* June ABI down 5.2 pts to 37.7
* Project billings index 53.8
* AIA says construction downturn not yet bottomed
NEW YORK, July 22 (Reuters) - A leading indicator of U.S. nonresidential construction spending fell in June, suggesting the sector's downturn has yet to hit bottom, an architects' trade group said on Wednesday.
The Architecture Billings Index fell more than 5 points last month to a reading of 37.7, after a slight increase in the prior month, according to the American Institute of Architects.
The index has remained below 50, indicating contraction in demand for design services, since January 2008. Its lowest recent reading was 33.3 in January.
All four U.S. construction sectors tracked by the group, and all four geographic regions, remained below 50 in June.
A measure of inquiries for projects dipped to 53.8 from 55.2, the fourth straight month that inquiries have held at a similar level but have not led to higher billings, as more architecture firms bid for the same projects.
"It appears as though we may have not yet reached the bottom of this construction downturn," AIA Chief Economist Kermit Baker said. "Architecture firms are struggling and concerned that construction market conditions will not even improve ... next year."
Earlier this month, the architects' trade group cut its 2009 and 2010 forecast for U.S. construction spending.
It predicts a 16-percent decline in construction spending this year, and another 12 percent decline in 2010. In January, the AIA had forecast an 11-percent drop in 2009, followed by a further 5 percent slide next year, but has revised its estimates, citing continued U.S. economic weakness, including steep job losses and tight credit conditions.
http://www.reuters.com/article/marketsNews/idUSN2225310920090722
It appears that many projects in the pipeline are being mothballed. This could bring substantial downward revisions to the current AIA forecast.
Wednesday, July 22, 2009
Thursday, July 16, 2009
Will Government Tax 100% of our ASSETS?
As we have seen this week, earnings to our major corporations are evaporating. It is these earnings that were major drivers for taxes last year.
In addition, corporate earnings are evaporating AFTER millions of workers have been fired. Not only have millions been fired and still unemployed, Tens of Millions have suffered MASSIVE WAGE CUTS!!!! Many of these workers are paying no taxes or a fraction of taxes they paid last year.
In addition to earnings, sales are predictably shrinking as well, so sales taxes are contracting materially. And as house prices crash and foreclosures keep reaching record highs, property taxes are now starting to decrease dramatically.
ALL OF THE ABOVE IS OCCURRING WHILE GOVERNMENT SPENDING IS INCREASING DUE TO A GREATER NUMBER OF PEOPLE NEEDING UNEMPLOYMENT CHECKS, WELFARE, AND MEDICARE AND MEDICAID ASSISTANCE....NOT TO MENTION SOCIAL SECURITY AND PROSECUTING A COUPLE WARS.
AND DUE TO THE CONTINUED ECONOMIC CONTRACTION, WE ARE NOW HEARING RUMBLINGS OF ANOTHER STIMULOUS PACKAGE.
The problem is if Obama tries to print TRILLIONS of dollars with little in the way of tax revenues coming in, our dollar will collapse, interest rates will skyrocket, and America will go broke at an accelerated rate.
The President's only choices are cut spending or raise taxes. Any spending cut spending will need to be large.....which will drive our economy into an immediate DEPRESSION as government spend is now responsible for OVER 50% of GDP.
The other choice is raise taxes. Since fewer and fewer are earning incomes anymore, AND our government's need for money is growing, the only place left to tax is our assets. As home prices are crashing, and so is commercial real estate, really the only place left to tax is our stock holdings and retirement accounts.
Based on my current estimates, factoring collapsing earnings and massive layoffs and wage cuts, it appears that Federal, State, and Local Deficits will materially EXCEED $3 Trillion dollars next year. Since half of America does not really pay income tax, the other half will have to shoulder the burden. And since the top 10% of tax payers pay about 80% of the tax, we will have to raise over $2.4 Trillion dollars from about 10,000,000 families....or about $200,000 per family.
Since the many families in the top 10% of taxpayers don't earn $200K, and need income to live on, the only way to raise the much needed money is to tax stock portfolios and retirement accounts.
As stock prices will inevitably crash from the mass liquidation, the next go around, there will be nothing left to tax and most of the country is broke.
There simply is not enough income/money to service debt and cover expenses at the same time.
In addition, corporate earnings are evaporating AFTER millions of workers have been fired. Not only have millions been fired and still unemployed, Tens of Millions have suffered MASSIVE WAGE CUTS!!!! Many of these workers are paying no taxes or a fraction of taxes they paid last year.
In addition to earnings, sales are predictably shrinking as well, so sales taxes are contracting materially. And as house prices crash and foreclosures keep reaching record highs, property taxes are now starting to decrease dramatically.
ALL OF THE ABOVE IS OCCURRING WHILE GOVERNMENT SPENDING IS INCREASING DUE TO A GREATER NUMBER OF PEOPLE NEEDING UNEMPLOYMENT CHECKS, WELFARE, AND MEDICARE AND MEDICAID ASSISTANCE....NOT TO MENTION SOCIAL SECURITY AND PROSECUTING A COUPLE WARS.
AND DUE TO THE CONTINUED ECONOMIC CONTRACTION, WE ARE NOW HEARING RUMBLINGS OF ANOTHER STIMULOUS PACKAGE.
The problem is if Obama tries to print TRILLIONS of dollars with little in the way of tax revenues coming in, our dollar will collapse, interest rates will skyrocket, and America will go broke at an accelerated rate.
The President's only choices are cut spending or raise taxes. Any spending cut spending will need to be large.....which will drive our economy into an immediate DEPRESSION as government spend is now responsible for OVER 50% of GDP.
The other choice is raise taxes. Since fewer and fewer are earning incomes anymore, AND our government's need for money is growing, the only place left to tax is our assets. As home prices are crashing, and so is commercial real estate, really the only place left to tax is our stock holdings and retirement accounts.
Based on my current estimates, factoring collapsing earnings and massive layoffs and wage cuts, it appears that Federal, State, and Local Deficits will materially EXCEED $3 Trillion dollars next year. Since half of America does not really pay income tax, the other half will have to shoulder the burden. And since the top 10% of tax payers pay about 80% of the tax, we will have to raise over $2.4 Trillion dollars from about 10,000,000 families....or about $200,000 per family.
Since the many families in the top 10% of taxpayers don't earn $200K, and need income to live on, the only way to raise the much needed money is to tax stock portfolios and retirement accounts.
As stock prices will inevitably crash from the mass liquidation, the next go around, there will be nothing left to tax and most of the country is broke.
There simply is not enough income/money to service debt and cover expenses at the same time.
Sunday, July 12, 2009
Only a Miracle Will Stop America's Shutdown
Barring a miracle worthy of a Frank Capra script, the historic Boulder Dam Hotel won't open for guests, diners and history buffs Sunday.
The 20-room hotel and museum in downtown Boulder City is three months behind on its mortgage and last-minute appeals for money from the local government failed.
That leaves operators no choice but to shut down at midnight, which means the 76-year-old hotel, restaurant and museum will become a dark spot in the middle of Boulder City's historic district.
It also will leave 22 mostly part-time workers without jobs and two on-site caretakers looking for a new place to live.
http://www.lvrj.com/business/50532907.html
Consolidated Resorts Inc. and 13 affiliated companies filed for Chapter 7 bankruptcy this week, seeking to liquidate the time-share companies.
Consolidated has between $100 million to $500 million in liabilities and $1 million to $10 million in assets, according to a bankruptcy document signed by Consolidated President Arthur Spector. It's not believed that those numbers can be added to the range of numbers reported for the other companies.
When the companies previously disclosed that they planned to file for bankruptcy protection, they said they were planning to file under Chapter 11, which gives them an opportunity to reorganize their debts and emerge from bankruptcy as an ongoing businesses.
Chapter 7 provides for liquidation of assets so that cash may be distributed among creditors.
http://www.lvrj.com/business/50347922.html
It appears we are still at the early stages of Zombulation to Commercial Real Estate....stay tuned for more carnage from the Zombatic Fallout.
The 20-room hotel and museum in downtown Boulder City is three months behind on its mortgage and last-minute appeals for money from the local government failed.
That leaves operators no choice but to shut down at midnight, which means the 76-year-old hotel, restaurant and museum will become a dark spot in the middle of Boulder City's historic district.
It also will leave 22 mostly part-time workers without jobs and two on-site caretakers looking for a new place to live.
http://www.lvrj.com/business/50532907.html
Consolidated Resorts Inc. and 13 affiliated companies filed for Chapter 7 bankruptcy this week, seeking to liquidate the time-share companies.
Consolidated has between $100 million to $500 million in liabilities and $1 million to $10 million in assets, according to a bankruptcy document signed by Consolidated President Arthur Spector. It's not believed that those numbers can be added to the range of numbers reported for the other companies.
When the companies previously disclosed that they planned to file for bankruptcy protection, they said they were planning to file under Chapter 11, which gives them an opportunity to reorganize their debts and emerge from bankruptcy as an ongoing businesses.
Chapter 7 provides for liquidation of assets so that cash may be distributed among creditors.
http://www.lvrj.com/business/50347922.html
It appears we are still at the early stages of Zombulation to Commercial Real Estate....stay tuned for more carnage from the Zombatic Fallout.
California Shutting Down
California would be the eighth largest economy in the world if it were a independent nation.
California's once-booming export sector is continuing a deep slide, according to an analysis of federal data by the University of California's Sacramento Center.
The weak international economy is dampening demand for California's agricultural products and other goods, Jock O'Connell, a consultant to the UC center said.
California exports totaled $9.5 billion in May, 25.2 percent below the $12.7 billion in goods the state shipped abroad in May of last year. "The May export numbers offer no encouragement that economic recovery will be a near-term thing," O'Connell said. "These were the lowest California export totals for the month of May since 2004."
California's manufactured exports fell by 28.0 percent in May, while agricultural goods and other non-manufactured exports shrunk by 23.3 percent. Re-exports of goods previously imported into the state were off by 15.4 percent.
On a year-to-date basis, California exports are down by 22.6 percent compared to last year when the state's exports totaled $59.9 billion. So far this year, the state's exports have amounted to just $46.4 billion.
Imports through California ports have been hit even harder. The UC analysis of Commerce Department data showed that the value of foreign goods entering the United States through California dropped by 31.7 percent in May.
http://www.sacbee.com/static/weblogs/capitolalertlatest/023784.html
Economists define a depression as a 10% decline in GDP from peak to trough. We know California's trade is already in a depression since exports are down 25.2% and imports are down 31.7%.
In addition to imports and exports being down significantly, California's tax receipts are down approximately 11%. The drop of over $10 Billion dollars is the largest drop EVER!
http://www.sacbee.com/politics/story/1370595.html
Government spending makes up a material part of California's economy. Due to declining revenues, massive cuts and government shut downs are foreseeable.....the impact on the economy will be unprecedented and will likely confirm California's economic Depression.
California's once-booming export sector is continuing a deep slide, according to an analysis of federal data by the University of California's Sacramento Center.
The weak international economy is dampening demand for California's agricultural products and other goods, Jock O'Connell, a consultant to the UC center said.
California exports totaled $9.5 billion in May, 25.2 percent below the $12.7 billion in goods the state shipped abroad in May of last year. "The May export numbers offer no encouragement that economic recovery will be a near-term thing," O'Connell said. "These were the lowest California export totals for the month of May since 2004."
California's manufactured exports fell by 28.0 percent in May, while agricultural goods and other non-manufactured exports shrunk by 23.3 percent. Re-exports of goods previously imported into the state were off by 15.4 percent.
On a year-to-date basis, California exports are down by 22.6 percent compared to last year when the state's exports totaled $59.9 billion. So far this year, the state's exports have amounted to just $46.4 billion.
Imports through California ports have been hit even harder. The UC analysis of Commerce Department data showed that the value of foreign goods entering the United States through California dropped by 31.7 percent in May.
http://www.sacbee.com/static/weblogs/capitolalertlatest/023784.html
Economists define a depression as a 10% decline in GDP from peak to trough. We know California's trade is already in a depression since exports are down 25.2% and imports are down 31.7%.
In addition to imports and exports being down significantly, California's tax receipts are down approximately 11%. The drop of over $10 Billion dollars is the largest drop EVER!
http://www.sacbee.com/politics/story/1370595.html
Government spending makes up a material part of California's economy. Due to declining revenues, massive cuts and government shut downs are foreseeable.....the impact on the economy will be unprecedented and will likely confirm California's economic Depression.
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