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Friday, January 24, 2014

Anecdotal travel experiences confirm consumer is not spending and local government is getting dumber

good thing I shorted the market on tuesday. There are things that I'm seeing on my travels that may help myself and others to get a sense of the consumer and real estate markets -  first person experiences I am having with Americans:

  When I was in Michigan trimming trees after the ice storm, I was surprised that MOST of the suburban homeowners of half acre, 2000 sq ft homes with trees can't afford the cost of a simple "hazard reduction" tree trimming job.  IN FACT, the travelling ragtag tree trimmer crews who came to Lansing to work in the affluent suburbs seem better off financially than the homeowners!  If one studies it, the tree guys had short and long term income potential, by virtue of a productive, gainful employment skill whereas the Lansing residents seemed to have financial anxiety and depression.  Something is wrong with the local economy when upper middle class homeowners cannot afford $700 to cut down a dangerous tree that may fall during the next thunderstorm on their house.

Another telling anomaly I discovered in Lansing, Michigan was that the the towns of greater metro area were publishing debris pickup dates for residents to place branches on the curb for recycling, and the towns were sending the organic debris to the landfill!  Tree branch chips are the most valuable and cheapest, most proliferate natural compost for any gardener.   They are also a great source of renewable, stored energy.  And, as I found out, there was a 100 million dollar wood chip/natural gas power plant project developed by the power company and the city of Lansing, which had recently gone into service. It was the pride of the papers.   I called towns to ask why, when chips can be used at the power plant, or easily sold as composting mulch to farmers or landscapers, were the chips being landfilled.  The answer was that the wood chip power plant was overwhelmed with material and that neither the dump or city procurement offices had the appropriate leasable land to store the chips until spring, so they were being landfilled.  It sounded to me like an inside job!

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