A Leading Economic Indicator

Staffers say the Christmas season was the best Pawn Mart 2 has seen in its 13 years in business.

Retail sales doubled, said manager Chad Bourn, who noted similar sales at the company’s Moss Point store.

Bourn attributed the booming business to the sluggish economy, and good deals.

It is a trend that’s happening nationally, as well. A story in the Los Angeles Times in late December noted “two of the nation’s leading publicly traded pawn companies, Ezcorp Inc. and First Cash Financial Services Inc., are among just a handful of stocks that have risen this year, up 31 percent and 20 percent, respectively.”

And it isn’t just pawned-goods sales that are rising.

Many local residents pawned items for spending money before Christmas. Now a majority of customers are getting loans to pay bills from holiday purchases.

“Everybody always spends more than they should,” Pawn Mart’s Bourn said. “After Christmas, everybody’s broke. We’re doing nothing but loaning, loaning, loaning.”

Bourn has been surprised at the items offered as collateral on 30-day loans, such as big-screen televisions. He expects the trend to continue into tax season; then it will flip-flop as people getting refund checks start spending again.

LVT, The Series–Part 2

I have been asked how will the LVT assist a community–it is best stated by the Center for the Study of Economics and The Henry George Foundation Of America:

Why Would a Community Implement Land Value Taxation?

•           A shift to LVT, even when structured in a revenue-neutral manner, usually results in net tax reductions for the vast majority of residents.

•           The problem of inaccurate or radically higher assessments is reduced because of the reduction in reliance on the building portion of the property tax.

•           The damage that taxes like sales and income taxes do to working families and local commerce can be lessened.

•           By reducing or eliminating the tax on improvements, there is a greater incentive to build, to build with higher quality materials, to maintain, to avoid blight, and to redevelop economically depressed areas.

•           Cities are almost always on the “short end of the stick” when economic development dollars are handed out.  This program helps achieve the same goals with no public investment.

•           When cities DO get permission to give out tax abatements, they lead to a revenue loss to the community with no assured payoff later.  LVT is purely revenue neutral to the city.  There is no tax shifting to citizens and property owners who have already done their bit.

•           A tax on land also has the advantage of being a “value capture tax.”  A new public works project may make adjacent land go up considerably in value, and thus, with a tax on land values, the tax on adjacent land goes up.  Thus, the new public improvements would be paid for by those most benefited by the new public improvements — i.e., those whose land value went up most.

•           A tax on land has been shown to result in better land use patterns and more in-fill development.  This has the benefit of reducing sprawl.

•           Several Nobel Prize winners in economics have stated their approval of government revenue being raised from taxes on land.

•           Support for LVT cuts across political lines.  Free-market economists like how it reduces distortions in economic decision-making.  Environmentalists like how it reduces sprawl and helps fund public transportation.  Developers appreciate how it makes new homes more affordable for their customers.  Citizens like the reduction in taxes.

This is a proposal that has come to call, especially now when the economy is tankinbg and communitiesd will soon be feeling the raising problem of sagging revenues.  Yes there is a plan to inject lots of cash into communities to head off the approaching economic storm.  But ask yourself, when those cash cows are gone where will the renvenue come from to continue the improvemnts to the community?

LVT will save communities from the revenue crisis that they are ALWAYS having.

How Silly Can People Get?

With the economy tanking and these people are worried aboiut their ownership of a gun?

The Saturday after Barack Obama was elected president, people jammed Cook’s Gun Shop in Biloxi, eager to purchase the guns they believe might be off-limits beginning next year.

Manager Michael Creel said sales began to increase last year, but really ramped up after the election.

“It started about a year ago when the election started to heat up,” he said. “People were afraid that if the Democrats won they would institute more control on guns. It kept building, and the Saturday after the election it was pandemonium in here.”

Gun-shop owners and managers throughout South Mississippi are reporting similar trends, which also are reflected across the country.

The FBI reported earlier this month that in November it completed more than 1.5 million background checks, a 41.6 percent increase over November 2007 when the agency performed just over 1 million checks.

Obama has said in the past he believes state and local governments should have some say over gun control. He also has said he believes in a “common-sense approach” to curtail the number of illegal guns that end up on the streets.

Those comments have caused gun owners all across the U.S. to buy guns now before any new laws go into effect.

This whole thing is just flippin’ silly…..too much BS from Hollywood and the end of days….personally, I am thionking about how to feed my family without using a gun….Peace.

Casino Revenue Down

The economic crisis is effecting everyone…..how long will it last is the question all are waiting for the answer.

November was the third straight month that revenues at the 11 Coast casinos fell below the 2007 levels.

Numbers just released by the Mississippi Tax Commission show the Coast casinos won $96 million this year compared to $103 million in November 2007.

The River casinos took a much bigger hit from the slow economy, down $12 million in November after falling $7 million in October.

Total earnings for the state were $205 million compared to $225 million in 2007.

I believe that I read that Louisana’s casinos had a 6% rise in profits for the same period.

State Repubs Hold Up “Bailout”

Wicker said in a press statement that the country could not afford to reward bad management with bailouts.

“I opposed this bill because I think it fails to get to the root of the problem. The Big Three were in financial straits before our economy slowed down due to a troubled business structure that ensured they couldn’t compete with other automakers. Now, they have asked for billions of dollars in taxpayer assistance to help survive. While the merits of using taxpayer funds to help save these companies can be debated, the fact is that this proposal falls well short of guaranteeing the needed reforms to keep these companies afloat. The U.S. government simply cannot continue to throw good money after bad using taxpayers’ dollars,” Wicker stated.
“This is an unfortunate reminder that Mississippi is not immune to the global economic slowdown,” wrote Wicker in reaction to the news. Ӆ [W]hile it may have been delayed by the economic downturn, I am confident Mississippi workers will still play an important part of that future.”

Mississippi workers have already played a huge role in allowing foreign auto manufacturers to duck the union presence in their home countries, however.
Mississippi AFL-CIO President Robert Shaffer pointed out that Nissan’s existing Mississippi plant has successfully fought off attempts to unionize since it arrived in 2003, giving them an unfair advantage against its unionized competitors in Detroit.

“What they do is they come to America and start a bidding war between these southern, right-to-work states, and taxpayers wind up subsidizing their arrival by paying for infrastructure and tax subsidies. Then they get to sell a product for less than their American counterparts,” Shaffer said.

The state, according to Gov. Haley Barbour, has already invested about $200 million in infrastructure development at the Blue Springs site while local governments have invested an additional $35 million.  (Keep in mind this is money that is gone)

My question is, how will the state get its money back from Toyota?  What domestic programs suffered to get this deal from Toyota?

The Economy Comes Calling

Mississippi is starting to feel the economic crisis more and more.

Bankruptcy filings in Mississippi are on pace to climb to its highest level since stricter bankruptcy guidelines went into effect in 2005.

The American Bankruptcy Institute reported this week that Mississippi saw bankruptcy filings increase about eight percent in the third quarter of 2008 from the same period a year ago.

Mississippi followed a national trend with U.S. bankruptcies up 34 percent during the period of July 1 and Sept. 30. Mississippi had 3,134 bankruptcy filings in the third quarter, compared with 2,908 in the same period of 2007.

The state had 2,606 bankruptcy filings in third quarter of 2006 and 11,217 total filings in 2007.

So far, Mississippi has 8,897 filings this year with fourth-quarter totals still pending.

“Tweak” The Law

THis does not surprise me…coming from a city that has little to offer but casinos….

Members of the House Gaming Committee met on the Coast today and were asked to mandate a late August start to the school year and to clarify the law that allowed the casinos to move onshore after Hurricane Katrina.

Eleanor “Sissy” Jordan asked what the committee could do to “tweak” House Bill 45 so other casino developers who want to build on the Coast won’t meet the same fate as the South Beach Casino. The Mississippi Gaming Commission ruled the R.W. Development property on U.S. 90 at Veterans Avenue was not a legal casino site.

Rep. Earle Banks (D-Jackson) said if the bill were brought up again, “there are forces out there that could kill the whole industry.” He said these forces are getting stronger every year and he told Jordan if House Bill 45 is brought back, “I’m telling you it may not survive.”

Without passage of the bill, Rep. Randall Patterson (D-Biloxi) said half of the Coast casinos probably whould not have built back after Hurricane Katrina. The bill passed the House by only three votes, and Patterson said three or four of the House members who supported the bill were defeated last year.

Woody Bailey told the Gaming Committee the Gulf Coast Business Council will ask the legislature to set the start of classes for the fourth week of August to boost tourism. “It makes business sense to do this,” he said.

Where Have All The Cars Gone?

More bad news for the state of Mississippi.

Toyota Motor Corp  is suspending completion of its newest plant in Mississippi indefinitely in response to a “steep decline” in U.S. industrywide auto sales, the automaker said on Monday.

The plant near Tupelo, Mississippi — Toyota’s eighth assembly plant in North America — was slated to produce Prius hybrids beginning in late 2010.

The latest move by Toyota, No. 2 in U.S. auto sales after General Motors Corp  underscores the pressure across the industry, as U.S. auto sales have slumped to their lowest levels in 25 years amid weak consumer confidence and tight credit.

“Due to the uncertainty of the market, it is impossible to say at this time when production will begin,” Toyota said in a statement.

“Toyota continues to evaluate its operations globally and reduce production as necessary to match the weak market.”

Toyota had already changed plans for the Mississippi plant in July, when it said it would produce better-selling Prius hybrids there, instead of the originally planned Highlander sport utility vehicles, in response to high gasoline prices that sent sales of trucks and SUVs plunging.

Where will Mississippi recoup the freebies given to Toyota as an incentive to locate their plant in Mississippi?

Coast Financial Outlook

Sales vs. population

Before Katrina, South Mississippi had built a normal cycle of purchases with a normal population. Although the Coast lost an estimated 40,000 people after Katrina, initially there were at least that many volunteers spending money on the Coast, said McFarland.

Now about 25,000 residents have returned, McFarland said, but “we’ve never had a population loss before, and this time we’ve gone three years with less population.”

Retail sales-tax collections, which spiked after Katrina when people were replacing everything from cars to clothing, have dropped back down, but are still slightly above pre-Katrina levels.

“That being the case, you can argue that our local challenge is less about the national economy than it is resulting from a population that is down about 7 percent,” he said.

New and used vehicle sales

The lower population should also show up in sales of new and used cars and trucks, but McFarland said registrations are the same as 2003 and doing better than the first half of 2004.

“Cars are the biggest single purchase people make other than their homes,” and he is optimistic car sales will begin an upswing.

This is the third year since Katrina, when many people had to buy cars to replace those destroyed during the storm. Most people who buy new cars trade them in between the third and sixth years.

Housing

The upswing in post-Katrina home sales leveled off and now has dropped on the Coast.

The lower asking prices and bigger inventory of homes for sale has brought more “lookers” to the local market, but “housing sales are down” for the year, he said. “Through October 2007, 3,373 homes were sold at an average price of $167,695. Through October this year, only 2,448 homes were sold at an average price of $151,955.”

Employment

Unemployment rates in Mississippi fell in October from 7.5 to 6.9 percent; the rates locally were 5.6 percent in Harrison County, 5.9 in Hancock County and 6.1 in Jackson County.

Even with the lower population on the Coast in 2008, “the work force in Harrison and Hancock counties is almost identical to 2004,” McFarland said. With the demand for workers in 2006 and 2007, “a lot of people who hadn’t worked in a long time entered the work force and the labor force swelled. Others took a second job. But now there are fewer jobs available, causing a lot of those recent workers to begin to move out of the work force.”

They make all sound so good and level that it is just amazing……further analysis will be done….

Mississippi’s Sub Prime

Everyone is concerned with the sub prime meltdown and its implications.  The countryis slowly drowning in debt and this state of Mississippi is no different.  Let us look at the sub prime situation in the state.

First of all Mississippi leads the nation in subprime loans at 37% of all first time loans.  71% of households where the house is the sole wealth that the people have.  11% of all home loans are past due.The foreclosure rate of sub prime loans in Mississippi is  6.5 times higher than prime loans.

Mississippi has been a bit lucky in the past, but it is only a matter of time before the economic crisis catches up with the state and when it does it will be castrophic.  There are a few things that can be done to help the people of the state who will be suffering with their subprime loans, according to the Mississippi Economic Policy Center.  These are:

1–enact strong anti-predatory laws

2–create a default loan program to assist thoise in danger

3–increased foreclosure notification

4–require county administrations to automate data collection on foreclosures and to closely monitor the effects of foreclosures.

5–create a task force to identify and persue foreclosure prevention and reduction

While I think some of these are a bit timid and would prefer a more radical approach, this would be a start and could possibly help head off a crisis at the pass.