Tuesday, December 10, 2013
Commercial Confidential tracks Maine's business leaders and economic indicators.
I'm an economics wonk and an online content producer for the Portland Press Herald.
"On the Move": Submit items of interest regarding new employees, promotions and professional honors — with photos and LinkedIn URLs — to business [at] pressherald.com.
Reporting and explaining the global economy is difficult: the narratives are complicated and they literally span the globe.
NPR's "Planet Money" team took on the challenge with a product that seems relatively simple: a t-shirt. Reporters and videographers went from the cotton fields of Mississippi to the textile plants of Indonesia to the sewing factories of Bangladesh, and the resulting story is both beautiful and amazing.
It's also a really nice example of web-based journalism. They even financed all the globetrotting by pre-selling the t-shirts on Kickstarter instead of relying on pledge drives.
Occupy Maine, take note: if you want your business leaders to get worked up about the ills of capitalism, forget about fast food workers and focus on your local pro sports teams.
We often hear from Chamber of Commerce types that government ought to be run "like a business," but now that the Cumberland County Civic Center's board of trustees is managing the arena in the best financial interests of its taxpayers and driving a hard bargain with the Portland Pirates hockey team, the Portland Community Chamber is calling for a coup d'état, as detailed by Bill Nemitz in his column today.
The reason the Pirates left, you may recall, is because the Civic Center turned down a weak lease agreement with the hockey team in favor of hosting other, more lucrative events.
It was a perfectly capitalist decision, made in pursuit of maximum profits. Nemitz points out that Neal Pratt, the Civic Center's hard-nosed negotiator, actually won a prestigious award from the Chamber of Commerce earlier this year for his work as the Civic Center's board chair.
Via Jason Kottke, here's what Twitter's home page looked like during its awkward childhood back in 2006.
Seven years later and this is worth $31 billion, supposedly.
Randy Billings has a story today about a small boom of housing units being planned or built on small infill lots in Portland's East End. A quote from the story:
“There are a lot people who would like to live on Munjoy Hill, for example, but they don’t want to live in the type of housing that exists right now,” said Jeff Levine, the city’s director of planning and urban development.
Neighborhood residents have mixed feelings: they welcome new investment and vitality as housing replaces vacant lots, but they're also wary of rising rents. "We want to keep the balance where people feel it’s a comfortable and affordable place to live and not overrun with high-end, impossible-to-afford places,” said Andrea Myhaver, president of the Munjoy Hill Neighborhood Organization.
The typical metric for home "affordability" is one-third of a household's income. In Portland, the median household income is $45,153, or $3,763 a month, which means that the median household can afford $1,254 a month (that's $3,763 divided by 3) in rent or mortgage payments.
One development under construction, the 86-unit "Bay House" near India Street (on the site of the former Village Cafe parking lot) is advertising 2-bedroom condos starting at $380,000. A household paying a 10% down payment on a mortgage there would end up paying $2,380 a month — roughly twice what a median household could afford.
In a Wednesday interview, reporter Kevin Miller found that Maine's Senator Susan Collins is somewhat skeptical of the looming default deadline. Here's a quote from Miller's story:
“I’ve been here long enough when we’ve come to what was supposed to be the date of default and the Treasury finds a way to shift obligations or payments . . . in a way that gives us a little more time,” Collins said. “However, I do not doubt that we are coming close to the point where we will need to do something about the debt ceiling.”
Meanwhile, financial markets have been a lot more active than Congress has been. Below is a chart showing the yield rates on short-term Treasury bonds. These 1-month and 3-month bonds typically generate very low, near-zero interest rates, because they're usually regarded as very low-risk investments.
But that attitude has changed over the past week or so. As we edge closer to the debt default deadline, investors are getting skeptical about whether the U.S. treasury is really such a safe place to store their money, and as a result, they're demanding dramatically higher rates of return from these short-term t-bills: