INTERNATIONAL

We have had good news from the Middle East. Two of the most wanted terrorists were either captured or killed in military actions over the last two days.
The international economics cannot be described in any positive terms. Greek is more than likely going to default on its debt. The US, the more developed countries in Europe and even countries such as Australia and others are suffering from the world wide economic issues.

NATIONAL

• Much of the summer was spent with the Democrats and President Obama battling the Republicans on how to achieve a continuing resolution so that the government can continue to fund our country. It was not the finest days of our republic.
• The S&P downgrade on real estate had a limited effect on commercial real estate. Interest rates have fallen even further making the long term financing of any worthy project worthwhile. And CAP rates for quality real estate are even more compressed than a year ago, causing the price of institutional quality property to rise further.
• Consumer confidence remains weak after dropping to a post-recession low in August. The index was at 45.5 in September. This does not bode well for retail sales during the Christmas season this year.
• The United States Post Office is going to close nearly 3,700 locations over the next few years, including 220 Texas locations with four in Fort Worth/Arlington.

JOBS

The US unemployment rate remains stuck at 9.1%. But the real US jobs picture is much worse when you add in the underemployed and those that are working part time. It is estimated that there are approximately 14 million unemployed and 8.8 million working part time that would like full time employment.

RETAIL REPORT

Borders Group is liquidating. The chain announced on July 18 that it would close all stores by late September. They certainly did that in our area.

HOMEBUILDING

• The new federal loan regulations are slowing and in many cases preventing home sales. The stiffer rules have swung the pendulum the other way.
• According to the Wall Street Journal, economists and analysts are forecasting more pain with home prices continuing to weaken through 2015. Overall prices are expected to drop 2.5% this year. Prices nationwide have already fallen 31.6% from their 2005 peak as measured by Standard & Poor's Case-Schiller 20-city Index.

TEXAS

• Texas is the second largest state in the nation with about 25 million residents. The state created approximately 262,000 jobs from June 2009 to June 2011, about half the USA's 524,000 jobs added, according to the Federal Reserve Bank of Dallas and the Bureau of Labor Statistics.
• Further, according to Chief Executive.net, Best & Worst States for Business, Texas scores very high when compared to the other industrialized states in rankings for relocations.
• But we are in a severe drought and had the second hottest summer on record with over 71 days above 100 degrees. This is the third worst drought in history.

DFW/NORTH TEXAS REGION

• Last quarter we stated that Qantas was coming to DFW and Air Tran, purchased by Southwest Airlines, was leaving. This quarter KLM announced that it was suspending its flights from DFW to Amsterdam.
• DFW Airport announced a $1.9 billion renovation project will start immediately. The makeover will bring the airport's legacy terminals into the 21st century with many new food and retail venues and greater parking. This was badly needed.

FORT WORTH

• GE Transportation announced that it will bring a $96 million manufacturing plant to north Fort Worth just west of Alliance. GE will make locomotives at the 670,000 square foot plant.
  
• Ray Perryman, a very well-known economist in our area, has published a study that states that the Barnett Shale activity supports 100,000 jobs and is worth $65.4 billion to the region over the next decade. Remember, most of this activity is on the Fort Worth side of DFW.
  
• Lockheed is cutting 670 jobs in Fort Worth, most of them from its big facilities at the Joint Reserve Base in NW Fort Worth,
  
• Alcon Labs, now owned by Novartis, will add 750 to its workforce by the end of 2018 with 400 of those being employed by the end of 2013. The Alcon plant is in the southern part of the city.
  
• The Moncrief Cancer Institute broke ground on its new $22 million, 60,000 square foot facility in Fort Worth South in June. It is scheduled to open in mid-2012.

SUMMARY

If I had to guess, I would say that the economy is stalling again. Two very important commodities, copper and crude oil, are weak. Copper is the one to watch as its price is directly related to demand in the construction industry. Copper has fallen dramatically since early summer. If you Google copper prices, you can see what a lot of the "experts" think our economy is going to do. Not much anytime soon.
We remain somewhat optimistic and continue to look for opportunities.