Will The Economy Ever Get Back In Sync?

I'm doin' this tonight,
You're probably gonna start a fight.
I know this can't be right.
Hey baby come on,

We start off with a little ‘NSYNC because this economy is so out of sync.

In June several key economic indicators were ‘flashing red” and I wrote that I thought the economy was entering into a new recession. Fortunately, this forecast was wrong.   I still believe the economy may have stopped growing for a few weeks around the end of June, but instead of continuing to drop it bounced back to grow weakly in Q3.

Typically when the economy drops to 0% or negative growth, it continues to fall into a recession.  This is why the ERCI (Economic Research Cycle Institute) model has predicted two recessions in the last year that have not happened.  Their model assumes that once the economy stops growing, it continues to fall. However as the economy bounces softly on the bottom of this cycle, this is not happening under current conditions.  Fortunately there is not enough downward pressure to push the economy through the floor, so we are in a holding pattern.

The usually accurate, predictive, economic indicators continue to malfunction.  This is a result of the economy being “out of sync”.  Usually the housing market is a leading driver of the overall economy. However, the housing market crashed much harder than almost all other industries as a result of the Great Recession.  The rest of the economy has been slowly recovering for over two years, but the housing market recovery is less than 8 months old.  Now just as the housing market is picking up steam, the rest of the economy is losing momentum.  This results in the economy bouncing between 0% and 1.7% GDP (I’ll address the most recent GDP report later).

This is the Ying-Yang economy.  We are floating on the ocean, bobbing up and down.  Never sinking, but not really going anywhere either. If this economy was a country, it would be Malaisia.  Just look at the recent data:

Retail Sales – Dipped earlier in the year, but were up 1.1% in September

Industrial Production – Down 1.4% in August, up 0.4% in September

Index of Leading Economic Indicators – Down 0.4% in August, up 0.6% in September

Chicago Fed National Activity Index – Down in August, up in September

Los Angeles Port Activity – Inbound up 3%, Outbound down 2% (latest monthly data). Traffic has basically flat lined for the last several months.

Bank Lending – Very flat for the last several months

Job Growth – July = 181,000. August = 142,000. September = 114,000. Weak and flat.

Inventories – Have outpaced sales, which means manufacturing and freight markets have pulled back

Many Other Industries and Indicators – Are showing a flat pattern with small bounces up and down

What’s Next?

The first Q3 GDP report had the economy growing at 2.0%.  However increased government spending was responsible for a whopping 0.7% of the 2.0%.  Why the government would spend so much money in the quarter before a presidential election, I’ll never know.  It appears that they may have spent the entire military budget in Q3.  This means the Pentagon won’t have any money to buy even toilet paper the rest of the year. But this is the military, so they know how to get out of sticky situations.

I would also bet the farm on the 2.0% number being revised downward  after the election. My guess is the final Q3 number will be no higher than1.8%, which means after factoring out the government spending boost, the “real” growth may have been around 1.1%.

My panel of economic experts forecasts the following GDP growth rates: Q4 = 1.4%, Q1-2013 = 1.5%, Q2 = 1.9%, Q3 = 2.2%.  The good news is the growth increases every quarter.  Of course the bad news is the increases are so small that you have to work your way up to 2.2% growth.  The panel’s forecasts have been very accurate this year so I think this is consistent with this “bobber” economy.  Unfortunately these GDP rates historically have not resulted in a lower unemployment rate.

My guess is the panel’s forecast assumes no change in economic leadership.  So if you keep doing what you’re doing, you’ll keep getting what you’re getting.  But maybe it won’t turn out that way.  The economy is out of sync, but you will know a change is coming if on the morning of November 7 you hear us getting back ‘NSYNC.  

They want better GDP!

I know that I can't take no more
It ain't no lie,
I wanna see you out that door
Baby, bye, bye, bye...
Bye Bye 

We’re Shakin’ Cause The Economy’s Not Bakin’

Good evening, this is Eugene Roush reporting from the World Economic Speedway.  There is much excitement here because in just a few weeks we will find out if there will be a new driver of the U.S.A. car or if people will decide to stick with the current operator.  I am joined today by renowned NASCAR driver Ricky Bobby of Talladega Nights fame.

Eugene: First we are going to talk to current driver Bearleft Orama.  Bearleft, how do you think you have performed as a driver the last four years?

Bearleft: I have driven the car just great.  I’ve put my foot on the accelerator and kept the car on the right course.  I am an excellent driver and absolutely deserve to continue driving for the next four years.

Ricky Bobby: How fast you driving this thing?

Bearleft: I’m doing around a 1.3 GDP.

Ricky Bobby: 1.3! I can go faster than 1.3 riding naked on a tricycle!

Eugene: Now don’t exaggerate

Ricky Bobby:  No really, I have.  Want to see the photos?

Eugene: No! -- Bearleft, why are you going so slowly?

Bearleft: The previous operator of the car ran it into the ditch and caused considerable damage.  Me and my team had to repair it and now this is all the faster it will go.

Ricky Bobby: That sounds like you are making some wimpy excuses.  Are you sure that’s all the faster it will go?

Bearleft: Look, I’m trying really hard and I care deeply about going faster.  I know I’m not driving as fast as the Chinese car, but just give me more time and I know I will drive much faster.

Ricky Bobby: Trailing the Chinese? That’s disgraceful. – Look dude, if you ain’t first, you’re last!

Bearleft: Let me be clear: I am a great driver.  If you don’t believe me, just ask me or anyone on my team. I’m the best there is, plain and simple.  When I wake up in the morning, I whiz excellence.

Ricky Bobby: Hey, that’s my line! (Actual line from the movie: I p*** excellence.)

Bearleft: Not anymore. I’m the king of this track!

Eugene: Now let’s talk to the man challenging Bearleft for the opportunity to drive the U.S.A car for the next four years, Richie Richney.

Ricky Bobby: Those are interesting drivin’ gloves you got there.

Richie:  Oh these aren’t driving gloves; these are my silk driving mittens. They’re from France!

Eugene: Are you sure the people will accept a driver wearing such expensive “mittens”?

Richie:  Why not?  Underneath the mittens, my hands are human, just like theirs, although with a much better manicure.

Eugene: Do you think you can drive the U.S.A. car faster than 1.3 GDP?

Richie:  Are you serious? My grandmother could go faster than 1.3 GDP. In fact all 12 of my grandmothers could drive faster than that!

Ricky Bobby: You got 12 grandmothers? How is that possible? Your grandfather must have been a real tomcat!

Eugene: Why do you believe you would be a better driver than Bearleft Orama?

Richie: I’ve had lots of experience driving smaller cars on other tracks.  I drove the Bain car and had it zooming really fast.  I drove the Olympic car to victory and I once drove the Massachusetts car on the American circuit.

Eugene: How are you going to get the car to go faster?

Richie:  I plan to put high octane fuel in the tank and to take off all the restructure plates.

Eugene: Can you give us more details?

Richie: Uh, no I can’t.

Eugene: How about you Bearleft, what is your plan?

Bearleft: Plan? I don’t really need a plan.  Remember, I whiz excellence.  Just watch me!

Richie: Oh yeah?  I can whiz excellence too! Only faster!

Eugene: Run Ricky Bobby! It’s turned into a giant whizzing contest!

Ricky Bobby: Shake and Bake! I just wish I would have brought my rain coat!

Eugene: Ricky Bobby, what happens if neither Bearleft Orama or Richie Richney can drive the U.S.A. car any faster?

Ricky Bobby: Then it’s time to pray to that little baby, in that little manger…… 

Shocking News About The Volt

Three years ago “American” cars held a 100% market share of my garage.  We favored domestic automobiles due to our “blue-collar” roots.  My father-in-law was a municipal union worker for many years.  I was raised exclusively on United Autoworker Worker wages.  My father was not an autoworker, but worked in a factory represented by the UAW.  This heritage had always influenced our car buying decisions.

But now things have changed.  American cars now hold a paltry 25% market share of my household.  First, my daughter got a used Kia.  Strangely enough, my father-in law (a Korean War veteran) became a strong admirer of Kia cars before his death.

Next, my other daughter chose a Hyundai Elantra for her college graduation gift.  Her other options were a Mazda and a Nissan.  She refused to test drive a Chevy.  I would have forced her to test drive a Ford, but they are not part of our supplier discount program.  Her Elantra was an award-winning model and my daughter is very pleased with the car.

Then my wife bought a Mazda 3 (another award winner) this year.  My wife was very brand loyal to the Saturn brand.  Three years ago we owned three Saturns, and she certainly would have bought another if General Motors had not discontinued the line.  She loves her new Mazda.  My Saturn Aura, one of the best cars GM has ever made, is the last Yankee standing.

The Last "Yankee" Standing

And just as America cars lost market share in my driveway, they also lost share of the total market.  The value and quality of cars started to decline years ago and foreign competition has continued to improve, especially the Korean companies.

American cars are providing less value because they cost more money to produce.  This is the result of paying generous union wage and benefits even in the face of increased competition and foreign companies opening factories in the U.S.  The American companies are also saddled with large pension benefits and retiree medical expenses.  In addition, I believe the lack of competitive advantage has led to complacency in new product design, quality standards and creativity.

General Motors and Chrysler were already in a swirling downward cesspool when the Great Recession hit and threatened to flush the companies away.  Typically, the companies would have gone through a structured bankruptcy.  The purpose of the process is to restructure the resources and debt of the troubled company so it is able to continue operations in a reduced, profitable, condition.  This is very beneficial since it preserves investor, creditor, and employee value.

But there was no structured bankruptcy this time. There was a government bailout with partial government ownership.  Recently several commentators have referred to the bailout in very positive terms.  This is so wrong! A bailout is a very negative thing. It means you have failed so miserably that there is no way you can climb out of the mess by yourself.  It should be a very shameful, embarrassing, occurrence.  

A big government bailout has winners and losers and the government gets to select who the winners are.  It can be argued that the government did not bail out the car companies, but bailed out the UAW.  It some cases union pensions were preserved over salaried pensions and union wages won out over preferred stock holders.

And while a bankruptcy forces a company to correct its bad practices so that it can regain profitability, a bailout doesn’t have to do this.  The government initiated some peripheral changes, but did not address the big issue: GM union wages and benefits are still significantly higher than the competition.  Because the root cause of GM’s problems were not addressed, I expect the U.S. operations (they are doing well in China) to “fail” again in the future.

In a free market economy the government should never own any part of a company.  This is what communists do.  Unfortunately governments do not understand business, but they sure do understand politics.  A good example of this is the Chevy Volt.  It has been reported that a Volt costs $80,000 to produce.  The asking price was $40,000, but there were few buyers so they had to drop the price to $30,000.

The Volt: Shocking "Profitability"

The manufacturing costs will fall as volume rises, but how long will it take for the Volt to be profitable?  And this is a “high-tech” product which means new technology will make the Volt obsolete in a shorter time.  Producing a product for $80,000 and selling it for $30,000 is a business model only the government, and the Underpants Gnomes from South Park, can buy into.  It does produce many “green jobs” however, you happen to be paying for the bailout with your green.

It is also rumored that the recent increase in Volt sales is not just due to the price cut, but has to do with the government buying many Volts for its own use.  Boosting Volt sales before the November election may be very bad business, but it is very good politics. 

Avoiding the Portfolio of Doom

Last time I compared the current investing environment to an Indiana Jones movie.  So what can the average investor do to prevent his holdings from becoming the “Portfolio of Doom”? 

You must cross the high, rickety, bridge to the acceptable rate of return on the other side, without plunging into the crocodile pit below.  Here is some advice on how to do this. I am not a financial professional, however I do manage the GeoDon Fund, a portfolio of stocks and bonds that was originally put together by my grandfather George over 50 years ago.  The GeoDon is up 11.1% YTD vs. 15.4% for the S&P 500.  Not too shabby for a conservative rated fund.

Diversify and Then Diversify Even More

Diversification is needed by the average investor to prevent you from making big mistakes and to spread out your risk.  Because the current environment is so risky, you should diversify even more than normal.  For stock and bond people, this means putting $5000 into two stocks or bonds instead of $10,000 into one.   I know that this increases your investment costs, but paying extra commission reduces your risk is and this makes it worth it right now.

For mutual fund investors, if you are in three mutual funds in your 401-K (the minimum I recommend), consider now spreading your money into two or three more.  Just make sure the additional funds are solid ones.  Look at the five-year history and be aware of how they performed in the worst year because things could get nasty again.

Gold and Silver

Gold should be considered strictly a defensive action and this can be a valid strategy for some people.  Do not consider it a value generating investment.  If you lose money, you received a benefit from hedging against disaster.  If you make money, consider it insurance that paid a dividend.  To rely on it as an investment is the same as an NFL team expecting their defense to score enough points to win the game.   Also, it has been reported that Russia is hoarding gold.  This is driving up the current price, but if Russia decides to unload its holdings in the future, the small investor could get stuck.

Silver is like a gorgeous woman that flirts with you, deceives you, seduces you and causes you to fall deeply in love with her.  It is a sultry, steamy, romance until she crushes your spirit and leaves you poor and brokenhearted.  All the good things the commercials say about silver is true, but don’t be sucked in.  The silver market has a history of suddenly imploding for no reason at all.  A careful investor should avoid the “Silver Mines” when climbing through this wilderness.  And copper presents some danger also.  China has been stockpiling copper, so it could be overpriced and the risk of a future sell-off exists.

Opportunities

People always say “I wish I would have got in at the bottom of that one”.  Well there are two sectors that are very close to the bottom that offer a potential big upside:

Water

Demand for clean water is expected to greatly increase in the future.  Companies that purify, transport and provide this water are still very cheap compared to their potential growth.   You can do the research to determine which are best.  I am planning to add a water company (or ETF) to my portfolio in the near future.

Uranium

Uranium prices are still very low.  China, India and Turkey are expected to build many nuclear power plants in the near future.  In addition, even Japan is expected to replace its old, damaged, nuclear power plants with new plants featuring the latest in safety technology.  Next year, demand is expected to rise while supply, due to some unusual circumstances, is expected to temporarily fall.  This creates a potential for a big price spike.
 

Of course investing in uranium companies is very risky.  But the downside is limited because uranium prices are already depressed and should not go much lower.  I do have some money invested in two uranium companies.  Please do your own research to determine what you may want to do here.

Looking Under the Rocks

This tricky investment environment makes it necessary to look for opportunities in unusual places.  The quest to find good investment takes some creativity.  I have used my new “hyper-diversification” strategy to make small investments in two riskier companies, but there are logical reasons for both.

Can he be trusted with your money?

I invested a small amount of money in the Bank of Scotland.  The bank suffered during the European financial crush, but has made an impressive comeback.  I figure that the Scots are so tight with their money (I am allowed to say this because I am part Scottish) that after almost losing it once, they won’t risk letting it happen again.

I also invested a little cash in a Spanish electric utility.  Again this may look very risky, but it really isn’t.  If things totally collapse in Spain, the very last thing to shut down before all the lights go out would be, well, the electric company.  Until then, the stock is up 47% in two months and I can still sleep well at night.  Invest wisely my friends.

The Sound of Silence

It’s quiet, real quiet, too quiet.  The stock market is quiet, the economy quiet. It’s so quiet, it’s downright eerie.  And just like an Indiana Jones movie, you know when it gets this quiet that something very terrible or very good is just about to happen.  And while this makes for a great movie, it makes things very nervous for investors right now.

Investor “Wall Street” Jones is searching for high returns with low risk, which is now as difficult to find as the lost ark.  Jones survived being crushed by the giant rolling debt crisis in 2008, but now is trying to navigate a financial jungle filled with junk bonds, commodities and Chinese, Greek and Spanish obstacles. He must walk across a very unstable bridge that is built with Euros.  A few years ago the bridge was rock solid, but now the bridge is so rickety that it could suddenly collapse and send Jones plummeting to financial ruin.  He is trying to avoid building the “Portfolio of Doom”.

Jones is very concerning about the lack of activity as he navigates through this jungle.  He then reaches a clearing and realizes why things are so quiet.  All the creatures in the jungle are assembled watching two knights engaged in a brutal jousting match.  The winner will be deemed worthy to fight the nasty, fire-breathing, dragon that goes by the name of “Bad Economy”.

"Bad Economy"

One knight, Sir Barack, has been fighting the dragon for over three years.  The dragon has been winning this battle and in fact Sir Barack’s pants are currently on fire.  But Sir Barack believes he can slay the dragon if he is just given more time.  The other knight, Sir Mitt, believes the dragon should have been slain by now and thinks Sir Barack’s lance is flaccid and incapable of defeating the dragon.  Sir Mitt believes he is rather good with a lance since he has experience slaying smaller monsters.  The jungle is expected to be rather still until one knight is victorious and the battle with “Bad Economy” resumes. 

Quiet Until November?

This election is so pivotal and the difference in choices (and economic direction) is so great, that it seems like the stock market and maybe even the economy (lack of activity due to uncertainty) have ground to a halt.

In a normal presidential reelection year, the incumbent takes significant actions to stimulate the economy and thus improve his election chances.  Congress usually supports these actions because most of them are up for reelection also.  These actions usually work but can be harmful for the economy in the long-term.  However, an incumbent president doesn’t really care.  If he wins, he just thinks “Hey I’m in for four more years, suckers!”  If he loses, he just says to the winner “Good luck dealing with that mess sucker!”

But this year has been very different.  There have been no big economic stimulants and economic growth has been anemic.  Possible reasons for this are:

A.   The economic is so weak that it can’t be stimulated much

B.   The administration has already fired all the stimulus bullets in its economic pistol and so it has nothing left to try 

C.   The administration is so inept that it has no idea what to do (the Republican favorite) 

D.   The administration has all these great ideas (that for some reason were not tried before) but the stupid Republicans in the House of Representative are obstructionists and won’t agree to anything (the Democratic favorite) 

I’m hoping the answer is B, but I fear it could be A or C. (you can vote by commenting after this post)

 

Do Not Believe the Election Year Models

You may read articles about what the stock market does in certain months of an election year and for that matter what will happen after the election.  As I have said several times this year: the traditional economic models and indicators are broken.  This is a strange and unique situation so do not invest based on these historic-based models. 

Something Big is Going to Happen Soon

But things are too quiet.  Something big has to happen before the end of the year, unfortunately in this crazy situation it could be a spike up or a crash down.  If I had to bet, I would bet for a drop.  In May, I forecasted an S&P 500 Index low of 1245 this year before a recovery.  I expected the drop to have started already so I am much less confident of that forecast now.  But it remains quiet, much too quiet.  So put on your Indiana Jones hat, keep your head low, and beware of the snakes that can poison your portfolio.

Beware of the Tax Zombies

I have a Miniature German Schnauzer named “Midnight”. One characteristic of this breed is its ravenous appetite.  Midnight wolfs down every meal and constantly begs for more.  If you gave him all the food that he wanted, he would literally eat himself to death in a short time. He has an almost insatiable appetite for food.


Midnight

And like Midnight, there are people in this country that have an insatiable hunger for tax money.  They want more taxes continuously.  They spend time thinking of new ways to get it.  They make emotional pleas for it.  At times, like Midnight, they even beg for it. 

They are “Tax Zombies” who seek to bite open your wallets and eat up all the cash.  They exist both inside and outside of government. A commentary in last week’s New York Times argued that higher taxes are the solution to all our problems.

But how much taxes would be enough for the Tax Zombies?  Just like Midnight and food, I don’t think there are enough taxes to satisfy them. They would just develop more and more programs and more and more ways to spend the money and then ask for more.  It’s like a spendaholic with a credit card.  No credit limit is high enough because they will always spend all the available funds and then want more.

If allowed, the Tax Zombies would take every dollar you earn and then give some it back in food stamps, housing allowance, and other credits.  Therefore the power to tax is the power to control.  The more you are taxed, the less freedom you have.  An increase in taxes results in a decrease in freedom.  Some taxes are necessary, but nations that figure out how to provide “Public Goods” with the lowest tax rates are rewarded with stronger economies.  Remember that every dollar removed from the private sector in taxes is one less dollar available to fuel economic expansion.  Higher taxes will not solve all our problems – it is the problem.

The Affordable Care Act (aka Obamacare) includes 21 new taxes or increases (7 hitting the “non-rich”).  This is expected in order to be able to cover people who are currently uninsured.  But the problem is how government will manage your tax “contribution”.  Fraud is so rampant in Medicare that it can’t even be accurately estimated.  A sample audit found fraud at over 30% in one location.  There will be much fraud with the government managing the ACA and this is not factored into the cost estimates.  This means the ACA, even if the costs estimates are accurate (and you know they are too low), the program will cost 25-30% more due to fraud.  After you make promises to people and you come up short on funds, how are you ever going to pay for it?  Here come the Tax Zombies again!

Both Illinois and California have huge deficits because they spent way more money than they collected in taxes.  The solution? Even though they already have very high tax rates, both states plan to raise taxes even higher.  The Tax Zombies strike again! My friend Mike just ran (moved) across the border to Indiana to avoid the monsters.

Our enormous tax code is composed of thousands of ways for the Tax Zombies to get your money and thousands of ways you try to keep ahold of it.  We are in dire need for tax reform because running and hiding from the Tax Zombies results in too much cost and inefficient use of resources. 

Economic theory says that collective money (taxes) is necessary to pay for public goods (roads, bridges, security forces, education, etc.)  But the government didn’t create these, it merely manages the process. (Think about it, the government didn’t build the bridge, a private construction company did)  And when you factor in the fraud and inefficiencies of government processes, it manages your tax money very poorly. 

The government cannot generate any revenue on its own, it is dependent on taxes and fees) collected from people who earned income in jobs that were created by entrepreneurs who took personal risks.  These business owners also paid corporate and personal taxes along the way.  So what about those “ungrateful” business owners?  Because of their successful efforts they created jobs that provided the tax money for the “Public Goods” to be produced. Yes they did build their businesses and they helped build those roads and bridges too.    

A Very Different Type of Economic Recovery

This recovery has been inconsistent, sporadic, and unpredictable.  At times it looks like the economy is getting stronger and starting to zoom.  At other times it has looked so feeble that you question if we are making much progress at all.

This recovery is certainly very different from past recoveries.  To get a ground-level perspective on how things are progressing, let’s go back and look at that distressed business district near my home in Stark County, Ohio.

This is the place I have written about before, where things were so bad that the self-serve car wash was encouraging people to bring their buckets with them to wash their cars.   During the depths of the Great Recession about half of the business along this nearly two-mile stretch closed up shop. 

It is interesting to note that the first business to close up was the dancer bar / strip joint.  This happened before the recession actually started.  I believe strippers are a good economic indicator.   This industry is based on disposable, discretionary, male, entertainment, spending.   This type of spending is the first to be cut during bad economic times and should be the last to return in a full recovery.  I think an economics student needs to do a doctorate thesis to prove this.  There is a connection here and of course the research would not be boring.

The owner of the strip club tore down the existing old building and put the property up for sale.  I doubt that he has heard from any interested buyers in years.  And the car wash will still let you “bucket wash”, but business is still slow.

There are signs of recovery in the distressed district.  About half of the vacant buildings have new businesses.  But the types of new businesses that moved in give an indication about the nature and quality of the recovery.  Let’s look at a few of the more interesting ones:

 

Internet Café

This is the ultimate in misnomers because it does not offer Internet service nor is it a coffee shop.   You buy time on terminals that allow you to win money if you are able to click on targets at just the right moment.  They say they are games of skill, but of course it is really just gambling.  Actually it is worse than gambling because it is unregulated which means that payouts are just high enough to keep the pathetic customer hooked.  So far law enforcement has not shut them down and there are many of these “cafes” opening all over Ohio.

Dog and Cat Shampoo 

Kitty right before the shampoo

I am guessing the owner started this business at home and after building up a customer base, moved out into a building.  This is a tough business to grow in a slow economy because people can wash their own pets if necessary.   But this can be a tough job.  Many breeds of dogs will not resist bathing, but cats are another story.  Shampooing a cat can be dangerous for all involved, so the proprietor must be good at what she does.  Many she can video the cat shampooing sessions and then sell DVDs for entertainment.

Arabian Food Market

This business moved into a building where there has been much turnover.  However, I think this business is going to do well.  There is a growing Arab population in the area and there is no competition of any sort for miles.  The location is also close to the interstate which means it can draw customers from a wide area. 

The Gift Boutique

According to an article in the local newspaper, this business opened based on a permit to sell retail purses, women’s wallets, scarves and knick-knacks.  They must believe that it is very stressful for men to shop for these gifts because in the back of the store they offer full-body massages performed by unlicensed masseuses.  Unlicensed masseuses often rub their customers the “wrong way”.  I don’t know whether the opening of the boutique has resulting in greater employment, but it can be assumed that it has resulted in an increase in the number of “jobs”.  A police spokesperson said they are “accessing” the situation, but the business still appears to be open.

The Church 

A local factory closed and put its large warehouse and surrounding property up for sale. This facility was a prime business property because it was situated right off the interstate and just over 10 miles away from an intersecting interstate.  It would have been a great property for a new factory or distribution facility.  

But who bought it?  It was an expanding church.  I have no problem with a church buying the facility.  They renovated the place and it is much better than having the building sit idle.  However something is wrong with your local economy when the organization that is able to gain the most value (by paying the highest price) from this property is a church and not an expanding business.

The Conclusion

Regarding this business district, this is an economic recovery built on saints, sinners, hungry Arabs and smelly cats.  No wonder it is inconsistent and unpredictable.