Sunday, May 25, 2008

Bend: No More Bloody Marys, Let The RE Bubble Hangover Commence

Welp, you know how when you wake up a little "salty" from an especially brutal month-long bender of hard partying, and go straight to the hair of the dog that bit you? But then there even comes a time when that isn't enough to get rid of the pangs of reality that the party is over, and even the hangover treatment is over, and now things are just horrible. Right?

Yes, that time arrived this week.

There seemed to be this mass realization all at once, that Bernanke's Bloody Mary The Morning After, while potent & temporarily alleviating almost unspeakable horrors, has itself run out of steam. Here's a quick view of the hangover's hangover, via a 5 day snapshot of the DJIA:
DJIA - last 5 days

We got whacked for just over 500pts this past week. Probably not seen as a big deal in the context of the almost 1,500pt rise from bottom to top since March. But I think this is the beginning of Yet Another End. You can see the progression of "Ends" here:
DJIA - 2 years

You can see the initial Subprime Surprise way back in February 2007. That was brushed off as a Tsunami False Alarm, and the party went on like nothing happened.

And so it went with all-time stock market highs being made as recently as last Fall, with nary an interruption. Until early this year when Wall Street Wonks figured out that it wasn't just "us" anymore, it was "them" too, when Bear Stearns went belly up.

And you might wonder just where Bend is with respect to the rest of the country.
CACB - 5 years
Yes. Here we are at fresh new 5 year lows on Cascade Bancorp, The Little Bubble Bank That Could.

As bad as things are in the rest of the country, they are orders of magnitude worse in Bend. And they are awful bad everywhere else, now that Bernanke's Bloody Mary has worn off:

Fed lowers growth forecast, raises inflation view

By Mark Felsenthal and Glenn Somerville Wed May 21, 4:39 PM ET

WASHINGTON (Reuters) - The Federal Reserve on Wednesday slashed its 2008 U.S. economic growth forecast and signaled that mounting concerns over inflation would make further interest rate cuts unlikely.

"Several members noted that it was unlikely to be appropriate to ease policy in response to information suggesting that the economy was slowing further or even contracting slightly in the near term," the Fed said in minutes of its April 29-30 monetary policy meeting.

Fed officials said that cutting benchmark interbank lending rates by a quarter percentage point to 2 percent at their last meeting was "a close call," reinforcing the impression that they may be on hold with any further interest rate moves.

"If you had any doubt that the Fed is signaling a pause, that doubt is gone," said Christopher Low, chief economist at FTN Financial in New York.

In an accompanying forecast, the Fed cut its projection for growth to a scant 0.3 percent to 1.2 percent in 2008, down from the 1.3 percent to 2 percent it estimated three months ago.

At the same time, the Fed -- the U.S. central bank -- said it expects inflation to remain "elevated" and unemployment to increase "significantly."

Stocks tumbled, with the Dow Jones industrial average closing off 227 points, or nearly 1.8 percent, and Treasury debt prices pared losses on the Fed's forecasts. The dollar fell against the euro and the yen.

U.S. short-term interest rate futures expect no imminent change from the Fed but point to rate increases in the final months of the year.

The rate cut on April 30 was the seventh in a series that has taken the interbank lending rate down by 3.25 percentage points since September as the central bank moved to buffer an economy battered by the housing downturn and a credit crunch.

The economy has expanded at a sluggish 0.6 percent annual rate in both the last three months of 2007 and the first quarter of this year.

At the same time, however, record high oil prices have pushed up energy and food prices, raising the consumer price index by 3.9 percent in the 12 months to April.

Policy-makers felt at their April meeting that the risks that growth could slow were more closely balanced by the risks that inflation could spike higher.

"Members were ... concerned about the upside risks to the inflation outlook, given the continued increases in oil and commodity prices and the fact that some indicators suggested that inflation expectations had risen in recent months," the Fed said.

Participants at the Fed's meeting were roughly evenly divided as to whether the risks to the inflation outlook were balanced or were tilted to the upside, the minutes said.

The Fed boosted its forecasts for inflation to 3.1 to 3.4 percent in 2008 from its January 2.1 percent to 2.4 percent projection for the personal consumption expenditures index. It expects unemployment to rise to 5.5 percent to 5.7 percent for the year. The jobless rate was at 5 percent in March, but employers had cut jobs for the fourth month in a row.

The Fed warned that the risks to its scaled-down growth projection remain to the downside, particularly if house prices continue to slide lower.

"Participants saw little indication of a bottoming out in either housing activity or prices," minutes of the meeting said.

Fed officials took some comfort from signs that fragile credit markets, which were severely shaken by doubts about bad credit, appear to be on the mend.

"The generally better state of financial markets had caused participants to mark down the odds that economic activity could be severely disrupted by a further substantial deterioration in the financial environment," the minutes said.

Yup, that there says it all.

No more rate cuts (ie Morning After Bloody Marys). Higher unemployment. No more credit. Higher inflation. Lower growth.

See, that last one still shows they have a sense of humor. "Growth"? Yeah, right.

Worst Of All Possible Economic Worlds, that's what that is. Everything going straight into the crapper simultaneously. That's what we call STAGFLATION. Everything costs more, but you get fired anyway, and you are ultimately rehired at dreadful Illegal Alien Wages.

And let there be no doubt about the source of all this, it's The Housing Bubble. I know, to many on this board, that's so obvious it's literally retarded to think otherwise. Ahem:

Deschutes home prices see further declines in first quarter
(excerpt:)

Despite Deschutes County’s recent declines, home values have grown 74.96 percent over the last five years, the report said.

Linda Williams, a co-owner of Tamarack Homes, one of the four builders developing the 458-lot RiverRim subdivision in southwest Bend, said the softening of home prices in the last few quarters was inevitable, adding that price declines are due to downward pressure from people who have been forced to sell.

Nevertheless, as the traditionally strong summer sales season is about to begin, Williams believes real estate prices will hold steady, perhaps even climb.

“Until we get through the summer season and to the end of October, we’ll have a better picture, but I don’t see there will be further declines in the near future,” Williams said.

Yes. It DOES continue. In a story about the DECLINES in Deschutes County home prices, there is, AS ALWAYS, a plug by local RE wonks telling us to buy, and this whole temporary bubble nonsense is over, at least locally.

And there are people who BITE on this crap. They actually go out & look for homes & BUY THEM.

Just a flashback folks: These are the same people who tried to PANIC US INTO BUYING because if we didn't WE WOULD NEVER, EVER OWN A HOME EVER AGAIN.

THAT was actually more plausible than the idea that Bend RE is headed up, up and away from here. It ain't. From the same Bulletin piece:

The last OFHEO report, for the period ended Dec. 31, 2007, said home prices in Deschutes County depreciated 1.44 percent in the final quarter of 2007 compared with the year’s third quarter, and 2.84 percent when compared with the fourth quarter of 2006. That report ranked Deschutes County at 236th in the nation for appreciation — meaning 235 MSAs had better rates of appreciation or lesser rates of depreciation — out of a total of 291 MSAs.

Remember the Top Spot? Bend was Numero Uno? Then we were Top 5? Then Top 10?

Then it got awkward, cuz we had to do stuff like, "Bend, We're Still Top Quartile!", and such?

Right. Now we are square in the LOWEST 20% of appreciating MSA's in the U.S.

People DO NOT come a running to invest in the LOWEST 2 DECILES from my own experience. I don't know, maybe we should call the Mayor of Flint, MI and ask how it's going.

So what's the Big Picture Summary?

1) We've got runaway INFLATION. Do not believe the U.S. Government, they do all sorts of stuff to convince you that we're sitting around 3-4%. 2 words:

Got Gas?

Right, we are RIGHT NOW in a state of runaway inflation. That's BAD. But it gets worse.

2) U.S. homeowners, probably the largest amalgamation of wealthy people on Earth, are getting poorer at an rate UNTOLD IN THE ANNALS OF RECORDED HISTORY. Case-Schiller will be out Tuesday, and it will almost certainly show some of the greatest losses we've had so far.

And as an aside: We're starting to take for granted these little 1 and 2% declines, as small or insignificant. But a 1% drop in US home values is a loss on $20 TRILLION. 1% is a measly $200 BILLION. And given the ~70% ownership rate in this country, that's $1,000 loss for each person inhabiting an owned home.

Fannie Mae, and others have predicted total losses of 25%. Maybe more. In Bend the losses will be greater. FAR greater.

3) Unemployment is exploding locally. It's marching steadily higher nationwide, but it's already at Bad Old Days levels in Bend:
Bend Unemployment - Jan -Dec. MAX, AVG, and MIN values, 1990 - Date

Here's a graph of Bend unemployment, as viewed through a "seasonal" filter. That middle line is the overall AVG unemployment for each month throughout the year, and this chart covers every month from Jan 1990 to now.

The purple and yellow lines are the MAX and MIN figures ever recorded for each respective month, in that entire period. ALL unemployment figures since 1990 lie between that MAX & MIN range.

The lowest unemployment ever recorded was in Oct 2006, at a scant 3.8%. That 11.1% high mark was recorded in Feb 1994.

And it's plain to see the high cyclicality of Bends economy. The best months are May -Oct. Things get worse from there, usually bottoming out in Feb. This is why I said "Things will get better", last Feb. They always do.

But take a look at how things are going once you factor OUT the cyclicality. Here is a graph with the AVG subtracted OUT of the figures:
Bend Unemployment, Cyclically smoothed, Aug 2006 - Apr 2008
Yup.

See where we just jumped up above 0? That means, after a run that brought us as low as 3% below normal yearly trend unemployment, we have actually entered the unhappy side of Bends average unemployment.

And that's "STATED" unemployment. As anyone who's been here more than 5 seconds knows, Bend is the home of the Independent Contrator, and our unemployment is ALWAYS better on the Good Side, and much worse on the unhappy side of the unemployment grind.

Note that although nominal unemployment peaked in Feb this year at 8.2%, as it almost always does, and it has since gone down to 6.8% for Apr, that in cyclically smoothed terms (ie subtracting out the AVG unemployment rate for each respective month), things are getting worse by the day.

We're in a near-unbroken uptrend in "real" unemployment around here. And it shows NO INDICATION of slowing down, much less reversing.

So where was I? Runaway inflation, massive loss of wealth, unemployment.... oh right

4) Bernanke has said "no mas" to rate cuts. This means the pick-me-up, day-after Happy Hour is over. This means the Main Street can't look forward (always forward) to ever lower rates, that make the number of craptacular ROI-positive projects expand ever wider. That means this extremely marginal source of growth is done.

It was only ever a figment that this would help, but it was a figment that Wall St seemed to cling to, to the point of myopia.

What this "no mas" statement really seemed to raise the specter of was No More Bear Stearns Bailouts. AKA: The Fed is out of The Game. Heads will roll, banks will fold, nothing is Too Big To Fail. THAT is the sort of thing that gets the stock market down.

5) Finally, it is just Quagmire Time. Nothing moving, nothing happening, economic activity just grinds to a halt. Maybe this is best illustrated through example:

Here you see MLS listing 2802501.
View Ridge STD, 2,156/sf, 4 bed, 2.5 bath, $299,900

It's your standard STD nightmare, thrown together by Triad Homes, over on the Eastsiiiieede.

Then, literally next door, you find a clone (MLS 2801622) for sale, of course:
View Ridge STD, 2,156/sf, 4 bed, 2.5 bath, $389,900

Yup. The Triad Borg Mothership crapped these two STD's out at varying times during the Bubble, and has left at least one of these people in a totally untenable position to sell their house.

I should note that both have been on the market quite awhile. Both are overpriced, it's just a matter of degree.

This is the state of RE all over Bend. Identical homes in every way, differing in price by 30%!

You might think, "Hey! That $299K shack is a Great Deal!". Maybe. But I think it's much more a signal of an Extremely Unhealthy Market. In the macro-view it's just a signal that many home values in Bend are being "made up" by the sellers BASED ON THEIR OWN CIRCUMSTANCES, and not the "market price", whatever that means.

That is what is truly scary around here. Prices, due to the vacuum of financing, lack of historically dependable comps, and a market that has literally siezed up, are almost impossible to figure out.

What's the "real value" of these 2 homes? They are almost certainly within 1-2% of each other, because they are within about 100ft of each other. It certainly seems that they are NOT worth $389K. And even $299K seems doubtful, as that home has been on the market quite awhile, without a taker. The only place to even come remotely close to a market bid is this airdropped number at $259,000 (MLS 2713223):
View Ridge STD, 1,859sf, 3 bd, 2.5 bath, $259,000

This STD nightmare briefly went pending for Assist-2-Sell, but promptly fell apart, and is now back on the market.

So we have sellers, in vast, VAST numbers simply making up prices in Bend, based on NOTHING but what they paid. Identical homes, wildly different prices; that just means an incredibly inefficient market. That means a High Cost Market.

This is a big problem everywhere in the U.S., but it is a near-crippling problem for Bend. There's no indication of where the bottom is.

Now... I can't help but re-print a recent blog post by Dunc:

Article on KTVZ.com of Bend being the 'new' Boulder, with this comment:

"Isn't that awesome?" Alana Audette, executive director of the Central Oregon Visitors Association, said in reaction to the article. She echoed one theme: "A predominance of new business startups here is largely from people who came here on vacation" and liked what they saw.


Oh, my God.
I've told this story before, but it bears repeating. A few years ago, a lady opened a Mystery bookstore in the Brooks Alley, facing Mirror Pond Parking lot. I won't call it Brooks 'Street' because there is no vehicle access. Anyway, it was a very nice store, especially for us mystery readers. She really knew her stuff.

But I thought it doubtful that she could cut the customers down to such a small portion; and I especially doubted her location.
Finally, I asked her why she had opened on that spot. "When I used to visit, this alley was absolutely packed. I'd come for the Market."

In other words, she had come on probably the only days in the entire year when Brook's Alley was super busy, and thought that was normal.
Unlike the COVA director above, I don't think luring tourists into opening businesses in Bend is "awesome." I think it's a recipe for disaster.

1.) They most likely visited on Peak days and hours.
2.) They most likely moved from a bigger town for the small town feel.

3.) They haven't lived in Bend long enough to really get a handle on it.


There seems to me to be only three ways to understand local business conditions: either you do a heck of a lot of accurate research. Or you live here for awhile. Or you have extensive experience in the field you choose, and can make educated guesses.


The most important thing a business needs to do to survive is to calibrate as closely as possible what the most likely sales levels are going to be, and to carry the proper amount of inventory to get there and to have overhead low enough to be covered by that level of sales.
How the hell do you know that? Especially if you are from out of town? Especially if the business is a dream business and you've never done it before?

Lets say you open a restaurant that does an average of 50 tables worth of business a night after 3 years. If you opened with 75 tables for peak hours, and you can still survive with 25 tables business, than you guessed accurately. But if you opened with 100 tables, you overreached.
And every business has the same strictures. The problem with doing demographic research for Bend, it that it will probably mislead you.

Bend really is different -- most people have been here for five minutes, for instance, which completely changes the whole marketing dynamic. If, as is likely, you come from a more populated area and you've seen what you perceive as successful businesses and that Bend is lacking such a business -- your conclusion might be that Bend needs such a business. When your conclusion might ought to be -- that Bend doesn't have such a business for good reasons.

That if you actually knew any better, you'd know that several such businesses have already come and gone. And so on....
I've seen many businesses open that had great presentation, great inventory, great service-- and still failed, because there just weren't enough customers. Bend's population is rather dramatically higher during the peak season, when most business opening tourists are visiting.

But that's like visiting a restaurant on a Saturday Holiday night and expecting that to be average. They need to come back in February and November. Take a clicker and stand on the street corner and count how many people walk by, something like that.
So by all means, open a business in Bend. But live here for a year or two or three, first.

Yup. Good Old Bend. Market 'em, reel 'em in, net 'em, fleece 'em, and leave 'em for dead.

That's our modus operandi. Fleecing Noobs For The Bend Dream. And have no doubt that the RE bubble here had a strong self-reinforcing effect on parting these Noobers from their cash. Untold numbers of Amenity Businesses have opened, and will close the second their 3 year leases are up, or the owners completely run out of cash, whichever comes first. Do not underestimate the number of people who have gone this route.

Bend: The Biggest Equity Sink Hole In America. There will almost certainly be more money lost per capita in this town, than anywhere, over the next decade.

And in a similar vein, you can start to see the beginnings of the Inevitable Commercial Property Implosion now sweeping this town. Just a short hop between 3rd & Wall on Greenwood, shows an astronomical vacancy rate already shaping up for downtowns Eastside corridors.

I'm sure the piece in todays Bulletin, while sprinkled with the usual false hope, explains this problem at least in part:

Too many commercial buildings, few tenants

Tighter market poses problems for landlords, but some businesses see an opportunity

(Anyone have a copy/paste of this one for the comments?)

Remember: Commercial in Bend was supposed to be TOTALLY IMMUNE to the residential downturn. Dunc & others called bullshit on this long ago, and of course, were dead right.

GDP & homeowner wealth are literally joined at the hip. No consumer spending, and business goes to hell. And much of consumers disposable income has come from their homes over the past decade. It is hard to overstate the importance of Mortgage Equity Withdrawals, and their effect on GDP:
Mortgage Equity Withdrawals Effect on GDP

Without home equity lines being drawn down, our last "slowdown" would have been a full fledged 2 year recession. As it was, it was just a little bump in the road.

But now, We Owe. And we owe for YEARS & YEARS of spending. All them Hummers, fake titties, snowmobiles, and all the rest did not come free:
Consumer Debt

We owe just TRILLIONS, and ALL OF IT is either collaterallized by assets FALLING IN VALUE, or by nothing at all (credit cards).

So we are going to suffer. But the Real Losers will be banks, as they always are. And business in general will suffer. It's really an unheralded event taking place. Even George Soros doesn't think we've seen anything like this:

Seeing Signs of ‘Systemic Failure’

“This is not a normal crisis,” George Soros, the hedge fund pioneer turned philosopher, said today to a group of reporters he had invited to lunch at the World Economic Forum. “It is the end of an era.”

It was the “era of superleverage,” he said, and regulators have not appreciated how serious it is. “Systemic failure,” he said, may be taking place.

This is exactly what's happening. If I had to put this in "movie-terms", I would equate it to "Escape From New York". We are entering some sort of post-apocalyptic nightmare scenario. If this doesn't put to bed Dunc's idea that I'm "not negative enough", I don't know what will!

Remember: Each 1% decline in home prices equates to a loss of about $200 billion. They've estimated that banks & other financial intermediaries are expected to face worst-case scenario losses of a trillion dollars.

We've already LOST THAT, and more. Bernanke has groggied us up with unlimited Bloody Marys, and has blurred our vision for just a few more months. But the losses have done NOTHING BUT INCREASE DURING THIS MORNING HAPPY HOUR. The problem is NOT over, and in fact, it has gotten worse with our Speak No Evil, See No Evil, Hear No Evil Fed policy.

Have no doubts through the Realtor-based rosey-palm, Buy Now bullshit, the DJIA respites, and all the other blather, that we are entering a state of financial Armageddon, and absolutely NOTHING can stop it.

And Bend will go down harder than ANYWHERE on this Planet.

OK, to end this thing on a lighter note, this piece from Slate was a great commentary of home buyers remorse. If you've EVER owned a home, you KNOW that it is fraught with problems, and this author does a pretty good job explaining how bad things can go:

Flip this house. Please!

After two decades of renting, I finally bought my own home. What the hell was I thinking?

By Steve Almond

May. 23, 2008 | Thanks to the mortgage crisis and the inevitable mortgage crisis legislation, we have heard a lot of bloviating recently about what Rep. Sander Levin, D-Mich., calls "the American Dream of homeownership." Yes, along with shopping and invading countries that pose no military threat to us, homeownership is now part of the American Dream lexicon, to be invoked as a single compound noun -- like a German word, only uplifting. There is only one problem I can see with the equation of homeownership to patriotic bliss, and that is homeownership itself. How vastly overrated and costly and crazy-making an enterprise it turns out to be.

I am qualified to say this, mind you, because I entered the holy circle of homeownership two years ago. To say that I was naive about the ensuing realities would be fair, but inadequate.

But then, I had a wife who was six months pregnant and needed a nest to call her own and I, too, figured I was ready to stake my claim after more than two decades spent renting (my nadir being the dungeon studio in El Paso, Texas, whose bathroom had no door). And besides, as I was assured by the panting chorus of fellow homeowners who take it upon themselves to advise you in such situations, real estate never-ever-gabever goes down, so I wasn't even spending my money, I was just "investing" it.

Thus, in the spring of 2006, my wife and I invested in a small cape bungalow in a suburb outside of Boston. As to the exact figure we invested, or promised to invest, I would prefer not to disclose the sum for the sake of privacy, but also because mentioning it causes my testicles to do that thing where they retract into my abdomen.

I mean this as no offense to the home itself, which has, on balance, given us both much pleasure. It is not the house's fault that I failed to buy it sooner. This we can safely blame on my own protracted adolescence and undependable income.

Nonetheless, it bears mentioning that our purchase served as a bellwether for the ensuing housing market collapse. It was as if the keepers of that market were saying, "What? Even Almond has a house now? Time to bail!"

This first shock of homeownership (that property values sometimes go down) was followed by a second: hidden costs. And by "hidden" I mean, of course, "those costs I was too lazy or negligent to consider beforehand."

Property taxes, for instance. My annual bill amounted to half what I had paid in rent. There were fees for water and garbage collection and heating oil and insurance. As a self-employed person working at home, I lost that fat tax deduction I used to receive for rent payments. If only someone had told me -- or pointed me to the right book, perhaps "Homeownership for True Dumbshits" -- I would have at least tried to scare my wife into a cheaper house.

But all right, too late. The check cleared. Now we owned this cute, if somewhat cramped, domicile. The appliances were newish and the yard was immaculate and we each had an attic office, even if they were built to scale for leprechauns. I figured we could coast for the next five years.

Then it was high summer and we needed to install air conditioners, to prevent my wife from perishing. She needed other things, too -- drapes, a dresser, a new filing cabinet. And because my own household know-how maxes out at the stage known as putting together a lamp from Ikea, I had to beg my friend Billy to come over and do all this stuff for me, which he did, for free, if you don't count the retail value of verbally emasculating me for hours on end.

And so we proceeded through fall and winter. The paint continued to peel and the driveway asphalt cracked and the bricks bordering our garden came loose and the insulation in our attic crawl spaces began to congregate in toxic, cotton-candyish tufts. These were all fairly manageable -- by which I mean, fairly easy to ignore -- until the structural engineer arrived.

The structural engineer arrived at the behest of his client, who was considering buying the house two doors down. The problem was he'd seen some "step cracks" in the foundation and wanted to see if we had the same damage. (Spoiler alert: We did.)

"Is it bad?" I said.

"That depends," he said.

"On what?" I said.

The structural engineer squinted.

"Should I be worried?" I said. "Can you at least tell me that?"

"I'm really just doing a purchase consult," he said, and scurried off to sow fresh structural doubts in the mind of his client, who did not, alas, become our neighbor.

The cracks in the foundation (about which I could do nothing) quickly led to cracks in the cement wall and granite stone path that abut our garage. I decided, after a brief consultation with a contractor, that we could do nothing about these for the time being, short of prayer. I refuse to go into detail about the water damage. It's already been a long day.

I will mention, though, that my wife is fond of telling friends of ours that if we ever "come into money" she hopes to knock out a few walls in the basement and create a second bathroom with a Jacuzzi tub.

When she says these things it calls to mind those reality TV shows whose central myth of transformation centers on the home. "Extreme Makeover: Home Edition," "Trading Spaces," "Flip This House" and so on. These programs are the new pornography of the landed middle class, and they are, in their own way, as cruel as the old pornography. Just as the libidinal 13-year-old will someday discover that not all naked women look like Playboy centerfolds, so too, the first-time homeowner will have to learn that refurbishing your den, even on national TV, does nothing to heal the cracks in your foundation.

Also: the yard. By our second spring, the neighbors had begun to notice that we were somewhat laissez-faire in our approach. We are blessed with very nice neighbors, by the way, all retirees, and it pleases them to landscape with ferocity. Such is the ornamental fervor of suburban culture.

My wife claims she understands this. Still, as she gazes upon their iridescent lawns and geometrically perfect flowerbeds, it is hard for her not to feel a twinge of shame.

"Our lawn is eroding," she informed me recently.

"I don't think that's the right word," I told her.

"What would you call it, then?"

I looked out at the scabs of browned sod and dandelions. "Eroding is when the soil disappears," I said, professorially.

This exchange is characteristic of my overall attitude when it comes to home improvement. I am both self-righteous and incompetent, a truly American combination. The result is a kind of flustered inaction familiar to those who have lived in tenements. Last month, for instance, my daughter dashed out of my office and nearly plummeted down the stairs. I managed to snatch her up, but in the process fell backward and knocked a crater into the flimsy wall of my wife's office.

I have refused to hire laborers to repair the crater, arguing (somewhat plausibly) that we don't have the money and (somewhat less plausibly) that I will do it myself. My stopgap solution has been to push an end table in front of the crater.

In a sense, our political leaders, in tandem with the retail sector, have offered the same cheap coverup. They've portrayed homeownership as a birthright and a breeze. Just plunk down your 10 percent, zip over to Home Depot, and you're home free.

But maybe it's time to admit that many Americans are like me: unfit for the privilege. We buy homes we can't afford, we treat them like piggybanks, and often we lack the aptitude or interest required to care for them. Would it really be such a heresy to return to the good old days of, say, early last century, when fewer than half of all Americans owned their dwellings, as opposed to the nearly 70 percent who do today?

I suspect, as the cheap oil era dwindles and the price of upkeep surges, we'll see a return to collective living spaces. Greater density will mean less privacy. But it might also rescue us from castles we were never truly ready to rule.

139 comments:

IHateToBurstYourBubble said...

More Armageddon-speak:

The Rising Risk of a Systemic Financial Meltdown:
The Twelve Steps to Financial Disaster

by Nouriel Roubini

Why did the Fed ease the Fed Funds rate by a whopping 125bps in eight days this past January?

To understand the Fed actions one has to realize that there is now a rising probability of a "catastrophic" financial and economic outcome, i.e. a vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe.

The Fed is seriously worried about this vicious circle and about the risks of a systemic financial meltdown.

To understand the risks that the financial system is facing today I present the "nightmare" or "catastrophic" scenario that the Fed and financial officials around the world are now worried about.

First, this is the worst housing recession in US history and there is no sign it will bottom out any time soon.

Second, losses for the financial system from the subprime disaster are now estimated to be as high as $250 to $300 billion. But the financial losses will not be only in subprime mortgages and the related RMBS and CDOs. They are now spreading to near prime and prime mortgages

Third, the recession will lead - as it is already doing - to a sharp increase in defaults on other forms of unsecured consumer debt: credit cards, auto loans, student loans.

Fourth, while there is serious uncertainty about the losses that monolines will undertake on their insurance of RMBS, CDO and other toxic ABS products, it is now clear that such losses are much higher than the $10-15 billion rescue package that regulators are trying to patch up
Any business that required an AAA rating to stay in business is a business that does not deserve such a rating in the first place.

Next, the downgrade of the monolines will lead to another $150 of writedowns on ABS portfolios for financial institutions that have already massive losses.

Fifth, the commercial real estate loan market will soon enter into a meltdown similar to the subprime one. Lending practices in commercial real estate were as reckless as those in residential real estate.

Sixth, it is possible that some large regional or even national bank that is very exposed to mortgages, residential and commercial, will go bankrupt. Thus some big banks may join the 200 plus subprime lenders that have gone bankrupt.

Already Countrywide - an institution that was more likely insolvent than illiquid - has been bailed out with public money via a $55 billion loan from the FHLB system, a semi-public system of funding of mortgage lenders.

hundreds of billions of dollars of leveraged loans are now stuck on the balance sheet of financial institutions at values well below par (currently about 90 cents on the dollar but soon much lower).

Eighth, once a severe recession is underway a massive wave of corporate defaults will take place

Ninth, the "shadow banking system" (as defined by the PIMCO folks) or more precisely the "shadow financial system" (as it is composed by non-bank financial institutions) will soon get into serious trouble. This shadow financial system is composed of financial institutions that - like banks - borrow short and in liquid forms and lend or invest long in more illiquid assets. This system includes: SIVs, conduits, money market funds, monolines, investment banks, hedge funds and other non-bank financial institutions

Tenth, stock markets in the US and abroad will start pricing a severe US recession - rather than a mild recession

Eleventh, the worsening credit crunch that is affecting most credit markets and credit derivative markets will lead to a dry-up of liquidity in a variety of financial markets

Twelfth, a vicious circle of losses, capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices will ensue leading to a cascading and mounting cycle of losses and further credit contraction.

Total losses in the financial system will add up to more than $1 trillion and the economic recession will become deeper, more protracted and severe.

Duncan McGeary said...

Emperor Cos Palpatine: He has grown strong. Only together can we turn him to the Dark Side of the Force.
Darth Vader: As you wish.
Emperor Cos Palpatine: Everything is proceeding as I have foreseen.

IHateToBurstYourBubble said...

And remember that MossCo more or less stated that CACB was immune to this little housing mess because they are Proper Commercial Lenders, and business & commercial is as strong as ever in Bend.

The Commercial/Business Echo Bubble is possibly going to go down harder than Bends resi calamity... if such a thing is possible.

IHateToBurstYourBubble said...

Emperor Cos Palpatine: He has grown strong. Only together can we turn him to the Dark Side of the Force.
Darth Vader: As you wish.
Emperor Cos Palpatine: Everything is proceeding as I have foreseen.


OK, now I'm freaked out. My kids are watching that right NOW!!!

Anonymous said...

That's our modus operandi. Fleecing Noobs For The Bend Dream. And have no doubt that the RE bubble here had a strong self-reinforcing effect on parting these Noobers from their cash.

Bend: Bullshit Is Our Business. Our ONLY Business.

(Quoting an ad slogan from many years ago. Who or what was that ad for? I can't remember.)

IHateToBurstYourBubble said...

Memorial Day visitors have to be wondering about our 300 Days of Sunshine right about now.

Anonymous said...

"300 days of sunshine" is bullshit. Many other resort towns and wannabe resort towns (especially in the West) make the same claim. Maybe for some of them it isn't bullshit, but it is here, as the climate data show.

IHateToBurstYourBubble said...

I have an econo-rocket rice-burner that I actually filled with gas yesterday. Cost $30. The last time I filled it, it was $20.

My kid-mobile cost $60.

Un-freakin-believable.

This killed all hopes for going to Portland/The Coast/Boise/? for Memorial Day. Might as well just stay home and BBQ.

I mean, I have the money for the trip to the Coast, but I feel like I'm being ROBBED for the privilege!

And in Dead End towns like Bend, we are just going to be killed by the gas spiral.

Comparing us to Boulder? My Lord, this almost as imbecilic as calling Pronghorn a "Bend neighborhood".

We ain't Boulder. Never will be. We are more like Bishop, CA. Dead End Town, 200 miles from anything. Nice to visit, but actually living there is fatal to the pocketbook. Always be seasonal, that'll never change. Dream World that typically makes paupers of 95% of its residents. THAT is Bend.

timothy said...

I'm pasting this from the end of last week's thread because I figure no one will read that thread anymore.



---



Blogger bruce said...

Remember that food and beverage tax proposal I floated a while back to deafening silence?

BULL today, F-1: "Sales Tax Islands"

All about the food and beverage taxes in these two cities and how they help pay for treatment plant costs...

Ashland, a city of 21,630, generated an incredible $2M last year from this tax.

One thing I would add if we did one is to take a portion and implement a restaurant waste oil collection system in partnership with a private biodiesel production facility. This grease is a huge problem at the treatment plant, and preventing it's entry into the system as much as possible is a cheap way to improve capacity.

May 25, 2008 9:10 AM
Blogger timothy said...

I'm OK with the tax on food and beverage, but I'm one of those people who thinks you institute those during the good times, not the bad times.

What's important to businesses from local gov't is consistency. You need to be able to plan.

At the very least, if they are instituted now, they should start very small and ramp up so that businesses can plan for the impact.

You try to run that through now and you'll get bulldozed. All anyone is going to think about now is how precarious the work environment is around here.

timothy said...

As someone who came from Eugene, let me just say that I actually buy Bend's 300 days of sunshine, if it's defined as "300 days where you see the sun at some point during the day."

In Eugene I think I went for months never seeing the sun.

It sure feels like a hell of a lot of sun here if you come from Dullsville. Probably not if you come from California.

IHateToBurstYourBubble said...

And a short "recap" on just exactly what The Bend Dream was, during The Bubble:

1) Come to Bend.
2) Buy a home.
3) Buy a business that loses money.
4) Use proceeds from never-ending home appreciation HELOC's to cover business losses.
5) Sell out at enormous $10 trillion profit after a lifetime of 100% annual gains.

There are THOUSANDS of people who bought this bullshit. That "Bend is Boulder" piece is PR-fueled bullshit to sell this dream to a whole new crop of Mindless Noob Drones.

If you believe this bullshit, I have a bridge to sell you. Like all the builders who are trying to expand their way out of this depression, because they are offering something "truly unique", these people always believe that THEIR KNICK-KNACK SHOP offers some "really unique" crap. Ask around downtown about Apricot Lane. Probably no one remembers because it was an amenity craphole that probably had a grand total of 5 people buy crap there, and it was in all ways UNREMARKABLE.

But have no doubt, those dumbfucks believed that THEIR KNICK-KNACK shop would beat the fuck out of the billions of knick-knack shops that now and in the past have littered Bends streets.

How many people have we fleeced with the idea that "Bend Is Different And YOU Are Different, So Come Here, Buy A House & A Business, And Live the Dream!"?

They figured out that Bend resi is a bust.

They figured out that Bend commercial is a bust.

Only a matter of time before they figure out that The Bend Dream PR bullshit is a bust.

We will be well & truly screwed at that point.

IHateToBurstYourBubble said...

What's important to businesses from local gov't is consistency. You need to be able to plan.

We're fucked.

IHateToBurstYourBubble said...

File under The Spice Must Flow...

Bend Oregon Real Estate-The Best Buyer’s Market in 20 Years

Realtors and Builders in Bend Oregon are pushing “The Best Buyer’s Market in 20 Years” advertising program. They are not saying it’s time for everyone to buy but that in certain circumstances it is a good time to buy.

I don’t personally agree with all of their reasons to buy but there are still plenty. The two houses I have in escrow right now ($400,00-$650,000) are both buyers that are moving to Bend from out of town. They plan on living in Bend the rest of their lives. They are not investors trying to flip a property. They plan on living in the home for a long while.

Will the value of the homes they are buying continue down in price this summer and winter? Probably. Will their home be worth more than they paid for them in 2 year. Maybe. Will their homes be worth more than they paid in 5 years. Yes.

Their only alternative would be to rent. They could move into a rental and wait for the bottom of this down turn and then buy. When will that be? No one knows. Could it be this summer? Maybe. Could it be next spring probably. These people are not renters. they are home owners.

To put their families through moving twice and not being able to live in their own homes they have wisely chosen to buy homes at a great value and get exactly what they want at a great interest rate below 6%.

If you currently live in a smaller home in Bend and are thinking of moving into a more expensive home I would recommend you wait until the Bend Oregon Real Estate Market has for sure bottomed out. If your home is worth $400,000 in today’s market and the home you want to buy is going for $750,000 you are better off to wait.

If the market goes down another 10% this time next year you will save money. The home you own would go down $40,000 but the home you want to buy will go down $75,000!! Wait and make $35,000!

On the other hand. If you live in a large home and you are looking to down size. You should sell you home now then you will not lose that $75,000 if prices continue.

IHateToBurstYourBubble said...

Have at it Timmy!

So many ridiculous claims, it's like blindly whacking anywhere & hitting a pinanta.

Will their homes be worth more than they paid in 5 years. Yes.

You willing to guarantee that?

No. Of course not. You just want someone to buy something so you don't have to eat Ramen noodles for the rest of your life.

Funny that this guys rationale is "Don't buy a BIG house, cuz you'll lose a LOT, but if you buy a small house, you'll only lose a little, and THAT'S JUST FINE!"

timothy said...

There's nothing quite like a Realtor singing in their native tongue.

IHateToBurstYourBubble said...

From the Source, calling bullshit on "The Bend As Boulder" Chamber of Commerce fueled insanity:

So Now We're "The New Boulder"
Written by The Eye
Saturday, 24 May 2008

There they go again: USA Today has published another Chamber-of-Commerce-style puff piece on Bend, touting it as “the new Boulder.”

“Bend's popularity as a second-home destination may be short-lived,” the story begins. “Many buyers lured here by the small city's outdoor living, natural beauty and mild weather are finding their vacation homes too good to be true and are relocating as full-timers.”

The story is illustrated with a color photo of hot-air balloons sailing above Mirror Pond in a cloudless blue sky.

The usual recreation attractions are listed – “easy access to an array of outdoor activities, including skiing, biking, white-water rafting and kayaking, hiking, golf and world-class fly-fishing” – and realtor Virginia Ross, who moved here from Oahu, expounds on the glories of the Bend climate: “There is great recreation out just your front door all year long. I was so happy to go from palm trees to juniper trees. Seasons were a change for which I am thankful each day.”

A local realtor – now there’s a real objective source.

In many respects the comparison to Boulder might be a little shaky. Boulder is a cosmopolitan city of more than 90,000 people with its own symphony orchestra and a much more liberal political climate than Bend. It also is home to the University of Colorado and a bunch of top-tier high-tech employers, including IBM, Ball Aerospace & Technologies, Medtronic and Lockheed Martin.

But, hey, we’ve got COCC and Cessna!

Writer Larry Olmstead looks at “three Bend neighborhoods” – Pronghorn, Northwest Crossing and Broken Top – which he evidently thinks are representative of the Bend lifestyle. He also informs his readers that “Bend is split into east and west sides with downtown on the east,” which will come as a surprise to the folks who live here.

But at least he didn’t repeat the bogus “300 days of sunshine a year” claim.

IHateToBurstYourBubble said...

Writer Larry Olmstead looks at “three Bend neighborhoods” – Pronghorn, Northwest Crossing and Broken Top...

This should tell you what The Powers That Be have in mind for Bend:

The Next Aspen.

What a horribly failed vision this will become, as it is of course, IMPOSSIBLE. All of these neighborhoods are standard dev's above what working class people can afford. There is probably 2% MAX of Bend's population that can afford to live in these 3 neighborhoods.

But I guess a piece including the plummeting Desert Skeeze subdiv would not reel in enough hyper-rich Noobsters for a quick filleting of their personal finances, would it?

That Pronghorn reference should indicate the extent to which our beloved Chamber will flat out LIE to people to get them to come here. Pronghorn? That's a subdiv of... Powell Butte?

Maybe the Chamber thinks that Pronghorn is representative of the Eastsiiieeed?

Delusional bitches.

Come one, come all, buy The Bend Dream! It's still alive & well!

IHateToBurstYourBubble said...

Also inherent in this thing is that THE CHAMBER DOES NOT GIVE A FLYING FUCK ABOUT THE EASTSIDE, THE WORKING CLASS, OR ANY NON-RE RELATED BUSINESSES.

Look at those choices. Pronghorn? OK, that's just insane.

Broken Top? What? This is "Bend"?

NWX? This is either Upper Middle Class, or Lower Upper class, I'm not sure.

Not a single one is even within 2 STD's of Bend AVG's.

WTF? It's like our "real economy" is a red-headed step-child that no one wants to acknowledge exists.

IHateToBurstYourBubble said...

This towns entire defacto business plan reminds me of Taleb's "superstition-based" quirks.

We happened to turn to a full-scale grifting pyramid scheme right at the beginning of the Bubble inflation, AND IT WORKED.

But grifting pyramid schemes ALWAYS ultimately implode, usually sooner than later.

But our actually survived an order of magnitude LONGER than it possibly could have in Normal Times. So now, it's like a gamblers nervous tick that they believe brings them good luck.

"We grifted the hell out of people for 5 years. It's gotta still work!"

Note to Morons In Charge:

Grifting Idiots To Join A Pyramid Scheme Is NOT A Sustainable Business Plan.

They will not buy our homes, because this place DOES NOT pay sufficient wages. WORK ON THAT. Work on getting real family wage paying employers here, NOT SCAMMING PEOPLE. It was a quirk of fate that it EVER WORKED.

bruce said...

More on the restaurant tax idea, brought about by article in BULL today (someone with full access, please post it)

The problem is how to finance $60M or so in wastewater infrastructure over the next 25 years, and then $25M more after 2030.

FYI http://www.ci.bend.or.us/depts/public_works/docs/Collection_System_Report_Draft_12_19_2007.pdf

Page 87 has the Summary 2030 Build-out CIP Costs table.

Page 132 has Summary Full Build-out CIP Costs table.

Bend has roughly $100M in food and beverage sales annually. A 2% tax would be a stable revenue source that could be used to issue bonds as it would provide $2M in debt service funding. That should be enough.

I agree, it would be really hard to pass it, but if the alternative is higher property taxes, I suspect it would have a better chance. It's an optional tax, it would be much lower that the transient room tax, and like the TRT it would be paid by visitors as well as locals.

May 25, 2008 11:48 AM

bruce said...

An article about what San Fran is doing about keeping the waste oil from restuarants out of the sewer system in the first place:

Fats to grease Muni’s wheels

SAN FRANCISCO (Map, News) - Leftover grease from San Francisco’s restaurants will be recycled into fuel for The City’s diesel buses, under a $1.3 million program in the works by the San Francisco Public Utilities Commission.

Fats, oils and grease have been a significant problem for San Francisco’s sewers, SFPUC officials said. When not disposed of properly, the greasy waste can form thick layers inside the pipes. Sewage flow becomes constricted, which causes odors, attracts rats and leads to backups in The City’s sewer system, all of which create costly cleanup problems.

In the spirit of turning lemons into lemonade, the SFPUC expects to start collecting grease from The City’s restaurants as early as this fall; the collected waste will then be converted by a local manufacturer into environmentally friendly biodiesel fuel.

“We’re turning an enemy of our sewers into an ally for the environment,” SFPUC General Manager Susan Leal said. “From blocking the sewers to moving the buses.”

The fuel that would be put into the buses would still be 80 percent regular diesel — with 20 percent biodiesel — under a formula known as B20. According to The City’s biodiesel policy, the goal is to convert San Francisco’s diesel fleet to B20 fuel by the end of 2007.

At least 1 million gallons of biodiesel fuel could be manufactured from the oil collected from The City’s 2,600-plus restaurants, said SFPUC official Lewis Harrison, who added that is “more than enough” to contribute the required 20 percent to power the entire fleet.

According to the U.S. Environmental Protection Agency, biodiesel is a biodegradable, nontoxic alternative fuel produced from renewable resources. It is safe to use in any diesel engine and is far less polluting than conventional petroleum diesel. “This is an important fuel for the future,” said EPA spokesperson Mark Merchant.

The Public Utilities Commission set aside $1.3 million of the agency’s general fund budget this year to implement the biofuel program. The money will cover the cost of purchasing two trucks to collect the restaurant waste, hire drivers and other staff for the program, and conduct all the necessary studies and file legal paperwork to get the program on the road.

The cost to manufacture the fuel will be partly offset due to the fact that The City is providing the raw materials — the fats, oils and grease, or FOG, Harrison said. A gallon of biofuel purchased at the Biofuel Oasis in Berkeley costs $3.65 per gallon.

The SFPUC also found out last week that it was awarded a $1 million grant from the California Energy Commission to do research on using leftover food grease for alternative energy, Harrison said.


See official site here: http://www.sfgreasecycle.org/

Follow-up article six months later:

S.F. grease-to-fuel plan gets cookin’

SAN FRANCISCO (Map, News) - San Francisco restaurants have started to sign up for a new program that will turn leftover grease into fuel to run The City’s vehicles.

Fats, oils and grease have been a significant problem for The City’s sewers, officials from the San Francisco Public Utilities Commission said. When not disposed of properly, the waste can form thick layers inside the pipes that constrict sewage flow, produce odors, attract rats and cause backups in the sewer system, all of which create costly cleanup problems.

On Tuesday, the commission approved a $550,000 amendment to expand the terms of an existing $220,000 three-year contract with Richmond-based BioSolar Group.

Starting this week, the SFPUC, along with BioSolar, will start collecting grease from the 40-plus restaurants that have already signed on to the program, SFPUC spokesperson Tony Winnicker said. The collected waste will then be converted into environmentally friendly bio-diesel fuel at Bay Area bio-diesel processing facilities. The SFPUC plans to build its own plant down the road.

At least a million gallons of bio-diesel fuel could be eventually manufactured from the oil collected from The City’s 2,600-plus restaurants, Winnicker said.

The program will roll out in phases, with an initial plan to convert about 50,000 gallons of grease per month, according to SFPUC documents, enough to fuel the agency’s vehicles. The fuel would still be 80 percent diesel — with 20 percent bio-diesel — under a formula known as B20.

The eventual goal is to generate enough fuel to contribute the required 20 percent to power The City’s entire municipal fleet, including Muni buses. According to The City’s bio-diesel policy, the goal is to convert the diesel fleet to B20 fuel by the end of 2007.

The Public Utilities Commission set aside $1.3 million of the agency’s general fund budget this year to implement the bio-fuel program. The cost to manufacture the fuel will be partly offset due to the fact that The City is providing the raw materials — the fats, oils and grease.

On Thursday, the agency will announce more details about the program. The SFPUC will continue to do outreach to sign more restaurants up for the program, Winnicker said.


This is a great model for a program here. It's win-win-win, the trifecta.

Win 1-keep grease from fouling sewers and treatment plant

Win 2-saves money by using waste to power buses, other city vehicles with biodiesel

Win 3-reduces greenhouse gases.

A restuarant tax could be configured to encourage restuarants to recycle their waste oil, working with the private sector to turn it into biodiesel.

And I bet green energy grants could be found to help fund it.

timothy said...

>>I agree, it would be really hard to pass it, but if the alternative is higher property taxes, I suspect it would have a better chance.

I'd agree if that's how taxes were put on the ballot.

"Please choose tax A or tax B."

IHateToBurstYourBubble said...

Woof. Clives Inventory Counter seems to be going geometric...

bruce said...

Re: I'd agree if that's how taxes were put on the ballot.

"Please choose tax A or tax B."

That's what it is going to come to, as we have no reserves built up from the good times. And we need a sewer system. Developer giveaways, etc. that continue today, as I noted after the last CC meeting.

bruce said...

BTW, one of the most maddening things I have seen in some time is John Russell congratulating Pete Wilkinson for successfully screwing the city out of a couple hundred thousand badly needed dollars in about 15 minutes.

Anonymous said...

As someone who came from Eugene, let me just say that I actually buy Bend's 300 days of sunshine, if it's defined as "300 days where you see the sun at some point during the day."

LOL! Well, yeah, I guess so -- Bend is "the Oregon sunbelt." But calling someplace "the Oregon sunbelt" is rather like calling someplace "the Antarctic banana belt," ain't it?

Anonymous said...

This should tell you what The Powers That Be have in mind for Bend: The Next Aspen. What a horribly failed vision this will become, as it is of course, IMPOSSIBLE.

Yes, and the real tragedy is that so much time and effort and money has been expended trying to build an economy based on conning suckers with BULLSHIT instead of building a viable, sustainable, solid economy. Tragic -- and damn near criminal.

timothy said...

Well, it happened. We had friends from out of town for the holiday and they complained about the weather. Bend just can't catch a break lately. :-)

Anonymous said...

I came from Portland to visit my friends, and, yes, it was warmer and drier over there (for a change:) It was time for some groundtruthing. It did seem awfully quiet for a holiday weekend, both in Sisters (we took 20 over) and in Bend. Their River Rim neighborhood is still being built, but in other areas, I did see foundations with floor joists left to rot in the weather. Lots of vacant commercial space, too. The biggest change I saw was in attitude - from, things are booming at the moment, to, there aren't a lot of jobs around here. OK for them, they have their own long time business - though they're struggling a bit for the first time in quite a while - but not for the neighbor across the street, who's under water on his place and wants a bigger one. They have new commercial buildings going up, too, and it's quite telling that they are hoping for a nice small grocery store - but apparently, no tenants have been signed yet. Hang in there. In Hillsboro, in 98-98, they discovered a shortage of hotel rooms and commercial /industrial space, and timed it so well that in 2001, 80% of it - yes, eighty percent - was empty.

By the way, it is nice country; I do enjoy visiting, but the summers are so short I could never live in Bend while working. That was me on the Sportster and my wife on the Suzuki. We must have been blessed, because we only got ten raindrops riding over on Sat and back on Sun.
Keep up the good writing!

By the way, my friends told me Gov. K. pushed Juniper Ridge and rezoning of the UGB northward and they suspect he owns land there. Are they completely full of it? I think they are.

Anonymous said...

It's not just waste oil in San Fran, it's also dog poop. Bend seems naturally rich in this resource as well.

http://news.nationalgeographic.com/news/2006/03/0321_060321_dog_power.html

Here's the Scoop: San Francisco to Turn Dog Poop Into Biofuel
Stefan Lovgren
for National Geographic News
March 21, 2006

Your house powered by pooch poop?

The idea may sound far-fetched, but officials in dog-friendly San Francisco, California, hope to harness the power of methane in doggie doo so it can be used for heating homes and generating electricity.

The technology of turning animal waste into energy was introduced in Europe some 20 years ago. It's practiced by hundreds of farms there, as well as by 16 U.S. dairy farms.

But San Francisco is believed to be the first U.S. city to explore the energy potential of pet waste.

In a pilot program to start this year, Norcal Waste, a garbage company that collects the city's trash, plans to use biodegradable bags and dog-waste carts to pick up the poop in one of San Francisco's most popular dog parks.

The waste will be run through a methane digester, a tank in which bacteria break down the feces to create methane. This biofuel can then be piped directly to a gas stove, heater, or anything else powered by natural gas.

From Food Scraps to Dog Doo

Known for its green credentials, San Francisco already uses several recycling programs to divert almost two-thirds of its household garbage away from landfills. The city aims to divert all of its waste from landfills by 2020.

The poop-to-methane project is an extension of another bio-recycling program the city initiated ten years ago, when it began collecting food scraps from houses and restaurants and turning them into fertilizer for vineyards and organic farms.

Today 300 tons (272 metric tons) of food scraps are collected every day from more than 2,000 restaurants and tens of thousands of homes.

Norcal's Reed says that some of the more than a hundred farms in the area that have used the compost produced from food scraps have seen record yields.

"We have the most forward-thinking recycling program in the United States," he said.

The plan to recycle pet waste followed a recent study, which found that animal feces make up 3.8 percent of the garbage from residential collections in San Francisco.

"The city saw this percentage and said to us, We need to get down to zero [waste to landfills], so we want you to start thinking about how to collect the dog waste and what can be done with it,'" Reed said.

The high percentage is not surprising considering that San Francisco is home to an estimated 120,000 dogs, far more than there are children.

San Franciscans may be responsible about cleaning up after their dogs. But most of the droppings are wrapped in plastic bags and end up in landfills, where the waste may sit for generations.

If it's not picked up, animal waste may dissolve into the soil and flow into the groundwater.

Breaking It Down

Almost 10 million tons (9 million metric tons) of dog and cat waste is generated annually in the U.S., according to William Brinton, president of Woods End Laboratories in Mount Vernon, Maine. The lab specializes in analyzing compost and other waste.

"The amount of energy potential in dog and cat litter is higher than anything else because of the rich diet that we feed [pets]," said Brinton, who was consulted by Norcal to test the energy content of pet waste.

He estimates that 1 ton (0.9 metric ton) of animal waste could produce 50 gallons (190 liters) of diesel-equivalent fuel, enough to heat a house in New England for two weeks.

The pet waste must be collected in special biodegradable bags before being placed into a methane digester, which works much like a compost bin.

Dog feces naturally contain bacteria called methanogens, which use hydrogen to break down carbon dioxide into microbial food. Methane gas is made as a byproduct of this process.

"It does not consume any energy to produce this energy, because you don't have to provide any energy to run the system," Brinton said.

The resulting biofuel can be piped into stoves, turbines, and other machines that run on natural gas.

The reaction from dog owners in San Francisco has been overwhelmingly positive, says Norcal's Reed. He expects to have special collection bins put up in Duboce Park, a popular San Francisco dog park, within a few months.

"Every day we get 20 to 30 people calling and asking about [the program] and how they can volunteer to make sure it's a success," he said.

bruce said...

Saw this interview at the library the other day:

Energy’s Prevailing Winds

By Philip Klein
Published 5/16/2008 12:08:08 AM

T. Boone Pickens has spent a lifetime in the oil business. Shortly after graduating from Oklahoma A&M (now Oklahoma State University) in 1951, Pickens went to work for Phillips Petroleum. In 1954, he borrowed $2,500 and joined with two other investors to start a domestic oil and gas company. The business would eventually become part of Mesa Petroleum, which Pickens built over several decades into one of the largest independent natural gas and oil production companies in America. He left Mesa in 1996.

Pickens, who turns 80 this May, is still hard at work running his multi-billion-dollar energy hedge fund, BP Capital. But the legendary oilman, who built his fortune by placing timely bets, is now looking at alternatives. Last year, Pickens correctly predicted that we would be seeing a $100 barrel of oil, and he recently announced plans to build a $10 billion, 150,000-acre wind farm in the Texas panhandle, which would be the biggest in the world.

Through the T. Boone Pickens Foundation, Pickens has become one of the largest philanthropists in America, having donated $600 million over the course of his career to medical care, education, and college athletics. He also is the benefactor of The American Spectator's Young Journalism Training Program.

TAS reporter Philip Klein spoke to Pickens over the phone about his views on the future of energy.

PHILIP KLEIN: Why is it so important for America to develop alternative sources of energy?

T. BOONE PICKENS: According to the crude oil report, as of today [March 12] we have imported crude oil at the cost for $1.4 billion for the week. Multiply 52 weeks times $1.4 billion [a day]. You'll get right at $600 billion a year you're paying for imported crude oil. We can't keep doing that. It's the greatest transfer of wealth ever recorded in the history of the world.

PK: What would you say to free trade purists who say it's not a big deal to purchase products overseas?

BP: You can say it's just free trade. You're just buying somebody else's products. I understand that argument, but if you're going to continue to do it as you have in the past, then in ten years you're going have to burn up $6 trillion.

PK: In the 1970s oil was very expensive, then it went back down. In the late '90s we had very cheap oil. Why can't that happen again?

BP: That will never be repeated, because we've had a fundamental change. The world's oil production has peaked. Now supply is capped at 85 million barrels a day and demand is growing. We've never seen that before. It's also going to be declining at a rate probably of 6 percent a year. This time next year you're probably going to have 80 million barrels a day.

It's unlikely that growing production can ever happen. What you're really focused on is even maintaining production at 85 million. You're going to have to replace 5 million barrels a day every year.

PK: What about discovering new oil or drilling in Alaska or in the oil sands?

BP: I don't think the ANWR is going to be released to be developed, but you're familiar with the transportation of crude oil off of the North Slope in the pipeline area. Do you know what the capacity of that is? Some people have the idea that ANWR could solve a problem for the United States, which is ridiculous.

ANWR, they try to compare to Prudhoe Bay, an oil field where the ultimate recovery out of it is 14 billion barrels. It's depleted substantially. At one time that field could fill that Alyeska line, which is 2 million barrels a day. Keep that in mind, that's all it is: 2 million. That has now declined to about 700,000 barrels a day and they put in satellite production from Endicott and other fields around Prudhoe Bay. But they've pretty well gutted everything that's available to go into that line.

It's unlikely that ANWR will be as productive as Prudhoe Bay. Probably a third as much. But let's just say it's as productive. All that oil coming off of ANWR does is fill up that line. You go back to 2 million barrels a day. We're importing today 14 million barrels of crude and products in the United States, using 21 million barrels of crude and products. So, the 2 million barrel Alyeska line would be 10 percent of what we use every day. It has no hope of solving many problems for us.

When you go to the oil sands, you should focus on a recent announcement to build a line from the oil sands to the west coast of Canada. That is a 528,000-barrel-a-day line. The plan is to move that oil into the Asian market. We haven't even moved ahead in the United States to make sure we capture everything coming out of the oil sands.

The cost of the oil sands is incredibly high but necessary. So all those projects in oil sands run up costs several times what they were originally estimated to be. So, you can't just go in and develop the oil sands. The oil sands is a manufacturing/mining operation. It has a huge amount of manpower necessary, equipment, everything else and I think the oil sands now are producing somewhere around 1.3 million barrels a day.

You don't have the option of just turning it on or anything like that. It takes years. And ANWR could not go on production for instance if Congress passed something that would allow entry into ANWR in the next session, it would take ten years to go into production.

PK: So even if we find different sources of oil in different parts of the world, it will take a long time to bring that oil online and difficult to transport it?

BP: That's exactly right. To do anything more than 85 million barrels a day is probably hopeless.

If I were the United States, it would be very disturbing to me to see anybody thinking about transporting any oil from North America to Asia. We let ourselves down if we don't capture that. Now you've got the Democrats talking about taxing it all and they have got the Canadians stirred up [on NAFTA] that they're going to change that. Canadians don't like to hear that type of conversation and the people of the United States who are doing the talking about it don't understand energy, because the last thing you'd want to do is to be at odds with Canadians on NAFTA and have some of that oil cut off from you and let it go to Asia. The Canadians are openly discussing this. They don't like NAFTA changes that the United States has talked about.

PK: The New York Times reported that you are going to build a new 150,000-acre wind farm for $10 billion. Why are you so bullish on wind power?

BP: What are my other choices? There's only one source of energy that's going to make a substantial difference for this country, and it's wind. It's renewable, it's green, there's no question it will work, and it's being developed very aggressively now in Texas, western Oklahoma, Kansas, and up in the Great Plains. For the next ten years, America will need about a 15 percent increase over the amount of energy that our country uses now. Where is it going to come from? It could come from wind.
The government would have to give access, right of way, to move that, but you'll be able to put that huge wind area in the central part of the United States to work. It would rejuvenate the Great Plains. Go look at what has happened in Sweetwater the last three or four years. That could be replicated all the way from Sweetwater to the Canadian border. At the same time there is a wind and solar corridor that would extend west of Sweetwater, Texas, to the California corridor.

PK: How is planning on the wind farm coming along?

BP: We're under way. We have leased the land, we'll put turbines under contract next month, and the question is, where do you take the power? One option is to go to the wind area in the panhandle of Texas, which is one of the best wind areas of the United States, and move it down to ERCOT (the Electric Reliability Council of Texas) about 250 miles south of us, or we might move it to the West Coast.

PK: How difficult will it be to transmit that power?

BP: Transmission has got to be solved, there's no question about that. We feel that we've got it solved if we move it to ERCOT from the panhandle, we have a right of way that we're working on at the present time. California is a bit more difficult, but transmission has got to be solved. If this country wants to take care of their energy needs and requirements, they're going to have to make some of this happen.

PK: Is it difficult to build transmission lines more because of zoning and energy regulations or because of the amount of capital needed for the initial investment?

BP: Well, if you're going to put turbines under contract, you're going to have to transmit the power. We're okay to transmit in Texas. We have that solved. As for the rest of the country, you're going to have to have some leadership come forward or this is going to be a disaster for us.

PK: What should the government's role be in all of this?

BP: I'd say in going to renewables, they'd need to have a production credit in place for a number of years, not renewing it every two years. That doesn't get the interest into it that you need to have, because people are frightened that they're investing in something that they can't get help on. So you need the production tax credit on wind. And you need to free up the right of way.

PK: In Congress, "alternative energy" often translates into ethanol subsidies, or other pork barrel spending projects. How much of the move toward alternative energy is going to have to be aided, at least in the short term, by government subsidies? Why won't companies see it in their interests to invest in alternative energies without government help?

BP: There's no question you're going to have to have the production tax credit. That's a must, because it can't stand alone without it. You're better off to create jobs at home, and recycle the money. I was against ethanol originally, but hell, I'd rather have ethanol than I would Saudi oil. They're the number two provider after Canada. They're selling about 1.8 million, 2 million barrels a day to us. Ethanol is not going to solve it. Nothing is going to solve the problem for us, because we've got such a huge appetite. We're now importing 62 percent of our crude oil. Out of the 85 million barrels a day the world produces, we're using 25 percent of it, with less than 5 percent of the population.

PK: What are your thoughts on solar power?

BP: Don't know anything about it. I just said there's a corridor for solar power from Sweetwater, Texas, to California across Arizona, New Mexico, and the California border. We're not in any solar power projects. But these are the kind of things that somebody in government is going to have to get involved in and make something happen. The country is desperate for leadership on energy. I don't think any of these politicians running for the president of the United States even have a clue we're up against.

PK: What about nuclear power? Do you think licensing more nuclear power plants would be a good option?

BP: I'm for nuclear power. We should do it. We should do everything, because we need energy from all sources and get away from what we're doing, importing so much crude oil. But, being a geologist, I have some concern over whether you've got uranium available to you.

I think the greatest source of uranium is Russia, and they're no friend. And then you look at the two largest oil producers in the world, it's Russia and Saudi Arabia, and the two largest natural gas producers, and it's Russia and Iran, and the two largest importers of oil are the United States and China. So, you're in a bad spot, and you have to get some leadership in getting this country off of the imported oil as our primary energy source.

PK: What are some of the more promising alternatives that are out there to power automobiles?

BP: The obvious one is natural gas, and natural gas is a domestic fuel. So, anything you can replace with natural gas as far as diesel gasoline is concerned, you cut down on the imports, and natural gas is a cleaner, cheaper fuel that's available. That infrastructure should be developed. It doesn't need much in the way of help from the government.

You've got to try to develop everything. You don't push anything off the table now. You just have to go balls-out to get it done, and get off of this crude oil. I just can't believe, I keep saying this. It's just a huge outflow of wealth from this country.

PK: People have been talking about alternative energy since the 1970s. What is different now?

BP: In the '70s, there wasn't a shortage of oil. Whenever oil would go up, and activity would start in alternatives, they would make more oil available, and drop the price. It would stop all of that activity. It's entirely different today, because you've peaked on the oil. In the Mideast, they can't give you any more oil than they're giving you. The game has changed.

PK: Do you think that now the technologies exist that make things more achievable than they were back when we were talking about energy alternatives in the 1970s?

BP: Sure, they're more achievable, because the price is better. Of course, the cost of development has gone up dramatically too. The only way you're going to kill demand is with price. But back in the '70s, you were taking a chance with alternatives, believing that oil prices were going to go up. When activity would start up some place, OPEC would just provide more oil and drop the price. Those days are gone.


A healthy dose of reality in that interview.

bruce said...

If $4 Gas Is Bad, Just Wait

By Anna Raff and Jessica Resnick-Ault, The Wall Street Journal
Last update: 11:17 p.m. EDT May 22, 2008Print E-mail RSS Disable Live Quotes

Judging from the futures markets, shock at the gas pump is bound to get worse. Maybe much worse.
Since the beginning of the year, benchmark oil and gasoline futures on the New York Mercantile Exchange both have increased by more than a third, but the average retail price of gasoline in the U.S. has risen by 22%. That bodes ill for consumers.

So far, oil refiners and petroleum-product distributors have absorbed much of the increase, but their ability to continue to swallow losses and operate at thin margins is limited.

Many analysts consider $4-a-gallon retail gasoline across the U.S. a foregone conclusion this summer driving season, a period of typically peak demand, but those estimates take only current record-high oil prices into account. Thursday, light, sweet crude futures breached $135 a barrel, more than double the price a year ago.

If oil hits $200 a barrel, which is the upper end of Goldman Sach's prediction for prices over the next six months to two years, the gasoline picture changes quite dramatically. At $200 a barrel, crude alone would cost $4.76 a gallon. Add on the costs of refining and distributing as well as taxes, and pump prices could rise to a range of $6 to $7 a gallon.

U.S. drivers haven't radically changed their behavior, and it is unclear at what price it becomes unprofitable for Americans to go about their usual day-to-day activities, said Eric DeGesero, executive vice president of the Fuel Merchants Association of New Jersey.

"Maybe at $6 or $7 a gallon, it becomes less attractive to go to work," Mr. DeGesero said. "We haven't hit that point yet, but we might soon."

Retail gasoline prices have topped $4 a gallon in Alaska, California, Connecticut, Illinois and New York ahead of the Memorial Day holiday weekend, according to the AAA Daily Fuel Gauge Report.
Nationwide, gasoline averages $3.831 a gallon.

Consumers have already taken note, with U.S. gasoline demand down 0.6%this year compared with the same period in 2007, according to the Department of Energy.

The erosion in demand is likely to accelerate if gasoline prices shoot above $6, but a radical cutback in consumption will occur only if high prices weaken the U.S. economy further and contribute to increased unemployment.

In regions of the U.S. that have been particularly hard hit by weakness in the housing market and economic instability, the fall in gasoline demand has already outpaced the national average, said Ann Kohler, an energy analyst with New York investment bank Caris & Co.

"There would still be additional hurt if there was further escalation in gasoline pricing, because other parts of the country would become involved," Ms. Kohler said.

bruce said...

Megabubble waiting for new president in 2009

'Numbers racket' exposes potential disaster for economy, markets
By Paul B. Farrell, MarketWatch

ARROYO GRANDE, Calif. (MarketWatch) -- Remember that big ah-ha moment in the 1939classic "The Wizard of Oz?" Dorothy wants to see the Wizard. His voice booms: "Do not arouse the wrath of the Great and Powerful Oz! Come back tomorrow!" Afraid, Lion, Tin Man, Scarecrow shake. Dorothy's dog runs up, tugs on a curtain. She chases Toto, pulls curtain open: "Who are you?" Dr. Marvel stutters: "Well, I - I - I am the Great and Powerful, Wizard of Oz." Dorothy: "You are? I don't believe you!" He replies: "No, it's true. There's no other Wizard except me." Dorothy's miffed: "Oh, you're a very bad man!" Wizard: "Oh, no, my dear. I'm a very good man. I'm just a very bad Wizard."

2009 Sequel: Script exposes diabolical cover-up conspiracy
Flash forward: Real life, Washington, new leaders, a new Congress, old wizardry. Be forewarned: No matter who's elected president, America will soon see a massive statistical curtain pulled back, exposing a con game of historic proportions. And when that happens, you and I will suffer another ear-splitting global meltdown, bigger than today's housing-credit crisis, dragging us deep into a recession and bear market for years.

Cast: New 'leading man' from old Nixon political machine
Yes, the lead character pulling back the curtain is none other than Kevin Phillips, a former Republican strategist for Nixon, and today America's leading political historian. Phillips just published "Bad Money: Reckless Finance, Failed Politics & the Crisis of American Capitalism," everything you need to know about today's credit meltdown.

Scene 1: Numbers racket hiding behind Washington curtain
Opening shot: Phillips pulling back the curtain, exposing charlatan Wizards in a brilliant Harper's Magazine article: "Numbers Racket: Why the economy is worse than we know." Far worse. Buy it, read it -- this is essential reading if you really want to understand the depth of today's political as well as economic impending meltdown, and the harsh realities facing Washington, Wall Street, Corporate America, and Main Street in 2009 and beyond ... harsh because we cannot cover up the truth much longer.

Scene 2: Statistics, Washington's new WMDs, a time bomb "If Washington's harping on weapons of mass destruction was essential to buoy public support for the invasion of Iraq, the use of deceptive statistics has played its own vital role in convincing many Americans that the U.S. economy is stronger, fairer, more productive, more dominant, and richer with opportunity than it really is. The corruption has tainted the very measures that most shape public perception of the economy," especially three key numbers, CPI, GDP and monthly unemployment statistics.

Scene 3: Backflash, 'It's always the cover-up, stupid!'
As I read further I couldn't help but think about similar traps politicians get themselves (and us) into. Remember nice guys like Scooter Libby and Bill Clinton: The crime wasn't their original stupidity, but their lying during the cover-up. Here, Phillips reviews endless statistical cover-ups since the 1960s and concludes there was no "grand conspiracy, just accumulating opportunisms." I call it plain old greed. And every step of the way the media went along with the con game played by politicians and economists.

Scene 4: Real numbers torture us ... like water-boarding!
How bad is it? "The real numbers ... would be a face full of cold water," says Phillips. "Based on the criteria in place a quarter century ago, today's U.S. unemployment rate is somewhere between 9% and 12%; the inflation rate is as high as 7% or even 10%; economics growth since the recession of 2001 has been mediocre, despite the surge in wealth and incomes of the superrich, and we are falling back into recession."

Scene 5: Most economists hushed, work inside conspiracy
Compare that to the phony stats Washington feeds the press and public: Unemployment 5%, inflation 2% and long-term growth at 3%-4% (actually more like 1%). For example, just last week the L.A. Times reported that while "gasoline prices are up more than 20% from a year ago and food prices have risen 5%," Washington says "inflation was fairly mild last month." A Wells Fargo economist shook his head in disbelief: That report isn't "worth the paper it was printed on." Most economists are quiet, working for the conspiracy.

Scene 6: No integrity, they cannot be trusted to tell truth!
The same can be said of any government report, every speech made by today's leaders: All hype, lies and propaganda intended to deceive us. Treasury Secretary Henry Paulson's clearly playing the game: Remember what the former Goldman Sachs CEO told Fortune last July as our credit meltdown was metastasizing into a worldwide contagion: "This is far and away the strongest global economy I've seen in my business lifetime." He has no credibility. He knew the truth. He knew the government's "numbers racket;" after all, he helped create the problems years earlier at Goldman.

Scene 7: There's enough Kool-Aid for everyone to drink
The plot's unraveling: The lies accumulate and compound one on top of the another ... get passed on ... keep mounting ... forcing successive new generations of politicians to drink the same poisonous Kool-Aid ... keep the lies alive ... going strong ... till everyone believes the lies are really "the truth," or at least an inconvenient truth ... as the hoax becomes the conventional wisdom ... not only by Washington, Wall Street, Corporate America and the media, but also 300 million Main Street Americans.

Scene 8: Inflation statistics are America's new 'guillotine'
The biggest of all lies is with inflation. Understating inflation "hangs over our heads like a guillotine," says Phillips. Yet if Washington told us the truth "it would send interest rates climbing and thereby would endanger the viability of the massive buildup of public and private debt (from less than $11 trillion in 1987 to $49 trillion last year) that props up the American Economy." So we keep sipping the Kool-Aid.

Scene 9: Washington and Wall Street delusional in 'Land of Oz'
"Were mainstream interest rates to jump into the 7% to 9% range -- which could happen if inflation were to spur new concern -- both Washington and Wall Street could be walking on quicksand," warns Phillips. "The make-believe economy of the past two decades, with its asset bubbles, massive borrowing, and rampant data distortion, would be in serious jeopardy."

Scene 10: Cover-up failing ... king really has no clothes
Yet everyone still acts paralyzed, unable (or unwilling) to do anything to stop this lethal musical chairs charade ... till it's too late, or a catastrophe wakes us. Meanwhile, we act as if we had no choice but to put up with the crashes of 1987 and 2001 and 2007. Just "normal" bull/bear cycles. So like lemmings driven over a cliff, we'll blindly accept the next crashes, as each increase in frequency and intensity. Next in 2011? As war debt piles? As reforming health care, Social Security and Medicare are delayed? As we deny and deceive ourselves, perpetuate the lie ... except notice, out of the corner of your eye, at the edge of the screen, a curtain's being pulled open, slowly, our once-mighty statistical king, the Wizard of Washington really has no clothes on.

Scene 11: Millions of co-conspirators in massive cover-up
Still, we let ourselves be conned. Why? "The rising cost of pensions, benefits, and interest payments -- all indexed or related to inflation -- could join the cost of financial bailouts to overwhelm the federal budget," says Phillips. But it's a heads-we-lose-tails-we-can't-win bet. "As inflation and interest rates have been kept artificially suppressed, the United States has been indentured to its volatile financial sector, with its predilection for leverage and risky buccaneering" Yes, Wall Street and the rich love playing this game.

Scene 12: Rich get richer hiding under 'statistical camouflage'
So who really "profits from the low-growth U.S. economy hidden under statistical camouflage?" he asks rhetorically. Certainly not the masses: "Might it be Washington politicos and affluent elite, anxious to mislead voters, coddle the financial markets, and tamp down expensive cost-of-living increases for wages and pensions?" Yes, yes, yes, a voice screams off-camera! Then a gun shot rings out ... dull thud ... silence ... haunting music builds, filling the theater ... signaling the end of this tragi-comedy ... although like Sartre's "No Exit," you know this drama will never end ... until ... the next sequel ...

Roll credits: Who was that masked man?
Kudos to the masked curtain-puller. Yes folks, it's the same Kevin Phillips who wrote "American Theocracy, The Peril and Politics of Radical Religion, Oil, and Borrowed Money in the 21st Century;" "The Politics of Rich and Poor: Wealth and Electorate in the Reagan Aftermath;" "American Dynasty: Aristocracy, Fortune, and the Politics of Deceit in the House of Bush" and others. In his "Wealth and Democracy: A Political History of the American Rich," Phillips warned us that "most great nations, at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out." Slowly, fade to black ....

IHateToBurstYourBubble said...

I read the "commercial space" glut piece in the Bulletin yesterday.

Yes, we're up just a smidge, from 3.2% industrial vacancy Q1 2007, to a slightly higher 14.2% vacancy for Q1 2008. That's only a 343% increase in one year.

Office space vacancies were only slightly less than that.

Industrial in Redmond was in the 21% vacancy rate zone.

Commercial seemed to "glut out" far, FAR faster than residential.

Retail was still at a relatively healthy ~6% vacancy rate.

Prepare to watch the echo bust of commercial tear this place apart.

IHateToBurstYourBubble said...

"Maybe at $6 or $7 a gallon, it becomes less attractive to go to work," Mr. DeGesero said. "We haven't hit that point yet, but we might soon."

This is going to become interesting soon. There are actually quite a few jobs predicated on the idea of cheap gas. The switching costs are high, so you'd think this might take awhile as people realize that their livelihood has become a money-loser.

Some businesses will try to pass on these higher costs to consumers, basically throwing cold-molasses into the economy.

Some will just shutdown.

Some will be forced to find gas-less alternatives. There lies the gold.

bruce said...

In the macro view, energy prices are going up, we are likely entering a period of stagflation, the credit crunch will continue albeit not as bad as it would have been if the Fed quit printing money at such an obscene rate, defaults in residential will increase from the present mind-numbing levels and will spread to commercial, more banks and other financial institutions will have serious problems and many will fail.

How will this affect Bend? A short list:
1) big pickups will become an anachronism

2) McMansions same thing. If you own one, you are going to lose money. Especially if it is in an outlying area.

3) Cost of goods being shipped here will continue to increase, making local farmer's markets more competitive. Grow local, buy local, and even though you will still get hit by the fertilizer and diesel increases, you will largely skip the transport costs.

4) Trains will take an ever larger share of the ground shipping market as diesel becomes more expensive. Prineville is in a leading position here locally.

5) Cost of shipping produced goods out will increase, making them less competitive. Goods that are small and light, that can be shipped by train, or can be delivered digitally will be the best choices for the future (ad agencies and PR firms rejoice).

6) We are going to have serious problem with the housing and commercial overhang at bubble pricing, leading to huge losses for regional banks highly invested.

7) Infrastructure costs are going to be higher than anticipated. That Cooley Road project could go to $50M from $40M; wastewater infrastructure costs will probably also go up 20% or more going forward, as the costs of running the big machinery to dig and for the transport of the large pieces required to build infrastructure will be directly impacted by fuel costs.

8) Things like ski areas with their large electric motors carrying people uphill will experience even thinner margins. Ditto motor-powered recreation, big RVs, boats, ATVs, etc. Think of Europe, for those of you who have been there and seen the downsized vehicle of all sorts. There is a reason the Dodge (Mercedes) Sprinter van has become so popular for commercial users.

More, anyone?

bruce said...

Re: Some will be forced to find gas-less alternatives. There lies the gold.

Exactly. We are entering a period of great structural change, one that will cause much pain, but will also provide opportunity.

IHateToBurstYourBubble said...

What are my other choices? There's only one source of energy that's going to make a substantial difference for this country, and it's wind. It's renewable, it's green, there's no question it will work, and it's being developed very aggressively now in Texas, western Oklahoma, Kansas, and up in the Great Plains.

Also very interesting. I've lived there, and the Midwest is nothing if not windy as hell.

Is it America's OPEC? Ground Zero for an RE bubble ala 1908's Texas?

IHateToBurstYourBubble said...

ala 1908's Texas?

that's "1980's Texas"

IHateToBurstYourBubble said...

That Boone Pickens piece is a good read.

Nice find.

IHateToBurstYourBubble said...

Dunc, maybe you have insight into this, but...

Did anyone else notice how DEAD it was in Bend this weekend? Isn't Memorial Day supposed to be pretty big? Downtown appeared to be dead as a doornail.

IHateToBurstYourBubble said...

Yeah... WTF is going on with some drunk Culver kid running from the cops, and ending up DEAD?

Here it's taken at face value. Air that shit in a crooked town like Chicago, and you got a near dead-lock on police murder-coverup.

bruce said...

Re: Dunc, maybe you have insight into this, but...

Did anyone else notice how DEAD it was in Bend this weekend? Isn't Memorial Day supposed to be pretty big? Downtown appeared to be dead as a doornail.

...

Went and saw Ironman at 4:20 yesterday and the Old Mill was jammed.

Excellent movie, BTW.

bruce said...

Re: Yeah... WTF is going on with some drunk Culver kid running from the cops, and ending up DEAD?

And not just any kid, but a local star, captain of the football team, etc.

Kind of wierd how a fall while running (one that the media all noted per the paucity of other info from the PD) could have caused a death...but we better not go there. Rather wierd, all around.

bruce said...

Bank failures to surge in coming years
IndyMac, Corus, UCBH under pressure as credit crunch slows economy
By Alistair Barr, MarketWatch

SAN FRANCISCO (MarketWatch) -- By April, Gary Holloway was almost three years into retirement.
He'd built a new home by a lake in Texas, bought a boat and was working on his golf game. While taking on some part-time work, Holloway also traveled for months across the U.S. with his wife, from Seattle to Washington D.C., catching up with old friends and family.

That life of leisure abruptly changed about six weeks ago when Holloway got a phone call from his former employer, the Federal Deposit Insurance Corp., or FDIC, which regulates U.S. banks and insures deposits.

Holloway, a 30-year FDIC veteran, had worked extensively with failed lenders in Houston during the savings and loan crisis in the late 1980s and early 1990s, when thousands of thrifts collapsed.
Earlier this year, the FDIC began trying to lure roughly 25 retirees like Holloway back to prepare for an increase in bank failures. It's also hiring about 75 new staff.

Holloway quickly went back to work. ANB Financial N.A., a bank in Bentonville, Ark. with $2.1 billion in assets and $1.8 billion in customer deposits, was failing and an expert like Holloway was needed to value the assets and find a stronger institution to take them on.

"I was very excited about coming back," Holloway said in an interview. "I'm now 57. There's still a lot of life left and the juices are flowing again."

On May 9, life for ANB ended when the FDIC and the Office of the Comptroller of the Currency, another bank regulator, announced that the lender was closing.

Only three banks have failed so far in 2008. But that number is set to surge as the credit crunch slows economic growth and hammers some lenders that grew too fast during the recent real-estate boom, experts say.

The roots of today's banking crisis grew out of the boom and bust in the real estate market. Lenders originated more and more mortgages, while other banks, particularly smaller and medium-sized institutions, ploughed money into construction and development loans.

While loan growth soared in 2004 and 2005, most regulators failed to scrutinize many banks or restrain this heady expansion of credit. Now that the loans have been made and delinquencies are climbing, some banks may already be doomed.

Marriages and managing

"At this point in the crisis, you can't stop bank failures," said Joseph Mason, associate professor of finance at Drexel University's LeBow College of Business, who has studied past financial crises.

"At this point you manage through failures and arrange marriages where another stronger bank takes on the assets and deposits," he said. "You move through the problem. You don't avoid the problem. It's too late to wait and hope that things get better."

Things may get worse before they get better.

At least 150 banks will fail in the U.S. during the next two to three years, according to a projection by Gerard Cassidy and his colleagues at RBC Capital Markets.

If the current economic slowdown deteriorates into a recession on the scale of those from the 1980s and early 1990's, the number of failures will be much higher this time around -- probably as high as 300 of them, by RBC's reckoning.

That's a massive surge compared to the recent boom years of the credit and real estate markets. From the second half of 2004 through end of 2006 there were 10 consecutive quarters without a bank failure in the U.S. -- a record length of time, Cassidy notes.

"This downturn will trigger a significant amount of bank failures relative to the past five years," he said. "There has been excessive loan growth and some banks won't be able to access capital markets to replace the money that will disappear as credit losses rise."

Texas Ratio

Cassidy and his colleagues have developed an early-warning system for spotting future trouble at banks called the Texas Ratio.
The ratio is calculated by dividing a bank's non-performing loans, including those 90 days delinquent, by the company's tangible equity capital plus money set aside for future loan losses. The number basically measures credit problems as a percentage of the capital a lender has available to deal with them.


Cassidy came up with the idea after covering Texas banks in the 1980s. Until the recession hit that decade, many banks in the state were considered some of the best in the country. But as problem assets climbed, that view was cruelly challenged, Cassidy recalls.

The analyst noticed that when problem assets grew to more than 100% of capital, most of the Texas banks in that precarious position ended up going under. A similar pattern occurred in the New England banking sector during the recession of the early 1990s, Cassidy said.

Along with his colleagues, Cassidy applied the same ratio to commercial banks at the end of this year's first quarter and found some disturbing trends.

UCBH Holdings Inc., a San Francisco-based bank, saw its Texas Ratio jump to 31% at the end of the first quarter from 4.7% in 2006, according to RBC.

The Texas Ratio of Colonial BancGroup, based in Montgomery, Ala., jumped from 1.5% in 2006 to 25% at the end of March.

Sterling Financial Corp., headquartered in Spokane, Wash., had a Texas ratio of 1.9% in 2006. It was nearly 24% at the end of the first quarter, RBC data show.

These banks are no where near RBC's 100% critical threshold, and several lenders have raised new capital since the first quarter.

For instance, National City Corp. topped RBC's list with a Texas Ratio of 40% at the end of March, though the bank did raise $7 billion in new capital in April.

"But these ratios have skyrocketed in recent years," Cassidy warned. "If that trend continues, some of these banks may be in trouble."

CD signs of stress

Other lenders are already in more dire straits.
IndyMac Bancorp, a large savings and loan institution and a leading mortgage lender, is one of Cassidy's biggest concerns, with a whopping Texas Ratio around 140%.

IndyMac is finding it much tougher to package up and sell the mortgages it originates in securitizations. That used to be a major source of new money for the company to turn around and use in further lending.

When lenders need to raise new capital, they can try to boost deposits by offering attractive interest rates on certificates of deposits, or CDs.

IndyMac is currently offering the highest rates on one-year CDs, according to Bankrate.com. Others in the top 10 include Corus Bankshares, Imperial Capital Bancorp and GMAC bank.

When Countrywide Financial was struggling last year, its federal savings bank unit began offering some of the highest CD rates in the U.S. to build deposits.
Bank of America has since agreed to acquire Countrywide and it didn't make it onto Bankrate.com's list of top 10 CD rates this week.

"These banks that are challenged for liquidity are having to go out and pay up in the market for CDs," Joe Morford, a colleague of Cassidy's at RBC, said.

Imperial Capital stopped paying dividends earlier this year. GMAC, owned by leveraged buyout giant Cerberus Capital Management and General Motors, is struggling to keep its Residential Capital mortgage business afloat.

Corus, offering the fifth-highest rates on one-year CDs, had a Texas Ratio of nearly 70% at the end of the first quarter, up from 9.1% in 2006, according to Morford.

Construction loan destruction

Corus is also highly exposed to types of loans that some experts worry will be the next major source of losses for banks after the mortgage meltdown.

Construction and development, or C&D, loans made up 83% of the Chicago-based bank's total loans at the end of 2007, according to RiskMetrics Group.

This type of loans helps to pay for things like the building of real-estate development projects and the construction of office buildings.

Small and medium-sized banks found it difficult to compete with large lenders in the national markets for mortgages and other consumer loans. So many focused on C&D loans because this type of financing relies more on local, personal connections, said Zach Gast, financial sector analyst at RiskMetrics.

As the real estate market boomed, C&D loans did too. A decade ago, bank holding companies had $60 billion of these loans. That number is now $480 billion, according to Gast, who also notes that C&D loans are almost never securitized, so they're held on banks' balance sheets.

Such rapid loan growth usually creates trouble later. Indeed, delinquencies represented 7.1% of total C&D loans at the end of the first quarter, up from 0.9% at the end of 2005, Gast said.


"It's a huge increase. Most of the deterioration seems to be coming from residential construction projects, but certainly there's deterioration in commercial projects too," the analyst said. "The rate of deterioration is still accelerating."

Colonial BancGroup had 37% of its loans in C&D loans at the end of last year, while Sterling Financial had 33% and UCBH had 20%. East West Bancorp, a rival to UCBH, is also exposed, with 25% of total loans in C&D assets at the end of 2007, RiskMetrics data show.

Regulators

Where were regulators when these banks built up such large exposures?

That's a question RBC's Cassidy has been asking himself, noting that "they dropped the ball in a big way." Officials at the FDIC declined to comment.

Efforts by the Securities and Exchange Commission to make sure banks report accurate earnings may have made the situation worse, Cassidy says.

Bank regulators try to encourage institutions to build reserves in good times, so they're ready for downturns. But the SEC has been worried that banks might use reserves to smooth reported earnings, so it advised some lenders that they couldn't set aside reserves if they weren't experiencing commensurate credit losses, Cassidy explained.

That left reserves relatively low at the end of 2007, as the credit crunch was building momentum, Gast said.

Still, regulators have responded strongly so far this year. In addition to the FDIC's efforts to bolster its staff, the Office of the Comptroller of the Currency has been telling banks to boost reserves even if accountants worry that such steps will stray from SEC guidance, Gast explained.

Crisis redux?

The FDIC had highlighted 76 banks that it considered troubled at the end of 2007. That's up from 50 at the end of 2006, which was the lowest level for at least 25 years.

Once identified by regulators, troubled banks are often required to limit or halt loan growth and shrink their balance sheets by selling some assets, Cassidy said.
Resolution and receivership specialists at the FDIC, like Gary Holloway, value troubled banks' assets as quickly as possible and try to find a stronger bank to absorb the weaker entity through an acquisition.

The current crisis hasn't reached the scale of the savings and loan crisis. In 1990, more than 1,500 banks were on the FDIC's troubled watch list, out of a total of roughly 15,000. More than 1,000 banks failed in 1988 and 1989, FDIC data show.

But it's possible for such comparisons to understate the scope of the coming wave of insolvencies.

During the late 1980s, banks in Texas couldn't open a new branch in another county without forming a new commercial bank. That meant there were lots more lenders in the state when the S&L crisis struck.

So when a bank failed, "40 of its other banks failed on the same day," Cassidy recalls.

Today, no states have such requirements, so there will be fewer bank failures this time, but those that do fail may be larger.

That means each bank failure may have a larger effect on the U.S. economy, withdrawing a bigger chunk of capital from the financial system each time.

"Bank failures don't cause recessions, they lengthen them," Mason, the Drexel professor, explained. "We could get a mild recession that could linger for a while longer because of the inability to recharge capital in the banking and financial system."

Duncan McGeary said...

"Dunc, maybe you have insight into this, but...

Did anyone else notice how DEAD it was in Bend this weekend? Isn't Memorial Day supposed to be pretty big? Downtown appeared to be dead as a doornail."

You know, it never fails that if I ask someone if it was slow, they'll pop up and say it was busy.

We had a busy weekend. Today will tell the tale, I think.

But I think I'm really pleased with how I've positioned my store with product.

This has been a good month -- the score this year is two good months, two horrible months, and one bad month......

IHateToBurstYourBubble said...

Yeah. I've come to expect Dunc's stores performance to be poorly correlated with downtown retail in general.

He's sort of a quasi-monopoly. Not a Me Too store, like 90% of downtown. You got plenty of places to buy shoes, for example. Pegasus probably'll be OK come hell or high water....

bruce said...

BTW, just did a quick Texas Ratio on CACB and came up with 49.3%.

Definitely up there.

I only used the info from here: http://www.snl.com/irweblinkx/finl.aspx?iid=100589

I'll try to drill down into the latest 10-Q and come up with a more precise number. For instance, does the NPA of $96M include those 90 days delinquent as well?

I have to go run some errands soon, so if anybody is curious, here is the 3/31/08 10-Q: http://www.snl.com/irweblinkx/doc.aspx?IID=100589&DID=7783938

bruce said...

Couple more notes on CACB, from the latest earnings PR:

"The Company carries NPA's at estimated net realizable value upon liquidation; however, because of the uncertain real estate market, no assurance can be given that the ultimate disposition of such assets will be at or above such value."

The Loan Portfolio shows 29% Commercial, 33% Real Estate-Construction/Lot, 4% Real Estate-Mortgage, 32% Real Estate-Commercial, 2% Consumer.

If/when commercial and C&D gets really ugly, CACB could be in for an even farther fall, as 94% of it's loans are tied up in these two areas.

Duncan McGeary said...

I did notice the clothing store two doors down is having a 'Closing Sale' with a sign on the door apologizing for erratic hours and promising to do better...

I'm starting to wonder if I'm getting business from all the downtown gawkers who don't want to spend an arm and a leg, but do a little casual shopping. My average item price is very low comparatively....

timothy said...

If they are closing, it's a bit late to work toward being diligent on their open hours.

How does that antiques store near you do? Anyone buy antiques anymore?

Duncan McGeary said...

She just re-upped on her lease. She's been there a long time. here husband is an architect. She has outside antique consulting work.

IHateToBurstYourBubble said...


The Loan Portfolio shows 29% Commercial, 33% Real Estate-Construction/Lot, 4% Real Estate-Mortgage, 32% Real Estate-Commercial, 2% Consumer.


Just curious what the diff is between "Commercial" and "Real Estate-Commercial"?

Commercial is just business loans?

Duncan McGeary said...

Ouch. If that is true, the worst is yet to come. I think the commercial area is just starting it's downturn.

bruce said...

Re: Just curious what the diff is between "Commercial" and "Real Estate-Commercial"?

Commercial is just business loans?

I was wondering the same thing and came to the same conclusion. They probably are not in jeopardy as much as the RE-Commercial. At least not as soon...

IHateToBurstYourBubble said...

Oy! Looks like BendBB has come up with a cool site inspired by redb.org:

http://www.mapbend.com/remap.php

Very cool Google maps integration.

Ultimately drills down to centraloregonrealtors.com.

He's done a damn good job on it.

IHateToBurstYourBubble said...

A similar cool site is HousingMaps.com
http://www.housingmaps.com/

Uses scraped craigslist pages/RSS to integrate into google maps. Doesn't have a Bend area. But good ideas there...

IHateToBurstYourBubble said...

Wow. Combine the UI goodness of redb.org's charts & tables, BendBB's mapbend google maps goodness, and the sweet image's of housingmaps.com... You'd have you a hell of a site!

All have their good points. All are pretty dang cool.

IHateToBurstYourBubble said...

I think the commercial area is just starting it's downturn.

Hmmmm... if 343% increase YoY is "just starting"... where does it end?

Duncan McGeary said...

More inventory for sure. And more to come.

But I don't think the pain has set in yet; the notice of defaults on commercial property, the foreclosures. More money invested, but more to lose, perhaps.

Like I said, I think the rent rates haven't hardly started to come down, putting pressure on the owners.

Duncan McGeary said...

Maybe I'm talking through my hat here. I'm not sure how the financing of all these commercial developments works.

Could be they are pretty much owned by the banks and lenders already, or can be taken back under their control without much fuss. All out of the public eye, unless there is a major bankruptcy and or bank failure?

I know that the Mountain View Mall was going downhill for years without any public fanfare.

The building across the way quietly changed hands.

I suspect there is just more money involved in these projects; and that the owners know that eventually growth will fill them in. Either they are better subsidized to withstand downturns, or changes are done behind the scenes -- unlike foreclosures....

IHateToBurstYourBubble said...

There is something fishy about the "Jack Elliott" guy posting over at BendBB...

"Hi, we're new to the area and think this database is pretty darn swell."

swell?

"Well, that's a pretty peachy map!"

peachy?

Ned Flanders from Atlanta.

Sounds Sally Heatherton-ish...

bruce said...

Re: Sounds Sally Heatherton-ish...

Yep, the more I helped him out the more I thought the same...

But if he's media, so much the better.

Anonymous said...

NEW YORK - U.S. home prices dropped at the sharpest rate in two decades during the first quarter, a closely watched index showed Tuesday, a somber indication that the housing slump continues to deepen.

Standard & Poor's/Case-Shiller said its national home price index fell 14.1 percent in the first quarter compared with a year earlier, the lowest since its inception in 1988. The quarterly index covers all nine U.S. Census divisions.

Prices nationwide are at levels not seen since the third quarter of 2004, according to Maureen Maitland, a S&P vice president. However, the index is still up 60 percent versus 2000.

The narrower indices also set record declines in the first quarter. The 20-city index tumbled 14.4 percent, the lowest since that index was started in 2001. The 10-city index plunged 15.3 percent, a record in its 20-year history.

"There are very few silver linings that one can see in the data. Most of the nation appears to remain on a downward path," said David Blitzer, chairman of S&P's index committee.

Nineteen of the 20 metro areas reported annual declines, with 15 of them posting record lows. Six metro areas lost more than 20 percent.

Las Vegas had the worst quarterly performance, falling 25.9 percent, followed by Miami and Phoenix. Only Charlotte, N.C., stayed above water, gaining less than 1 percent over the previous year.

Last week, the Office of Federal Housing Enterprise Oversight said home prices fell 3.1 percent in the first quarter, the largest drop in its 17-year history and only the second quarter of price declines recorded.

The OFHEO index is narrower in scope and is calculated using mortgages of $417,000 or less that are bought or backed by Fannie Mae or Freddie Mac. That excludes properties bought with some of the riskier types of home loans.

IHateToBurstYourBubble said...

Only posting this cuz it gives additional CS stats re previous recession.

Home prices fell at record pace in first quarter: S&P

NEW YORK (Reuters) - Prices of single-family homes plunged a record 14.1 percent in the first quarter from a year earlier, marking a pace five times faster than the last housing recession, according to the Standard & Poor's/Case Shiller national home price index reported on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas fell 2.2 percent in March from February and plummeted a record 14.4 percent from March 2007.

Economists expected prices for the 20-city index to fall 2.0 percent on month and 14.0 percent from a year earlier, according to the median forecast in a Reuters survey.

"There are very few silver linings that one can see in the data," David Blitzer, chairman of S&P's index committee, said in a statement.

Falling home prices have become the scourge of the housing market that is seeing its worst downturn since the 1930s. Home values since last year have been dropping below balances owed on many mortgages, leaving borrowers with no equity and more likely to succumb to foreclosure.

The crisis in foreclosures, which pressure prices even lower, has spurred numerous plans by regulators and lawmakers that aim to keep borrowers in their homes by forgiving a portion of their loan's principle.

Housing markets that grew the most during the housing boom, such as Las Vegas, Nevada and Miami, Florida, are leading the decline, S&P said.

S&P said its composite index of 10 metropolitan areas declined 2.4 percent in March, for a record 15.3 percent year-over-year drop.

IHateToBurstYourBubble said...

But this is the BEST TIME TO BUY IN 20 YEARS right?

IHateToBurstYourBubble said...

So that's around $2,200 lost by every man, woman and child inhabiting an OWNED home in the US.

2.2%. Don't sound like much.

Sit back boys (and girls) and witness the horror.

Largest loss of wealth in recorded history.

Never happen again.

Bend is Ground Zero.

IHateToBurstYourBubble said...

I'm just glad we all got those Stimulus Checks.

The marginal accompanying inflation has made the losses on housing So Much Easier to swallow.

Thank your Realtor.

Thank your Mortgage Broker.

Thank Greenspan.

Thank Bush & Al Qaeda.

U.S. is becoming the Worlds Also Ran in the biggest economic calamity since The Great Depression (From what I've heard, it wasn't that great).

Anonymous said...

Largest loss of wealth in recorded history.

Makes the stock market crash of 1929 look like a mere blip.

St Paddy said...

I didn't get my stimulus check yet, still waiting.

St Paddy said...

I did an experimental ad on C'slist the other day looking for a westside rental with a certain set of parameters. I'm up to about 15 responses of desperate owners looking to rent out their places until things rebound next year(per the owners).The funny thing is that most of them are asking far more than the $1,400 cap I placed on my want ad, but they are willing to lower their price just to get it rented out. I'm amazed at the amount of people that think we have a turnaround in the near future,I asked everyone of them what they thought would stimulate this turnaround? No one had an answer for me. We have a lot of people out there that are buying into the bullshit PR that this town is spewing and it's influencing people into making very poor decisions. My advice to everyone of them was to sell at whatever the cost now if they had any interest.

Anonymous said...

And the good news just keeps on a-comin':

Soaring gas prices and weakening job prospects left shoppers gloomier about the economy in May, sending a key barometer of consumer sentiment to its lowest level in almost 16 years.

The Conference Board said Tuesday that its Consumer Confidence Index dropped to 57.2, down from a revised 62.8 in April. Economists surveyed by Thomson Financial/IFR expected a reading of 60.

The May reading marks the fifth straight month of decline and is the lowest since the index registered 54.6 in October 1992 when the economy was coming out of a recession.

Economists closely watch sentiment readings since consumer spending accounts for more than two-thirds of the nation’s economic activity.

“Weakening business and job conditions coupled with growing pessimism about the short-term future have further depleted consumers’ confidence in the overall state of the economy,” Lynn Franco, director of the Conference Board’s Consumer Research Center, said in a statement.

Ms. Franco said consumers’ worries about inflation, fueled by increasing prices at the gas pump, are now at an “all-time high” and are likely to rise further in the months ahead. She added that based on consumers’ outlook on the economy, she believes there’s little likelihood of a quick turnaround.

Mark Vitner, senior economist with the Wachovia Corporation, agreed, saying that he doesn’t believe that confidence has bottomed out yet, an ominous sign for consumer spending.

“Higher gasoline is of immediate concern,” Mr. Vitner said. “ A lot of the extra money is going toward gas and food.” And he doesn’t see consumer sentiment improving until gas prices start receding.

The Consumer Confidence report, derived from responses received through May 20 of a representative sample of 5,000 American. households, has a margin of error of plus or minus 2.5 percentage points.

Anonymous said...

There's a story in today's NY Times about contractors picking up work taking care of homes that have been abandoned. Is anybody aware of homes being abandoned in Bend? I haven't heard of it yet but I guess it's just a matter of time.

Anonymous said...

Maybe not abandoned but I'm surrounded by uninhabited homes. The one behind me is "Available" from the builder, the one next door is a vacation house that hasn't seen a visitor in almost 2 months. Across the street is another "2nd home" that has only had the owners visit once in about 2 months.

Anonymous said...

"St Paddy said...

I didn't get my stimulus check yet, still waiting."

************

if you filed your taxes electronically, check your bank account and see if it was deposited electronically. my was and i didn't notice at first because the amount was so tiny. remember, if you made over a certain amount the rebate is cut down drastically.

bruce said...

The desperation is increasing:

Man pulls knife, tries to rob Bend ATM user

Holdup try at downtown bank

From KTVZ.COM news sources

Bend police are looking for a knife-wielding man who allegedly tried unsuccessfully to hold up a user of a downtown Bend ATM Tuesday night.


Police responded just before 9:30 p.m. to the report of an attempted armed robbery at the Washington Mutual Bank ATM, located at 450 NW Franklin Ave., said Sgt. Dan Ritchie.

The victim, a 27-year-old Bend resident, said a man brandished a knife and approached the victim's vehicle at the ATM, Ritchie said. The robbery try did not succeed and the victim was unhurt, he added.

The suspect was described as a white man in his 30s, about 5-foot-9, with brown hair. He last was seen wearing a black coat, white shorts, black glasses and a red baseball cap, worn backwards, Ritchie said.

Anyone with information on the robbery attempt was asked to contact Bend police through Deschutes County sheriff's 911 non-emergency number, (541) 693-6911.

Anonymous said...

Hey you threadnecks! I'm sure you missed me. I'm just popping in for a moment to tell you about my next invention. It's an environmentally friendly egg scale. It weighs eggs to the exact weight + or - about 1lb.

So eat that you bitches!

Anonymous said...

"and a red baseball cap, worn backwards"

Well, we know he's gay.

Anonymous said...

She gets it.

Watch the video. At about 2:30 ish she helps explain Buster's fancy mortgage math where you pay less than interest on the loan.

Anonymous said...

This guy has a simple formula for calculating whether it makes sense to buy rather than rent: http://tinyurl.com/6ntl27

Find two similar houses, one for rent and one for sale. Divide the total annual rent for the first one into the price of the second one. If the number is over 20, don't buy. So if a house is renting for $1000 a month you shouldn't pay more than $240000 for a similar one, tops. He says a large number of houses where the ratio is over 20:1 also is a good sign that a bubble is underway.

Anonymous said...

The desperation is increasing

I don't have any hard data but it sure seems like there has been a lot more serious crime in and around Bend recently. Sign of hard times or of growth, or both, I guess.

Anonymous said...

Horizon flies to Bend? They must mean Redmond.


Horizon Air cutting service in Northwest to save fuel
THE ASSOCIATED PRESS

SEATTLE -- Horizon Air is discontinuing service to Butte, Mont., and reducing or changing flights to other cities in the Northwest this summer to save fuel and improve financial performance.

The Seattle-based regional airline also is phasing out its jets in favor of a single fleet using the 76-seat Q400 turboprop.

Routes affected by service changes include Billings-Portland, Portland-Seattle, Pasco-Seattle, Kelowna-Seattle, Idaho Falls-Boise, Lewiston-Boise, Medford-Portland, Bend-Portland, Bend-Seattle, Billings-Helena, San Jose-Sacramento, Idaho Falls-Seattle, Boise-San Jose, Boise-Sacramento, Wenatchee-Seattle and Seattle-Sun Valley.

Horizon serves 48 cities in the West, including cities in Canada and Mexico.

bruce said...

More desparation:

Central Oregon chases end in suicide

BEND, Ore. (AP) - Officers say a Central Oregon theft suspect shot himself to death after firing numerous times at law enforcement vehicles during two chases.

A Deschutes County sheriff's deputy chased the driver in Redmond about 9:15 p.m. Tuesday.

But after firing several shots and hitting the deputy's vehicle, the man gave the deputy the slip south of the county fairgrounds. The deputy was uninjured.

About 30 minutes later, State Police officers and deputies saw the man's vehicle near Bend, gave chase and came under fire.

Finally, they stopped the man by putting spike strips on the road.

But, the sheriff's office said, the man shot himself rather than surrender.

He was not immediately identified.


Earlier story from Barney:

Driver fires at pursuing police, later kills self

A driver who fired several shots at pursuing police during a chase late Tuesday night eventually hit deployed "spike strips" and soon became stuck near the entrance to Pronghorn Resort. Police negotiated with the driver, who ended the standoff with a self-inflicted gunshot wound, Deschutes County sheriff's deputies said.


The driver's name was being withheld Wednesday morning, pending notification of family. A patrol car was hit several times in the initial pursuit, but there no injuries reported.

The series of events began around 9:15 p.m., when a sheriff's deputy looking for someone related to an earlier theft approached the area of SW 31st and Umatilla Avenue in Redmond and spotted a vehicle believed to match that individual's leave the area, said sheriff's Capt. Marc Mills.

As the vehicle sped off, the driver, alone in the vehicle, pointed a handgun toward the deputy's vehicle and fired several times, Mills said. The deputy's car was hit several times, but the deputy was unhurt, he said.

The deputy began pursuit of the vehicle through southwest Redmond but lost track on BLM land south of the Deschutes County Fairgrounds.

Around 10:50 p.m., Oregon State Police and sheriff's deputies began pursuing the vehicle after it was seen leaving the Pronghorn Resort, onto Powell Butte Highway, Mills said.

The driver "shot at pursuing police numerous times" during the chase, which headed southbound on Powell Butte Highway, then onto several county roads before heading east on Highway 20 East, Mills said.

Eventually, the vehicle turned north on Powell Butte Highway and back to the Pronghorn entrance, where it turned west at the entrance, Mills said. A short distance later, the vehicle turned south, heading off-road until it became stuck.

Several attempts were made to stop the vehicle using "spike strips" until they were successfully deployed on Powell Butte Highway, about a mile away from Pronghorn Drive, Mills said.

Police negotiated with the driver to surrender, but the subject wouldn't comply with pleas to surrender or give up the gun, before the self-inflicted gunshot wound.

Police agencies involved or assisting in the pursuit included Bend and Redmond police, Oregon State Police, Deschutes and Crook county sheriff's deputies and the U.S. Forest Service, Mills said. The investigation was under way with the assistance of the Central Oregon Major Crime Team.


Things are heating up--two deaths while running from police in less than a week.

bruce said...

It's sadly funny, but I just read "Flow My Tears, The Policeman Said", Philip K. Dick's book of totalitarian government and their control. And it seemed incredibly prescient. For these times, under BushCorps insistence on total power, unencumbered by a Bill of Rights or a Constitution.

The "pols" or "nats" are always right.

Now, if a guy wanted to get really CT minded, he may wonder if the National Guard units being hardened in Iraq may be equally "useful" here in the US down the road, provided they are deployed in states that they have no familiarity with...

Anonymous said...

Anyone with information on the robbery attempt was asked to contact Bend police through Deschutes County sheriff's 911 non-emergency number, (541) 693-6911.

The 911 non-emergency number? What kind of nonsense statement is that?

Anonymous said...

This economic implosion is long overdue. Bring on the $10 gas and the end of America as we know it. This is a good thing.

timothy said...

Wow, Bruce, it'll be exciting to see what kind of crazy stuff you believe after you read VALIS!

bruce said...

Check this out:
Jill Bolte Taylor: My stroke of insight

It has absolutely nothing to do with our bubble, but it is fascinating.

bruce said...

Re: Wow, Bruce, it'll be exciting to see what kind of crazy stuff you believe after you read VALIS!

I wish our Library had it.

Guess I'll have to go see Dunc :)

LavaBear said...

Horselover Fat.

bruce said...

LB, you know....

Marge said...

I guess I need to look into the laws of carrying an unconcealed weapon. I don't have a current CWP and would rather carry without one, since the cops tag you if they run your plate, you will be tossed to the ground, guns drawn on you, been there, done that in the past. I guess that a shot gun on a rack, in the back window is enough notice that I a have gun. Except they get stolen if the badboyz can see them. So the solution? Get CWP or carry illegally I choose the latter. Don't try to rob me at the ATM or hijack me at Costco. Your ass is grass, unless you can take a 9mm in you jewels.
Bend IS already changed, beware!!! So goes the reality of Bend now.

Anonymous said...

Vincent Bugliosi wants to charge Bush with murder for starting the Iraq war on a lie. For those who don't remember, he prosecuted Charlie Manson for the Tate-La Bianca murders, and wrote the book, Helter Skelter. His book comes out today, along with a copy to all 50 state AGs.

America may yet stand for something after all.

timothy said...

It stands for what it's always stood for--the enrichment of lawyers.

Anonymous said...

It stands for what it's always stood for--the enrichment of lawyers.

*

Thats what Bush really meant when he said he wanted to bring the "rule of law" to Iraq. He should have sent lawyers instead of soldiers, Al Queda wouldn't stand a chance against America's best and brightest attorneys.

Anonymous said...

Cost of goods being shipped here will continue to increase, making local farmer's markets more competitive. Grow local, buy local, and even though you will still get hit by the fertilizer and diesel increases, you will largely skip the transport costs.

The only problem with that idea is that with Bend's climate and short growing season there ain't much you can grow here. If you ate only locally grown stuff you'd end up with scurvy.

Anonymous said...

Went and saw Ironman at 4:20 yesterday and the Old Mill was jammed.

Of course -- everybody went to the movies. Not a hell of a lot else to do around here when the weather is shitty.

Years ago The Bulletin had a story about Bend leading the nation in per capita video rentals. (This was in the pre-DVD era.) There was a reason for that.

PS: I liked "Ironman" too.

Anonymous said...

Duncan's blog: "This cold and wet for Central Oregon really is unusual."

No, it isn't. This spring has been a little colder and wetter than usual, but cold and wet springs are the norm here. We often see more sunshine in February than in May. I've been here more than 20 years and know what I'm talking about.

But cheer up -- we should start getting some decent weather by early July.

Duncan McGeary said...

No, I disagree. I've lived here for 55 years, and I don't remember a year when we had only one week of real sunshine through May. This is unusual.

Duncan McGeary said...

Maybe I'm using a rough 'gardener's' measure. But I've always had several weeks worth of gardening under my belt by now, maybe a month and a half worth since February. (Yes, it seems like there was often a warm February period to start clearing refuse.) Then usually a spring week or two in March, a week or two in April, and much of May.

I don't think there's been more than about 10 days I've been able to garden without the temperature being under 50 and or wet.

I don't think stats will prove much one way or the other. There is the de facto time spent in the garden.

That's my measure.

Anonymous said...

I disagree. The sun never shines in Bend. I've been here 5 days and I know what I'm talking about.

Duncan McGeary said...

My Mom, Libby McGeary, used to own Mint Hill Gardens in the west hills. I worked for her every spring for years.

Her selling period was nearly over by this time -- maybe one more month.

This weather wouldn't have stopped her. But it might have stopped her customers.

Meanwhile, I've only had to water a couple of times, and have yet to mow my lawn. That ain't normal, not for me.

Anyone else want to chime in? Perceptions can be tricky. But...the steady frequency of the clouds, and the moisture, and the lower temperatures....maybe that isn't reflected in the statistics, either.

Duncan McGeary said...

Sorry about playing the oldtimers card. But I'm curious if this is just my perception.

You know who would know? Nurseries and landscapers; but I doubt any of them would be willing to say.

Anonymous said...

Deschutes jobless rate is among fastest-rising in the U.S.

By Jeff McDonald / The Bulletin
Published: May 29. 2008 4:00AM PST

Deschutes County had the nation’s third-highest increase in its unemployment rate in April when compared with April 2007, according to federal data released Wednesday that examined the country’s 369 metropolitan statistical areas.

The nation’s downturn in construction and wood products-related industries was largely to blame for more unemployment claims by Central Oregon workers who live in Deschutes County, according to a local economist who analyzed the data released by the U.S. Department of Labor’s Bureau of Labor Statistics.

Deschutes County’s unemployment rate was 6.8 percent last month. While down from 7.8 percent in March, April’s rate was 2.2 percentage points higher than April 2007, according to the federal data.

Statewide, the unemployment rate was 5.6 percent in April, 0.5 points more than April 2007.

“We’ve seen this increase because the housing-related sector, which includes the wood products and construction industries, makes up a big chunk of Deschutes County’s employment,” said Stephen Williams, a regional economist with the Oregon Employment Department.

About 11.6 percent of the county’s nonfarm employment is related to the construction industry, including workers who live in the county but work in Jefferson and Crook counties, Williams said. By comparison, the state’s construction-related employment is 6.5 percent and nationally, the average is 6.1 percent, Williams said.

Only Cape Coral-Fort Myers, Fla., and Punta Gorda, Fla., registered higher unemployment rate increases in April than the Bend Metropolitan Statistical Area, which includes all of Deschutes County. Ocala, Fla., ranked fourth in the nation behind Bend with a 2.1-point increase.

It was the second time this year that the Bend metro area has ranked nationally in the top three for the highest unemployment rate increase. In February, the area ranked first in the nation, tied with Cape Coral-Fort Myers, and ahead of Punta Gorda, with a 2.6-point year-over-year increase.

Despite higher unemployment rates than all but two of the nation’s 369 metropolitan statistical areas, Bend posted a 2-point jump in job growth over April 2007, higher than the state’s five other metropolitan areas, according to the federal data. Statewide, the labor force grew 0.7 percent in April.

The job-growth picture reflects the region’s population increase and growth in other areas, including professional and business services, leisure and hospitality, and retail sectors, Williams said.

“We’re still a growing area — we’re adding people and residents,” Williams said. “But now a higher portion of those people in the area are unemployed.”

New and existing unemployment claims in April shot up from 973 in 2007 to 1,782 in 2008, an 83 percent increase, according to data provided by the department.

For the first quarter of 2008, the county registered 6,715 new and existing claims, a 62 percent increase from the same quarter in 2007.

Jeff McDonald can be reached at 383-0323 or at jmcdonald@bendbulletin.com.

timothy said...

>>“We’re still a growing area — we’re adding people and residents,” Williams said. “But now a higher portion of those people in the area are unemployed.”

We need a Stature of Poverty.

"Give us your poor, your tired, your huddled masses longing to be poorer, more tired, and massively more huddled."

LavaBear said...

Here is an update to the Notice of Defaults chart thru this evening. I'd say it's kinda sobering if I believed in that kinda thing.

bruce said...

Kind of sobering?

No, that is fucking scary.

timothy said...

lavabear,

What do you mean, "if I believed that kind of thing?"

Marge said...

Speaking of NOD's, if you couldn't read the graph, that was 183 NOD's in Deschutes County.
Compararing apples with apples the sold's for every type of property in May to date are 196 and active listings are 6581. Baby Jeebus, please save us.
Did you hear on CNBC today? The economic problems are just about over?

LavaBear said...

>>What do you mean, "if I believed that kind of thing?"

Rehab is for quitters and I'm no quitter....but no. Mostly I go back to your thesis that we are sitting back and marking notches on the dungeon wall. Of course we knew the NOD's were going to go up. I'll admit that chart does make me pause but no it doesn't really sober me up. I've been expecting it. I also believe it's a leading indicator and that the shit storm is just beginning.

LavaBear said...

I do think it's getting closer to this around here. It's a slow process but it's picking up stream.

timothy said...

>>Compararing apples with apples the sold's for every type of property in May to date are 196 and active listings are 6581.

So we could conceivably end the month with a two-year inventory assuming a SPRING sales clip.

And still plenty of people waiting for a "better time" to put the house up for sale that they so badly wish to sell.

St Paddy said...

Give us your poor, your tired, your huddled masses longing to be poorer, more tired, and massively more huddled."

that is pretty funny:)

IHateToBurstYourBubble said...


“We’re still a growing area — we’re adding people and residents,” Williams said...


That's not what I heard.

IHateToBurstYourBubble said...

About 11.6 percent of the county’s nonfarm employment is related to the construction industry, including workers who live in the county but work in Jefferson and Crook counties, Williams said. By comparison, the state’s construction-related employment is 6.5 percent and nationally, the average is 6.1 percent, Williams said.

If this is even remotely true, I'll eat my head. Every other person I meet or know here is in the trades.

IHateToBurstYourBubble said...

Compararing apples with apples the sold's for every type of property in May to date are 196 and active listings are 6581. Baby Jeebus, please save us.

margie! That's only 33.6 months inventory! Best Buyers Market in 33.6 decades, and all that! It's a great time to jump right in!

P.S. Baby Jeebus will not save us; he is still busy with my New Years Smitings.

Anonymous said...

Oregon housing employment article from the State: http://www.qualityinfo.org/olmisj/ArticleReader?itemid=00005961

Worth a read/view.

Anonymous said...

http://www.bizjournals.com/portland/stories/2008/06/02/story1.html?b=1212379200^1643110

Portland Business Journal piece on condos and number of years' supply in PDX.

Marge said...

Guess condos aren't very popular here in Bend. There are 122 on the market and only 11 sold YTD. Is that a 60+ month supply?

IHateToBurstYourBubble said...

Is that a 60+ month supply?

Soooooo pessimistic margie!

It's only 4.5+ years inventory! We'll burn thru that in no time....

timothy said...

Month's not over yet! Anything could happen.

IHateToBurstYourBubble said...

only 11 sold YTD...

I wish I knew these 11 people. I could pull a Bob Barker grift where they can keep $100,000... or give it to me & take what's in my little cardboard box!

It could be anything!

It could be a bountiful cornucopia that fulfills all your dreams!

TAKE THE BOX!!

timothy said...

>>TAKE THE BOX!!

Turns out there's a goat in the condo.

Anonymous said...

Duncan: Bulletin story yesterday says rainfall for the month of May so far actually is a little BELOW the historical average. It's been colder than average, yes, but not extremely so. I believe most Bendites live in a state of denial about the local climate. Every year the spring weather is crappy and every year I hear everybody saying, "Gosh, this is so UNUSUAL!" Oregonians in general, and Bendites in particular, excel at convincing themselves that everything about their state/town is wonderful.

Duncan McGeary said...

Again, I disagree. It was number of days that it was cloudy, the extent of it. A few huge rainstorms can accumulate inches.

And I don't usually jump on the cold and wet bandwagon. In fact, if you go back a couple of months ago, I was saying it was normal.

It no longer seems normal. Today is such a contrast to what we've been seeing, and usually we would have quite a few days like this....

LavaBear said...

Where is our resident inventor dude? I'm sure he's toiling in his lab and will come up with something to stick up his ass to prove or disprove this weather question. Guess we have to wait till 1:30 am.

IHateToBurstYourBubble said...

Wow. Combine the UI goodness of redb.org's charts & tables, BendBB's mapbend google maps goodness, and the sweet image's of housingmaps.com... You'd have you a hell of a site!

Appears BendBB makes a better RE-mapping site than a bulletin board! mapbend.com is pretty sweet.

IHateToBurstYourBubble said...

I'm seeing a lot of subs I know washing their cars & mowing the yard on many weekdays, when 2 years ago in the Winter they were working 12 hour days, 7 days a week.

timothy said...

I've been seeing what seems to be an unusual number of houses for sale by builders. By that I mean their own houses that they live in.

Anyone else seeing this?

LavaBear said...

Final May update. Topped out at 195. Any bets on where this thing goes from here? Is 500 a month before the year in reach?

IHateToBurstYourBubble said...

I've been seeing what seems to be an unusual number of houses for sale by builders. By that I mean their own houses that they live in.

Anyone else seeing this?


I know a builder letting a sub live in a (tiny) home for sale, paying for his rent in-kind by finishing out a spec house next door.

IHateToBurstYourBubble said...


I know a builder letting a sub live in a (tiny) home for sale


Better worded:


I know a builder letting a sub live in a (tiny) spec home for sale, paying for his rent in-kind by finishing out a spec house next door.

Anonymous said...

Guys and Gals, Let's get jobs to Iowa -- they's dying to get warm bodies into jobs. Or maybe they can use virtual assistants. Or maybe there can be a Redmond - Des Moines flight....

As Iowa Job Surplus Grows, Workers Call the Shots

By JOHN LELAND NY Times

DES MOINES — On a recent evening here, Greg Tew, 28, considered the question: What is it like to work in a state that is creating more jobs than workers? He was sitting in the lobby of a new hotel in downtown Des Moines, part of an extensive redevelopment investment to attract workers to Iowa.

“It is noticeable,” Mr. Tew, a computer programmer at EMC Insurance Companies, said of the jobs surplus. “You’re a hot commodity. Salaries go up just because companies are fighting to retain the talent they have.”

His friend Stacy Berenguel, 28, a financial advisor at Citi Smith Barney, said that while she was very conscious of talk of a national recession, some of her friends in Iowa were switching jobs over company amenities, like fitness centers. “Even when I’ve had friends laid off, they had no problem finding jobs,” she said. “So I’m willing to take financial risks, like splurging. Last weekend I went to Chicago and shopped for clothes and shoes. It was great. There were sales everywhere.”

Are these the voices of a nation looking at recession?

As rising unemployment and layoffs beset workers around the country, Iowa faces a different problem: a surplus of jobs. Or to put it another way: a shortage of workers. A survey of companies by Iowa Workforce Development, a state agency, found as many as 48,000 job vacancies, in industries including financial services — Des Moines trails only Hartford as the nation’s insurance capital — health care and skilled manufacturing. One estimate projects the job surplus to reach 198,000 by 2014, with vacancies increasingly in professional positions. Greater Des Moines alone faces a shortfall of 60,000 workers in the next decade.

The state provides a small, advance view of what some economists predict will be a broader shortage of skilled workers in the next 20 or 30 years, as tens of millions of baby boomers retire from the workplace, and the economy produces more new jobs than workers. Potential consequences include slower economic growth and competitiveness, as well as higher wages for skilled workers and greater inequality.

Estimates of the national shortage run as high as 14 million skilled workers by 2020, according to widely cited projections by the labor economists Anthony P. Carnevale and Donna M. Desrochers.

But other economists believe the number will be lower, as the labor market adjusts to changes in the economy and advancements in technology. The federal Bureau of Labor Statistics does not make projections about a labor shortage, but such estimates are often hotly contested because they are often used to support positions on immigration policy.

Iowa’s surplus arises from colliding trends: the exodus of young college graduates, a state economy that adds 2,000 jobs a month, low immigration and birth rates, and an image problem that makes it difficult to recruit workers from out of state. Iowans’ median age is nearly two years above the national figure, and the state is near the top in the rates of women in the workforce and workers with multiple jobs — further shrinking the pool of people who might be drawn into the market.

“It’s really a perfect storm,” said Elisabeth Buck, director of Iowa Workforce Development. Over the next decade, more than 70,000 workers a year will become eligible for retirement, with school enrollment — potential replacement workers — dropping by 20,000 since 1998, while the nationwide housing crisis makes it harder for companies to recruit from out of state, because potential employees cannot sell their homes.

Last year, the state added nearly 13,000 nonfarm jobs, in part because of growth in ethanol and wind energy, and lost 3,300 people from the workforce. With statewide unemployment at 3.5 percent, compared to a national rate of 5 percent, nearly everyone who wants to work and can work has a job. “We’re looking for ways to grow our population,” Ms. Buck said.

For workers like Brando Guerrero, 25, a sales analyst at Nationwide Insurance in Des Moines, the jobs shortage means companies “have to sell themselves to potential employees, because there are so many opportunities here.”

“Do they have a free gym, dry cleaning, Starbucks on site?” he said. “What are they doing to make the community better? And once you’re there, companies know they have to promote you to keep you. We’re a little spoiled in our opportunities here.”

But for the state economy, a worker shortage can slow growth, said Benjamin Allen, president of the University of Northern Iowa. “It’s a much better problem to have than high unemployment,” he said. “But if companies think they can’t find a workforce here, it might deter them from coming out or expanding.”

Remedies are not simple. Companies want to be in Iowa because wages are lower than elsewhere in the nation or region, except South Dakota. But low wages also drive young college graduates out of the state, especially as student debt loads have risen, and they discourage workers from other states from moving to Iowa. Some, like Mr. Tew, accept relatively low wages in exchange for Iowa’s low cost of living. Companies compete on amenities and benefits more than salary, said Craig Jackman, president of Paragon IT Professionals, a recruiter and consultant firm.

Steven Smith, who runs a small technology company called GCommerce, was not deterred. After starting the company in the New York suburbs, he moved to downtown Des Moines in 2004, and expects to expand to 50 employees by the end of the year, from the mid-30s now. He said the costs of business were less than half what they were in New York, primarily because salaries and real estate prices are lower.

But he said it was difficult to hire people for advanced technical positions. “I plan a certain amount of my time during the week, 5 to 10 hours, recruiting. You’ve got to work at it. They’re not just going to come to you.”

Anonymous said...

Duncan: Maybe I expressed myself poorly. I agree that the weather this spring has been unusually shitty. My point is that shitty spring weather here is not unusual. In fact it's more or less the norm.

bruce said...

Re: Duncan: Maybe I expressed myself poorly. I agree that the weather this spring has been unusually shitty. My point is that shitty spring weather here is not unusual. In fact it's more or less the norm.

I moved here in a Feb ice storm. One of my worst drives ever was getting from Burns to here in a U-Haul with no alternator. Even though I told the idiots that the alternator was out and they just replaced the battery. The night before we had limped into Burns with me following my wife in the van, with no lights at the end.

So here I am going over Horse Ridge with a failing battery, very little lights, windshield wipers stopped, hanging my head out the window looking for the edge of the road, in an ice storm driving a 27 foot truck packed to the gills. Luckily, I only saw about three other vehicles the whole way, so I could just worry about myself. It was a long fucking drive.

But of course, being Bend, by the time I hit the city limits it had stopped and I made it OK.

Weather sure comes and goes here--just look at today. I thought it was going to be nice when I was rolling the greens this morning, and then shortly before I planned to go play a few holes, it started pouring.

And now the suns out.

I do like the green look right now, after all the rain.

IHateToBurstYourBubble said...

As Iowa Job Surplus Grows, Workers Call the Shots

Des Moines is actually a nice little city. West Coasters have a lot of preconceived biases about the Midwest. Des Moines is a great little place. I think that'll be more widely discovered as time goes on....

Marge said...

Not final , end of the month RE stats.
May 08 Residential only,
96 Sold @ $299,500 Median.
YTD 410 Sold @ $299,450 with 1510 active listings.
Hey tommorrow officially starts fucking summer(in my mind) in Bend. It's been a long time since September...like 8 months of winter has been long.
Don't plant you garden until the snow is off Black Butte, for the Noobs.

Anonymous said...

It amazes me that anyone thinks this weather is not the norm. You guys must be new.

We've had some dry years but that is not the norm. I love it, the garden looks great, tomatoes are going strong, and I haven't had to turn on the sprinkler for the last two weeks.

Anonymous said...

Hey tommorrow officially starts fucking summer(in my mind) in Bend."

The real fucking summer doesn't come to fucking Oregon until the fucking Portland Rose Festival is over. June 9 is the date this year. Mark your fucking calendars.