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Archive for December, 2011

US Airways adds Des Moines and Omaha

Finally. We’ve been talking about this for years, but US Airways is filling into two significant holes in its route map from Charlotte: Des Moines, IA and Omaha, NE. These are two of the largest markets within 1,200 miles or so without nonstop service to Charlotte. And from US Airway’s perspective, they are relative low cost and low risk, as the airline already flies to both from Phoenix. And yes, Charlotte is closer to both than Phoenix. Des Moines will be twice a day on 50-seat regional gets while Omaha is twice a day on a CRJ700 large regional jet that seats 67 and has a first-class section.

DCA slot swap, round one: The Des Monies and Omaha flights start on March 25, the same day as the first phase of the US Airways/Delta slot swap. US Airways is giving 132 slots at New York’s LaGuardia airport to get 42 slots at Washington Reagan National airport (DCA) in two phases. Service that US airways is adding from DCA on March 25, sorted by whether the city in question was on the original list of places to be added from DCA when the slot swap was first proposed back in the summer of 2009:

On the original list and added: Birmingham (3 x CRJ), Islip (2 x CRJ), Little Rock (2 x E70), Ottawa (3 x CRJ), Pensacola (2 x CRJ), Savannah (1 x CRJ), Tallahassee (1 x CRJ)

Not on the original list but added: Bangor (2 x CRJ), Fayetteville, NC (1 x CRJ); Ft. Walton Beach, FL (1 x CRJ); Jacksonville, NC (1 x CRJ); Memphis (3 x CRJ), Omaha (1 x E70)

On the original list but not added (yet): Cincinnati, Des Moines, Grand Rapids, Ithica, Madison, Montreal, Miami, Myrtle Beach

(CRJ = Canadair Regional Jet, a type of 50-seat regional jet; E70 = Embraer 170 large regional seats 69 and has a first-class section.)

Expect the press release on the routes being added on March 25 to be out Tuesday or Wednesday.

The second (final) phase of the slot swap happens on July 11, with US Airways adding another 20 or so slots at DCA. Delta is only dropping its single daily flights flight from DCA to Des Moines and Grand Rapids in July. A US Airways DCA – Des Moines flight then would seem likely; interesting though that US Airways is adding CLT – Des Moines in late March. If Grand Rapids happens from DCA, it would happen in July with the airline also adding Charlotte – Grand Rapids and/or Philadelphia – Grand Rapids.

Important US Airways travel note: US Airways uses LaGuardia as a connection point to secondary destinations in New York and New England with the airline’s reservation system still showing LaGuardia flights that the airline will soon be going away. So that (say) Charlotte – Bulington, VT itinerary with a connection at LaGuardia that you have booked for April may or may not still be valid. If you were going CLT-LGA-just about anywhere on US Airways after July 12, contact the airline ASAP. Come July 12, US Airways will only fly to LaGuardia from Charlotte, Philadelphia, Pittsburgh, Reagan National, and Boston.

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Occupy Charlotte protestors burn American flag

And, to be honest, it really comes as no surprise. Why? As someone who graduated from a university where protests were common (UNC-Chapel Hill), I’m pretty familiar with leftist protest types. A fair percentage are anarchists, Trotskyists, etc. And get enough of them together for long enough, and they’ll do something that utterly undermines their claim to represent “the 99 percent.” Like burn two American flags in the middle of the night.

Burning an American flag is protested under the First Amendment as political speech. Burning items without using a fire pit is a no-no though, and that’s what Jason Bargert, Michael Behrle, Stephen Morris, and Alex Tyler were arrested for. Bargert has acted as a spokesman for Occupy Charlotte.

Some charming quotes from Tyler:

“‘I’ve seen this group lose its activism and become lazy,’ said Tyler, adding that the other men told him, ‘We’re going to give Occupy Charlotte a wake-up call.’”

but also

“‘Those were actions taken on my own behalf,’ Alex Tyler said at a camp meeting. ‘I did it to display my utter contempt for American greed, not (the military).’”

Nice double-talk there. I’m guessing that 99 percent of Americans and even some Occupy types would not agree with him that the American flag is the ultimate symbol of greed. Hundreds of thousands of Americans did, however, die to protect the land that the flag symbolizes and that is something that 99 percent of Americans do associate with the flag.

Bonus observation: Why exactly is this below the fold on the front page of the local news section of the Charlotte Observer?

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Yo Charlotteans! Move to LA, Boston, NY or Atlanta for Lower Taxes? Yup.

Do Charlotteans pay more in combined taxes than the residents of Los Angeles, New York City, Boston, Atlanta, Los Angeles and Houston?

Prepare to confront the evidence. The Chief Financial Officer of the Government of the District of Columbia compiled a report of the tax burdens that property, auto, sales and income taxes put on a family of three making $50,000 to $150,000 in the largest city in each state.

The DC CFO shows his work (see page 9), listing exactly how he got there so you can see what Charlotteans pay relative to everyone else. It is eye opening. He inadvertently makes a convincing argument that when total tax burden is figured in, we pay some of the higher taxes in the nation.

Of the 51 cities in the report, Charlotte ranks the ninth highest in the nation in combined tax burden for families of three making $50,000, a crushing 10.6 percent of their income. That is roughly the same tax burden as residents of Chicago, Milwaukee and Los Angeles bear. And it is more than residents of Los Angeles, Boston, New York, Atlanta and just about every other desirable city in the nation.

Charlotte’s property taxes are about middle of the pack among all the cities. (Or they were in 2009, when the report was done. That was before the massive county property tax hike of 2010, which walloped just under half the county with double digit or near double digit tax increases using revaluation.) What kills us in the report is our combined state and local sales taxes, which take an eye-popping $1,286 out of the $50,000 income of that family of three.

Only three other cities out of the 51, Little Rock, Memphis and Phoenix paid more in combined state and local sales taxes.

The other killer that makes Charlotte so expensive for middle class families? State income taxes. Only families in six other cities, Philadelphia, Baltimore, Detroit, Louisville, Portland and Birmingham, paid more in state income tax.

Things are roughly the same for those up the income scale. A family of three making $100,000, pays 10.9 percent of its income in combined taxes, roughly on par with Detroit, Louisville and Milwaukee. Again, we pay more as a percentage of our income in taxes than those in Los Angeles (10.3%), Boston (9.1%), Chicago (9.5%) and Atlanta (9.8%).

What do we have to show for it? What did we get for this from state and local government? Was it worth it. I’ll let you decide.

Hat tip: To PunditHouse.com writer Mike Love for discovering this report.

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Prepare for Charlotte Home Prices to Triple Dip This Year. (Plus How to Time Your Purchase or Sale.)

Look for Charlotte home prices to triple dip this year. The Charlotte Observer just reported that Charlotte home prices are ONLY down 1.2 percent from a year ago.

The overall tone of the article is one of pending improvement, but clip and save this piece. Things are going to get much worse before they get better. Here’s why.

Home values (nationally) are expected to fall another 3.6% by next June, pushing them to a new low of 35% below the peak reached in early 2006 and marking a triple dip in prices.

Here’s why that is virtually guaranteed.  Banks have resolved their robo-signing legal controversy and can now proceed with foreclosures that have been stacking up in the pipeline for over a year. A massive shadow inventory of six million foreclosed homes that are not currently listed on the MLS as for sale will hit the sales pipeline. That’s more than an extra year and a half of housing inventory during a healthy economy.

And then there is the fact that contrary to what the media says, the economy is getting worse, spurring a massive hike in default notices:

Earlier this month, RealtyTrac reported the first quarterly increase in foreclosure filings in three quarters. Even more discouraging: new default notices were up 14%.

There’s also a “shadow inventory” of homes in foreclosure that have yet to go back onto the market.

The specter that those foreclosed homes could flood the market at any time and drive prices significantly lower is a huge concern, said Mark Dotzour, an economist for Texas A&M University. “That’s the elephant in the room,” he said, noting that there are 6 million home currently in shadow inventory.

Combine that with even a few thousand local firings by Bank of America, which is cutting tens of thousands of jobs, and the real estate market here will take a wallop. Fiserv is predicting a modest recovery starting in June. Real estate junkies like me will tell you that is madness. Um let’s see … the market is going to somehow clear out a year an a half of extra shadow inventory in six months when we can’t hardly move what is on the market now?

Maybe in a parallel universe. In this one, three things are obvious. No one knows how fast the shadow inventory will hit the market, but everyone knows it is coming. The odds the banks can even roll out over six million homes onto the market in six months are pretty low. If you are looking to buy a house, wait until at least June, preferably late fall. That will likely save you $10,000 on a $250,000 house.

If you are looking to sell one, don’t hesitate. Slap it on the market now. Maybe you will get lucky. That sucker is declining in value daily. It just hasn’t shown up in the market price yet, but it soon will. Selling your home in the next few months could protect you from a loss in value of at least $10,000, probably more.

Now consider that the Charlotte City Council has long planned a massive tax hike for this fall, and consider what that will do to your home value, particularly if you are renting your property. Best of luck.

The upside by the way is that what you are seeing is the real estate market finally being allowed to crash the rest of the way to the bottom, wherever that is. The faster that happens the better, so the recovery can finally begin after all these years.

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ACC Hoop Thoughts

It’s nearing the end of December, which is to say the out-of-conference portion of the college basketball season is about over. So, we have enough information to draw some conclusions about Atlantic Coast Conference men’s basketball. Overall, the conference has done well — the ACC ranks second both in conference strength of schedule and conference RPI — but that may not translate into it getting more than three or maybe four teams into the NCAA tournament.

Basically, the league so far looks to fall into four clusters of teams:

UNC Chapel Hill (11 wins – 2 losses, RPI rank: 11th), Dook (10-1, RPI: 2nd), and Virginia (10-1, RPI: 29th) have impressed so far. All are nationally ranked.

Florida State (8-4, RPI: 50th), Virginia Tech (10-3, RPI: 56th), N.C. State (8-4, RPI: 61st), and Miami (7-4, RPI: 62nd) are in the next tier. These four schools have taken care of business against weaker opponents, besting all teams they’ve played with RPI rankings of 100+. Unfortunately, they lack signature wins. A closer look at how these teams have done against top 100 teams in the RPI:

Florida State: Wins: #86 (UMass), #87 (UCF), #96 (Charleston Southern)
Losses: #4 (UConn), #20 (Michigan St.) #27 (Harvard), #40 (Florida)

Virginia Tech: Wins: #41 (Norfolk St.), #97 (St. Bonaventure)
Losses: #1 (Syracuse); #17 (Minnesota), #24 (Kansas St.)

N.C. State: Wins: #73 (Texas), #97 (St. Bonaventure)
Losses: #1 (Syracuse); #38 (Vanderbilt), #48 (Indiana), #98 (Stanford)

Miami: Win: #86 (UMass)
Losses: #33 (Mississippi), #35 (West Virginia), #66 (Memphis), #69 (Purdue)

Unsurprisingly, none of these teams are getting any votes in the national polls. At best, maybe they’re bubble teams. All need to make an impression in conference play if they want to make the NCAA tournament. 8-8 in conference gets an NIT bid. The question is just how much of a gap there is between these four teams and the top three teams in the league. Beating UNC, Dook, or Virginia a time or two would go a long way towards getting Florida State, Virginia Tech, N.C. State, or Miami into the Big Dance.

• In the third tier of teams are Wake Forest (8-4, RPI: 100th), Maryland (7-3, RPI: 108th), and Georgia Tech (7-5, RPI: 127th). They’re kind of like the second-tier teams but just not quite as good. Their losses and top 100 wins:

Wake Forest: Wins: none
Losses: #7 (Seton Hall), #49 (Dayton), #90 (Richmond) and, ugh, #221 (Arizona State)

Maryland: Win: #94 (Colorado).
Losses: #18 (Iona), #19 (Alabama), #44 (Illinois).

Georgia Tech Wins: #75 (VCU), #81 (Georgia).
Losses: #22 (St. Joseph’s), #37 (Northwestern), #58 (LSU), #101 (Mercer) and #161 (Tulane)

Boston College (5-7, RPI: 237th) and Clemson (7-6, RPI: 226th) just aren’t very good. Expect them to get pounded regularly in conference play.

Note all RPI ranking as of December 27 at about noon per realtimerpi.com.

Bonus observation: The ACC going 4-8 in the ACC-Big 10 Challenge really hurt the conference. Had the ACC gone 8-4, it probably would get them an extra team or two into the NCAA tournament.

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Merry Christmas!

Annika(m), Gabriel(l), and their cousin George(r) wish you a Merry Christmas.

Merry Christmas! And a Happy New Year! The kids are decked in their Christmas PJs and ready for Santa. Me, too. Annika (center), Gabriel (right) and their cousin George (left). Thank you for being a part of my MeckDeck family all year long! I love you guys!

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UPoR raises prices. Again

Catching up on some paper work, and just realized that I hadn’t mentioned that the Charlotte Observer is upping the price of a subscription again. Looks like effective Monday, the weekend rate (OK, Friday/Saturday/Sunday) is going up from $2.50 to $2.75, so presumably the Sunday paper will costing a quarter more. Got to love them telling me that this amounts to “only a few cents more per day” when I only get the paper three days a week.

And yes, by increasing the cost of a subscription in a down economy with little inflation, the UPoR is saying that it it still burdened by having too many subscribers. Sure this latest increase will relieve them of a few more.

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The Evidence: You Live in the Most Insanely Energy Wealthy Country on Earth

See? And this is with most of our energy supply still kept off limits from extraction by the federal govenment.

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Will the Smart Grid Standoff In CA Come Here?

Charlotte is the test ground for Duke Energy’s smart grid technology. So eventually, you can anticipate that something like this will happen here.

After customers refused their smart meters in Santa Cruz and replaced them with analog meters, PG&E cut their power off. It was only restored after a public debate on the matter at a Santa Cruz board of supervisors meeting.

Meanwhile, Duke plows ahead with its own smart grid. The purpose is clear:

“At a time when peak loads are at their highest and outages are costing Americans $150 billion a year, utilities require solutions to help them monitor, detect and control the conditions that ensure a secure and dependable grid. Our open, application-ready, platform will enable Duke and its partners to build and deploy intelligent distributed control solutions.”

And with that, they’ll begin to collect the data that will let them control your energy use in a manner they think best:

Future data received from intelligent devices across our distribution system will be available for enabling the Energy Efficiency Program …

And what is that?

Put simply, it’s what they call Demand Side Management, where utilities reward or punish customers for energy use during non-peak or peak times. And eventually perhaps, as many fear, allow utilities to control whether you can use energy at undesired times at all.

The media and the utilities have sold the upside of this technology as allowing customers to lower their energy bills. Not so, say consumer advocates. In fact, John Norris, Commissioner at the Federal Energy Regulatory Commission, is now warning that utilities must stop promising customers this:

“There’s this perception that all of this technology will make electricity less expensive,” John Norris, Commissioner at the Federal Energy Regulatory Commission, said at GridWeek. “It won’t. It will make it more efficiently priced. So we have to ask, what is the value we can receive from this?”

The hype of cost savings is an important issue, and one that came up repeatedly at GridWeek. The selling point of saving money should be true in the short term, as people know more about their electricity patterns and can curb their usage or sign up for plans that fit their lifestyle. But the real revolution will go far beyond just different pricing plans. Because electricity is not going to get cheaper in the long haul, many experts at GridWeek argued that utilities need to ditch the argument that everyone will save.

The real profit makers here? Many believe that will be utilities, as they charge higher prices for less electricity due to scarcity manufactured by the politicians. This country is wildly rich with untapped energy resources. We only need to extract them.

 

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The NC Jobs Picture: Face it Folks, This is the New Normal

Contrary to how the media portrays our economic situation, for the last two years, the jobs picture in North Carolina has been remarkably stable and highly predictable. We are just living in a new reality.  Eventually Americans are going to catch on to the fact that we have become France, a socialist country with routine, highly predictable double-digit unemployment. The real estate market charade that hid that ended. What you see now is reality. And it is a stable reality — at least for now.

People can be easily confused by the unemployment rate.

The unemployment rate for North Carolina fell from 10.4 percent in October to 10 percent. But what does that mean?

Here’s what John Quinterno told the News & Observer:

“Yes, the unemployment rate did come down, but overall, we had virtually no real job growth in November, and we really haven’t had much job growth the whole year,” said John Quinterno, a principal at research firm South by North Strategies. “So 2011 is shaping up to be basically the fourth straight year of negative or minimal job growth in North Carolina.”

But surely that’s better than the unemployment rate going up, right? Yes and no. The N&O has been more honest of late in reporting the reality behind these unemployment stats, which I applaud. But they still aren’t giving people the full reality.

Quinterno noted that a little more than 20 percent of the decline in unemployed workers in November stemmed from people leaving the labor force, many of whom have done so because they’re discouraged.

That’s a start. But it isn’t the whole picture. To understand that, you’ve got to ignore the unemployment rate and look at the number of people employed.

The good news is that the state added 47,063 jobs in November.

The bad news is that the state is still down 270,985 jobs since November 2007. But still, adding is better than losing jobs, right? Yes.

But the problem is that we’re down 15,000 jobs since July. Basically we’ve spent the year fluctuating between 3.97 million jobs in this state and 4.08 million jobs. Some months we go down. Some months we go up. It’s like a roller coaster ride with little rhyme or reason to it if you look at it on a chart.

Basically it’s a fluctuation of about 100,000 in the total number jobs from the lowest to the highest point. And that’s typical of most years in NC, whether we are in a recession or not. It’s kind of like job statistical noise.

We did the exact same thing last year, when we fluctuated between 3.97 million jobs and 4.07 million jobs. And in 2005, 2006 and 2007.

What does it mean? It means that those 270,000 jobs we shed in 2008 and 2009 aren’t coming back. The shedding stopped in 2010 and the regular pattern returned. The economy and the job picture have stabilized for now and this is the new normal. Not improving, not getting worse. Jobs wise, the way it is is the new reality, following the same old stable patterns.

The only way to change that is to change the structure of our economy both here and in Washington to favor the growth of free enterprise over government.

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