How low do bond ratings go?

So the PG had a story yesterday on how the bond rating for the Rivers Casino was downgraded yet again.

Note that the downgrade happened last month.  Not sure why nobody caught it until now, but you really have to read that story realizing it is about a report written a month ago to fully appreciate what it means.  The rating was dropped not just one notch, but two.. from BB to CCC. CCC being what is deep into what are called "junk bonds". It's not their worst rating, but there is not much farther you can go without literally defaulting on something...  CCC technically is: "currently vulnerable and dependent on favorable economic conditions to meet its commitments".  So things are horrible, but there is still hope might be a better way to phrase it.

Now take into account this was all last month's news and reread the story with that in mind you.  The story quotes the S&P folks as writing the following (reflective of data through November 24th:

...the agency said the average win per machine had fallen from a peak of $250 to about $180 by the week ending Nov. 15.

Unless there's a "significant improvement in operating performance from that observed to date" the casino might not be able to generate enough cash to meet fixed charges, which include the arena payment, in excess of $55 million next year, S & P stated.

Let's parse....   The drop from 250 to 180 per day is a drop of 28%. That seemed to be of concern to them.   Since then the daily take has not shown a "significant improvement", has not shown any rebound whatsoever, has not even stabilized, and has dropped a further 22% to $140 per machine per day as was just released.  Seriously, what would the S&P folks say if they were rewriting that report today?

Yes I know, I know... tables games are going to save us.  or not?  I also realize it's cold which is probably impacting traffic down there.  But you know, it's going to be cold for months and I bet it's cold this time next year.  So cold happens and if they really expect a daily average closer to $300 per machine per day yet have these depressed months.. how much would they have to bring in during whatever their peak season is to compensate?

Gonna try a test and embed my Casino Watch google gadget below.  If it does not work, you can get it directly via this link.

Pennsylvania population growth

Just a factoid extracted from some census data just released with Pennsylvania population trends.

Net Population Migration Into Pennsylvania between 2008 and 2009

Precedent Setting Pittsburgh

Inside Higher Education has its own postscript on the tuition tax.  See:  Tuition Tax Off the Table.

Mostly a summary of what has been reported on for the most part... but near the end it has this:

Though Pittsburgh avoided actually setting precedent for a tuition tax, it has set the precedent for municipalities to take actions that challenging higher education’s traditional contributions in order to squeeze a little more out in a tough economic climate.

editorial note

99.7% of you can skip this.... but I would love to know who it that is on vacationin the Antilles? 

Written as a stare at the remaining ice needing to be chipped in my driveway.

Today's hits: 

Barone on Pennsylvania Supreme Court Race

Michael Barone comments on the recent Pennsylvania Supreme Court election and what it may mean.  He digs into the county by county and region by region breakdown of the results in The American, a publication of the AEI. See: 

A Keystone Election.  by Michael Barone.  The American.  December 22, 2009

I won't quibble with some of the general comments he has in there on the economy here... he has a thorough breakdown of the political numbers.   He might be overinterpreting a bit because of the very low turnout in the whole election without any real headliner to motivate large chunks of folks, but he does have a point I didn't realize.  He says:

...metro Pittsburgh in this recession has had lower than national average unemployment. It is one of the few major metro areas where George W. Bush ran ahead of his father and where John McCain ran ahead of Ronald Reagan.

If that is true it has some implications on what motivated those Reagan Democrats people talk about.  Gotta ponder that some. 

Energy Watch

The biggest energy news this week you may not have read.  Via the Cleveland Plain Dealer is some pretty big news in the midwest electricity market that could impact us at least indirectly if not more. Read about some big changes in the regional electricity transmission networks: FirstEnergy's power move may cost  customers.

Why does it matter?. I need to go check to see if this is still true, but for some time Pennsylvania was the single biggest net exporter of electicity in the US with WV not much further behind.  PA + West Virginia together were by far the biggest block of excess electricity generation in the US. Also, remember the massive grid failure of 2003 started outside of Cleveland and cascaded from there. 

But reading the Plain Dealer's online site http://www.cleveland.com/ is something odd I've been noticing.   The biggest ad buy they seem to have is for Saab.  No joke - see screen shot below.  For those not following it, Saab is on the verge of just being abandoned by GM which is a little fact not  mentioned in the ads.  I presume the warranties are all still going to be supported, but still it's odd. Then I wondered.. Maybe I've been oblivious, but I don't seem to have noticed many online Saab ads at all on either the PG or Trib sites.  Yet they really are somewhat ubiquitous up the turnpike.  Are Cleveland consumers that different from us?  There are Saab dealers here right? I bet our local papers could use some of those ad revenues if my casual observation is correct. 

and just to tie that all together.  I really can't recall who it was I was talking to recently, but someone was telling me what I thought was just a historical footnote for gearheads that Saab had the last 2 cycle engine for sale in the US....   I didn't think much of it, but then there is this story in the NYT yesterday all about how the 2 cycle engine may be the disruptive energy technology that may save the auto industry. 

Yeah, boring. But given its no-nabob season I just don't have it in me to talk about pensions, the city budget, assessments, or other such conflagrations even if they are all in the news in one form or another. Although just fyi... the NYT must have felt obligated to follow up since they reported on the impending 'tuition tax' last week.  Their brief follow up is here:  Pittsburgh Mayor Strikes a Deal to Abandon Tuition Tax.  They also have a note on their higher education blog.  The original article last week topped out with around 300 comments on the NYT site, some quite long.  and if you didn't catch it... Jim R's comments on the whole episode made it into Forbes. 

required reading list

In case you missed these... far more insightful than I am on local issues are recent comments from both my good friends Jack and Carey.

Pennsylvania is a State* &

I will be the first to argue that the Philly and Pittsburgh are very different economically, geographically and in lots of other ways that matter to this... but I suspect lawyers may not care as much about those distinctions and that they may see a precedent in this....   Thus the news out of Philly that a recent abitration ruling that police force will no longer have a residency rule out there could have implications here. Pittsburgh still has it's residency requirement and the local police union folks sure oppose it.  Could put a whole new spin on commuter tax debates.

* apologies to Illyrias for borrowing on a phrase.

& Yes yes... commonwealth.

new 'Burghers and snow?

Don't you think the level of anxiety and the amount of snow being forecasted are a little out of kilter?  I see them saying 2-4 inches.  Even if it's a bit more than that there was a time that amount of snow would have been laughed at. There are some other regions getting socked no doubt, but this is a dusting.  Must be all the new folks in town??  We will get one of those 10-year storms one of these days. If you have broken out the snow shoes you have overreacted.

Nonetheless. on one of the (relatively) least walkable days in months it is a good time to think about walks for the spring.  In the PG, DNJ follows up on my pondering of some Jane Jacobs' walks in town.   See her post in her online CityWalkabout blog/column...  The earlier comments here are from this post.  Sounds like we may have a few volunteers to take this on.  Will need to work out the practicalities of it all, but it seems like Pittsburgh ought to have a role.

The Pittsburgh Ethic and the Spirit of the Parking Chair

but first a jobs note:  We could talk about how the Pennsylvania's unemployment rate droped 4/10ths of a percent... which is a pretty big drop month over a month as these things go.  If it holds up it would be a big event. Some routine coverage of the news, but not as much as usual.  I sense some cognitive dissonance as it were of potentially positive good economic news.   There is also this belief that that Pittsburgh somehow is just slow to get into recessions, but that things eventually get as bad as elsewhere.  That hasn't been true through the last couple recessions at the very least.  So we will learn the comparable local unemployment rate after the 1st of the year, but maybe we will get a strong early indication from local employment numbers that we will be able to look at later today.

But on much more substantive news.  Just in case you didn't see it.   Ms. Mon scoops everyone with what the parking authority is really up to. It's not the garages or the meters, they are looking to privatize the Pittsburgh parking chair business!!  Like the cookie table, it just does not happen anywhere else... at least on such a scale as here.  Hey, maybe that could be a NYT story as well.  As funny as that is, there is a real point in there.   Privatizing the mostly Downtown garages is one thing which I myself suggested last year... but privatizing street meters is going to bump up into a whole lot of local neighborhood perogatives, let alone development issues, which are a different set of issues and should at the very least be a separate debate/rfp/etc.  Probably won't be as best I can tell from the machinations thus far.

and here is an idea..  If it's there I can't find it, but shouldn't there be a Wikipedia entry on "Pittsburgh Parking Chair".  Colbert once was able to get his viewers to get Wikipedia to report that "the elephant population in Africa tripled over the last six months"..  Can we inspire a (far more fact-based) Wikipedia entry on the Pittsburgh Parking Chair.  Don't forget the caps.   If I am just missing it somewhere, pls let me know. 

Data watch

Via the Transportationist is a pointer toward a NYT article today on what may be one of the more perverse stories on government data transparency in the US.  This one involving traffic data. 

Which is half an excuse to post something else found recently via the Guardian's Data Blog (btw does anyone in the US do anything near as good as that?). 

From computing.co.uk dead on about something some of us dedicate a large part of our professional and avocational efforts on improving.  See: Free state data initiative goes local, Local authorities to put health, education, crime and public spending data online.

and a corollary.. Meta-transparency!!  Online information assessing how local governments (in the UK that is) do at data transparency.

I am so depressed.  I feel like I live in a cave. Or trying to use VisiCalc on a TRS80. 

Cookies Rule

See previous post for more but....   This is getting a bit ridiculous.  Well into a 2nd day topping the charts...   wars?   famines?  climate change?  RECESSION??   No... the most emailed story in the entire New York Times is their exposition of the Pittsburgh Cookie Table.  They really need to start covering some more substantive news to attract people's interest. 

Worth noting is that our #1 ranking comes from beating out a story on fish oil and a bit farther down something about walking your dog.  Maybe the point is foodies rule the world... or at least are the only ones reading the news for some reason.

The World Watches II: Revenge of the Cookie (table)

So Mike catches the Pittsburgh double in the NYT today.. Not just the story on Downtown machination mentioned earlier, but there is also a whole story on the Pittsburgh-defining Cookie Table.(it deserves capitals doesn't it?).. and notes I may not be reading the Dining section of the NYT enough. Probably true. 

There is a sublime message in all of that, as well as a reminder of the great cupcake debate.  I have to say I did once pontificate clearly:

"Cupcake targeting risks betting the future on yesterday's recipe. A disruptive technology is always on the horizon. You can never know when chocolate chip cookies or other retro-deserts will come into vogue."

Nuff said on that.

Also, I'd post this within a comment over on Pittsblog, but can't figure out how to put a picture in a comment.   This afternoon here is the shot of the NYT 'most emailed' list.  Does the world care about the tuition tax?  Nary a mention.  But the cookie table?  Number 1 for several hours at a minimum. 

World is watching

I will point out that the whole tuition tax miasma has gotten us into the NYT again.  Today: Pittsburgh Sets Vote on Adding Tax on Tuition. by Ian Urbina. Given what they could have focused on, they were pretty kind to us in general.  Up to 100 comments already as well.

WW

So I missed this... and I figure some of you have as well.  Assessment developments not on the docket. Channel 4 from last week:  Allegheny County Sends Property Assessment Head Home.  The title sounded like they fired the guy, but that was not the story at all.   The video is...  well it's really one of the odder twists in the whole assessment saga is about all I can say and this has been an odd story for so long.

You think the judge watches the evening news?

'eek' squared

eek.    Last week I noticed that casino revenues were the worst since G20 week during the first week of December.  I expected a little bounceback to follow that honestly.  But the 2nd week of December is down again.  Everyone too busy shopping or just too cold to trek to the North Shore.

This is becoming a real issue.  More tomorrow.

most sociable?

Passed on from the ever watchful NS readership... We were beaten out by Edmonton, but Pittsburgh was in the running as one of the most sociable places in all of North America.  So otherwise passed on without comment, because I can't comment with a straight face.  See the 2009 Social Hospitality Awards put out by the Responsible Hospitality Award.  We have merit achievement in 'Safety and Vibrancy'. The general criteria was looking for places that are "outstanding models for planning and managing nightlife". 

OK... that;s too snarky.  A good thing and I suppose the political doings are mostly irrelevant.

lower cost gift ideas

I think discretion rules and we will let this process play out before touching the whole tuition tax miasma...  but you have to wonder if town/gown relations in the city have not reached an all-time low of late. Below everyone's consciousness, but I think there is something going on in the sociology of all this. 

So for the completely uncontroversial comment of the day....   Spotted over at the handmade arcade in Shadyside over the weekend.  Showing my age but I thought this shirt was about my homophonic cousin, but probably not.  Also, GLUE may want to use this shirt as a theme. For your inner yinzer, there is this shirt.  Though my personal favorite shirt remains this one.  (others can opine what else that shirt symbolizes in town)

Also just something I caught in the Philly Inquirer about a contest they have there for identifying the "most beautiful block" they have. Is anyone doing that here?  A 'best Burgh Block' contest.... maybe a complementary 'most improved' contest as well. Anyone?  Could be incorporated into that Pittsburgh version of a Jane Jacobs walk even? 

and yes.. the 'uncontroversial' comment is a joke.  I am quite sure there are still people around who remain upset over ol Sid... probably more upset, or even more aware, than they are of anything to do with the crisis du jour in city finances.

Detroit's future

History as it unfolds. Worth a read: Detroit Free Press has a week-long look at the miasma in their auto industry

and the random news of the day... from New Hampshire is a focused look at the Meadows Casino in Washington County.

"Turn on the lights"

Trib has a thorough retrospective on the economic savior that was to be the USAirways hub at the airport that is really worth a read.

I guess it comes with getting old, but it's amazing to me how much people have forgotten how much focus, effort and sheer $$ went into the idea that airport was to be the economic generator to save the region.  The thing that I never understood, and which I would explain to everyone who asked, was that there was no academic research out there connecting causally support for an airline hub and economic growth. See comments here from 2004, by which time I was just tired of questions from folks on how big the economic impact was of the USAirways hub and even more tired more of people getting peeved when they heard I was not giving out the party line. It's one of those things that people just think should be the case. Indeed there might be.. almost certainly is, a correlation between increase flights and growth.   But as best anyone really has shown, the causality is the other way which would have a lot of implications for money invested on the 'effect'. Some of the greatest policy failures come from folks doing what you try to get introductory stats students to stop doing which is confusing correlation with causality. 

The great irony is that Pittsburgh's great revitalization story has only come into full bloom in the years since USAirways has virtualy eliminated it's hub operation. If one were to draw superficial connections, what would you  conclude from that?   It's been some years now, but for years everyone tried to tie the entire future of Pittsburgh's commercial competitiveness to the number of flights originating here.  Well, those flight counts have collapsed. Should we all shut down our business and complete the diaspora?   It is a good time to go back and look at all the prognostications of doom and gloom for Pittsburgh (in a relative sense) for Pittsburgh if we lost flights.   Maybe there is a reason research can't find the causality everyone just knew was out there.

I am not sure the story is over with. I mentioned recently that my direct, if anecdotal, observation was that bookings on the Pittsburgh to Paris flight are not the greatest. One flight to Paris I was on recently had 83 passengers total (I asked the crew) which made it about a third full. That and it was a pretty reasonable fare as well. That and the recent cancellation of the summer flights Continental had from Cleveland to the UK is a strong indicaton all is not well in the (greater, greater) Pittsburgh market.

Any coincidence there was both this oped in the PG in last Sunday's and this story in the Trib last Monday? Now there is this follow up from the AP out of Cleveland.   The Sunday PG oped makes the argument that 'we' (the royal we?) need to use the Pittsburgh to Paris flight or risk losing it.  No doubt.  Yet the argument to 'buy local' rarely works for any product (steel, agriculture...  your choice) these days whether.  The Trib article is interesting as well and focuses on more marketing $$ being put into the flight. 

The target of opportunity being the loss of Cleveland's flight. Note that Cleveland's flight was a seasonal one so it's cancellation probbaly can't produce too too much additonal demand for a flight out of Pittsburgh.  Peak summer flights are likely satiated no matter, its the off season that will make or break the Pittsburgh to Paris flight, IMHO of course.  But the Trib article has an ominous line that is new to the debate.  It acknowledges generally that:  "officials have said a bad first year likely would result in Delta pulling the plug on the route." That is a gloomier perspective than I have seen in print as yet over all of this. Which goes back to the recent oped in the PG. 

I dunno what it all means in the end.  Economic development is a lot harder that it seems.  The last couple sections of the Trib piece are best.  Folks mad at USAirways?  Yet beyond the name, the USAirways that made anyone any promises is gone... any legal promises washed away by multiple bankruptcies.  The fault is not with companies which if you believe in capitalism have to have the freedom to fail.  The failure was in those who took those promises at face value and didn't come up with any meaningful way to place risks where they should be placed.  In economic development vague 'promises' can't mean anything in the long run, that's why we hire all those expensive lawyers.

We all tend to glom onto the answers that we can focus on and the airport was an awfully concrete thing, literally.  I'm sure we all would like lots of flights and cheap fares. If one assumes there is a tradeoff.. which is what the market really wants?   The airport parking lots are awfully full these days and it probably isn't a coincidence that the county is now considering selling the parking lots.  One little irony is that back in hub days, the local parking was probably not as full and the value of selling the parking would not have been as much as it is now potentially.  Second order effects all around?