Things Are Getting Better, but…

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The Dixon Hughes Triad Business Index for March, 2010 shows that the local economy is improving, but it's not by much and we've got a heckuva long way to go before we can say things are good.  It will be interesting to see what happens in real estate when the stimulus plan expires at the end of this week, but when you read this from the report you wonder how much worse it can get (knock on wood):

At the end of the 1st quarter of 2010, the inventory of homes on the market was 9,098, or 6.3 times the number of homes sold in the 1st quarter.  At the current sales pace, it will take 18.9 months to exhaust the existing inventory.  The number of existing homes offered for sale was up 16.5% from what it was at the end of the 4th quarter, and it was 9.5% higher than at the end of the 1st quarter one year ago. 

The price of the average home sold in the 1st quarter was down 2.8% from the previous quarter.  The average quality-adjusted price of an existing home in the Triad was $158,718.  The average this quarter was down 1.7% from the average recorded in the 1st quarter of last year.  By comparison, over the past year, consumer prices nationally have risen 2.2%.

Sociopathic CEOs

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Lex has linked to a very interesting piece that provides the following quote:

But what part of being a CEO could be so difficult — so impossible for mere mortals — that it would mean that there are only a few hundred individuals in the United States capable of performing it?

In my humble opinion, it’s the sociopath part.

CEOs of community-based businesses are typically responsive to their communities and decent people. But the CEOs of the world largest corporations daily make decisions that destroy the lives of many other human beings. Only about 1 to 3 percent of us are sociopaths — people who don’t have normal human feelings and can easily go to sleep at night after having done horrific things. And of that 1 to 3 percent of sociopaths, there’s probably only a fraction of a percent with a college education. And of that tiny fraction there’s any even tinier fraction that understands how business works, particularly within any specific industry.

Thus there is a shortage of people who can run modern monopolistic, destructive corporations that stockholders have to pay millions to get them to work. And being sociopaths, they gladly take the money without any thought to its social consequences.

This makes it much easier for me when I read business news and ask myself the question, "How do these people sleep at night?" The answer, of course, is "quite soundly."

I'm not a big believer in generalizations, so I my knee jerk reaction is to say that this description probably only fits the vast majority of the CEOs of the world's largest corporations. 

Trust and Judgment

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Today offered another one of those lessons you learn early but need to be reminded of often: leaping to conclusions usually lands you in the wrong place.  I was at lunch and the person I was sitting next to, someone whom I trust, started talking about the ongoing situation here in the Piedmont Triad between Waffle House Inc. and its (now former) local franchisee.  Long story short the local franchisee got out of the business and in the process some employees were issued paychecks that bounced.  Fingers were pointed, but early on the local franchisee looked like the bad guy.

Now it's important to provide some context here.  People in the Triad who pay attention to these kinds of things are likely predisposed to believing the worst in any story about employees being given rubber checks, because another local company recently went out of business, and in the process the owner really did screw his employees out of pay and health benefits. 

At lunch I was hearing from a trusted source that the Waffle House franchisee was one of the most honorable and ethical business people she had ever met.  Knowing what I know about the source, and knowing the number of people she knows in the business community, my angle on the story instantly shifted 180 degrees. After reading the initial coverage of the story I'd just assumed that the franchisee had gotten in too deep and had done what lots of companies do in that situation: tried to hold on and pray for a miracle while telling the employees nothing of the problems and then eventually bouncing paychecks. I also assumed that stories of delinquent payroll taxes would soon follow. A one minute conversation at lunch changed my assumptions, and I began to think that there's probably a whole lot more to the story and I probably needed to reserve judgment until the situation was fully aired.

Now don't get me wrong, I don't think the media did any faulty reporting.  The stories I read simply stated the facts: employees' paychecks bounced, the state's labor department was investigating and if they found any wrongdoing they were going to go after the franchisee for the employees' pay.  I did the rest of the work myself, leaping to conclusions and letting my own biases take me to an early, and potentially faulty, conclusion.  Luckily I was saved from myself today.

After lunch I got back to my desk and found this story waiting in my alert box. It seems that my source at lunch was right and it's the folks at Waffle House Inc. who haven't been behaving too well in this case, at least to this point.  And that's where I need to remember another lesson: there's usually more to a story than meets the eye, and it will probably be a while before we have the full story here.  Stay tuned. 

For Those Who Still Think All Blogs and Twitter Feeds Are About Cats and BM

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As reported by the Triad Business Journal the Wake Forest MBA program's student run blog and related Twitter feed have been recognized as a "must follow" by TopMBA.com. 

Five years into this whole blog experiment thing and I still feel the need to justify my existence.  I never knew I was so insecure.

Something for Nothing

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I was doing some research for the day job and came across this article about a panel discussion on the future of GSEs (Fannie Mae and Freddie Mac).  There are several good quotes contained within, but these two really caught my eye: 

But according to White and Booher, it was a broader cultural issue, an unbalanced federal housing policy that stressed homeownership at the expense of rational underwriting. “I believe that the deception of our culture, that money grows on trees, that there can be action and no reaction, is so prevalent that we live in a fantasy world,” White said. “And members of Congress were the ultimate actors there.”

That unbalanced housing policy was prevalent on the operations side as well. "The problem really starts with a culture that’s increasingly looking for something for nothing,” Durkin of Wood Partners explained. “That permeates our housing policy.”

I really do hope my children's generation ends up being smarter than mine or my parents'. 

Once Again NCAA Shows How It’s Done

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Remember a month ago how the rumors started flying about the NCAA men's basketball tournament field potentially getting expanded to 96 teams? Today the news hit that there would indeed be an expansion, but it would be to 68 teams and not 96 teams.  I'm gonna go out on a limb here and say that there's a very high probability that the NCAA deliberately "leaked" the 96 team number so that when the true expansion hit everyone's reaction would be "Only 68 huh?" and not, "Jeez, 68 teams will totally dilute the field and make this thing a crapfest!"

PR flaks around the world are smiling.

A Question Only an English Major Would Ask

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I'm no scientist (I'm actually the antithesis of a scientist), so this is probably the dumbest question ever asked, but I have to ask it: Is it wise to put a solar array on the roof of a hardware company's distribution center?  Still it's kind of cool that Winston-Salem will have two of Duke Energy's new solar sites.