New Link Added -- Crude Oil Futures Out To 2024 -- March 30, 2016

Reminder: this link has been added to my page on "Links": crude oil futures out to 2024. Extremely bad news for Saudi Arabia which historically set their national budget on $100 oil, and then for 2016, set it at $60 oil. Not going to happen.

A huge "thanks" to the reader who sent me this link.

Williston Building Continues -- March 30, 2016

From The Williston Herald:

While celebrating the grand opening of a four-story apartment and retail complex in downtown Williston, Chicago developer Nancy Kapp had a message for her banker:

“There’s no way on God’s green earth you’re ever going to own this building. It’s mine,” Kapp said.

Competition for renters in Williston is tough, and likely only going to get tougher. Some apartments are still being constructed in Williston even as the oil industry slowdown continues and vacancy rates rise.

In spite of the downturn, Kapp is confident that the downtown location, rooftop terrace and heated underground parking will attract more tenants to the $15 million Renaissance on Main project, which had about half of its apartments full when it formally opened this month.

“Because of where we are and because of the type of building this is, we don’t anticipate having a challenge,” Kapp said.

While developers such as Kapp remain optimistic about Williston’s long-term future, many expect tough times in the short term. Investors in several apartment projects told city commissioners recently they’re struggling with cash flow and talking to their banks about reworking their loans.

Other numbers at the linked article:

Williston has added more than 5,750 apartments since 2008 and has about 575 units still under construction, according to the city planning department.

Greystar, a property management firm that operates several buildings in Williston, surveyed occupancy rates of 20 developments earlier this month.

Complexes that have been open for a few years were about 75 percent full on average, and buildings that opened more recently averaged about 50 percent full, the survey found. The average rent of a two-bedroom was about $1,200, the survey said, about half the price Williston renters were paying four years ago.

Snapshot In Time -- March 30, 2016; Also, Jobs For March 2016

Updates

March 30, 2016: the comments at this article on "new jobs" are pretty much in line with my thoughts over the past several years.  Comments have in common:

• government statistics on jobs/unemployment are bogus, massaged
• if the "job situation" is go good, why is the Fed hesitant to raise rates?
• one permanent job lost; replaced with two part-time employees (ObamaCare effect)  

Original Post

 

Apparently the market likes what the Fed is doing: nothing.

Early morning trading has the market up strongly; the Dow is up almost 130 points.

Crude oil is up about 2.4%, around $40.

Reuters reports that US private employers added 200,000 jobs in March, above economists' expectations.  Remember: these are the "magic numbers" with regard to US jobs:

The Magic Numbers

First time claims, unemployment benefits: 400,000 (> 400,000: economic stagnation)

New jobs: 200,000 (< 200,000 new jobs: economic stagnation)

Economists estimate the labor market needs to create about 125,000 jobs a month to keep the unemployment rate steady, though estimates vary -- Reuters. 

I will stick with 200,000 (the "magic number" prior to the Obama administration) -- it's a nicer, "rounder" number to remember.

I love the spin: economists had forecast a gain of 194,000, with estimates ranging from 150,000 to 220,000. I would argue the number (200,000) came in right on expectations. For Reuters to say in the very first line "above economists' expectations" suggests a bit of editorial spin for the Obama administration. Just saying.

More from the linked article:

The ADP figures come ahead of the U.S. Labor Department's more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.

Economists polled by Reuters are looking for U.S. private payroll employment to have grown by 197,000 jobs in March, down from 230,000 the month before. Total non-farm employment is expected to be 205,000.

At 197,000, this would be below the magic number that was used prior to the Obama administration.

Williston Slow-Down? What Slow-Down? Another Coffee Shop To Expand -- March 30, 2016

From The Williston Herald:

The women of Williston are an ambitious lot, especially Meg-A-Latte owner Megan Wold, whose summer months will entail expanding to a third location. All this while carrying her third child.

Amid a brief slowdown following the lunch rush, Wold took a moment of pause. Every so often, her hands fluttered to her stomach as she adjusted to a more comfortable position.

Her third child is expected to arrive in July, just a couple of months after the projected opening of her third Meg-A-Latte location. While she and her husband, Eddie, are leaving the sex of the child a surprise, she left no room for surprises when contemplating the viability in another coffee shop.

A hearty portion of Meg-A-Latte’s business stems from Williston High School. As students, teachers, and parents look to transition to the new facility this fall, Wold knew she would have to take a hard look at her operation and if she had the ability to recapture the shifting clientele.

In a scouting expedition, Wold found an ideal spot in Harvest Hills located on 32nd Ave. which already included a drive-thru. The space is equal in size to her 13th Street West location, but will have a larger kitchen which would aid in additional menu options.

Even with the new high school nearby, she considered the school board’s approval to allow for a coffee shop within the facility. But with more than 1,000 high school students and teachers looking to be served in a lunch period, she knew there would be enough spill-off.  

With approximately 8,000 people residing in the area, Wold knew she would be able to market to more than just a lunch crowd.

The $150,000 buildout that will mirror the ambiance of her other locations is expected to be complete by May.

Much, much more at the link. 

California PUC Rules "Forbearance Agreements" Re: Ivanpah Solar Experiment Are Confidential, Though Paid For By Taxpayers -- March 30, 2016

I've blogged often about the solar science project at Ivanpah in California. A reader sent me another article on the same. It's an important article.

Briefly: the solar farm is not meeting production targets, which under "normal circumstances" would allow utilities to claim "breach of contract" which could threaten to shut down Ivanpah. To prevent this from happening, the California Public Utilities Commission "saved the day," by granting the company an extension to meet those promised (and contractual) production targets.

This is why the article is important. This is what Californians are being told about the cost of preventing "breach of contract" lawsuits, in its entirety:

ESTIMATED COST:

• Actual costs of the Forbearance Agreements are confidential at this time. 

Maybe The Los Angeles Times will submit a request for this information under the Freedom of Information Act. Certainly this is not a national security issue.

I track the Ivanpah links here.