INTERNATIONAL

Petrobras, Brazil’s state-run oil company, raised $70 billion, a new record, by selling more than 4 billion common and preferred shares in Brazil and the US. The money will fund Brazil’s $224 billon, five-year plan to develop the offshore fields that supposedly hold more than 50 billion barrels of recoverable oil. It is interesting how many of the Latin American governments are now considered “investment grade” by investors worldwide.

Iranian President Mahmoud Ahmadinejad, in the US to attend the United Nations General Assembly, stated again that the 9/11 attacks in New York could have been set in place by officials of the US government wanting to promote Israel. He called for an United Nations fact finding panel to look into the matter. This guy is a nut!

NATIONAL

The Consumer Confidence Index is back down, just above 50. Anytime there is this much joblessness - almost 10% of the workforce is unemployed – the confidence number will be low. But the index seems to be trending higher.

ENERGY

BP is attempting to determine just how much oil leaked from the massive blowout in the Gulf. The fine that will be assessed on the company will be determined by how much oil was leaked into the Gulf.

Double Dip

Ethan Harris, Bank of America/Merrill Lynch Global Research, says he doesn’t think that the US economy will go into a second recession during the next year because the numbers are so bad that “it is doubtful that it can get much worse”. I guess that is putting some good news on the bad.

Jobs

Joblessness remains a big drag on the economy. The media seems to be focusing on the unemployment report (just under ten percent) but no one seems to want to talk about the underemployed. Initial claims for jobless aid rose by 12,000 to a seasonally adjusted 465,000 the third week of September.

Home Mortgage Rates

Mortgage rates continue to drop. Thirty year fixed rates are now under 4.5 percent. In a separate report, the National Association of Realtors said that sales of previously occupied homes rose 7.6 percent in August from July. Still, this was the second-worst month for sales in more than a decade.

For years, conservatives have been stating that Fannie Mae and Freddie Mac should be taken off the federal dole. Now that critics have been proved right, the question is whether they should be privatized or abolished. I would not want to throw the baby away with the dirty bath water. But smarter men and women than me are in control - I hope.

New Lending Program

President Obama’s $30 million small community lending program faces a big hurdle. Many of the community banks and businesses it is supposed to help don’t want it. The bill that is awaiting the President’s signature contains a mix of tax cuts and credits aimed at helping small business. But interviews with small bank officials and small businessmen and women show that they are reluctant to accept additional loans at this time, especially with all the government strings that will be attached.

RETAIL REPORT

• Neiman Marcus cut its losses in the quarter and for the year. Fiscal annual sales were up slightly to $3.69 billion for the year ended July 31 compared to last year’s numbers of $3.64 billion. Neiman has begun marketing that targets more sale items and has instituted a “shoe of the day” program where more than 15,000 people check in daily to see what is being offered.
• Best Buy’s net income in the second-quarter jumped 60%, helped greatly by sales of cell phones. Sales of flat-screen TVs continue to be weak.
• Most automakers posted decreases in sales for August with GM down 25 percent from a year ago and Ford down 11 percent. Luxury maker Infinity showed a 22 percent increase and Chrysler was up 7 percent. But this period was compared to last year when the federal government Cash for Clunkers was in effect.

TEXAS

• After six months of jobs gains earlier this year, Texas has now recorded its second consecutive month of job losses. The August number came in a negative 34,200 while the state unemployment edged up to 8.3 percent from 8.2 percent in July.
• But Dallas, Fort Worth, San Antonio, Houston and Austin represented half of the ten cities that had the largest numeric population increases in the US from July 1, 2008 – July 1, 2009. It will be interesting to see what the updated numbers will look like.
• While Texas factory activity weakened in August, Texas beat out Virginia for the best business state title according to CNBC.

DFW NORTH TEXAS REGION

• DFW Commercial foreclosure filings were up 51 percent in August from last year. But the actual number is still lower than in the worst downturn of the late 1980 to early 1990 period. For the first nine months of 2010, 2,541 commercial foreclosure postings have been recorded according to Foreclosure Listing Service, a local filings firm.
• Home listings rose 15 percent from a year ago with foreclosures making up a larger part of the inventory. Area home sales fell for the third month in a row.
• Grocers are attracted to the DFW area because of the increasing population. According to the US Census Bureau, DFW added more new residents last year than any other metropolitan area in the country. We attracted 147,000 new residents in the 12-month period ending in July.
• Because of the population growth and the relative stability of the jobs market, many franchise companies are offering big incentives to potential and current franchisees to open new locations in DFW. Some of the breaks include decreased franchise fees, reduced base royalty fees and other help. We are also seeing big franchise entities come in and build corporate stores themselves.

FORT WORTH

Fort Worth is in the same shape as many other municipalities in the country – it is suffering from an income decline. Dale Fisseler, the City Manager, is proposing a budget that reduces staff and city services and includes things like reduced hours for the libraries. The staff announced that it anticipates $77 million budget gap for next year.

NORTHWEST FORT WORTH AREA

• The retail market around Loop 820 and Jacksboro Highway seems to be gaining some life as we see several deals being shopped around. But it is a long way from where it was three years ago.
• The federal government is not doing us any favors by cutting back on the F-35 purchases. News reports are that the Pentagon plans to slash the scheduled 32 jets by 10 and defer additional funds for software development and flight-testing.

SUMMARY

Are we coming out or slipping backwards? I don’t know. I was feeling more optimistic last quarter but we seem to be stalling. I think it has more to do with the pending elections than anything else. Maybe once we get November over with, and hopefully a new congress with more of a business bent (it could not get much more anti-business than the current one), we will see the economy pick up.

While I am seeing some increased velocity of deals floating around, it certainly is hard to get one signed up these days. And the users just do not want the landlord to make any money at all. But on the good side, most of our deals have good cash flow and some are free and clear land. I am seeing landlords that can’t make a deal because they do not have the ability to pay tenant improvements and commissions. Generally speaking, we are not in that situation so we have more flexibility in our negotiations.

I am ready to get back to normal, whatever that is!