Wednesday, February 27, 2013

Drip, drip, drip


So this will be a bit circuitous.  Some funny blog metrics of late here lead me down an old rabbit hole. Hang on tight.

Years ago a topic here was the history and impacts of the liens on unpaid City of Pittsburgh property taxes that were repackaged and soldoff to a financial entity created by a company called MBIA.  That is all a story in itself, but tangential for the moment.  Far beyond its Pittsburgh exposure, MBIA was more in the business of insuring municipal bonds. 

In the financial news of late is a new spat between the same Bill Ackman, who has been quite successful himself, with even richer investor Carl Ichan.  They have had some very public spats some may have caught.  This time the debate is  not over MBIA, but a company called Herbalife.  Again, that is tangential, but the history of Ackman's call on MBIA is in the news as a result of this new fight.  I once found and posted a copy of Ackman's old report on MBIA and have had literally tens of thousands of hits over the last month to my web site downloading it. I once even had MBIA itself write me over what I put up about their spat with Ackman, even though I really only cared because of their Pittsburgh investment in liens. Noticing the downloads just the other day got me thinking.

update: I had no idea as I typed that, but it turns out coincidentally that MBIA is in the news today with a rather dire financial outlook about its future.  That in itself may have some implications for local public finance and any local bonds insured by MBIA.  Am too lazy to go look up what debt that may apply too of late, but the bond rating of bond insurers gets imputed into the bond rating of a lot of local bond debt. 

So whatever? eh.   The thing is the MBIA's core failure had to do with a lot of interest rate risks that Ackman pointed out where mispriced at least as far as MBIA was concerned.   MBIA basically insured a lot of variable rate municipal debt and the whole market for variable rate debt was much a fiction in the end.  Bad for MBIA and few noticed.  What other interest rate risks are out there and closer to home.  Some may remember the story of the Pittsburgh Water and Sewer Authority's big variable rate bond offering.

Anyone still reading except for Paz?

So. It just got me thinking a bit. We used to talk about all the auction rate debt exposure locally a lot more. When nobody was reading I didn't care so much that I was talking such nonsense. Still, what was one of the bigger auction rate bonds floated locally? That of the Pittsburgh Water and Sewer Authority in 2008.  Have not thought about the state of the PWSA auction rate bond of late.  The very very short story is that when the market for auction rate bonds collapsed the PWSA was in a big big pickle (that is a technical term) paying 'penalty' interest rates  on their sizable bond. Rates way way above the historically low bond rates regular borrowers were able to get.  The folks who set up the bond, JP Morgan mostly, basically let the PWSA out to dry and would not back the bond in any way.  For a time I believe PNC actually did PWSA a big favor and came into back up the bonds.  You'll have to trust me because the actual explanation of all of it is way way too painful to explicate.

Even Paz has given up on me by now.. Maybe Fester is still out there..   is there any nugget of currency in all of this?

Well.  The problem with the 2008 bond was never really solved, just deferred (deferred being an unfulfilling eupemism for 'kicked down the road').  What I think is too lost in the esoterica is that the PWSA still has over $350 million in variable rate bond debt it has not been able to convert or refinance into more traditional vehicles.. and over half of the PWSA's variable rate debt is callable in 2013.  That would be this year according to my calendar!!  and basically I suspect the PWSA has little plan as to how to deal with it all. All at a time when I think the actual needs for new capital investment in water and sewer infrastructure are higher than ever.  So pure loss financial costs are not exactly a happy thought.

update2.. I swear I did not see this before I typed this all up, but it turns out that the very same PWSA debt is potentially about to be downgraded . That actually is a news item in and of itself.

In summary: this is bad. and this is big. How big?  Whatever the $$ we are talking about it potentially going to cost PWSA, it dwarfs whatever $$ was actually misused in anything and everything going on down at the police buread.  It is just so so much harder a story to tell. I bet the ink/$ ratio for the PWSA debt story will never crack a mill of coverage of whatever is going on down at the police bureau's detail office.

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Tuesday, February 26, 2013

Pittsburgh inflation

Some new inflation data for Pittsburgh is out.  From the Bureau of Labor Statistics last week: Consumer Price Index, Pittsburgh – Second Half 2012

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Monday, February 25, 2013

Port Authority Executive Director to Speak

Just passing this on... interesting in light of recent events:




I didn't say which Port Authority executive director, now did I?

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Pittsburgh makes - the world takes

Apologies to Trenton on the title.  Missed this on Friday...  The Bureau of Economic Analysis has new GDP data for the metro region out.  For those who like to quote numbers, the Pittsburgh region's gross domestic product (which is a measure of value added) is estimated to have been $117.8 billion in 2011.  An increase of 4.8% over the previous year which is a pretty good showing relative to rest of the nation.

So dark blue is good in the BEA's national map:

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Sunday, February 24, 2013

Luminosity doesn't lie

With a big extraterrestrial h/t to tweeting Canadian astronaut Chris Hadfield here is a reminder of just how borderless we really area; no matter how much we deny it:

 
Dare I connect the dots with this AP story running now: Pa. officials mull consolidating transit agencies.
 
I just have to wonder how different that image is from what it would have been in, say, 1944.

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Friday, February 22, 2013

Paleofuture Pittsburgh Riverfront

This is... well, it just is.  The caption there says: "An imaginative waterfront snack-bar like this in Oslo, Norway is just as feasible in Pittsburgh"

 
 
Who needs Prince Charles? 
 
Anyway, this really is from: A Master Plan for the development of riverfronts and hillsides in the City of Pittsburgh (1959) - An analysis of the best possible uses, for the enhancement of its citizens, prepared by Griswold, Winters and Swain, Lanscape Architects, under the direction of the Department of Parks and Recreation. July 
 
Cover had Ozzie and Harriet gone dowsing:


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Wednesday, February 20, 2013

Click That Hood - Pittsburgh

So for all the Pittsburgh/geography/neighborhood wonks out there, this is guaranteed to be addictive.  See the post over on the Pittsburgh Urban blog about the Click Your Hood-Pittsburgh online game.

I say this only half in jest, but if left to me I would have one of the upcoming mayoral debates dedicated to having all the sundry candidates play this game in real time before a live studio audience.

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Monday, February 18, 2013

Gratuitous transit post

The caption says "Pittsburgh's early contributions to the art of surface transportation"



Embarassingly, I have lost my note on where that image comes from.  Anyone?

Apparently Pittsburgh has some role in the development of the trolleybus (electric buses via overhead power lines) in the US? 

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Sunday, February 17, 2013

Ad numerum

Call me left brained, but some stories really could use more quant.

PG today follows up on the pre-obituary for train service from Pittsburgh to New York: Amtrak's Regulars Treasure the Pennsylvanian. Here is the annual ridership from 2012 at each of the stations impacted by this.  This all comes from GreatAmericanStations.com which has a host of data on literally each station. See links below for more on that.

Altoona 26,978
Greensburg 13,395
Huntington 5,837
Johnstown 23,964  
Latrobe 4,669  
Lewiston 8,315
Pittsburgh 129,372
Tyrone 3,108


and yes... to the map. But again, from Mike Hicks of MN what this all looks like visually.

 
I will add one semi-relevant factoid.  All the state subsidies out on the Eastern side of the state for rail.... it looks like both Harrisburg and Lancaster make  it onto the list of the top 25 busiest Amtrak stations in the nation.
 
 
 
 

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Friday, February 15, 2013

All things Heinz

Lots of coverage of the Heinz news.   All I will add is mostly from a post here more than a few years ago about Heinz during World War II

Below are some pictures of Pittsburgh's Heinz plant during World War II when it converted some of its facility to making gliders. So those D-Day troops who landed behind the front lines via gliders most likely delivered in Pittsburgh-made aircraft. Note the picture of a shop floor at Heinz during the war with more than a few women working.






From: Men and Women of Wartime Pittsburgh. Frank C. Harper
 
 
What I also mentioned in the original post was a fleeting reference to Mexican workers brought to Pittsburgh during World War II specifically to work at the Pittsburgh Heinz plants making gliders. There were severe shortages of skilled wood workers here during the war, shortages of all workers for that matter. I have tried to pull the thread on that bit of workforce history.  I will occassionaly have conversations with people who remember this vaguely, or see very fleeting references out in the ether, but thus far I have not really found any hard references.  If there were Mexican workers here, it was most likely as part of the much larger Bracero program the Federal goverment stated in 1942 to bring Mexican workers here because of the wartime demand for workers.  The program continued after the war until the mid 1960s. If anyone has any hard information, or even detailed oral history, I would love to hear about it.
 
 

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Thursday, February 14, 2013

Theseus' Ship

Just saying is all. Note caption in PG today:

 
h/t to MH for the Greek history

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Wednesday, February 13, 2013

3D Pittsburgh

I would propose this idea to the Awesome Pittsburgh folks, but I am pretty sure I need more than $1000 to do this.....   We really need a franchise of this store here in Pittsburgh.  Pop up store anyone?

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Tuesday, February 12, 2013

66.7%

That would be the percentage households in Haysville Borough with some Social Security income.  The highest percentage for any municipality in Allegheny County.  So more than 2 out of 3 households.  I think that qualifies as a Naturally Occuring Retirement Community (NORC).

The lowest you ask?  Ohio Township at 15.8%.Outside of Allegheny county some anomalies:  Valencia in Butler County comes in at 68.8%. I wondered if that was highest in the state, but it isn't even close.  Millstone in Elk County clocks in at over 84% among others that are higher. Those young person voter drives really must go over well up there.

Ohio Township has one of the lowest numbers in the state other than maybe Green Hills Borough in Washington County at 11.8%.

Allthose factoids and more you can find by checking out the State Data Center's latest education dashboard.

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Friday, February 08, 2013

Titanium or teeth?

Just reading two recent articles and wondering which has the bigger current impact on Pittsburgh's economy:

Motley Fool: Will the Dreamliner Ground Pittsburgh's Economy?

Governing: Can Medicaid Dental Coverage Boost the Economy?

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Wednesday, February 06, 2013

Show me the revenue


Nothing wonkier than budgets I suppose.  So everyone I know is obsessed with parsing all the proposed expenditures in proposed 2013/2014 state budget just out. Makes sense; first question for everyone is how will this impact me? I'll pass on the initial summary that most expenditures are stable or modestly up, with no big losers. Overall proposed expenditures are going up +2.4% over the year before (i.e. the fiscal year we are currently a little more than halfway through).   

But what about revenues?  The general expenditure levels are first and foremost set by the anticipated revenues.  The battle for who gets what is really the second order battle after there is a projection (and it is just a projection at this point) of what revenues will be next year. Here are the revenues in the guv's budget (see bottom of page 23 of the budget in brief for summary).
 
 

So a few things. The budget just released is for the 2013/2014. What is being projected?  The +4.1% expected for the fiscal year we are currently in is being projected to scale way back down to just a +1.5% the next fiscal year.  Bad times ahead? A big deal?  Well, the state's total revenue or the general fund is a tad under $28.8 Billion this fiscal year.  So a difference of 1% is about $289 million.  Put another way, if revenue growth next year just equaled the growth anticipated for this year, there would be $750 million more top line revenue in the projection. Now it seems that expenditures are projected to grow +2.4% so someone is not quite as dismal as the revenue projection would have you believe, but still, it all starts with revenues.   
Why such a low revenue projection you ask?  My speculation on the dismal budget forecasting I went into in depth in this recent post: The most important number you have never heard of. In short, it's all about the projection for the state's labor force. Anticipate slow labor force growth and you get slow revenue projections. Might be an interesting question for econo-wonks to debate. Is revenue growth going to be as low as predicted? The answer drives a LOT of budget thinking. I'll just start you out, it turns out that Pennsylvania's labor force is growing pretty fast of late, no matter what the projection is calling for. 

But there is a 2nd question.   How about this years revenue forecast doing?  Forget the dire prediction for next year.  Was the projection for this year optimistic or pessimistic, we are more than halfway through the fiscal year so we should have a good feel for how we are doing.  +4.1% is certainly better than the year before.  So here is the same graph with the latest data through December (in red), so the first half of the fiscal year.  So not that far off,but if anything the budget revenues for THIS fiscal year are coming in ahead of the curve, by just a bit... but a bit that adds up.
 

 
See where this is going? Everyone fights over expenditures, but the battle is shaped by revenues. The budget just being proposed is anticipating just 1.5% additional revenues over the current fiscal year.  Virtually a new recession in Pennsylvaia. The current fiscal year is pacing at least +5% (or 3.5points above what is being projected).   Each of those percentage points in the delta is $280+ million not being budgeted for.  If nothing else, and I fully appreciate the obligatory dismalness of budget forecasters... at a certain point you have to ask yourself how much dismal is enough?  Maybe the bigger question is if there is reason to think Pennsylvania's ecconomy is going to tank pretty soon (FY13/14 starts in less than 5 months) then we should have some explanation as to why giove.

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Tuesday, February 05, 2013

How now brown field?

h/t to @otiswhite for pointing out this article on How Gas Works Park shapes the Northwest today all about Seattle's Gasworks Park.  Worth a read and worth comparing to what we have going on here. 

From the archives here, Gasworks Park was mentioned here long ago in this post: Duisburg on the Mon.Gasworks park is much akin to Pittsburgh's industrial heritage.  The difference being they have attempted to preserve some of it, whereas we are becoming experts at returning our industrial heritage to fallow.  Not much left to save even.  

That old post was actually about Landscape Park in Duisburg, Germany. Duisburg is really about as close to a sister city Pittsburgh can have.  Former industrial center, large inland port, and now university center in the Ruhr Valley of Germany.  Landscape Park is a bit euphemistically named site of a former steelworks comparable in size to what was in Homestead.  You can roam through it from top to bottom, no guide necessary. Something the risk averse legal beagles would never allow in this country.  An obligatory visit for any Yunzer visiting anywhere in proximity.  Now we are left trying to more limited artifact that is the Carrie Furnace.  Maybe, just maybe, it will be saved by toruism generated by the bike trail to be completed imminiently, as ironic as that would be.  Truth is, and I hate to admit, the site has been left to oxidize far too long and may be past saving in any meaningful sense.  If you get a chance though, get out there to take one of the guided tours they offer if only to see the massive guerilla art that has been erected inside. I argue it may be the most extensive mass of guerilla art in the nation. 

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Monday, February 04, 2013

Rail not taken

Many have already noted the news that Pittsburgh is potentially going to lose HALF of its Amtrak service.  So ok.... one train.  But 1 of 2 is 50%.

I saw a great map in development of Amtrak ridership nationally and asked the creator for a Pennsylvania zoom.  So via Mike Hicks of the Gopher State is this great map of Amtrak ridership by station. 



Funny though.  Looks like some folks in Pennsylvania are still planning to use their stations more; even though those stations that may not have service in the future. For serious reading, a summary of the state of Amtrak service was this recently in RailwayAge: Competitive bidding for corridor passenger rail service in play

On Pennsylvania though.  Compare the usage east vs. west of Harrisburg.  Amazing what demand service generates (did the article say 14 trips daily Philadelphia to Harrisburg?).  Supply side transportation economics anyone? What gets me is that after many attempts over many years nobody has figured out how to get bicycle portage to Cumberland or Connellsville.  and if it has not worked in the past, there are all the developments on the Great Allegheny Passage out there.  Even if PA is moribund, you think Maryland might find a way to get pay Amtrak just enough to get baggage service at Cumberland just for the tourism it might generate. I say that fully admitting I am not an expert in baggage car economics. 

For those too pressed to click through to see this, I'll just pass on the cool national version again from the same source.




and if you read the fine print, I can't believe I have to go learn something new. Anyone else use d3js? Need more hours in the day.... that or my personal graphics assistant.





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