Comments from our Houston, Texas dealer: “I’ve been a technician & service manager for over 40 years and have extensive experience with construction lasers. The Pro Shot line by Laser Reference is the best instrument for the money, available today”                  -  Ron McCuen, Service manager    Read the rest of what Ron said here:
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16 July, 2015  -  Long Time No Blog Looking at the EU – Greece agreement reminds me of the time I tried bargaining for a pot. Vendor wanted $15, I offered $10, and settled for $20. Unfortunately, whether Greece pushes through the required reforms and gets its bailout or if it exits the EU, it will be very painful economically. Kevin Drum shows a chart that explains why the economic recovery still doesn’t feel that great for a lot of people. Since 2007, “80 percent of all workers—that is, everyone with an income less than about $65,000—saw their compensation fall. Only the top 20 percent saw their compensation go up, and only the top 10 percent saw it go up by more than a pittance.” Need more evidence? Take a look at this chart from the St. Louis Fed. New privately owned housing unit starts peaked in 2006 at around 2,200,000, bottomed in in 2009 at around 490,000, and stood at around 1,165,000 in April 2015.
21 August, 2015  -  The Shortage to End All Shortages In California, rivers are running dry, fields lie fallow, and lawns die because of the drought. In Greece, the country has had to endure 3 bailouts and harsh austerity because of a lack of euros. However, this must be the most humiliating shortage. From the Independent: “Dutch soldiers have apparently been shouting “bang, bang” when they shoot their weapons because of an ammunition shortage. Soldiers have been imitating gunfire during training drills after being told that they would no longer be able to use live bullets because too much ammunition has been used on international missions.” Wonder what they do if they are practicing with automatic weapons?
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6/27/12  •  Who Needs Gold? Certainly not the people of the island of Yap out in the Pacific Ocean. From the Planet Money blog back in December 2010. “There's no gold or silver on Yap. But hundreds of years ago, explorers from Yap found limestone deposits on an island hundreds of miles away. And they carved this limestone into huge stone discs, which they brought back across the sea on their small bamboo boats. It's unclear if these stones started as money. But at some point the people on Yap realized what most societies realize. They needed something that everyone agrees you can use to pay for stuff.” “So imagine there's this great big stone disc sitting in a village. One person gives it to another person. But the stone doesn't move. It's just that everybody in the village knows the stone now has a new owner. In fact, the stone doesn't even need to be on the island to count as money. One time, according to the island's oral tradition, a work crew was bringing was bringing a giant stone coin back to yap on a boat. And just before they got back to the island, they hit a big storm. The stone wound up on the bottom of the ocean. The crew made it back to the island and told everybody what happened. And everybody decided that the piece of stone money was still good — even though it was on the bottom of the ocean. "So somebody today owns this piece of stone money, even though nobody's seen it for over 100 years or more," Fitzgerald says. This system, in the end, feels really familiar. If you go online to pay your electric bill, what's really changing in the world? Some digits in your bank account get shifted around, along with some digits in the power company's bank account. In other words, that stone money on the bottom of the ocean that you used to own now belongs to the power company.” Of course, once you realize that the concept of the big stone on the ocean floor is money, then the concept of some numbers stored in a computer or a ledger, (that can be exchanged for goods and services), can also be treated as money, without the big stone.
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4/12/12  •  What It Would Take for Us to Start Hiring I was speaking to our company President about what it would take to put us in hiring mode, and we both agreed that there was no conceivable tax break or reduction in regulation that would cause us to increase head count. We are staffed to where we can build to meet our orders and we don’t have work for additional employees. What would cause us to look for new workers is increased demand for our product. The National Federation of Independent Business agrees: “Earnings expectations increased to a -19 and has continued to improve in recent months but major concern still ranked near the top of the list and was unchanged from last months read of 22.  Furthermore, going back to the employment issue it is aggregate end demand that drives employment.  This is where the concern about sales has a very high correlation to employment.”
3/23/12  •  Republic of Ireland back in Recession BBC News: “The Republic of Ireland fell back into recession in the last three months of 2011, official figures have shown. Its economy shrank by 0.2% from October to December, following a contraction of 1.1% in the third quarter.” So much for austerity infusing the economy with confidence and reviving the Celtic Tiger. Well, Ireland is just one country. What about the UK? Clive Crook in Bloomberg: “Since 2010 Britain has been a laboratory for an important experiment in economic policy. The question: When economies slump and public borrowing soars, can fiscal restraint speed the recovery? Preliminary findings: No, and whatever made you think it could?” Portugal has been following the austerity recipe, so they should be recovering nicely. “Economists are confident that Portugal will follow Greece and seek a second bailout, and many expect Ireland to do the same. They agree that if both countries do need further funds in 2013, Europe can comfortably underwrite their cash needs.” The other day, European Central Bank President Mario Draghi  stated, “the worst is over, but there are still risks. The situation is stabilising”. I hope he’s right, but it sounds like he’s really saying, “Who are you going to believe, me or your lying eyes?”
3/30/12  •  Tacocopter! Tacocopter, a visionary new enterprise to make sure your tacos arrive hot and freshly made. Enabled by the senses stunning technology of modern drone warfare. Just be sure to keep your head down and the rotors stop before you chow down. In your neighborhood April 1. This is of course, a joke. However, the domestic use of drones should be considered very carefully. A prototype drone being demonstrated to the Mongomery County (TX) Sherriff’s Department, (which had purchased a different $300,000 drone for law enforcement), experienced technical difficulties. As the sheriff’s SWAT team suited up with lots of firepower and their armored vehicle known as the “Bearcat,” a prototype drone from Vanguard Defense Industries took off for pictures of all the police action.   It was basically a photo opportunity, according to those in attendance. Vanguard CEO Michael Buscher said his company’s prototype drone was flying about 18-feet off the ground when it lost contact with the controller’s console on the ground.   It’s designed to go into an auto shutdown mode, according to Buscher, but when it was coming down the drone crashed into the SWAT team’s armored vehicle. Fortunately, no one was hurt, but we can’t all be protected inside of armored vehicles from unmanned flying thingies with propellers falling from the sky.
4/3/12  •  Is China in a Building Bubble? From Climate Progress: (Click the link to see the pictures.) Meet the world’s largest shopping mall, the New South China Mall in Dongguan, China.  It is twice as big as the huge Mall of America outside Minneapolis.  Super-talented photographer Matthew Niederhauser mall on his blog: “A local billionaire built it, and they did not come. The South China Mall was the most ambitious and largest retail space ever conceived in China, if not the world, when it opened in 2005. Constructed smack in the middle of the Pearl River Delta between Shenzhen and Guangzhou, about 4 million people live within six miles of it, 9 million within twelve miles and 40 million within sixty miles. Nonetheless, six years later, the South China Mall only maintains a 1% occupancy rate at best. Nouriel Roubini, who called the meltdown in the US housing market, has been predicting a bursting of the Chinese bubble in 2013. China has embarked on a large scale construction program resulting in empty modern airports, roads to nowhere, unoccupied government buildings, and high speed trains that go unused.
4/25/12  •  So Much for Austerity The Financial Times reports the UK is back in recession. Furthermore, the decline in GDP during the recent recession is now deeper and longer than that experienced during the great depression of 1930.
5/3/12  •  Euro Zone Generational Unemployment Disaster The New York Times reports that unemployment reached 10.9% in March for the 17 nations that comprise the Euro zone. That rate does not include the economic misery caused by reduced wages, reduced government benefits, or reduced working hours. Spain’s and Greece’s economies are destroyed. If you think that description is extreme, consider that the unemployment rate in Spain is 24.1% and the rate in Greece is 21.7%. It is much worse for young workers. The unemployment rate in Spain for people under the age of 25 is almost 50%, while the rate for Greece peaked at 46%. Furthermore, based on what has been seen in the US market, when young adults entering the job market start off in a financial hole, many of them never catch up “It turns out, though, that even if the economy magically started working again tomorrow morning that the recession would have a lingering malignant impact on young adults. Since most firms aren’t hiring many new entry-level positions, recent graduates seeking to start off their career on the right foot have been forced to stop-gap jobs unrelated to their prospective career path. This means that when the economy does (fingers crossed!) pick up again, these young adults will not only be competing amongst themselves, but recent college graduates as well for entry-level jobs. This is expected to depress employment potential and wages for years to come; when quantified, it’s like losing $100,000 each (inflation adjusted) over the course of their lifetimes, even when compared with other age groups that have been hard hit by the recession.” In other words, young adults entering the job market now will be able to contribute that much less to the economy.
4/18/12  •  Interesting Stuff According to the International Institute for Strategic Studies, the United States 2011 defense expenditures came to 45.7% of the world’s total. In other words, if you except Brazil, Sub Saharan Africa, and the Caribbean, we spent more on defense than everyone else combined. You may want to think about eating seafood from the Gulf. From Climate Progress According to Kuhns, at least 50 per cent of the shrimp caught in that period in Barataria Bay, a popular shrimping area that was heavily impacted by BP’s oil and dispersants, were eyeless. Kuhns added: “Disturbingly, not only do the shrimp lack eyes, they even lack eye sockets. “Some shrimpers are catching these out in the open Gulf [of Mexico],” she added, “They are also catching them in Alabama and Mississippi. We are also finding eyeless crabs, crabs with their shells soft instead of hard, full grown crabs that are one-fifth their normal size, clawless crabs, and crabs with shells that don’t have their usual spikes … they look like they’ve been burned off by chemicals.” [...] Animated stereoviews of late 19th and early 20th century Japan. These have been colorized and the views animated to create a 3D effect. Very cool. Huashan Trail, the world’s most dangerous hike. Bring your parachute.
4/19/12  •  I’m Calling BS on This This is a company blog intended to be interesting and informative, but non-political, I’m going to break that rule and call BS on the US House of Representatives H.R. 9, introduced by House Majority Leader Eric Cantor, which implements a one year, 20% tax cut for “small business”. First of all, the tax break is given to businesses with less than 500 employees. Now we can argue about just where the cut off is in terms of number of employees in order to be classified as a small business, but 500 isn’t it. I could go for 10 or 20 or perhaps 30 employees, but certainly not 500. Under these terms, the following would be eligible for the tax break: (source, Center for American Progress) Professional sports franchises, such as the Los Angeles Dodgers, which were recently sold for $2 billion Donald Trump’s Trump Tower Sales & Leasing Paris Hilton Entertainment, Inc. Furthermore, “Under the Cantor bill there is no requirement that a business owner use the extra cash from the tax cut to reinvest in his or her business, as opposed to spending it on personal consumption or simply putting it in the bank. Businesses that do not create jobs—and even those that lay off employees—are still eligible for the deduction” H.R. 9 is a tax break for some very well heeled individuals and large businesses, under the guise of being a boost for small business. It will increase the deficit, it will provide very little relief for true small business, and will do little to boost employment. Citizens for Tax Justice: “A slew of tax credit programs in Iowa that have failed to live up to their job-creation promises is further evidence that while companies will happily take taxpayer money when it’s offered, no amount of corporate pork can make a company hire people when there’s no demand for its products.”
5/8/12  •  Employment Has a Long Way to Recovery Construction industry unemployment fell to 14.5% in April. The overall unemployment rates fell to 8.1%. Mark Thoma points to an article that suggests unemployment would be a full percentage point of state and local government employment had not occurred. The longer a person is unemployed, the greater the chance that cyclical unemployment caused by a poor economy can turn into systemic unemployment where a person’s skills do not fit the requirements of the job market. The longer you’ve been unemployed, the harder it is to get back into the labor force. “If you’ve been unemployed for a few weeks, your chance of finding a job is 30 or 40 percent,” says Michael Reich, an economist at the University of California at Berkeley. “If you’ve been unemployed for six months, it’s 10 percent.” If that is true, then this chart from Calculated Risk shows the magnitude of the jobs problem.
5/9/12  •  Imposition of Musical Taste “Little Hands” by the String Cheese Incident Winding down the dusty trail from Cathedral Butte Walking towards the canyon floor playing Anasasi flutes. Eagles flying overhead beneath the desert sky. Makes me think of how they lived many years gone by. years ago they painted these little hands. Yes this is the timeless place that's seen them come and go. They packed it up way back when and drifted on down the road. The earth, the sun, the moon and the stars. meant so much back then. But the years go by and though you try you can't bring them back again.
6/6/12  •  Just Cause It’s Said Don’t Mean That It’s So Don’t get me wrong, I would love to know the housing industry has bottomed and is on its way back. However, Ritholtz points out just how many times different people and entities have called the bottom of the housing market over the past 6 years. Click the link and see for yourself or see the pared list below. If you forecast often enough, sooner or later you will be right. 2006 New home sales: Back from the dead? (CNN, December 27, 2006) Read Between All Those For-Sale Signs (NYT, August 27, 2006) “the latest housing numbers seem like they could be a turning point.” “Perhaps the biggest reason to be skeptical about a real estate crash is that the country has not really suffered through one before” NAR’s Existing Home Sales & Prices (TBP, November 2006) Greenspan Says `Worst’ May Be Past in U.S. Housing (Bloomberg, October 6, 2006) “Fed Vice Chairman Donald Kohn, a former top adviser to Greenspan, also said this week that while he doesn’t know how long and deep the housing slump will be, it probably won’t sink the U.S. economy into a recession.” “Former Federal Reserve Chairman Alan Greenspan said the ‘worst may well be over’ for the U.S. housing industry” New home sales: Back from the dead? (CNN, December 27, 2006) “David Seiders, the chief economist with the National Association of Home Builders, agreed that the supply of homes on the market is still too high to say that the report signaled a recovery, yet he’s encouraged by the solid sales pace in this report. ‘What I’ve been looking for is stabilization, that’s what I’m reading from this,’ he said’” 2007 IMF believes US housing market may bottom out (Reuters, April 11, 2007) “The IMF’s forecast for another year of strong growth, with some risks, is based on the notion that the U.S. housing market will bottom out and a slowdown in U.S. capital spending will be reversed, a senior IMF official said on Wednesday.” Real Estate Outlook: Will Housing Turn Around? (Realty Times, December 31, 2007) “outlook from Dr. Lawrence Yun, chief economist of the National Association of Realtors: 2008 NAR Housing Market “Bottoms” (TBP, January 2008) Cramer Calls the Housing Bottom (CNBC, August 27, 2008) “The economy will never recover if housing doesn’t find its footing first. But when will that happen? Cramer said he expects a bottom by the third quarter of 2009.” Real Estate Markets Most Likely To Rebound (Forbes, October 29, 2008) 2009 U.S. Housing Market May Bottom in 2009, Zandi Says (Bloomberg, February 9, 2009) Greenspan Sees ‘Seeds of a Bottoming’ in U.S. Housing (Bloomberg, May 12, 2009) Home prices show signs of stabilizing in May (AP, July 28, 2009) U.S. housing starts keep recovery hopes alive (Reuters, August 18, 2009) “ ‘The economy is recovering, this is the turning corner. We will have positive growth this quarter, but not a lot of strength. It very much looks like a U-shaped recovery rather than V-shaped,’ said Kurt Karl, head of economic research at Swiss Re in New York.” 2010 In hard-hit markets, some see signs of bottom (MSNBC, January 29, 2010) “ ‘The epicenter of the boom and bust will be the leaders of the recovery,’ said Lawrence Yun, chief economist for the National Association of Realtors. Warren Buffett sees housing market bouncing back by 2011 (USA Today, March 1, 2010) “Billionaire Warren Buffett said the U.S. will recover from the residential real estate slump by 2011 as demand for houses catches up with the supply that accumulated during the bubble.” Wasn’t commercial real estate supposed to crash? (CNNMoney, June 8, 2010) “Peter Roberts, Chief Executive Officer of the Americas for property giant Jones Lang LaSalle believes commercial property values are in the process of bottoming out and will get to the ground floor by early 2011.” Real estate market primed for turnaround (Savannah Now, December 30, 2010) ” ‘Once the current oversupply of inventory is absorbed, the real estate market should turn around very quickly,’ said Harvey Gilbert of Gilbert and Lattimore. ‘It’s really just a matter of when.’ “ 2011 U.S. housing bottom seen in mid-2011: poll (Reuters, January 28, 2011) Home Prices In U.S. Showed Signs Of Stabilizing (Bloomberg, August 30, 2011) Is housing bouncing back? (The Washington Post, December 20, 2011) “The deeply depressed housing sector finally seems to have found its bottom — and may even be starting to bounce back.” 2012 Has The Housing Market Hit Its Bottom? (Forbes, January 10, 2012) Homeownership rates fall to 66% as downturn nears a bottom (USA Today, February 1, 2012) Ready to Rebound (Barron’s, March 19, 2012) Has the Housing Market Finally Hit Bottom? (Time, April 27, 2012) Mortgage-Bond Bigwig Lewis Ranieri Calls Housing Bottom (U.S. News, May 7, 2012) Report: Housing Market Recovery Has Officially Begun (TIME May 15, 2012) Housing starts add to recovery signs (Reuters, May 16, 2012) Buyer alert: Rising prices ahead (, May 22, 2012) April new-home sales increase 3.3%, pointing to recovery (Detroit Free Press, May 24, 2012) Housing Market May Finally Be Turning Around With Sales Up 10 Percent In April U.S. Home Prices: Has the Tide Turned? (ABC News, May 29, 2012) The Housing Bottom Is Here (Business Insider, May 29, 2012) S&P: Home Prices See New Bottom, Recovery On Deck (Reverse Mortgage Daily, May 29, 2012) “The rate of decline has moderated, however, suggesting that a recovery is near.”
5/21/12  •  What Happens When You Buy the Wrong Laser Courtesy of Laughing Squid
5/25/12  •  Where Are Homes Underwater? Here is a cool, searchable map showing the percentages of underwater mortgages throughout the United States. Yikes, zip code 95206 in Stockton, California shows 72% of mortgages owe more than the home is worth. Zip code 89107 in Las Vegas 80%. Santa Clara County, California (Silicon Valley) 22%. Maricopa County, Arizona (Phoenix) 55% Orange County, Florida (Orlando) 56%
5/29/12  •  Back to the Debt Ceiling Debate Speaker of the House John Boehner has promised another fight with the White House over raising the Federal Debt ceiling. Unfortunately, according to this article in Bloomberg by two professors from the University of Pennsylvania’s Wharton School, the threat to block an increase in the debt ceiling last summer “almost derailed the recovery, and this time could be a lot worse.” Last summer, when the debate was on, consumer confidence tanked, business uncertainly rose, and job numbers declined: “Confidence began falling right around May 11, when Boehner first announced he would not support increasing the debt limit. It went into freefall as the political stalemate worsened through July. Over the entire episode, confidence declined more than it did following the collapse of Lehman Brothers Holdings Inc. in 2008.” “Businesses were also hurt by uncertainty, which rose to record levels as measured by the number of newspaper articles mentioning the subject.” “Growth in nonfarm payrolls decelerated to an average 88,000 a month during the three months of the debt- ceiling impasse, compared with an average of 176,000 in the first five months of 2011” Having to debate the debt ceiling is both silly and serious. On one hand, Congress passes its budget in which it agrees to spend money in excess of revenue it collects. It is saying that it will buy goods and services and increase debt. The debt ceiling is after the horse has escaped from the barn. Failing to increase the debt ceiling is saying, “OK, we agreed to buy these things and increase debt, but we’re not going to pay.” It is serious to take the US to the point of defaulting on some of its obligations. That will cost in terms of jobs, economic growth, and increased cost of borrowing to the country. Not good.
5/30/12  •  Catch 22 In Joseph Heller’s black comedy, Catch 22, there is a patient bandaged head to toe, (I think he was called the soldier in white), with a drip bag feeding into an arm and a waste bag draining him. When the drip bag was empty and the waste bag full, a nurse would switch the full bag onto the drip stand and connect the empty bag to the end of the waste tube. It sounds like that is what is happening in Greece. From the New York Times: “Its membership in the euro currency union hanging in the balance, Greece continues to receive billions of euros in emergency assistance from a so-called troika of lenders overseeing its bailout. But almost none of the money is going to the Greek government to pay for vital public services. Instead, it is flowing directly back into the troika’s pockets. The European bailout of 130 billion euros ($163.4 billion) that was supposed to buy time for Greece is mainly servicing only the interest on the country’s debt — while the Greek economy continues to struggle.”
6/14/12  •  The Pain in Spain Over at Mother Jones, Kevin Drum points out that despite the billions the EU indicated it was willing to lend to Spain to recapitalize its banks, yields on Spanish bonds are up in the danger zone again. The yield on a 10 year Spanish note is almost at 7%, the level that touched off the need for bailouts in Ireland and Portugal. The ironic thing is that bond investors are demanding a high return because they think there is likelihood that Spain, with its deficit and national debt, won’t be able to repay its bonds. Furthermore, depositors were withdrawing their funds from Spanish banks and placing them into safer banks outside the country (Germany) to avoid being caught in the event that Spanish banks ran out of cash. So the EU went ahead and said they would loan up to On one hand, the EU has been pushing reduction in spending, deficit, and debt. On the other hand, it just said it will loan billions to keep the banks afloat. Makes your head spin.
6/18/12  •  Pew Poll: Americans Want More Services Suzy Khimm at the Washington Post points out that Americans view reducing the deficit as a top priority. However, when presented with a list of government expenditures, there was no single item where a majority favored decreasing spending. When push comes to shove, it’s going to be very difficult to actually come to some sort of consensus about what to cut. “While they overwhelmingly support reducing the deficit, more Americans would prefer to increase than reduce spending in nearly every major policy area, from Medicare to aid to the needy, Kohut points out, citing a 2011 Pew Research poll. There are only two areas where more Americans want to cut spending than increase it: unemployment benefits and foreign aid, neither of which would make much of a dent in the deficit.”