More good ink for Oklahoma
Oklahoma and Oklahoma City have been the recipients of a fair amount of good media coverage that has focused on the city’s MAPS-driven, NBA-approved renaissance, and the state’s relatively robust economy. The Economist recently joined the publicity parade with a column titled “Come Home, Tom Joad.”
The “Grapes of Wrath” theme plays out in the article’s final paragraph:
Still, many states would envy Oklahoma at the moment. And its leaders are trying to take advantage. Natalie Shirley, the state’s commerce secretary, says that a few years ago she had the idea of getting a list of Oklahoma university graduates sorted by age, course and zip code. Her office sent out a volley of postcards to young engineers who had scattered around the country, directing them to a website that had a list of job openings and a cost-of-living calculator. Between 2005 and 2007 Oklahoma had some 6,000 transplants from California. The grapes of wrath taste a little sweeter now.
To see the entire column, click here.
Don Mecoy
Business Writer
The $300,000 clunker
The Detroit Free Press ferrets out some fascinating details from government data about the recently concluded Cash for Clunkers program. Someone traded in a 1997 Bentley Continental R, which had an original price of more than $300,000, in exchange for no more than $4,500 credit toward a new car.
Some enthusiasts would have paid many thousands of dollars for the rare 1987 Buick GNX destroyed under the program; only 547 were built. The nation’s supply of used Chevrolet Corvettes was thinned by 131, including 34 convertibles, and the program also liberated 22 Americans from the burden of owning a Peugeot.
And this
And 37 people decided to clunk models that were less than a year old.
Don Mecoy
Business Writer
Consumers stressed about finances
Despite recent gains in the stock market and some improvement in the economy, consumers remained very worried about their finances, according to Financial Finesse, which provides financial data to employees of large companies.
The study shows that counter to recent signs of recovery on Wall Street, economic conditions are actually worsening for many Americans.
“Above all right now, American consumers are financially stressed,” says Liz Davidson, founder and CEO of Financial Finesse. “We’re seeing employees’ financial stress reaching serious levels that we need to be concerned about.”
An overwhelming 98% of employees who used the Company’s online financial planning platform in the second quarter reported they are stressed about their finances, 35% indicating their stress level is either high or overwhelming.
In the second quarter, employees inquired nearly twice as frequently about tapping retirement accounts as they did in the previous quarter, the study showed. Over the same period, calls regarding investing dropped, a sign that consumers aren’t ready to jump back into stocks.
The entire report is available here.
Don Mecoy
Business Writer
Investors pricing stocks for earnings growth
Based on this chart of price-to-earnings ratio among S&P 500 stocks, which has surged since the early March bottom, stock buyers are anticipating that corporate earnings are going to grow. The latest spike shows a 50 percent rise in the index while earnings have declined.
Bespoke Investment Group, which produced the chart, notes: “Obviously if the current bull is going to have any sustainability at all, earnings will have to start growing again. But for now, as evidenced by the skyrocketing P/E ratio, investors are paying up on the hopes of future earnings growth.”
That reflects a surprising level of optimism. (via Felix Salmon)
Don Mecoy
Business News
Car killer: the video
Since my post a couple of days ago that detailed how auto dealers can commit vehicular homicide by pouring a solution into the engines of “clunkers,” I’ve spotted this video of what happens after the car poison is administered.
Don Mecoy
Business Writer
Loans: the good, the bad and non-performing
The state’s largest banking company, BOK Financial Corp., issued a good earnings report this week. But buried within were some numbers that help illustrate the bright side of Oklahoma’s economy and the stark contrast with states that aren’t doing so well — such as Arizona. BOK operates Bank of Oklahoma and separate banks in six other states.
The company reported that its non-accruing loans totaled $353 million on June 30, or nearly 3 percent of all outstanding loans. A non-accruing loan is one that is months past due and no interest is being charged. In Arizona, 20 percent of the company’s loans are non-accruing. Less than 5 percent of BOK loans in Colorado and New Mexico were non-accrual. In Oklahoma and Texas — BOK’s largest markets — the rates were less than 2 percent.
Meanwhile, the picture was even worse when focused on commercial real estate loans. In Arizona, 38 percent of BOK’s commercial real estate loans were non-accruing, compared with 12 percent in Colorado, 6 percent in New Mexico and just 3 percent in Oklahoma.
Another sign that you’re doin’ fine, Oklahoma.
Don Mecoy
Business Writer
How to kill a car
The Cash for Clunkers program requires that vehicles that auto dealers receive be sent to the scrap yard. But before the clunkers are squeezed, slammed and sliced, the engine should be destroyed — preferably with sodium silicate.
Here is the wording from the National Highway Traffic Safety Administration Final Rule document:
The agency has determined that a quick, inexpensive, and environmentally safe process exists to disable the engine of the trade-in vehicle while in the dealer’s possession. Removing the engine oil from the crankcase, replacing it with a 40 percent solution of sodium silicate (a substance used in similar concentrations in many common vehicle applications, including patching mufflers and radiators), and running the engine for a short period of time at low speeds renders the engine inoperable.
Generally, this will require just two quarts of the sodium silicate solution. The retail price for two quarts of this solution (enough to disable the largest engine under the program) is under $7, and the time involved should not substantially exceed that of a typical oil change.
If the dealer removes vital parts, such as the heads, this procedure isn’t necessary.
The agency also testing drilling a hole in the engine block and running the engine without any oil as methods of destruction. That must have been a fun week to work at the NHTSA.
Don Mecoy
Business Writer
10-4, Ben, just keep printin’
Merle Hazard signs “Bailout” as an homage to the classic “Convoy.”
Don Mecoy
Business Writer
You can see the recession in our eyes
Kiplinger.com has compiled a list of 10 “quirky” economic indicators that reflect consumers’ reaction to the recession. Several are related to our eyes:
Total eye-makeup sales at supermarkets and drugstores were up 8.5% in the one-year period that ended on March 22. In that period, more than $260 million was spent on eye makeup – in particular, eyeliner was up 9% and mascara almost 13%, the industry says.
And those sales may be an effort to cover up puffy, sleep-deprived eyes:
The 2009 Sleep in America Poll found that nearly one-third of Americans lost sleep because they were worried about their finances. The poll, by the National Sleep Foundation, also found that 10% of those people tossed and turned, specifically worrying about their jobs.
See the rest, including data on dating, alligators and mosquitos, at Kiplinger.
Don Mecoy
Business Writer
Recession becoming more rare
Economic recessions are becoming more rare, according to Ten, a quarterly publication from the Federal Reserve Bank of Kansas City. (Oklahoma City has a branch of the Kansas City Federal Reserve Bank).
- From the end of the Civil War in 1865 until the end of World War I in 1918, the U.S. economy was in recession about half the time.
- From the end of WW I to WW II in 1939, the U.S. economy was in recession about one-third of the time.
- From the end of the Korean War in 1953 until 1984, the economy was in recession about 20 percent of the time.
- Since 1984, the economy has been in recession about 7 percent of the time, with a recession occurring roughly every 12 years.
Recessions also have become shorter on average. Prior to WW II, recessions average about 22 months. Since then, recessions average about 10 months.
However, the current recession is the longest since the Great Depression.
Don Mecoy
Business News
