Monday, February 28, 2011

Monday Morning Musings

Morning roundup if you missed any of these over the weekend or just before:
I am unclear if this is new video or not, but CNN films in Braddock: A Pennsylvania town on the brink
Former local anchor Edie Tarbox is getting a new regular gig on CNN
and just for nostalgia's sake and when the steel industry used to be covered in the media here. From just a couple hours north a headline from Hamilton, Ontario: A future for steel in Canada?
Gasland didn’t win the Oscar, which means the Marcellus Shale Coalition does not need to start advocating a boycott of the commercial movie industry.  Though I am told that in the "man-camps" of Pennsylvania, showing "R" rated movies is verbotten.  I kid you not.



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Sunday, February 27, 2011

Senior Thesis Time

There are like a dozen things in the news today that spark my gene for opining... but who want's to hear all of that.  So I will stick to an obligatory mention of George Will's column today.  He writes today on Wendy Kopp, who founded Teach For America while she was an undergraduate..  essentially it was her senior thesis.  Wendy would not know me for a hill of beans, but at one point I think I lived down the hall from her when she was doing this.  I am pretty sure her thesis was an order of magnitude more interesting than mine, and about a googol times more impactful.  Alas.  Lesson being, you can always be more productive.  

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Saturday, February 26, 2011

Bit by bit

No reason, but the last bits of the former Children's Hospital in Oakland.

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Friday, February 25, 2011

When Nanki-Poo came to town

Friday is good for factoids.  How about this one?

Average employment of Pittsburgh MSA manufacturing firms in 2010:  85K

The last year with fewer manufacuturing workers in the Pittsburgh region: 1885

Notable events of 1885: AT&T founded, Chester Arthur was president and the Mikado opened... and I suspect most of Pittsburgh's current water, sewer, road and housing infrastructure had already been built.

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Thursday, February 24, 2011

Marcellus $$

New PSU report on state tax implications of Marcellus Shale: http://pubs.cas.psu.edu/FreePubs/pdfs/ua468.pdf

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So you want to run for governor?

How much does it take to run for Governor in Pennsylvania?  8 figures it looks like.

With both a contested primary and general election, Dan Onorato's campaign for governor had to spend heavily most the year.  With his campaign's annual report for 2010 now online, the final numbers are that all-in over $19 million was spent during 2010.  Is that the most expensive governor's race in PA history?  I dunno, but how far from the top can it be?

Of the 2,888 itemized expenditures, the biggest amounts collectively went to Philadelphia's The Campaign Group for media buys and consulting.. almost $14 million in total.  The smallest itemized expense? Well, not quite the smallest, but someone's $8.23 venti extra shot latte (I presume) at a Starbucks in Philadelphia has its own line item.

We'll get to a version of this for Corbett, but his expenditures were not all summarized on one report as Onorato had this all reported.. at least on the online reports I see as yet.  This graphic is much more fascinating in the interactive form loaded on IBM's Manyeyes' site.  What it looks like in static form is just this:

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Wednesday, February 23, 2011

Detroit Rhapsody

Many readers here know of the debate and dialogue over Chrysler's long and expensive Super Bowl ad highlighting the auto industry and Detroit.

As cool as the Detroit version is to watch, when it comes to the core message it is trying to send, I just don't see much different between these two industry sponsored video productions; separated by a half century they may be.



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Lawrenceville leads the way

From the Census gnomes.  On this day in history:

"Profile America -- Wednesday, February 23rd.  On this date in 1954, children at the Arsenal Elementary School in Pittsburgh, Pennsylvania took part in a vital medical test.  The youngsters were inoculated against polio -- a scourge that had crippled many children and adults, too, such as Franklin D. Roosevelt.  The vaccine was developed with the backing of the March of Dimes by Dr. Jonas Salk, head of the virus research lab at the University of Pittsburgh.  Its effect was immediate, greatly reducing the number of cases in just a few years.  Now in the U.S., the incidence of new polio cases is rare, as 95 percent of children have been inoculated against the disease.  You can find these and more facts about America from the U.S. Census Bureau, online at http://www.census.gov/.

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Tuesday, February 22, 2011

So you want to calculate your new property tax bill?


So you want to figure out if your property tax bill is going to go up with the new assessment?  Good luck with that.
Trib has begun what will be a tsunami of coverage on the coming reassessment (as compared to the coverage of the political machinations that lead up to it) this year.  They have also compiled via Realstats a lot of numbers which are fascinating in themselves.   You can see their interactive site which shows the change in property values from the 2002 base year reference for Allegheny municipalities and wards in the city.  Worth checking out in itself, there are some increases, and even some substantial decreases, in certain areas.   Wards 10 and 12, East liberty(update, see below) and Homewood have seen a nominal decrease in their housing values by 50%.  So adjusted for inflation you are talking -60, -70% give or take over a remarkably short period of less than a decade. That Eastside spillover sure has been extensive.  Imagine the counterfactual without all that economic development and how far property taxes would have dropped.  And when you compare that value to the average market increase, there will properties that see their tax bills drop by 70-75% if these numbers hold up in the county's assessment model. 
Reality is a bit more painful since to get a market transaction, as is used to compute those numbers, you need to... well.. have a market transaction.  Truth is there is so much vacancy and 'dead' parcels in Homewood that most of the market is not making it to a sale.  In economic speak, the market is not clearing, most likely because the real economic value of most parcels is negative and we just have a hard time dealing with the concept of negative property valuations.  So if we could calulate the actual value of properties in some neighborhoods they would be a lot less than even these numbers. 
Braddock's decline, since it is obligatory to talk about Braddock, is only -35%, but when you are down to an average sales price (even after taking out non-arms lenght transactions mind you) of $13K you have to wonder how much lower you can go.. though to be honest, if Braddock is up to $13K it may represent an improvement in the most recent years.  Scary as that is.

Not to pick on Braddock alone.. Homestead -43%, and down to an average value of $19K, so ditto on the impact the Waterfront has had on the actual community of Homestead.  But again, in both communities it appears tax bills will be cut in half.

Their coverage  also gives a starting point explaining that with county wide assessments going up 25% on average it is estimated, your taxes will go up or down based on whether your home’s assessed value went up more or less than 25%.. not if it went up or down period.  If your home’s value went up by 10%, which would be a decent gain given the national real estate news in recent years, your county tax bill will likely be going down.
Fox Chapel from their data shows an increase in value of 14%.. Which if the county really does appreciate by 25% means that for homeowners in Fox Chapel, their county tax bill at least will actually be going down.  Law of unintended consequences pops up again.
But those are just your county taxes, which for virtually everyone is the smallest of the 3 property taxes you pay if you are a property owner.   Much bigger bills come from your school district and your municipality, and for those the 25% benchmark is pretty much irrelevant.
So with anti-windfall laws pretty much going to force taxing bodies to reset millage rates to keep their collections revenue-neutral with the new assessment values…  will your taxes be going up?  Basically you need 8 numbers to figure that out.
For the county, the average assessment in 2002 vs. now.
For your municipality, the average assessment in 2002 vs. now.
Your school district's average assessment in 2002 vs. now.
Your own home's assessment from 2002 compared to it’s new assessment.
We will skip the added complexities of calculating who is actually paying their tax bills which need to be figured in anti-windfall calculations.  But hold that thought. Probably good to note that the story today was all in anticipation of new assessment values.  Some may be confused; you have not been sent those values yet.  They are slated to begin mailing on July 4th.

I guess you need 3 more numbers to calculate this out..  You will need the millage rates for your 3 taxing bodies to allow you to weight that out, or to calculate your tax bill explicitly.  So 11 numbers in total.  So once you get all that data together, come back to me and we will come up with a number for whether your total property tax bill increases, or decreases.

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Monday, February 21, 2011

Bernardo Katz heads to Federal Court

I'm serious..  or at least I am not lying.  Check it out.

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Daily ranking: "Even beats Honolulu"

Say it ain't so....

Folks are not supposed to beat me to this, but the Economist has again ranked Pittsburgh higher than any other US region for livability.  You can read more on our sustained ascendancy from the Huffington Post.

The UK's Daily Mail has the best headline though.  They literally say:  It's official: Pittsburgh is best place to live in U.S. (it even beats Honolulu)

Reads like they may be suffering from a bit of cognitive dissonance I guess.  Someone should send this over to Newsweek where just last month they ranked us among the most dying cities in America.  My brain hurts.  I guess it would be a good time to go back and rehash some of our history with these livability metrics for what they are worth.

For Professor Loftus' review of Pittsburgh's 1985 top livability ranking... you can read it here: Say It Ain't Pittsburgh

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Red Right Returning

The energy story of the year!  Maybe it will be coal?  Yeah, coal.

You would be surprised what my regular reading list includes, but PilotOnline has a story today:  Coal ships create a traffic jam on Hampton Roads waters.Where is all the coal being loaded in Hampton Roads coming from? I once had to inspect a coal ship loading down there... in a white uniform no less.  Not the greatest idea in the world. 

and you thought this was going to be about shale.  How's Marcel doing?

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Sunday, February 20, 2011

Last call

Just about 24 hours left on the ebay auction of your dreams.  Still no offers it appears for the 104 acres of mineral rights in New York.  A sure thing is it not?   We've given this asset a name.. or the nickname Marcel, short for Marcel the Shell Shale.

Does not this story from Armstrong County scream out for the need for digital records in Pennsylvania... and modern open access to those digital records.  See: Armstrong County Courthouse to stay open late for Marcellus shale research.  Sure seems some folks up there could use some version of our interactive map of energy leases which is limited to Allegheny County. Yet here we are facing the biggest economic development in a century we are told, and the key research behind it is being conducted much as it was a century ago.

and it isn't just workers being imported for the Marcelllus play.. it's academic research.

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Saturday, February 19, 2011

Auto-reply from the Judge

Short of an emergency injunction requiring action because someone is in imminent physical danger, has there ever been a more rapid response from a judge to a filing in a civil case?  It sure seems to me that Judge Wettick had an auto-reply set for the filing yesterday morning by County Councilman, and Chief Executive Candidate, Chuck McCullough.  By the end of the day the response came and it was denied, and denied on mulitple grounds just to make sure there was no misunderstaning.  As Tim transcribes from the Judge:
"You're just too late. You're the wrong person to do this. And I'm denying the petition."
I think that pretty much lacks equivocation. Though for added measure this paragraph is too fun not to mention
Judge Wettick repeatedly shook his head through the councilman's arguments, noting how long his order had been public record. "Why is this an emergency? It's been going on forever. You found out about my order just recently?" he asked.
Reportedly McCullough tried to argue he just found out about the assessment a few months ago. I guess he does not read here. Raises the question of what they do on County Council if he missed the whole reassessment issue somewhere along the way.  Note the Judge's personal timeframe on 'forever' is not hyperbole.  Litigation of county property assessment issues have been before him since Larry Dunn fired the assessors in the mid 1990's. 

McCullough must be the consummate litigator.  Dude must just live in court.  He is like an actor in a one-man play since he plays all the parts.  Plaintiff, defendent, counsel for plaintiff, counsel for the defense, in civil, criminal, even orphan's court....   sometimes all in the same week it seems.

But this isn't about McCullough's legal manuever at all.  Let's bet he is not the last to attempt to try and stop reassessments from happening.  Memo to all politicians, of all parties, philosophies, and candidacies:  When it comes to assessments, there is not any chance the reassessment will be halted.  There is no new legal case to file.  The county attempted to litigate this specific case continuously for 5 years.  They lost.  They appealed.  They lost.  They appealed the appeal... and lost.  They appealed the lost appeal of the appeal... and lost... and were attempting to appeal again against all logic when they finally surrendered. Hiroo Onoda didn't hold out much longer.

If you want to see the final surrender document, that is if you really need something beyond the State Supreme Court ruling against them...  here it is.  A simple declarative statement from the county solicitor requesting that the n'th order appeal be withdrawn.  The result is that the judge is presiding over the county's assessment, and there really is no recourse, because technically they have at this point agreed to what is happening.  Granted I am using the term "agreed" a bit loosely, but still.  If the county tried to back away from this less than tacit agreement I am pretty sure the judge is going to whale on them.

If there is some new grounds for appeal, it's hard to imagine it is not based on an argument that has been argued before...  and denied.  The only thing I think is plausible is an agument that the final withdrawn appeal was issued under a form of duress.  Duress in that I lay good money that the good Judge was nanoseconds from holding individuals and the county itself in contempt for their utter denial of the obvious. Some may recall the final frantic spasms in all of this which included the Chief Assessor publicly blasting the county in and out of court until he was told to go home.  

Have not heard much of Ed Schoenenberger since he left town.  Mr. Google does not give much hint of what he is up to.  Maybe his separation package from the county was lucrative enough to give him a long vacation to Aruba? Nonetheless....

These proceedings are closed.

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Friday, February 18, 2011

Ruble Machine

For a really contrarian view on shale gas development worldwide, the head of Russia's Gazprom (which would be the largest natural gas producer in the world btw) recently likened shale gas to the "internet bubble".  Sounds a bit like sour grapes to me, but still an awfully strong perspective to put into the public record like that. From the world's ultimate natural gas insider. I'd at least pay some heed to the reference to the "rational and logical size" prognostication.

Still, I think making sense of what the real impact to all of this is an awful lot more complicated, or nuanced, than people want to make it..  An interesting story on the economic impact of Marcellus Shale in the region was in the Trib earlier in the week focusing on the indirect impact from pipeline manufacturing.  Headline sounds like it is talking about the big economic impact.  Yet if you read it, its main points say a) US Steel tubular production is down a decent chunk of late,  and b) a new plant being built for pipeline production is out in Loraine, OH.. so Cleveburgh close, but still out of the region and even so is said to generate all of 100 new permanent jobs when completed. That is about the size of net new job creation on the 5th floor of Presby this coming year I suspect. 

It does point out there is one full shift working hard at a new pipeline plant in Ohio owned by TMK IPSCO.  That is some solid impact and some incidental work in Beaver County.  Yet if you recall our history which includes how a generation of steel barons spun off their new wealth locally and gave their name to just about everything.  Not quite sure that will happen in this case where the new profit from those plants has long been making more news in Russia than here.

I really wonder if the subtle message in that story was at the end where it pointed out the reference the industry is making to past natural gas booms in the region. Might not have been intentional??

For the ultimate insight into what the industry itself expects for its future, note the story about how the folks like Chesapeake are hedging 96% of their output for 2011. (I didn't believe that myself, but see page 28 of Chesapeake's own investor presentation) That is the type of thing more insightful to my inner energy analyst than anything else out there. So the folks most in the know are pretty much shouting that prices are going to be plummeting. 

Maybe ebay is more efficient a market than some give it credit for.. still no offers on the Marcellus rights on our NY State ebay listing.  I need to give that listing a name, sort of like NPR's 'Toxie'. We will have to see if anyone makes a bid before it expires in a few days.

Update...  A new name.  Ben the intern says I should name the real estate in NY Marcel the Shale.

Finally.. not sure why this didn't make news here, but it looks like Gulf Oil's return to Pittsburgh had shareholder approval yesterday.  A big deal in the Marcellus biz in the state.

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Thursday, February 17, 2011

Bad bonds, bad bonds, watcha gonna do

So I saw the notice that some Port Authorty debt was being rated and didn't think much of it.. Of course, the way this works is that new debt ratings like that don't normally happen spontaneously, but reflect some new debt offering or other big change.  So it comes as no big surprise that the Port Authority is paying a big penalty to get out from some variable rate debt

$39 million bucks... I wonder what it would have cost if they dealt with it earlier?    No biggie. 

Something I should have caught...  or maybe I did?  I think it is the same debt mentioned here in 2008.  If it is the same debt, then the story today is far less interesting than it could have been.  There is, or was, at least the theoretical possibility of foreclosure on some "T" cars somewhere woven in there.  I have this image in my head of the cars being loaded onto barges for shipment down river and then shipped to Belgium or something.

I also don't get the line about this debt becoming "unpredictable" and thus the reason they had to shell out nearly 40 mil.  I think there are innumerable ways to hedge a debt instrument to make your budgeting less volatile.  Makes no sense as transcribed.  They basically chose to borrow in a highly risky way and chose not to hedge it in any way. 

Alas...  water under the bridge and I like the general theme that this was all just a problem others have gotten into.  No, many many places never got into these binds.  But let's ask the rhetorical question again and ponder what other variable rate, auction rate or 'swaption' debt is still out there looming ready to hit someone's bottom line.  Say large public agencies with big debt outstanding.  Some others with letters of credit about to expire?

Bueller?

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Wednesday, February 16, 2011

Books without Borders

Borders to close stores in Monroeville, Whitehall,(that's Whitehall somewhere out East), East Liberty, and Bethel Park according to bankruptcy filing:

http://online.wsj.com/public/resources/documents/Borders_Closures.pdf


So about half their stores in the region it looks like.  Add in the Joseph Beth closure (someone didn't get that memo) and it's the great Bookalypse. Check the AP style manual, that's what it is called.  What's a respectable TIF to do these days?

TIFaclypse?

and I fully admit I stole the title there from Tweeter YaJagoff. Just too good to pass up.

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Phil's prognostication not so bad......

Poor weather folks are some of the few people more maligned for the predictions than economists...  but still there is just something wrong with this picture.   As of this moment on Wednesday, this is the official weather bug on the PG website:



When you can't even backcast accurately, you know you are in trouble.

Anyway, I still say fire Phil.

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Tuesday, February 15, 2011

Pittsburgh's energy boom



Circa 1916 I should mention.  Though it does read much like the advertisement from our friend Mr. McKelvey. I saw some other ad similar to that recently, but forgot to grab it to make a copy. 

Radium, by the way, was selling for $70,000 per gram at one time around then.  That's nominal, so work it out.  Some say radium was first produced commercially here in Pittsburgh. That $70K price dropped by $50K one day when someone found radium in the Belgian Congo.  I think that would be considered a bad day on the market.

Back to the present, it's not too hard to find folks pitching Marcellus Shale for various forms of investment.  Looks like ebay is a forum for the pitch.  Nothing new in that ad, we've caught these before, but this one is a bit more interesting.  If you read that ad, it clearly says "no surface rights" and the location is in New York state, though the seller is in Pennsylvania.  The ad never mention that New York has a pretty complete moratorium on Marcellus Shale drilling.   It does add the nice map of the Marcellus field though.  As best I can tell, this property is near the edge of the field as marked on that map.  I originally thought it was a joke since the ebay ad starts with "Gasland!", but I take they never saw the documentary.

I am sure someone knows better than me, but I am pretty sure there is leasing activity in New York State, but I bet a lot of the payments are contingent upon NY state changing the law to allow the development to proceed.  So that ad I am guessing is someone trying to make money selling their rights and actually get cash now...  Assuming someone realizes that, by definition a speculative play.

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Monday, February 14, 2011

Daily Hagiography

Quote in an article from GovMonitor today:
 “I believe that Houston – together with Pittsburgh, Baltimore, and Cleveland – could be a model for bringing job creation and economic growth to Providence and Rhode Island...."
It is talking about medical hubs for the most part. The thing is... isn't providence just down the road a bit from Boston?

But more important, the Freakonomics blurb on Ed Glaeser's new book Triumph of the City, set off my Ben Chinitz news alert.  For everyone who thinks this whole 'transformation' history has been simple, scroll down the article for where he goes into the Pittsburgh story a bit.  I guess I have to read the book.  I am told Glaeser will be on Colbert tonight. Something all urbanophiles (small U and apologies to Aaron) will be watching. 

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Sunday, February 13, 2011

Follow those stories and infinitives are overrated

Too many things in orbit today..

PG digs into other city pension issues.  Feel free to crowdsource yourself with what I have put on my iPension page.  I'm sure there are some other stories in there.  The issue remains a lot more basic; why is so little information on the pension system made public.  The current online presence for the pension office is a sublime exercise in minimalism.  If you look really hard you can find a 2009 'newsletter' on the state of the pension system.  Anyway, I don't quite have time to keep that iPension page updated and am more than willing to hear ideas on how to get help to expand it.

Tyler Brûlé's new urban/news/culture fusion show on BloombergTV briefly covers East Liberty's Conflict Kitchen.  He forgot the 'h', but who's complaining. 

Buzz over the latest story on all things Braddock, this time in the NY Times Magazine which gets closer than most at observing how the stylized facts do not quite match the reality we can measure.  We're about to get a 2010 census results, and one of the first things we will all obsess on are population counts of lots of places.. I suspect the population being referenced for Braddock is higher than it really is these days. 

Stories of yet another R running for county executive.  Who knows how to handicap any of this now?  We go from virtually never seeing a contested countywide Republican primary to a 3 or 4 way race (has Drozd actually announced officially?).  With McCullough's entrance, you can look back at the race where he won the county at-large seat, coincidentially one of the few contested countywide primaries in decades and the pattern of the McCullough-Acklin results.  That and someone did predict McCullough would run for County Executive some time ago.

Good oped on workforce issues facing the region and the state.  Maybe I will just rerun the graphic I had posted once of the occupations of Pittsburgh.

Speaking of opeds:  I keep telling you, its Yunz, not Yinz and others agree.  To answer the question of when 'Yinz' became popular, I still think it was the "New Yinzer" magazine that really put it into the vernacular.  Wasn't the origin of course, but when it became the default.

It probably wasn't quite necessary for me to get caught up in this story on adult education in the state,. but a point I generally make is that we often talk about "Pennsylvania" as one big homogenous place when in fact it just isn't.  Relevant to this topic, here is a quick table showing the proportion of the population (age 25 and over) who have a bachelor's degree or higher, by county, within Pennsylvania.  This really is quite an amazing range of values between the high and low end of this.  What I take from it is that it just does not make a lot of sende to talk about Pennsylvania as a whole when it comes to education issues. Not much in common between Fulton and Chester counties here:

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Saturday, February 12, 2011

Orwell couldn't have phrased it better

If there has ever been a more perfect example of doublespeak I can't think of it. Via tha Trib today..  and the context does not matter, just parse the semantics of this line:
Board Treasurer Scott Kunka said although there was no wrongdoing on Kenney's part "from a legal standpoint, there may have been some ethical lapses, and the director lost his job over it."
May have been.. possibly... who knows... who cares.

Is that not the most amazing use of language ever? Of course Scott is the one who just before the administration thought the parking asset lease was a good idea was consistently saying that even mentioning pension funding problems as akin to "crying fire in a crowded theater". That language changed when they decided to pull the alarm themselves.  A phrase they seem to like a lot down there in that it was used again yesterday. Something about seeing every problem as a nail comes to mind.  (I feel obliged to point out that tweeting politicians are so common that economists have felt empowered to study polticians who tweet.. and a former colleague of mine is the editor of the Journal of Information Technology and Politics which also obsesses on such topics... might be an article in all of this for the journal??).

I digress.  I guess what is most remarkable about the statement is that obviously nobody felt any compunction about saying that out loud, let alone putting it into the public record. Says as much about what reaction (or lack thereof) he expects from the public as much as anything else. Consider the implications. No need to investigate Madoff any longer.. I mean, he resigned as well in a sense.  Time to move on. 
Anyway..  PWSA problems of the past are far from over.  Since their disclosure is so limited, I could not be up on the latest developments, but last I checked they have a credit facility they acquired that allowed them to escape from the penalty interst rates of their variable rate debt was only a temporary solution.  That credit facility is due to expire this year and one hopes they have a plan for dealing with that.

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Looking back, looking forward - Nile edition

I like to think one of the points here is to look toward the future and not always be caught up in the reactionary short-term. 

So just pulling this from the archives, it is interesting to look back to 3 years ago and see what I once even wrote on Egyptian Bloggers.  I believe all of the links are still active and worth checking out even today.... or I suppose even more so today.  The blogger Sandmonkey I mentioned has even been a big part of the story over the last 3 weeks... and a big part of the whole story when you think about it.

Keeps things in perspective at least.

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Friday, February 11, 2011

Pension singularities

You know, just reading your quarterly investment statement is not supposed to be an exercise in Bayesian statistics. 

I don't quite understand the story today with the latest quarterly information on the assets of the Pittsburgh Pension Fund. Should be a boring straightforward story as these things go, but it confused me more than it clarifies anything.  It seems to say they just don't know how the investments did last quarter.  How can that be?  Certainly someone knows exactly what the quarterly statement from the investment advisor says for assets on hand, even if there is this odd question of how to value the promise of future tax revenues.. that does not mean it should confuse the reporting. 

It seems to say, and again it does not quite add up to me so I will presume I have it wrong, that after the cash infusion of $45 million, the funds assets are $325 million.  Up from $290 million in the previous quarter.  A good thing....  But net of the $45 million that would have been $280 million which means the funds assets would have gone down.  Not sure anyone noticed, but the stock market in the 4th quarter last year had a pretty solid gain..  maybe +7% in the Dow.  7% over a quarter is what... 28% at an annualized rate which would make it an outstanding year as these thigns go. Those returns do not translate directly to what you would expect of a balanced public portfolio, but if you don't gain ground in good quarters like that, what will happen in bad quarters?  There will be bad quarters. 

So the story seems to be left with the City Controller guestimating what the pension is worth and he says even with the parking promise you get $525-550 million.  Thing is, as of January 1, 2009, the pension liability was already up to $989 million.  That was over 2 years ago and history is awfully clear the total liability is climbing steadily.  I would say it is a decent bet that the current liability is higher and certainly over a billion and close to $1.05 billion wold be my guess.  That would imply $525 million may fall short of providing the 50% funding level already.

So to add to all the paper accounting machinations of last year.. we are now going to be left with this metaphysicial question as to what the state of the pension fund is as of the very last moment of December 31, 2010 vs. the very first moment of January 1, 2011. As of December 31st everyone can play ostrich and pretend the 2 year old actuary numbers are still valid; as of January 1 there should be new actuary numbers used.  The difference will be whether the state takes over the pension system or not.  So it all comes down to a debate as to whether the instant of midnight on New Years is 2400 on December 31, or 0000 on January 1.  This is getting silly.

But I have a real metaphysical question.. This promise of future parking revenues and all.. does it exist in any document.  Is there a counterparty?   If it is a pension asset, does the Pension Board have some piece of paper it could use to say sue the city if the money is not delivered as promised?  Can the pension board sue the city, or is the Pension board itself part of the city?   The state's argument was that the promise of parking revenues could be considered akin to say investment in a REIT.  OK, but even equity in a REIT would be managed by some form of investment manager.  I just and wondering what 'asset' or notional paperwork representing the asset, has been turned over to Mercer.  Could that be causing some of the issues at the moment?

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Thursday, February 10, 2011

To the Cloud: Visioning Pennsylvania

Some may remember my graphic that went with: Southwestern Pennsylvania: Meet your Governments.

Well, below is what you get for the great Commonwealth of Pennsylvania.  The resolution is such that you really need to look at a high-res version or one in PDF to really feel it. Warning in that both of those are big files.  I could never do that for the paper because you can't get that much resolution out of newsprint I bet.  As before, the size of the individual entries are proportional, though not in a linear way, to the number of full time employees a government has.

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Hypothesis

Hypothesis: Transit is being cut precisely where population and jobs are growing the fastest.

Sounds pathological.

Reality: Last Bus Out of Cranberry

Not even going to get into: Spatial Mismatch

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Wednesday, February 09, 2011

We're growing slower than Detroit!

Really.  Read the report.

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Long Blue Wave

So everyone keeps saying that there is an impending wave of police retirements coming for the City of Pittsburgh's police force.   I just wonder if those anticipated retirements are incorporated into the pension actuary's assumptions when calculating pension liability?  Lots more early retirements = bigger pension liability. Also there is a sidebar to that story that it didn't get into, but if the police force can't keep up its active personnel numbers there is a direct hit on the state's contribution to the pension fund. How much does that add up to?  Just asking.

Actually, the story is not quite what it seems and is great case study of demography and policy. Looks to me like a long wave cycle.

There probably is an impending wave, or at least mini-wave of retirements.  Is it because of some vast unhappiness or other current issue in the police force? Maybe not.   Some or most of this should be an expected result of some decisions now seemingly long ago.  In 1993, facing impending financial crisis, the Masloff adminsitration offered the police force an earily retirement option.  That, coupled with the fact that the force at the time was disproportionally near retirement eligibiligy because there had not been much hiring in a long time within the force, both factors contributed to a large number of retirements at the time.  The force then had to hire a lot of younger folks to make up for the personnel loss.  It was a big problem at the time as much of the subsequent years the police force was made up of very junior folks without the senior leadership it had been used to.

So now, we are coming up on precisely 20 years since the hiring that happened back then. Not really a surprise that some or many of that cohort will retire when first eligible.  As the story highlights, lots of options for police officers to make better wages elsewhere so there is plenty of incentive to leave even without retirement vesting.  With it, the reasons to stay drop a lot.

So I like the story looking to current retirement data from the city to try and back up the story.  The first pass said the retirements from 2010 don't show any surge with only 15 total retirements.  I believe that, but the point is that in this case there is strong reason for future trends to be nonlinear in their trend.  The story also hints at that trend saying there were 5 retirements so far this year.. if they mean the calendar year if you ratio that out?

One lesson is that you really see how policy decisions have impacts years in the future.  The Masloff folks were really just trying to balance their virtually unbalanceable budget, but the costs are still being paid for the early retirement plan of 20 years ago. 

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Tuesday, February 08, 2011

Complement or Substitute?

So who wants to speculate what the impact on local casinos will be when Cleveland's new casino opens up.

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Monday, February 07, 2011

Back to work

Apologies for the vanity nature of these, but if you missed these over the weekend......

Wall Street Journal:  Pittsburgh Plays Pension Defense

and Border Guard Bob has not died, he has merely moved to Nevada.  From the Las Vegas Sun:  Flight of Nevada's Brightest.

and no, nothing from me in this, but what is still a shocking statistic in Marcelllus Shale: Workers finding a future in gas drilling in the Centre Daily Times.  It cites a recent report that says no less than 70% of Marcellus Shale workers in Pennsylvania are from out of state. That's remarkable and I just have to wonder if that out of state factor was input into any of the economic impact models that have been used to evaluate the economic impact of the whole shale play thus far.  I would love to see the stats on the relative wage levels of the 30% in-state workers compared to those who are coming in from elsewhere.

The really interesting question that article raises is something else.  It says one of the new Marcellus Shale workers previously "worked in a factory that manufactured pharmaceutical products. "  I really hope some local journalist goes and interviews that other firm to see how they are coping with their workforce being poached by this explosion of new demand for shale workers.  You can read the workers' quotes about how they are being told their jobs are secure for decades.  Might be worth reading this from the Pittsburgh Business Times: Marcellus Shale firms rethink plans due to low gas prices

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Sunday, February 06, 2011

Did NSC 68 address football?

I really would love to be a fly on the wall if and when the Trib editorial board reads Gene Collier’s piece today: Socialism serves fans and billionaires well. There really is something to think about in the way the NFL operates, but even more in the different models of Pittsburgh and Green Bay.

We can argue details and some like to rationalize that this isn’t the case, but Green Bay may be organized as close to the collectivist ideal as is possible in the United States. If you think about it, the Green Bay organization operates as a collective even more so than most any non-profit you can think of. What is more interesting than the fact that the citizens of Green Bay wanted to take on and keep ownership of their team is that we don’t know how unique they would be if other communities were allowed to buy their teams. The NFL no longer allows community ownership which is kind of remarkable for a lot of reasons.

Then there are the Steelers.  Art Rooney by all accounts pretty much exemplified the risk taking entrepreneur.  Maybe more weighted toward the risk.  Then his son Dan pretty much exeplifies a certain business efficiency. Yet yin and yang both are playing the Super Bowl, and both have a consistency at doing well that many teams envy. 

So is this a football game, or a clash of civilization?  That is all just an excuse for me to put up what may be one of the more remarkable images of an era. The symbolism works.

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Saturday, February 05, 2011

Pittsburgh vs. Tampa

No, I didn't confuse our opponent tomorrow.  Some future Super Bowl maybe?

However, it looks like the powers that be have declared an economic war on Tampa. See the biz news from down there: Tampa Super Bowl viewers to learn of ‘Pittsburgh Nation’
Interesting.. and the rationale seems to be that Tampa is being focused on because it is one of many.. "markets with high concentrations of former residents, including Tampa."
True that the Tampa region ranks high in terms of outmigrants from Pittsburgh.  The thing is that for Tampa, those diasporans are disproportionately retirees.  I can't complain though; it's not a Border Guard Bob strategy.  I say let's welcome Gramps back.

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The Google Bowl

From the other day, but here is the de rigueur Super Bowl post from the official Google blog: It's Googler v. Googler this weekend as the Packers and Steelers face off
I have a great idea for the Google apparachniki.  How about the winner of the Super Bowl wins the Google Fiber contest?

I guess that would eliminate Topeka as a candidate.  I do think it might have been worth the brownie points with Google if anyone had thought up any Super Bowl connected PR stunts aimed at winning the fiber contest.   Alas, I should go into PR.

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Friday, February 04, 2011

The Future of Cheese is.........

Suffice it to say, other than possibly the residents of Camembert, France, nobody has ever considered replacing "Cheese" for "Steel" in something like this:


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We interrupt the 24/7 football coverage to note that yet again: Pittsburgh Was Named One of the Top 10 Cities in Which to Buy a Home in 2011.

Almost the same story, but note their extended coverage on our story: The underlining and exclamation point ARE theirs. I keep saying, this is a bigger story than anyone is giving notice to.
"What’s interesting about Pittsburgh is that it is one of the few markets Zillow found where home values are increasing! (on not just a yearly basis, but on a quarterly basis). So they’re climbing upward fast enough to see the progress in three-month chunks. In fact, Zillow discovered that half of homes there are increasing in value. Nationwide, only about a quarter of homes are going up in value."

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Don't know much about geometry

Yes, we wrap infants in Terrible Towels (that almost sounds like child abuse), Art Rooney's biography is an awful lot better known than say William McKinley's*, and an order of magnitude more folks can sing the Pittsburgh Polka than can identify Dvořák, but do we know what we think we know?

By 2nd grade you should have been taught that the Steelers Logo is made up of 3 hypocycloids.  Yet, if you actually look it up, there are lots of hypocycloids.  For example, this is accurately described as a hypocycloid:  the deltoid, or this unnamed 'oid'. Hypocycloids one and all. None of those shapes will be caught on the side of any neomodern Steelers logo. To just describe them as hypocycloids is a lot less precise than just saying they are 3 diamond-like shapes of different colors.

The logo the Steelers use has 3 shapes that are one particular type of hypocycloid.  Ready for this?

They're Tetracuspids, also known colloquially as Astroids.

want more.... here is the optional reading.

* McKinley being Pennsylvania's only elected President to date. (Back to school for me, I guess Buchanan is the only 'official' President from Pennsylvania.  I got confused because I knew McKinley had attended Allegheny. ).  Still.

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Thursday, February 03, 2011

On color-blind passions

I have a serious question. Without minimizing the serious issues of race and disparity that we are so fearful of even talking about; without overhyping even more, if that is possible this week, the impact of sports on everything from the economy to our self esteem…. I still wonder:

Is support for the Steelers the single most color-blind passion in Pittsburgh?

Think about it. On no other topic will you find the same Monday morning quarterbacking of the weekend’s game going on in Homewood or Braddock as you will in Shadyside or Cranberry. You really do. It may be positive, or it may be spewing ire as only Steelers’ fans can dole out when a player underperforms, but it won’t break down entirely along racial lines as most everything else does. There just isn’t much in town that you can say that for at any level.

Even if true, I am not sure what it means, nor whether it really improves our dialogue much. Even if we cheer the same, we don’t necessarily cheer together. Still worth thinking about.

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Wednesday, February 02, 2011

Daily Ranking - inflation adjusted income growth

So I missed this last week, but I was away.  We've been noticing that Pittsburgh has been faring well in income growth of late compared to other regions.. but Wendell Cox in Newgeography.com takes it a bit further and adjusts for regional cost of living differences to measure recent growth rates.  We weren't number 1, but note what picture they used: Personal Income in the 2000s: Top and Bottom Ten Metropolitan Areas

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Tuesday, February 01, 2011

Daily Ranking: Bricks, mortar and jobs

Well, one could note the regional unemployment rate dropped below 8%.  Almost sounds like bad news.

To dig into the numbers beyond the headline...  according to a report from the Associated General Contractors of America the total gain in the absolute # of construction jobs here over the last year, +1,800 between December 2009 and December 2010, was the 4th largest gain among all metro areas. Gain, as in increase. Only Columbus, Dallas and Phoenix had more.  Curious, since I am bit unclear what construction is ramping up of late.

But when have we ever lead the nation in construction employment trends?



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