Foreclosures in the Morrisville area

In teeny-tiny print inside of long boxes there were Foreclosure Notices. One, two, three, four, five -- five-and-a-half pages in the Cary News.

It's startling to see this, but perhaps these have to be published by the end of the year. I don't know. Maybe a reader does and can leave a comment.

The type size was what the news industry calls "agate" (Awfully Gosh Awful Tiny Elements) but I scanned a pageful anyway to see where the locations were. Almost none were actually in Cary. They ranged from one side of Raleigh to the other, and I wonder if the law firm that placed them deliberately avoided the more highly circulated Raleigh New and Observer. Or maybe the Cary News charges less.

Will this cause cheaper groceries coming soon?

Sometime this summer, my Dial soap gained an hourglass waist. While this is a good thing for a person, it's not good for my soap, which used to be solid, rectangular, and gripped well in my hand.

Barring a production line of whistling whittlers at Dial Corporation playing a prank with the product, let's call it package shrinkage, a practice to make up for rising costs.

Shrunken packaging with the same price crept into the stores last year along with rising prices on products that couldn't shrink.

The chart below show the price on the futures market of one contract of wheat (one contract = 5000 bushels). Below is the average monthly cost that industry paid for each contract.






















Easy to see why the cost of things like bread went sharply upwards last year. But wait. Doesn't the chart also show those costs sliding back down the other side of the mountain? I would expect price decreases at the grocery store are to come.

In case you think I picked wheat because of its dramatic trend, here's some other charts with the same curve. Remember that soy, corn, and derivatives of these are hidden in almost every packaged food product we have.

What the Soviet Union knew that we don't seem to

In the short term, financial markets can run amok and play confounding games baffling even the talking heads on CNN. But in the long run, the basics will win out.

Here's the most basic, 101, lesson of economics: There are four factors of production. Factors of production are the things that build an economy, the things that build wealth. There's different schools of categorizing these but here's the way I learned it: Labor, Entrepreneurship, Capital, (money, equipment) and Commodities (the stuff you mine, grow, etc, and land).

All the fancy schemes in the world will only build faux wealth -- the kind that evaporates like so many, well, popped bubbles. Only these four factors will build permanent, lasting wealth in a country.

When was the last time you heard anything like this in all the news talk about the economy? But in the heyday of the Soviet Union, the government understood these factors, and put a hefty emphasis on using them to build their economy. Yes, the country suffered shortages, and communism fell, but these problems arose from distribution and politics. After military spending, the USSR invested most in industry and natural resources. They built machines to build machines. Even a 1970s satire magazine once lampooned the USSR with a soviet calendar that featured not a sexy woman, but a tractor.

Think about the U.S. in the past thirty years or so. We've banished so much of our manufacturing to cheaper locals overseas. High tech was our economic savor until we sent many of those jobs away. There goes a large part of capital and labor. Commodities? Some big ones have run out, like coal in the east. I'm not a proponent of 'drill, baby, drill', and I hate to say it, but we are bypassing lots of oil resources at home that could stem the tide of American $$ and jobs going overseas.

What we have left is entrepreneurship and the part of capital known as Money. In fact, over the years the U.S. economy is relying more and more and using money to make money. Financial institutions have come up with all kinds of ways to make money from money: futures, options on the futures, derivatives on the options on the futures, and short selling when you think the futures have no future. In order to keep this going we had to go into more and more debt. But, and here's my opinion, so many of our financial products aren't building the other factors of production, they're just building more money. And that's not real wealth. That is my big picture on why we're experiencing the collapse that we are now in.

If you have followed so far, you know why I am all for the auto bailout. We have so little manufacturing left in this country we don't need to lose any.

The Big Broadcast of 2008 - Will Americans still rate their entertainment high?

Mixed among the Christmas cards in yesterday's mail was a heads up from Time Warner that they will be wanting a raise next year.

We had just been hearing that existing media companies will be jumping into the TV channel providing service in 2009, which led my husband to be sure prices would have to come down. Doesn't look like it.

In the 1930's, Americans went to movies like crazy and it was assumed the reason was movies took their mind off their troubles. Maybe Time Warner estimates the same thing will happen during this recession, only with TV. We'll see.

The Grapefruit Guage

We drove from Florida to North Carolina a few days ago and I wanted to stop for a bag of grapefruit. The first time I did that was in the mid-90s and I bought those juicy yellow orbs for 10 cents apiece. The last time I did it was two years ago. The price was considerably steeper, but I remember the fruit stand overflowing with bags of Florida citrus the way grapes fall from the edge of a full fruit bowl.

That last time it was crowded too. I had to wait in line.

This time the stand was sparse, showing more stand than fruit. And we were the only ones there.

I had to go inside the gas station to get the vendor who was doing double duty as BP attendant and produce manager.

"Is it the end of the season?" I asked.

"No," he answered, "in fact it's the height of the season for some of these oranges."

I asked if he'd been busy. He hadn't. Not for the past few years. He hoped things would pick up when the kids got out of school and more families made the drive south.

I take it that gas prices rather than the economy originally hurt the off-Interstate vendors. But gas prices have plummeted since early fall and sales aren't improving. I wasn't encouraged either by the next place we stopped; a small gas station off I-95 somewhere in South Carolina where the shelves in the far third of the store were completely bare.

Here's a hint if you happen to own one of these stores. A successful Toronto businessman told this story, but I can't remember if it was Ed Mirvish or Mel Lastman. When he worked in his parent's store as a young man during the depression, he lined the shelves with empty boxes to make the store look prosperous. The shelves overflowed with filler and the trick worked.

My oh my. Didn't even say goodbye - Restaurant Business

"Remington Grill on Airport Road is closed," my husband told me last week. I can't imagine where all those business travelers looking for a quick dinner for one will go now. And goodbye to the all you can eat hand-cut french fries.

"Dakota Grill in the Food Lion plaza closed too," he told me yesterday. Now where can I get fries and gravy, and what about all the two-for-one coupons I got in the mail that I hoped to use after Christmas?

Morrisville and Cary are blessed with more restaurants than most towns and I suppose it was only a matter of time before even some of the good ones could no longer hold up.

We went to dinner at NeoChina on Friday night. Arriving at 5:45 on a Friday used to mean you had to wait for a table but the restaurant didn't even fill up by the time we left at 6:30. OK, it was about 60% full, but really, that's still a notable dropoff. For a real barometer I'd like to try making weekend night a reservation at P.F. Changs. Normally you have to call a day before if you want to eat there on a Friday or Saturday night.

On the positive side, Perkins was hectic as usual for breakfast on Sunday. (No, we aren't eat-out aholics, the power in our neighborhood went out on Sunday morning.)

And here's another positive note about restaurant business in the Raleigh area. I found out while researching this blog entry that Remington Grill didn't go bye-bye. It's just moving to Davis and McCrimmon.