminal.

Thursday, July 17, 2008

On the Cusp of Worldwide... shortages:
Of the 266 distinct nations or entities on the world today, nearly 100 are now reporting continuing energy shortages, mostly in the form of inadequate electricity supply, but in a growing number of cases, shortages of liquid fuels and natural gas. The actual number of countries affected is probably well over 100 but there are dozens of isolated island-states scattered around the world that are rarely heard from and are almost certainly suffering in silence while waiting for the next oil tanker to come in.

The majority of these energy-short states are small, poor and play only a minor role in world trade. While we should feel sorry for the plight of their inhabitants who are, or shortly will be, enduring severe hardships from greatly reduced supplies of electricity, water, food and use of motor transport, the impact of their problems on the better-off OECD world is likely to be minimal for a while.

Shortages, however, are not confined to small, poor states, but, in an increasing number of cases, are appearing in large, relatively well-off and active states on which the OECD world of North America, Europe and parts of Asia are very dependent. Several of the countries having energy problems are actually oil exporting states that, for one reason or another, are not able to turn their increasing oil wealth into smoothly functioning shortage-free economies. Unfortunately, several major countries appear to be on the path to an energy shortage-induced economic and perhaps political collapse within the foreseeable future which obviously will have serious consequences for us all.
According to my brother who currently serves as a missionary in Togo, West Africa, oil prices are about to jump nearly 25% there.

These are very serious concerns. People should be prepared for the possibility of greatly reduced international travel soon.

Wednesday, July 16, 2008

Daily Sprawl Loves Coffee...

....and has been increasingly researching more sustainable coffee options.

This website has an article ranking some of the better "fair trade" and organic coffee options.

Tuesday, July 15, 2008

Gas Shortages This Fall?

This article concisely and carefully explains whey gas lines and fuel prices in excess of $5 per gallon should be expected this fall:
The purpose of this essay is to highlight petroleum inventory issues likely to cause shortages this fall. Several events can create instant, grave shortages. Following is an incomplete list of known risks. There are still more unknown risks of unknown magnitude. As explained below, gas lines will be accompanied by a price jump of about $1.50 per gallon, even if crude oil does not increase in price.
Drive slower=save gas money.

A no-brainer that, if my daily commute is any indication, some people are starting to join the 60 mph, right-lane caucus:
Even with gas prices cresting above $4 a gallon, large SUVs, pickup trucks and even Toyota Priuses barrel down freeways here in suburban Detroit at more than 75 miles per hour -- well beyond the 55 mph that was the national speed limit during the '70s and '80s.

If the U.S. Energy Department's calculations are right, all these lead foots could save the equivalent of 29 cents to 94 cents a gallon if they slowed down just to 60 mph -- and reduce the fuel they burn by about 7% to 23%. But most of my neighbors and I still choose to hit the gas rather than add 10 or 15 minutes to our commute times.

Monday, July 14, 2008

The Next Shoe to Fall?

More than $1 trillion (£500 billion) is held on credit cards in America. In the UK, debts of more than £50 billion have been run up on the plastic. Across the world, somewhere between $2 trillion and $3 trillion is owed on credit cards.

Up to now, the credit crisis has passed by without plastic going into meltdown. Statistics have shown steady levels of arrears, and suggested that many consumers have been successfully paying off part of their balances.

Now there are increasing signs that this last breakwater, shoring up the economies of the western world, is about to crack under ever-increasing strains.
Read the entire story here. The hard truth is that credit card defaults could not just be the next but, quite possibly, the final shoe to fall. As the story discusses, credit cards have been the last line of payment defense for many consumers--including such basic expenses as food, shelter, and power.

When the credit card market contracts later this year/early next year, the chaos will be unique among recent generations.

Grade Your Banking Risk...

With IndyMac going under (the second biggest U.S. bank failure to date) and Fannie Mae and Freddie Mac essentially doing the same, several have asked how to determine how safe is a person's own bank.

For starters, the Federal Deposit Insurance Corporation (FDIC) provides some level of protection for deposits up to 100k. However, if they have to get to that point, troubles may delay receiving your funds.

So, instead of being reactive, try a little proactiveness.

This website has analyzed and graded most U.S. banks. In the industry, it is considered a very reliable source.

Check it out and learn how much comfort/discomfort you should feel toward your bank.

For instance, we bank with three banks here in Montgomery. One had three stars, one had one star, and the third had five stars.

Since more stars is better, guess what I'll be doing soon...

Sunday, July 13, 2008

Sen. Schumer... matter how much he wants to deny it, really screwed up by exacerbating the IndyMac bank failure.

Would the bank have failed anyway? Quite possibly as it was very poorly managed.

However, the fact that a U.S. Senator knowingly (after all, it would have taken a complete numbskull to not know what his letter would do) worsened a bank crisis by releasing a private letter is shameful.

In these tough economic times, Americans don't benefit from political games with the banking system. Mature adults in important leadership positions should generally avoid such churlish behavior.

The Seventh Generation blog... looking at the positive aspects of Peak Energy:
There’s no question that the current oil crunch is making it painful for most of us to visit the gas pump.But is there a silver lining in the clouds of this energy storm? Some experts think so.
p.s. When it comes to buying healthy, non-toxic household products, Daily Sprawl strongly recommends Seventh Generation. Indeed, you can find many of their products at your local Target these days. Great stuff at reasonable prices.

The Town of Hampstead...

...the website for Montgomery, Alabama's only DPZ-designed community, Hampstead, just went live.

Click here to explore what is shaping up to be one of the best TNDs in the DPZ repetoire.

Saturday, July 12, 2008

T. Boone Pickens...

...has a plan for dealing with our oil sprawl addiction.

Some very interesting ideas, indeed.

Matthew Simmons Continues... preach the truth about Peak Oil.

This time on CNBC.

Watch the video and especially the face of the announcers. It's a classic deer and headlights situation.

Covered Bonds

As Fannie Mae and Freddie Mac continue to crater in value, most people we speak with don't seem to realize the consequences the country faces if either of these entities fail--the biggest being that the entire mortgage industry in the United States will be forced to dramatically change.

This "change" could be a system wide reduction in mortgages which would be a huge economic knockout punch.

On the other hand, there is the idea of "Covered Bonds". Many European countries use this approach and it works fairly well for operating a decent mortgage market.

Read a good primer about Covered Bonds, here.

Daily Sprawl expects that we will all start hearing more and more about this term soon. An educated person is often the best prepared one.

Thursday, July 10, 2008

Smart Growth Happenings...

...right here in Montgomery, Alabama.

One of the local t.v. stations, WSFA, recently did this story on the growing number of downtown roundabouts and this story on a new loft project in the city center.

An Interesting Look By...

...the opinion page of the Bloomberg news service regarding what a post-sprawl future might look like:
``Then the euro, one of capitalism's crowning achievements, began to unravel. After Ireland rejected the Lisbon treaty in three consecutive referendums, its fellow single-currency members decided to kick the country out of the project. Once Germany and France realized how easy it was to thin the ranks back to the core gang of euro countries that they'd wanted in the first place, they started finding excuses to bar more nations, starting with Italy.

``With banks and mortgage lenders going bust faster than the government could arrange bailouts, every nut job with an Internet connection started demanding a return to something called the gold standard. When a bunch of academics joined in by denouncing fiat currencies, the general public lost all trust in money.''

The Calculated Risk Blog... reporting on bad news for two of sprawl's biggest stalwards: strip malls and motels/hotels.

It's easy to foresee how both of these categories are going to face major contraction--especially in an era of diminishing air travel.

Those Skymiles and Hilton Honors just seem to keep losing more and more value...

Wednesday, July 9, 2008

The Return of... stockpiling:
Stockpiling staples such as rice, meats and canned soup is coming into vogue again as food inflation and $3.60-a-gallon gasoline have consumers cutting the frequency of shopping trips -- and loading up carts when they do shop. Sometimes shoppers are prodded by fears of impending food shortages, though none have yet materialized in the U.S.

The Department of Agriculture predicts a 4% to 5% increase in food prices this year, nearly twice the rate for 2005. The largest increases are forecast for fats and oils, estimated to rise 8% to 9%, and cereals and bakery products, projected to jump 7.5% to 8.5%. That's on top of existing increases: A dozen large eggs cost $2.20 in March, up from $1.63 a year earlier. White bread now costs $1.35 a pound, compared with $1.16 a year ago.

The Human Toll...

...of the sprawl-provoked credit crisis:
Shelby and millions of other young people have become the largely overlooked victims of a real estate crisis that's led to record foreclosures, sinking home prices and rising numbers of families straining to pay mortgage bills as adjustable-rate loans grow more costly and home equity shrinks. Children and teenagers are enduring a variety of consequences — forced to move and say goodbye to friends, leaving behind schools and teachers, and losing the ability to take family vacations or take part in summer camps because of the financial strain.

Some are giving away family pets or suddenly finding themselves in charge of babysitting siblings because parents can no longer afford child care. In the most drastic cases, some wind up living with relatives or even in temporary shelters for the homeless.

Tuesday, July 8, 2008

An Interesting Irony... gas prices continue to increase, they are finding a new victim---gas stations:
Far from profiting from climbing gasoline prices, station operators are finding that their costs are jumping even as gasoline sales are sagging. And so gas stations are being shuttered at an accelerating clip, their numbers dropping by almost 3,000 over the past 12 months.

Daily Sprawl Agrees with Shedlock...

The Shopping Center Economic Model Is History just as more shopping space is coming online. Vacancies are poised to soar, lease rates poised to drop, and more writeoffs can be expected at Lehman.
Read the whole story here.

Monday, July 7, 2008

Will Peak Oil Kill the RV?

Maybe so:
Buying a motorized or towed recreational vehicle has become a daunting prospect for those who long to see the country at their own pace while surrounded by their own living space.

Financing has dried up as quickly as the equity in many homes -- the kind without wheels. Some people who might have the means to buy an RV are loath to commit $40,000 to $280,000 on a depreciating asset in a dismal economic climate. And the prospect of spending $315 to $675 to fill up a vehicle that gets seven miles per gallon isn't a big draw, either.

Today's Kunstler Update...

...well folks, as I've said before: sometimes Jim Kunstler is brash and strongly-worded but so far his projections keep proving true.

So much so, that this Monday's Update (July 7th) is a must read in terms of understanding and being prepared for the issues at hand:
But to get back to my prior point, things are hitting home anyway, and with force. The US economy is crumbling because the way we conduct the activities of daily life is insane relative to our circumstances. We've spent sixty years ramping up a suburban living arrangement that has suddenly entered a state of failure, and all its accessories and furnishings are failing in concert. The far-flung McHouse tracts are becoming both useless and worthless in the face of gasoline prices that will never be cheap again. The strip malls and office "parks" are following the residential real estate off a cliff. The retail tenants of all those places are hemorrhaging customers who have maxed out every last credit card. The lack of business is now leading to substantial layoffs. The airline industry is dying and will probably cease to exist in its familiar form in 24 months. The trucking industry is dying, threatening the entire just-in-time distribution system of things that even people with little money to spend still need, like food.
These conditions will now get a lot worse, no matter whether the banks continue to conceal their problems. All of it leads to an inflection point that coincides with the November election. By then, I expect that quite a few banks will be toast, job layoffs will rise spectacularly, foreclosures and bankruptcies will be raging across the land, and homeowners north of the magnolia belt will be shattered by the cost of staying warm this winter.
Yes, this stuff can be scary. But, great leadership is also possible. A post-partisan type of leadership which understands that the big picture is changing and, therefore, some of the traditional little picture concerns (like getting re-elected) may soon matter less and less.

Wednesday, July 2, 2008

The Growing Popularity and...

...sustainability of community farms:
When a new one opened for Norwalk residents this spring, with plots for $5 each, all 225 were snapped up in minutes. The 1.8-acre garden at Fodor Hill Road offers water, garden tools and compost for free.

More than 100 people are on a waiting list, so the city plans to expand the garden by 3 acres, replant the original orchards and restore the 1806 farmhouse, parks director Michael Mocciae said.

"We're offering ideal conditions. We're giving them everything but God's work," Mocciae said.

All 48 plots at Westport Community Garden, now in its third year, were taken this year, and there's a waiting list, co-chairwoman Mary Ann West said.
Daily Sprawl recommends Jones Valley Urban Farm in downtown Birmingham as one of the Southeast's best examples.

The Plight of General Motors... apparently getting more and more bleak:
General Motors Corp (NYSE:GM - News) will need to raise as much as $15 billion in cash to shore up liquidity and bankruptcy is "not impossible" if the U.S. auto market continues to slump, Merrill Lynch said.

Other analysts have suggested GM, whose shares fell to a new 54-year low on Wednesday, needs to raise funds to ride out the downturn in the U.S. auto market through 2009.

But Merrill's estimate of GM's financing needs is the highest yet. It also carried the most stark warning of the bankruptcy risk for the largest U.S. automaker.

And You Thought Our Inflation...

...was getting bad. Just check out Zimbabwe's record-setting inflation:
A billion Zimbabwe dollars = 10 U.S. cents.

This should put an end to ridiculous talk of hyperinflation in the U.S., but it won't.
Why is this happening? Mostly because the leader of Zimbabwe, Robert Mugabe, is one of the most evil human beings alive on the face of this planet. He has tortured and stolen so much of his country that he's left to simply printing money over and over again. He's not just your garden variety absolute dictator but, instead, one with an especially evil proclivity for killing those who disagree with him.

Tuesday, July 1, 2008

Brave and Visionary Men... how these individuals correctly predicted--and continue to educate Americans--on the threat of Peak Oil.

Peak Oil and Rural Communities...

The expected exodus from small towns, said Don Macke, a widely considered authority on rural economics and head of the Center for Rural Entrepreneurship in Lincoln, Neb., will be far more profound than the gradual erosion that has been going on since World War II. That decline was due to the country’s shift away from an agrarian economy and a choice for convenience: People wanted to be closer to jobs, shopping and entertainment.

The new flight, Macke thinks, will be more out of necessity.

Most commuters from small towns are high school graduates. They are driving 50 miles or more to work as school cooks, hospital aides, office workers, dental assistants and unskilled factory workers.

“The reality is that those jobs don’t pay all that well,” said Macke, who is also a visiting scholar with the Rural Policy Research Institute at the University of Missouri. “They’re spending up to $500 a month on gas. A third to half is already technically working poor.

“And as gas goes higher, they will get poorer and these towns will soon struggle to hold on to these people.”
Read the entire story here.