Monthly Archives: October 2008

That’s a load of debt

Kansans may be feeling a bit smug in the housing price collapse: “We didn’t go nuts with the mortgage loans.”

Well, not exactly. Some calculations by the First American CoreLogic show that Kansans have an average 73 percent debt to value ratio. That means that of all homes that have mortgages, debt is equal to 73 percent of the value of the average Kansas home. The remainder is the homeowners’ equity, about $10 billion total for all homes in the case of Kansas. It’s a measure of how leveraged (a dirty word these days) we are in Kansas.

What surprised me a bit is that, even though the usual suspects finished worst (Nevada had an 89 percent  ratio), Kansas was well above the national average of 66 percent. The company also figured that nearly 15 percent of Kansas homes with a mortgage have negative equity, which means the debt it higher than the home value. That’s a recipe for foreclosure.

That must be in Johnson County because I haven’t heard of much of that here.

A double standard for Wachovia

Charlotte, N.C., banking behemoth Wachovia tried to stay independent but the Federal Deposit Insurance Corp. said no.

Details of that effort are outlined in a Charlotte Observer story today.

The thing that’s disturbing is that Wachovia’s effort included getting assistance from the FDIC.

The FDIC said no to Wachovia’s plan, but turned around days later and announced that it would provide assistance to Citigroup in its bid to acquire Wachovia.

So, the FDIC said no to Wachovia and yes to Citigroup.

Something just doesn’t seem right about that.

Math lesson: Boeing raise isn’t 15 percent

Nobody will ever confuse journalists for mathematicians, but I would like to share a lesson I learned long ago. Possibly eighth grade. Maybe ninth.

You can’t add percentages.

I bring this up because I’ve read numerous times — like here and here and here — about the 15 percent raise in Boeing’s contract offer to the Machinists union. Only one problem: That’s wrong. The raise is closer to 16 percent.

Here’s how the math works. If a Machinist is making $50,000 a year, he’ll get a 5 percent raise in the first year of the contract to increase his annual pay to $52,500. The Machinist will get 3 percent raises in the second and third years to increase his pay to $54,075 and then $55,697.25. A 4 percent raise in the fourth year will boost it to $57,925.14. That’s a raise of 15.85 percent (57,925.14/50,000=1.1585028).

If it were a 15 percent raise, that same Machinist would be making $57,500. Not a big difference, but I think I’d rather have the extra $425.14 (before taxes, of course) at the end of the year.

Just sayin’.

O-spam-a

An internet security firm, Secure Computing Co., did an analysis of spam whose message line refers to either Obama or McCain.  Not sure what it means, but Obama has a 70-30 advantage in the amount referring to him for good or ill. Here are few headlines:

  • “Obama shows McCain what a real debate should be”
  • “Obama’s private video”
  • “Obama’s Biggest Mistake Yet”
  • “McCain belittles Obama’s abilities”

In reality, once they’re opened they’re the same old crap: male enhancement, etc.  The one telling piece, though, is that McCain references lead when the spam is about discount pills.

Recession?

We in the media have been tiptoeing around the “R-word” for a while, using weasel words such as “downturn” or “slowdown” or “what feels like recession.” Technically, a recession is two quarters of negative GDP growth.

We’re not there, yet. But, today, the first shoe dropped with the release of national GDP showing the economy shrank in third quarter by -.3 percent. I’m betting that other shoe will hit the floor with a deafening bang in the fourth quarter. And then we can call it a recession.

Compare Boeing’s contract offers to the Machinists

The Seattle Times has compared how Boeing’s latest offer to the Machinists union to the one workers rejected August 28.

The union made gains on outsourcing, health care and pension. Missing from the latest offer is a company incentive pay plan.

The chart compares general wages, wages for recent and new hires, pensions, bonuses, incentive pay plans, medical plans and outsourcing  language.

Hats off for chefs

If you’re planning on dressing as a chef this Halloween, good luck finding a toque. You know, the tall, funny white hat that’s been a part of the official chef’s uniform dating back to the 16th Century.

At least, it used to be part of the uniform. While searching for a couple of toques to decorate pumpkins for Trick-or-Treat Street, we discovered most chefs are opting not to wear toques anymore.

Ty Issa at Larkspur checked with his staff and called back to say sorry, everyone is wearing ball caps these days instead. He recommended calling the Wichita Country Club since those chefs tend to still wear toques. Not so, reported club event coordinator Darian Tjaden. A quick check with her chefs revealed that they, too, are wearing ball caps. But she called over to the Airport Hilton for us, and a chef there found a couple of paper toques.

After struggling to get the toques to stay on the pumpkins’ heads (not to mention our own when we tried in fun), I must say I think the ball caps seem to make a lot more sense.

One question, though. Toques used to denote who outranked whom in the kitchen depending on their height. What ranks now? A Phillies cap over a Rays?

Boeing on the rise

Looks like Wall Street thinks the Machinists at Boeing are going to go back to work.

It’s been a good day-plus on the New York Stock Exchange for shares of Boeing. After gaining $6.55 to close at $48.91 Tuesday, Boeing is trading higher again today.

It’s still well below Boeing’s 52-week high of $98.71 but should be good news for a company that hasn’t had a lot lately.

Time to hold ‘em or fold ‘em?

We’ve said a lot, in print and on this blog, about Wichita developers’ penchant for fiscal conservatism. We didn’t overbuild or speculate in the housing market, and that’s helping prop up the local economy.

But we certainly overbuilt commercial space — the dreaded vacant strip centers that popped up like toadstools in a damp yard all across town, location be darned, because real estate was everywhere. So much Tuscany that I’m seeing it in my sleep.

Which brings me to today’s issue: Wichita commercial development has slowed in the face of a national economic slowdown and tighter credit.

So much so that there’s little or no movement, even in projects that seem to have great potential and great location, like Brad Saville’s Holland Place at Kellogg and Tyler and the nearby growth around the QuikTrip at Kellogg and Maize.

Tell me what you think. Is now the time to build, as businesses look for bargain leases? Or is it time to pull back and wait out the economic downturn? Is Wichita done growing commercially, for the time being?

Taming the market madness

One New York firm thinks it has a cure for the madness on Wall Street: Transcendental meditation.

Here’s its reasoning:

Research shows this experience generates highly coherent brain functioning, increasing creativity and intelligence, while providing deep physiological rest and reducing stress for the individual. When practiced in groups, research shows the calming effect of meditation spreads throughout society, creating coherence and order, while increasing creativity in society as a whole—providing the basis for a stable, growing economy.

I suppose anything is worth a shot at this point.

Just in time for Halloween

Below is a story that just moved on the Associated Press wire. Not sure which part is more unfortunate: the foreclosure or the name of the funeral home.

Even the dead can’t escape foreclosure in suburban Detroit.
Five bodies and the cremated remains of 22 people have been evicted from the House of Burns Memorial Chapel, a funeral home in Pontiac.
After removal, they were delivered to the Oakland County medical examiner’s office for storage early Friday. The medical examiner’s administrator, Robert Gerds, said some of the cremated remains date to the 1990s.

What he said

Bill Wilson isn’t alone in his random radio screw-ups.

One day, I was recording three or four business items, one of which was about the B-52 Stratofortress. I practiced saying the word several times before the recording. Then, during the recording, I made such a point of enunciating Stratofortress that it came out sounding ridiculous. I started laughing. Then I apologized to George and tried it from the top again. And, of course, I started laughing again. I couldn’t stop.

Finally, I had to give up on that item altogether. I apologized to George again and just went on. But anyone who happened to hear the rest of my report when it aired probably wondered why my voice was shaking. I wasn’t nervous. I was struggling not to laugh.

George did not laugh. However, he was very nice about it. As he is with each one of my radio forays. You might say I have a voice for newspapers.

Sorry, George!