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Archive for July 7th, 2009

Uptown Paper Wants Drunk, Slut, Dickhead Biz

hhQuite fascinating what the Uptown outpost of McClatchy is hawking these days. Snorg Tees is a PG-13 seller of t-shirts, intended mostly for the college-age crowd. Nothing wildly offensive, but more than a few notions that might conflict with the do-good values of the Dilworth liberal set the paper normally tries to please.

Perhaps this is some sort of mistake. Perhaps the Uptown paper does not really stand behind such notions as “Any Job Worth Doing Is Worth Doing Drunk” — although that would explain much that goes on down on Tryon Street.

Most of all, I am curious how this call to alcohol use and abuse squares with the paper’s Mission Possible effort, as every study of social dysfunction and need for the past 40 years has identified alcohol abuse as a prime component of family breakdown and social decay.

This is John Lee Hooker.

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Red Tide Hits HELOCs, Bank-Card Debt

Hey, the hits keep coming, this one of special importance as BofA and Wells try to claw their way out from under trillions in bad obligations. Bloomberg reports that delinquencies on home-equity loans climbed to a record 3.52 percent of all accounts, up almost 50 basis points in the quarter. At the same time bank-card delinquencies hit a record 6.60 percent of all outstanding card debt in the first quarter, up from 5.52 percent in Q4.

With job losses still climbing, those numbers are only going to be worse in Q2 and probably Q3 as well. If that is the case, how will the banks cope?

Long about Labor Day the stuff is going hit the fan, you watch.

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Charlotte, Meck Need Checkbook Visibility

Wake County has its finances publicly available in a quite nifty little Web site. There is no reason why the city of Charlotte and Mecklenburg County could not do the same.

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Charlotte Headed for 18% Unemployment?

Although there is already plenty of wise counsel warning that the economy will not soon improve, we need to also consider the possibility that things will get worse before they get better. Part of that is truly internalizing the fact that unemployment in the Charlotte region is running ahead of national averages by 25 to 30 percent. With that as a backdrop, what would happen if the national index surges toward 14 percent? Well, the local jobless rate may then hit 17 or 18 percent, up from the current 12 percent rate.

Too dire? Check out Louis Woodhill of the Club for Growth explaining how a Q1’s real nonresidential fixed investment as computed by the Bureau of Economic Analysis points to continued job loss:

This measure decreased 37.3 percent in the first quarter of 2009, compared with a fall of 21.7 percent in the fourth quarter of 2008. Given that employment is a direct, linear function of private business investment (PBI), unemployment can be expected to rise much farther in the months ahead.

Here’s why. Because a lot of PBI goes toward offsetting depreciation and increasing productivity, it takes a 5% year-over-year increase in PBI to produce a 1% increase in the number of jobs. Correspondingly, a 5% decrease in PBI will yield a 1% reduction in total employment.

The unemployment rate a year ago was 5.5%. Because the potential labor force is growing, we need employment to increase by 1% annually to keep the unemployment rate from going up. The 37.9% investment decline reported by the BEA can be expected to eventually produce a reduction in total employment of about 8.5%. Accordingly, we can expect unemployment to rise to about 14% within a year unless the downward slide of PBI is reversed.

This is admittedly the glass half-empty view. The view our local policymakers have not and will not get from the half-full crowd at the Charlotte Chamber. The view which suggests that city and county government, along with CMS, must get serious about right-sizing government for a permanently down-sized local economy.

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