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Euan on his hopes for his kids' education - To remain inquisitive & independent

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Urban Chickens - Update

Looking good for the Biggleys and their Chickens

New Ghost Towns

In Canada we remain isolated from what is happening in many US Cities - isolated for now.

As we explore what it is like in the places hit hardest such as Ohio - that have had the jobs go forever - we see the emergence of Ghost Towns. Once unemployment reaches 15%, they seem to die. Here is a story I found on MarketPlace:

"It makes you wonder, if for different reasons, we’re going to see more ghost towns across America. Just think of all those subdivisions and shopping malls that are being abandoned.

John Wasik, author of “The Cul-De-Sac Syndrome: Turning Around the Unsustainable American Dream,” says this:

“The whole premise of the ‘Cul-De-Sac Syndrome’ is we hit a dead end,” he said. “We hit a wall of unaffordability. I want to convey the idea that we are building, selling and developing communities that are not sustainable.”

“Sprawling urban areas with no public transit or connection to a central city … will become ghost towns if high energy prices return and persist,” he writes, adding that both scenarios are likely in a healthy economy.

From an LA Times real estate blog:

A financial analyst fresh from a tour of construction sites in the Inland Empire (east of LA) is warning Wall Street of a “ghost town” where finished homes sit vacant and additional homes are still under construction.

“At several properties, there were a significant number of fully built homes sitting vacant along with a large number of additional homes still under construction,” Sandler O’Neill & Partners analyst Aaron Deer wrote today after touring developments in Corona and Ontario. “At one master plan community, the entire development appeared to be vacant — with the exception of crews working on new construction, it was a ghost town.”

And that was a year ago.

As we talked about a few months ago, cities like Flint, Michigan that don’t want to wind up like Cairo might just tear things down and start over, thinking smaller this time.

Urban Farming - Part of Reinventing America?

As I learn more about the financial crisis - I am drawn to what is happening in the worst hit cities. For if unemployment stays high, what happens in Detroit - Cleveland - Las Vegas could happen in many more cities.

What we are seeing in these baseline cities is both a breakdown of everything we might expect to find in a city and then the emergence of a response from a population that cannot descend any further - groups that know that the only way has to be up and the only people to do this are themselves.

Here are two related stories - the deal with the basics of food and work.

I knew things were bad in Detroit but THIS!

Detroit’s 138 square miles are home to “enough abandoned lots to fill the city of San Francisco,” reports Bloomberg. In an effort to make its unused land more productive, nearly six acres of vacant land out of an estimated 17,000 have been turned into 500 food-producing “mini-farms.”

The 11th-largest American city has been rapidly shrinking; the population decline has been brought about largely by the ailing auto industry, as people move out to find work. The city, which suffers from a $200 million deficit and some of the highest poverty, unemployment and foreclosure rates in the United States, doesn’t have a lot of options.

After decades of failed renewal efforts, the city’s leaders are starting to pay attention to the city’s dwindling size, and to its 55,000 empty lots. On Nov. 25, the city passed a Neighborhood Stabilization Plan that seeks $47 million from the federal government to knock down abandoned homes for development.

Urban Farming, a Detroit-based nonprofit that was started by former pop singer Taja Sevelle in 2005, is hoping that its work helping to clear land and providing topsoil and fertilizer to Detroit residents will catch on. The crops grown on its farms are sold in markets or end up in soup kitchens, and help to raise home values. But although urban farms are innovative, they may not be enough to save Detroit. “I hate to say it … but I wouldn’t put my money in Detroit,” says real estate broker Russ Ravary.

Buying food is a big problem in Detroit - the major supermarkets have all moved out.

DETROIT (CNNMoney.com) -- Detroit is one of America's largest cities, but there isn't a single grocery chain store within the city limits. Spurned by national retailers, Detroit's nearly 1 million residents instead rely on independent stores run by local entrepreneurs for their most basic needs.

So Detroit is instead trying to nurture its home-grown grocery stores and help them grow. For example, the city is working on tax abatements for Honey Bee Market, which expanded in 2006 from 4,000 square feet to 15,000 square feet, and is now dealing with higher property taxes as a result.

Honey Bee Market has been in business on Detroit's southwest side since 1956. Co-owner Kenneth Koehler attributes his store's longevity to selling products that cater to the neighborhood's significant Latino community, as well as being involved in neighborhood events.

"We know the neighbors, we know the people," says Koehler, who has 40 employees. "We look out for them, and they look out for us. "

Koehler also takes care to keep up his store's image and physical maintenance. "It's got to shine, it's got to be clean," he says. "It just has to be very presentable, just like it would be at your home."

Customer service and presentation is key to staving off bigger rivals. While national retailers steer clear of inner Detroit, they're littered through nearby suburbs like Dearborn, Southfield and Warren. University Foods owner Norman Yaldoo sees his store's emphasis on service as critical to its survival.

"We've built a reputation here in Detroit that's really unsurpassed to other stores that have come and gone," says Yaldoo, who opened his store in 1979 and now employs 20 workers. "That's why we're still here. Customers trust us."

Like Honey Bee Market, University Foods pays close attention to local preferences. Yaldoo stocks his 30,000-square-foot with a diverse product lineup catering to various cultural groups that live near University Foods.

That's one area where independent retailers have an advantage over major chains, says Jane Shallal, president and CEO of the Associated Food and Petroleum Dealers, a trade group that represents independent grocers throughout Michigan and Ohio. They can adjust to local conditions.

For example, food stamp distribution can result in a feast-or-famine retail atmosphere in Detroit, with shoppers buying most of their food at the beginning of each month and trickling into stores at the end. Small stores have more flexibility than chain retailers to reduce their hours during slow times.

Independently owned grocers have strong incentives to find ways to adapt and survive:

"This is their livelihood," Shallal says. "They're there for the long haul."

Development official Stella says Detroit is trying to provide additional assistance, such as by helping grocers find financing, secure the zoning they need, and organize focus groups to help fine-tune their product mix.

"You want to stabilize your base and help the strong stores make the changes that can serve the community," Stella says. "We have to be willing to think a little bit differently about urban neighborhood stores, and how you get the best quality and the best selection of products in a small space."

Detroit's citizens are waiting for more grocers to master that tricky formula. Beth Burrelsman, the store manager for Zaccaro's Market, says she still gets calls from people asking when Cindy Warner will be ready to tackle a new venture.

"The way the community tried to come together towards the end to try and 'save' this store reminded me of something you'd see in a movie," Burrelsman says. "The store had a vibrance and a spirit that I've never witnessed before in my 47 years. Working at this store was a gift."  

150 Katrinas?

As markets rise in anticipation of a fix for CIT and analysts ask whether improved bank earnings are a sign that the economy has bottomed out - things are getting desperate in many communities as the number of empty houses blights entire areas.

150 Katrinas is how one person describes this:

“I would say it’s hurricane season for foreclosures and 150 Katrinas are pounding urban neighborhoods across the country,” he said. “It’s forcing us to reinvent the way we do community development.”

Noting that 654 homes in New Jersey were repossessed in February, Mr. Morrissy added, “We have to grow the scale of our commitment — rescue troubled properties, organize citizens as neighborhood guardians, get new homeowners into the picture — or this thing is going to devour us and our neighborhoods.”

Is is a surprise that I see this headline today? (NPR)

-- The Washington Post -- "Poll Shows Obama Slipping On Key Issues": "Heading into a critical period in the debate over health-care reform, public approval of President Obama's stewardship on the issue has dropped below the 50% threshold for the first time, according to a new Washington Post-ABC News poll Obama's approval ratings on other front-burner issues, such as the economy and the federal budget deficit, have also slipped over the summer."

Buy Local - A Huge step Forward

I quote in Full CBC Report.

We can push here for the same!

Dale Kropf calls it Independence Day: On July 3, his five grocery stores in southwestern Ontario ceased to be Sobeys franchises.

Corporate policies prevented him from buying local products, he says, so he joined forces with four other former Sobeys franchisees and formed the independent Hometown Grocers Co-Op.

"We feel that local food, local presence is huge in our market and we wanted to take advantage of that," Kropf says.

Dale Kropf, an independent Ontario grocery store owner, says his customers want the ability to buy locally produced food. (Alison Crawford, CBC)Canadians are increasingly subscribing to the "buy local" and "100 mile diet" philosophies due to concerns over imported food, Kropf adds. "The pressure was always mounting — the more recalls, the more bad press from China or wherever the product was coming from. I know that in our case, our private label pickles are made in Indonesia. I couldn't believe that."

As a franchisee for a large grocery chain, Kropf says, corporate policies stipulating that he only buy federally inspected meat prevented him from stocking local products. Most federally inspected meat in Canada comes from large corporations such as Maple Leaf, Cargill and Tyson.

"Most of our beef was Alberta beef. Chicken and pork could be U.S., so to me, that was a concern that, you know, we've got all these farmers in our back yard," Kropf says.

The nine stores have retained their wholesale relationship with Sobeys for items such as dog food, spices and breakfast cereals, but the chilled meat section of Kropf's store in Elora, Ont., is now stacked high with fresh pork, chicken and beef that comes from no farther than 60 kilometres away.

The stores are located in southern Ontario communities such as Arthur, Durham, Lucknow and Palmerston.

Co-op member Peter Knipfel owns The Chesley Grocery Store in Chesley, Ont., and is part-owner of a provincially inspected local beef processing facility 10 kilometres from his supermarket. Sobeys' corporate policy meant he couldn't stock his shelves with his own beef.

Meat processors frustrated

"We actually put it on our shelves because we felt it very necessary for it to be in our community, and that prompted that we get away from the franchise system, because it was not making them [Sobeys] happy," Knipfel says. "I didn't want to ruffle any more feathers, so we just decided to part company."

At L&M Markets in Elora, Ont., a store owned by Dale Kropf, the shelves are stocked with locally produced meat. (Alison Crawford, CBC)Officials from Sobeys were not available to comment on the company's purchasing policies.

The big grocery chains' insistence on buying federally inspected meat has long annoyed Ontario Independent Meat Processors, a group that represents Ontario's meat and poultry processors, retailers and wholesalers.

"We've strived to harmonize to a standard food safety level," executive director Laurie Nicol says. "We've implemented HACCP [hazard analysis and critical control points] programs to meet the needs of the retailers to ensure the integrity and safety of the product. It doesn't seem to be enough."

Lee-Ann Walker, general manager of the Ontario government's meat inspection program, says she can't comment on why the big-three grocery chains — Metro, Loblaws and Sobeys — don't buy provincial meat. "But certainly we feel that we have a system that is equivalent to the federal system."

Keith Warriner, who teaches in the department of food science at the University of Guelph's Ontario Agricultural College, says large grocery chains have good reason for insisting on federally inspected meat. Warriner says federally inspected meat processors, "can produce the volumes, the consistency, the price and the level of safety."

Backed by paperwork

He adds the federal system is backed by reams of paperwork. "So when an outbreak occurs and the CFIA comes knocking on their door, they can say, 'Yes I got this product from this plant at this time,' and they can trace it [all the] way back.'"

Keith Warriner, a teacher in the department of food science at the University of Guelph's Ontario Agricultural College, says several studies show provincially inspected meat is as safe as meat inspected by the feds. (Alison Crawford, CBC)That said, Warriner adds that several studies show provincially inspected meat is just as safe as meat inspected by the feds.

Kropf and Knipfel say they have full confidence in the quality of the provincial meat inspection system, and they take comfort in knowing exactly where their meat is coming from.

Leaving the franchise nest hasn't been easy, though. The Chesley Grocery Store's Knipfel says putting together and publishing weekly flyers, for example, has been a challenge.

"[Sobeys] has a complete advertising department that assists you in building your advertising and your weekly flyers, so that all is the growing pains. It's a lot of work, and we're learning every day," Knifel says.

Kropf agrees that the franchisor provided a lot of expertise in promotion and human resources.

"You wake up, the prices are in your system. If there is a problem, you pick up the phone and they fix it. Now if there's a problem, we fix it. Now that comfort level has gone away and we're truly back to being an independent business again."

However, he says there are benefits to his newfound independence in the produce aisles. Kropf says Sobeys did permit franchisees to buy local fruit and vegetables, but items that don't grow in Canada or were out-of-season came in big boxes from a centralized distribution point. He says co-op members can now control the quality of their produce, and the group has hired a buyer to hand-pick fresh fruit and vegetables at the food terminal in Toronto.

"He actually looks at the quality. If the quality isn't good, we don't have it [in our store]. So before we would just get it. We'd put it out and it would either sell or it wouldn't sell," says Kropf. "Green beans is a prime example where we're now selling more green beans than we've ever sold before because they are No. 1 quality."

'Support our farmers'

For his part, Peter Knipfel says he's discovering more about what's growing locally. At his store, he says grape tomato sales have tripled since the switch to a local producer.

Ontario independent grocery store owner Peter Knipfel says some types of local produce can be pricey, but on average locally produced goods are competitive with those sourced from outside the community. (Alison Crawford, CBC)"We are now a group of nine stores that probably have a little bit of buying power to buy larger quantities of local tomatoes, larger quantities of cucumbers from, say, some of the Mennonite farmers that are producing it at Elmira market, for example," he says.

Mary Copp has shopped at Kropf's store in Elora for 30 years. She says she noticed the changes immediately. "I think it's great because we look for local, and you can get it here. You can't get it at [chain-store rival] Zehrs … well, sometimes you can, but not as much."

Shopper Linda Tompkins of Chesley agrees, "I don't want food from some place else when we've got food right here. Support our farmers."

Still, Warriner predicts that while that more consumers are asking for local produce, they will always be the minority. The University of Guelph professor says like organic produce, local will always be a niche market because mass production generally leads to cheaper prices.

Co-op members concede some of their wares are more expensive than those of the competition, but add that on average they are competitive. "We're not saying we're the cheapest but we're certainly not the most expensive either," says Knipfel.

Kropf adds that the ability to offer locally produced food is ultimately about quality first, price second.

First Steps - Becoming a human

If you think that the the economy is coming back soon - Read this

The market ticker Karl Denninger - 

Again, we continue to see the same sort of theme in industrial and consumer products reporting - Harley Davidson (NYSE: HOG) reported units shipped down 30% year over year yesterday, and now GE out with a 17% year over year revenue decline.

Stocks are, at their core, priced on earnings growth, with the most-common ratio used for such metrics being P/E/G, or Price-to-earnings-growth.

But earnings are not growing, they're contracting - dramatically - in percentage terms over year-ago levels.  How can it be otherwise?  Even with no inefficiencies due to firms having too many employees for the revenue contraction that is occurring, a 30% reduction in business done should lead to a 30% decline in profits earned.  Add to that the fact that firms are nearly always behind the curve and you have profit declines that are much larger - in some cases 100% or even going from a profit to a loss.

This is not a circumstance that will reverse in the immediate future; in order for it to do so, revenue must come back up, and in order for revenue to come back to pre-bust levels, we would have to re-inflate the credit bubble - which simply cannot happen............. More follows

Recall all the guys who told you to buy as the market crashed are telling you to buy now

Thanks John Robb - as usual a great source

If you read one article this year - let it be this one

Link here

If Fox doesn't do it for you - Jon Stewart and Paul Krugman

Jon - Here

Paul K - Here