Thursday, August 28, 2008

Watering Lawns in the Desert...

...Mish has this one right:
Why anyone thinks that watering the desert is a good idea in areas where water is in short supply is beyond me. But here it is: "Can you imagine what this will do to the value of our home?” [resident Brandon Knudsen] said. “One of my neighbors said, ‘I just put $20,000 into my backyard.’ And I just spent my summer, and $8,000, in my backyard. And for what?”

However, this goes far beyond a water problem for the 60 home owners in Liberty Ranch. The issue at hand is why anyone would want to buy a home from Centex or any other national builder that treats its customers this way.

Wednesday, August 27, 2008

Smart Growth webcast

I was recently interviewed by this webcast related to New Urbanism issues. Flagstaff city planner Roger Eastman joined me.

Have a listen...

Trains of the (Near) Future... airline travel becomes more costly and less viable for many, the possibility of a return to more passenger rail travel increases.

This article does a nice job laying out some of the possibilities.

Tuesday, August 26, 2008

Last Desperate Gasps at CitiGroup?

That's what appears to be going when reading this Bloomberg report:
Citigroup Inc., the biggest U.S. bank by assets, banned off-site meetings among employees and cut back on color photocopying to reduce expenses as investment- banking revenue declines.
Now, don't get us wrong. Daily Sprawl is a huge supporter of these type of more sustainable corporate practices.

But, at this point, they beg the question: Why did Citi wait until it was a crisis time to take such logical steps?

Unfortunately, there's no good answer and that's much of the reason why Citi and other similar companies are unlikely to survive this crisis as they are currently situated.

Sprawling Jefferson County, Alabama...

...inches closer to a bankruptcy filing. That's right, the large county that includes Birmingham, Alabama's largest city, appears to be on a course to file bankruptcy.

The dominoes continue to fall across the board...

NPR Has a New Report...

...on how Wal-Mart is increasing its use of locally-sourced foods:
Two years ago, retail giant Wal-Mart created a stir when it announced it was moving into the organic foods market.

Today, the nation's top grocery seller is highlighting its purchases of "locally grown" produce. While the company is touting the community benefits, buying local produce is also a way to cut the company's growing fuel costs.

Wal-Mart says partnerships with local farmers have grown 50 percent over the past two years — not just in California, but in Wal-Mart stores across the country. This year, it plans to buy about $400 million worth of locally grown produce.
Someone asked "so, do you think this is a good thing?"

My answer was "of course it is!"

Granted, Wal-Mart remains on the negative side of the sustainability balance sheet, but efforts to change that--even incremental--are important, especially when they are done on a Wal-Mart scale.

After all, the Wal-Mart produce aisles remain much more visited than even the most popular of farmer markets. Meaning that, the more that Wal-Mart sources locally, then the more that people will be exposed to the benefits of local food production.

Monday, August 25, 2008

Game Over?

That's what Warren Buffet is saying about Freddie Mac and Fannie Mae:
And the billionaire investor Warren E. Buffett, the chairman of Berkshire Hathaway, said in an interview on CNBC that “the game is over” for the firms to continue operating as independent companies.
Read the entire NYT story here.

Now, this does not mean that Fannie and Freddie are going away. The federal government has guaranteed to somehow back them. However, the reality is that the home mortgage market is about to become even tighter, even sooner.

We may be looking at a huge decrease in mortgages and huge increase in rental agreements. Which, contrary to the myth of an "ownership society" is not an inherently bad thing.

Thursday, August 21, 2008

Oil Price Update...

...the Naked Capitalism blog has an interesting update on the current state of all things Oil-Priced:
The bad thing about the volatility in oil prices is that it is an impediment to moving to new sources. The Financial Times, in an editorial last year, stressed the importance of having a stable price for carbon to facilitate the transition to cleaner sources. But as much as the runup of oil to nearly $150 a barrel led to conservation in advanced economies (which is far and away the biggest opportunity over the short to intermediate term), the sudden drop to almost $110 leaves open the possibility that it might retreat further (which this article contends will happen later in the year), which would call the viability of alternative energy into question and may also lead to more consumer use (at a minimum, airlines may be able to lower prices and add flights although their nickel and diming is no doubt here to stay).

Wednesday, August 20, 2008

Another Movie That Seems to Matter...

...this time, Daily Sprawl offers for your viewing knowledge: I.O.U.S.A.

Here's a WSJ interview with one of the movie's lead participants.

And, here's the trailer.

Tuesday, August 19, 2008

The Marketing of "Second Mortgages" into...

...a "home equity loan" disaster. The NYT has the backstory how this banking scheme has contributed to the current housing crisis in big ways:
Marketing executives knew that “second mortgage” had an unappealing ring. So they seized the idea of “home equity,” with its connotations of ownership and fairness. The phrase was also used for lines of credit, which are sometimes taken out by people who have already paid off their first mortgage.

But in the early 1980s, Americans were not very familiar with the concept of dipping into home equity. Charles Humm, the senior vice president for marketing and sales at Merrill Lynch Credit Corporation, had to go on a road show explaining the idea to potential customers.

He had to change the notion that only people in financial trouble took out a second mortgage, he recalls. Merrill wanted to sell second mortgages to consumers who did not need to borrow money urgently.

Monday, August 18, 2008

Going Natural... and then, a book comes along that really changes your outlook on something. Oftentimes, its a large, substantive book.

In Daily Sprawl's case, it was a more simple tome: Squeaky Green.

Quite simply, this book has led the Daily Sprawl family to consider the health and environmental effects of many everyday products. Indeed, little did we know that things like parabens and petroleum by-products make simple products like shampoo and detergent more toxic than most people should be comfortable with.

Below is a list of several products that we are trying. Yes, sometimes they are more expensive (though with stores like Target and Wal-Mart stocking many of them, the difference is mitigated some):

Top natural product manufacturers: Tom's of Maine, Jason's Natural, Seventh Generation, Method, Ecolever, Ecos.

Toothpaste: Tom's of Maine, Jason's Natural
Shampoo: Jason's Natural, 365 (Whole Foods store brand)
Household Cleaners: Seventh Generation, Method
Detergent: Ecos, Ecolever, Seventh Generation
Shave Cream: Tom's of Maine, Jason's Natural
Deodorant: Tom's of Maine

Just of sampling of the products we're trying out. Daily Sprawl highly recommends checking out for great deals on many of these products.

Friday, August 15, 2008

Remember the Pickens Plan...

...and the Daily Pickens update here.

While we don't agree with everything the Plan promotes, we do find the vast majority--and the effort in general--to be exactly what we need to begin to address the Major Changes coming our way very soon.

Tuesday, August 12, 2008

Frugality and Saving Start... become cool and admired:
And this new frugality might actually be OK with many of us. Consumers were "so glutted on everything that they had acquired and all the time that was robbed from them...that they almost saw this [downturn] as a great opportunity to stop," says Faith Popcorn, chief executive of her eponymous consultancy. In a recent survey, she found that 90 percent of respondents said they were considering options for "the simpler life," and 84 percent said they were inclined to buy "less stuff."

Another survey found that people rank being in control of their finances and living a green lifestyle higher as signs of success than having money or a luxury car, and view having a paid-off mortgage as more of a status symbol than having a beautiful home. "We have to convince ourselves that the lifestyle we can afford right now is a desirable one," says Holly Heline Jarrell, a global director at the communications firm Manning Selvage & Lee, which sponsored the survey.

Monday, August 11, 2008

The California Story... all of its depressing detail:
But this was no ordinary gold rush; it was alchemy, with the developers turning piles of concrete, glass and steel into gold as if by magic.

This boom was great for state finances as taxes levied on the new buildings and on the tens of thousands of construction workers arriving in the state flooded in. But Stockton's newfound prosperity was just a flash in the pan. All too quickly the city became vastly overdeveloped, with so many empty houses and blocks of flats that the place started to feel like a ghost town.

A Startling Statistic...

...from this CBS News report:
Sixty years ago, cheap gas and new highways helped fuel suburbia's rapid rise, creating a new American utopia. But as CBS News correspondent Ben Tracy reports, the triple threat of falling home values, empty nesters returning to the city and sky-high gas prices is driving suburbia to the brink.

Some developments are left half built while other homes look abandoned. Demand for suburban housing is dropping so fast that a recent study predicts that by 2025 there will be a surplus of 22 million large-lot homes in suburban areas.

Interesting Washington Post Article...

The New Economy of the 1990s fostered delirious spending with easy credit. Americans were encouraged to borrow far beyond their means. A pervasive taste for extravagance equated size and opulence with luxury. The McMansion, gargantuan in size, appeared, often entailing the demolition of several historical houses. The facades of these homes are adorned with a showy pastiche of super-size motifs. How about some classical columns, two stories high, to stir memories of Southern plantations, alongside huge displays of half-timbering to evoke a Tudor castle? Interiors focus on a majestic stairway and a portentous spectacle called the "Great Room."

A McMansion is rife with contradictions. It's an exhibitionistic house, yet it's set far back from the street, with tall gates and security systems. These Hummer houses appeal to people who want a truly conspicuous display of wealth. They've given freedom of expression a new and rather disturbing meaning: the right to do whatever you want, to be totally self-absorbed. Which is where we are, for the most part, today.
Read the whole story here.

Friday, August 8, 2008

You Can't Make This Stuff Up...

Have you ever heard about the incoherent strategy of giving an alcoholic cigarettes in order to take the focus off of their alcohol addiction.

Apparently, the U.S. money masters have decided to try it out with their failed addicts.

Thursday, August 7, 2008

Goodbye Airline Seats?

At least 60 million will be grounded according to this article:
Airlines are set to make the reduction, the equivalent of one in every 14 seats, in response to high oil prices and the global credit crisis, according to the Official Airline Guide (OAG). Reduced availability is almost certain to force up ticket prices.

In all there will be 59.7m fewer tickets available compared to October-December last year. Routes will be scrapped at 275 airports around the world and 3,500 fewer planes will be needed, according to the OAG. While Europe will suffer the loss of 5.5m seats, America will be worst hit, with a reduction of about 20m.
The effects of Peak Oil continue to wreak havoc on both the airline and auto industries. The biggest difference is that the auto industry can adapt to a greater degree with electric-powered cars.

For the airline industry, that is practically not an option. So, as we've said before, use those SkyMiles and WorldPerks while you can...

Wednesday, August 6, 2008

Automakers Drive Toward the Cliff...

Awhile back, we posted a Daily Sprawl update on the likelihood of a major U.S. car maker hitting the skids [see "Is GM Going Bankrupt?"].

Well, it looks like that prognostication is gaining credibility:
Some experts fear that GM, Ford and Chrysler - their sales plunging as fewer consumers buy gas-guzzling pickups and SUVs - could be forced to head for bankruptcy.

Last week, General Motors (GM, Fortune 500) reported a $15.5 billion second quarter net loss. While its operating loss was only $6.3 billion, that's still more than the market value of the company.

GM's loss followed an $8.7 billion loss at Ford Motor (F, Fortune 500) and came on the same day that the industry reported a 13% drop in sales, its worst month in 16 years.

The States in Worst Shape...

...the whole sprawl-induced, housing crisis is pretty widespread across the country. Indeed, this list of the states in the most financial trouble (ugh! it includes Daily Sprawl's home state of Alabama) represents every region of the country:
The list of states in trouble is 29 on the way to 50. The Center on Budget and Policy Priorities is reporting 29 States Faced Total Budget Shortfall Of At Least $48 Billion In 2009.

Washington, California, and New York have all recently acted. Every other state will eventually follow to varying degrees.

The worst states as a percentage of budget gaps vs. general funds are in order: California (21.3%), Arizona (17.8%), Nevada (13.5%), Rhode Island (12.6%), Florida (11.0%), New York (9.1%), New Jersey (7.6-10.6%), and Alabama (9.2%).

Those eight states are already in deep trouble. Another 21 are in less trouble.
Click here for the entire report.

Monday, August 4, 2008

Trapped in Suburbia?

Yep, it's happening more and more often:
Falling real estate prices, a shrinking job market, and huge segments of the population underwater on the value of their home in comparison to their mortgages are making it very difficult for people to move. Add in rising gas prices and inability or unwillingness for people to commute long distances and it's no wonder many suburbs have become ghost towns.

Some trapped in suburbia, with no one to sell to and no willing or able buyers, have become their own neighborhood islands.

Friday, August 1, 2008

The Ongoing Fiscal Nightmare...

...for SUVs appears set to get worse:
If you thought $4 per gallon was a hit to the wallet, wait until hundreds of thousands of off-lease sport/utility vehicles are returned to dealerships. That's when the whammy of inflated residual values of off-lease sport/utes will hammer the market.

According to Oregon-based CNW Research, with some 800,000 truck-based sport/utility vehicles coming off lease this year, residual values projected three and four years ago will be missed by as much as $6,000 per unit.

Whom will this hurt? Those who lend the money--banks, credit unions, car companies' captive finance arms and others who write leases--will face a tab of nearly $5 billion just in 2008. That number rises to $5.24 billion in '09 and $4.74 billion at the end of the decade.
Sport utility vehicles are about to become virtually worthless to anyone other than the current owner (whether that is an individual or a bank that holds a loan). No resale, the return value in a lease is tanking, and gas prices plus insurance costs are going higher (which is strange for insurance at least since you'd think that decreased value would mean decreased premiums).

All in all, unless you can afford an SUV outright, you likely won't be getting one soon. Which, ultimately, is probably a good thing for the environment and the economy in the long term.

Special Beach Edition...

...we're here wrapping up a great Daily Sprawl get-away.

No Internet use all week until today and, ya know, life goes on without it (and, quite possibly improves).

Nevertheless, while checking emails at the end of the vacation, Daily Sprawl discovered that Mish Shedlock is getting more and more accurate in his prognosticating.

On a much more exciting note, today is the day that the Hampstead Sales Gallery opens to the public. Go check it out--it's one of the most amazing New Urban projects we've ever worked with.