Where’s My Money, Mike?

February 2012

“You haven’t sold anything for me lately; how long ‘til I start getting money back?”

I’m getting more of that lately; I get you.

I’ve been through three of these droughts, and I have to tell you, this battering is like no other.

More troubling, if what we learned at last December’s breakfast presentation at the Colonial Country Club in Fort Worth becomes fact, 2012 is going to look not a whole lot different than 2011. The turnaround we’ve been praying for, whenever it comes, most likely won’t be soon enough to forecast a paycheck for investors in 2012.

Presenter Dr. Mark Dotzour of Texas A&M Research Center says part of the reason is economic.The U.S. is battling a severe case of “exogenous shock.”

Exogenous?

See inexplicable, outside the model, incongruous with a supply and demand system.

Dr. “Dot” extends the definition into 2012 U. S. Economy terms: fake economies make for prices so unreal, markets can’t stabilize, to the point that if things continue on the same trajectory, the U.S. could be Greece in ten years.

Don’t point fingers at the blues, the reds, tea party, libertarians or independents either – we all are to blame for allowing this capitalize-the-gains-socialize-the-losses agenda. This means when a corporation does great, they get to keep it all. But, when through bad business practice, they don’t, (see GMC, now25% owned by the government.) suddenly it’s the American taxpayers’ job to inject billions of dollars into this lost-our-bet corporation for which you and I will never see a dime in Return on Investment (See AIG,
now 92% owned by the government,)

Isn’t that nice?

Outright criminal, I say.

Criminal that a society built on the right to pursue the American Dream is now one that feels. . .entitled. . . to the American Dream. Criminal that our new great idea is to throw more money at those who refuse a job at McDonald’s, and who we know will squander it away anyway. (Wasn’t that the same mistake we made in aid to Africa?) Criminal that the lawmakers we put in charge of this country are ensconced with a health plan far superior to that of its own citizens, let alone guaranteed a paycheck for life. Is it any wonder the system is so broken?

And this: we want budget cuts, but not the ones that inconvenience us.

Listen: Everyone has to help. Everyone has to sacrifice. Everyone has to engage.

Meanwhile, big corporations are stashing away billions and billions of dollars while GE jobs czar Jeffrey Immelt says those that sit on that cash waiting for a turnaround will lose, while companies who invest their way through this crisis will be the only winners.

Is that the same Jeff that advises Obama’s newly created jobs council?

It is, but Immelt may as well be yelling at a cigar store Indian. Washington, for all their contrived concern, where are they on this?

But not let fear creep in; all is not darkness. HCC’s largest holdings are in El Paso, Texas and Cincinnati,Ohio. Both have been prepping for years to reach market-ready, and 2012 is that year.

El Paso’s 1,300 acres, now 100% entitled and engineered, is ready for show. The Cincinnati project enriched its tenant mix with more national credit tenants. Ready for show.

Both go to market near the end of this year and, while we’re not celebrating yet, it wouldn’t surprise us to see a contract on one of these before 2013.

Then those two commercial lots in San Antonio scheduled to close spring of this year, atop Grand Opening festivities scheduled for both The Bluffs of Cresta Bella in San Antonio and the Hilton Conference Center in College Station. The Hilton gala is to celebrate the completion of $4.5M in renovations.

Could there be more?

Yes.

Both Governor’s Pointe in Cincinnati and Hilton Conference Center in College Station are paying double digit returns to their investors, and have surpassed proforma in quarterly distributions since day one.

What?

Through all of this?

Yes, we never left the kitchen.

You?