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Little sign of life in Asian securities

February 19, 2009 by baltia

By Andrew Wood in Hong Kong

Published: February 18 2009 00:52 | Last updated: February 18 2009 00:52

Indonesia and South Korea may be some of the few Asian securitisation markets outside of Japan to show any life in 2009, as demand for fresh asset-backed and mortgage-backed securities, which dried up last year, shows little sign of reviving, according to Moody’s, the ratings agency.

“The trends that echoed through all Asian securitisation markets in 2008 – the lack of investor interest and widening spreads – are expected to continue into 2009,” said Moody’s special report Asian Structured Finance: Asian Markets Slowing and Continue to be Affected by Global Volatility, published on Tuesday. The report covers South Korea, Singapore, India, China, Taiwan, Indonesia, Hong Kong, Thailand and Malaysia.

EDITOR’S CHOICE
China equities strength revives decouple talk - Feb-16Asian shares rise on bailout confidence - Feb-13Bleak times for the funds of hedge funds - Feb-08A and H shares near parity - Jan-06Beijing boost for foreign banks - Jan-08Optimism in face of gloom - Dec-21South Korea remained the largest market in Asia outside of Japan with $3bn of international structured finance issuance in 2008, based mainly on credit cards, and car and home loans. Demand was strong in the first three quarters of the year but investors lost interest as the credit crisis deepened following the collapse of Lehman Brothers in September.

Moody’s expects consumer asset securitisations sponsored by quasi-government entities to increase in South Korea. Banks, it says, are showing interest in covered bonds, a more traditional and conservative form of securitisation, in which assets remain on the issuers’ balance sheet.

Moody’s expects further bundling and listing of Indonesian home loans following the success of the country’s first-ever residential MBS transaction last week.

The state housing lender Bank Tebungan Negara sponsored the Rp100bn ($8.2m) issue, which was small by international standards but could mean further deals now that regulatory issues have been clarified.

“Many originators had been waiting for this first transaction to complete so that they can reference the structure and the various rulings and opinions in deciding whether or not to follow suit,” Moody’s said.

China launched securities backed by car loans for the first time in 2008, but prospects in China remain uncertain following the end of the China Banking Regulatory Commission and the People’s Bank of China’s pilot securitisation programme. No further plans have been revealed.

Copyright The Financial Times Limited 2009

The Case for Brainy Power-Newsweek

Sponsored By

The Case for Brainy Power

Google's Dan Reicher says we need to make our electricity grid a whole lot smarter.

Fareed Zakaria

NEWSWEEK

From the magazine issue dated Nov 24, 2008

A clean-energy economy will require lots of new hardware—sleeker wind turbines, more efficient solar panels, recharging stations for electric vehicles. It'll also require smarter software, to efficiently guide energy to where it's most needed. Always ambitious, Google hopes to be the architect of this software. Heading up its effort is Dan Reicher, a former assistant secretary at the Department of Energy who now serves as director of climate change and energy initiatives at Google .org, the company's philanthropic arm. NEWSWEEK's Fareed Zakaria spoke with him about the promise of the "smart grid" and more:

ZAKARIA: You ' ve worked in both government and the private sector. To get to a clean-energy future, which do you think has the bigger role to play?
REICHER: I think it's both. There are often large barriers to moving new energy technology into the marketplace. It takes a combination of policy, technology and finance.

Google has made noise recently about the energy grid. Why is that such an important topic?
The electric grid is in many ways the backbone of our economy. Beginning in Thomas Edison's time, we've built a massive system to both generate and move electricity around the country, from nuclear-power plants and coal-fired generating facilities, across a huge infrastructure of wires and into people's homes. However ... in many ways [the grid] isn't up to the task that we're asking it to take on in the next couple of decades … If we're really going to take advantage of renewable energy, we have to build substantially more transmission capacity to move wind-generated electricity from the Dakotas to Chicago or solar-generated power from the Southwest to L.A.

Why is " transmission capacity " a stumbling block?
We simply don't have enough power lines to move large quantities of green electricity from where it exists to where it's needed. So we've got to build more power lines to take advantage of wind and solar and geothermal energy.

But we also have to do it in a smarter way, right?
Right. We've also got to build a more intelligent grid. Electricity generally flows in one direction, from where it's generated to where it's used, but increasingly we want to be able to send electricity in multiple directions. For example, if we have a fleet of millions of plug-in vehicles, we've got to have a grid that not only knows how to fill up the batteries with electricity, but one where the same vehicles can send electricity back to the grid when it needs it. They can serve as a large storage capacity for the grid.

What are you doing at Google to improve things?
We launched a partnership with General Electric, for example, which brings together GE's energy hardware and Google's information software.

How would this help people?
One of the challenges that the electric grid has is how to provide power on a hot day in the summer: since everybody's using power at that point, we frequently see brownouts and sometimes blackouts. If the grid could be in constant communication with your air conditioner, we could avoid these kinds of problems, and you might get paid in exchange for allowing your air conditioner to be cycled on and off in relatively imperceptible ways. If we had real-time pricing of electricity—that is, pricing for people that reflects different costs throughout the day—you would have a choice: wash and dry your clothes at noon on a hot day, which will cost you x dollars, or wait six to eight hours when it will cost you a quarter of that. Over time, we are going to have smarter appliances and equipment in our homes. But all this is going to take increasing investment in the grid.

What will that investment get us?
For one, we need what are called smart meters. These are meters that record real-time information and can send it over the Internet to utilities, and then get it directly to consumers. You wouldn't expect to go into a grocery store and do your shopping and not know what the prices for anything were and only get a bill at the end of the month. We need to get to a point where people have a lot more sense about what we're paying for energy at any given point, and more choice about where it comes from and how green it is.

Sounds wonderful, but it also sounds like something involving a patchwork of overlapping governments and regulators. Is it likely that we could actually get to the point you ' re describing?
Yes. As I said, one of the critical needs is intelligent meters, and those are beginning to be installed. State utility regulators are encouraging utilities to purchase and install large numbers of them. We're not where countries like Italy are—they've installed smart meters across the entire country—but we're moving in that direction. I also think the economic attractiveness of being able to better monitor and control your own energy use, whether you're a homeowner or a factory operator, is going to motivate people, especially in an era of higher energy prices.

Google uses enormous amounts of energy in its server farms. Wouldn ' t part of the new energy future require you to do better on that front?
Absolutely. The energy work we're doing will also help Google to green up its own operations. It turns out that responding to millions of Google searches uses a fair amount of electricity. We've made some good progress in making those facilities more efficient, and we are looking for greener sources of electricity.

If you are asked to be secretary of energy in the Obama administration, what would be the first thing you ' d do?
I think one of the things we clearly need to do is put a price on carbon emissions to control greenhouse gases. That would send the right price signals to the economy and drive the trillions of dollars of investment that will have to be made both to avert the climate crisis and to rebuild our economy.

URL: http://www.newsweek.com/id/169165

© 2008 

The Case for Brainy Power-Newsweek

Sponsored By

The Case for Brainy Power

Google's Dan Reicher says we need to make our electricity grid a whole lot smarter.

Fareed Zakaria

NEWSWEEK

From the magazine issue dated Nov 24, 2008

A clean-energy economy will require lots of new hardware—sleeker wind turbines, more efficient solar panels, recharging stations for electric vehicles. It'll also require smarter software, to efficiently guide energy to where it's most needed. Always ambitious, Google hopes to be the architect of this software. Heading up its effort is Dan Reicher, a former assistant secretary at the Department of Energy who now serves as director of climate change and energy initiatives at Google .org, the company's philanthropic arm. NEWSWEEK's Fareed Zakaria spoke with him about the promise of the "smart grid" and more:

ZAKARIA: You ' ve worked in both government and the private sector. To get to a clean-energy future, which do you think has the bigger role to play?
REICHER: I think it's both. There are often large barriers to moving new energy technology into the marketplace. It takes a combination of policy, technology and finance.

Google has made noise recently about the energy grid. Why is that such an important topic?
The electric grid is in many ways the backbone of our economy. Beginning in Thomas Edison's time, we've built a massive system to both generate and move electricity around the country, from nuclear-power plants and coal-fired generating facilities, across a huge infrastructure of wires and into people's homes. However ... in many ways [the grid] isn't up to the task that we're asking it to take on in the next couple of decades … If we're really going to take advantage of renewable energy, we have to build substantially more transmission capacity to move wind-generated electricity from the Dakotas to Chicago or solar-generated power from the Southwest to L.A.

Why is " transmission capacity " a stumbling block?
We simply don't have enough power lines to move large quantities of green electricity from where it exists to where it's needed. So we've got to build more power lines to take advantage of wind and solar and geothermal energy.

But we also have to do it in a smarter way, right?
Right. We've also got to build a more intelligent grid. Electricity generally flows in one direction, from where it's generated to where it's used, but increasingly we want to be able to send electricity in multiple directions. For example, if we have a fleet of millions of plug-in vehicles, we've got to have a grid that not only knows how to fill up the batteries with electricity, but one where the same vehicles can send electricity back to the grid when it needs it. They can serve as a large storage capacity for the grid.

What are you doing at Google to improve things?
We launched a partnership with General Electric, for example, which brings together GE's energy hardware and Google's information software.

How would this help people?
One of the challenges that the electric grid has is how to provide power on a hot day in the summer: since everybody's using power at that point, we frequently see brownouts and sometimes blackouts. If the grid could be in constant communication with your air conditioner, we could avoid these kinds of problems, and you might get paid in exchange for allowing your air conditioner to be cycled on and off in relatively imperceptible ways. If we had real-time pricing of electricity—that is, pricing for people that reflects different costs throughout the day—you would have a choice: wash and dry your clothes at noon on a hot day, which will cost you x dollars, or wait six to eight hours when it will cost you a quarter of that. Over time, we are going to have smarter appliances and equipment in our homes. But all this is going to take increasing investment in the grid.

What will that investment get us?
For one, we need what are called smart meters. These are meters that record real-time information and can send it over the Internet to utilities, and then get it directly to consumers. You wouldn't expect to go into a grocery store and do your shopping and not know what the prices for anything were and only get a bill at the end of the month. We need to get to a point where people have a lot more sense about what we're paying for energy at any given point, and more choice about where it comes from and how green it is.

Sounds wonderful, but it also sounds like something involving a patchwork of overlapping governments and regulators. Is it likely that we could actually get to the point you ' re describing?
Yes. As I said, one of the critical needs is intelligent meters, and those are beginning to be installed. State utility regulators are encouraging utilities to purchase and install large numbers of them. We're not where countries like Italy are—they've installed smart meters across the entire country—but we're moving in that direction. I also think the economic attractiveness of being able to better monitor and control your own energy use, whether you're a homeowner or a factory operator, is going to motivate people, especially in an era of higher energy prices.

Google uses enormous amounts of energy in its server farms. Wouldn ' t part of the new energy future require you to do better on that front?
Absolutely. The energy work we're doing will also help Google to green up its own operations. It turns out that responding to millions of Google searches uses a fair amount of electricity. We've made some good progress in making those facilities more efficient, and we are looking for greener sources of electricity.

If you are asked to be secretary of energy in the Obama administration, what would be the first thing you ' d do?
I think one of the things we clearly need to do is put a price on carbon emissions to control greenhouse gases. That would send the right price signals to the economy and drive the trillions of dollars of investment that will have to be made both to avert the climate crisis and to rebuild our economy.

URL: http://www.newsweek.com/id/169165

© 2008 

Risk Worth Taking-Newsweek

Sponsored By

A Risk Worth Taking

Many ethical subprime lenders still manage to make plenty of money.

Daniel Gross

NEWSWEEK

From the magazine issue dated Nov 24, 2008

In recent months, conservative economists and editorialists have tried to pin the blame for the unholy international financial mess on subprime lending and subprime borrowers. If bureaucrats and social activists hadn't pressured firms to lend to the working poor, the narrative goes, we'd still be partying like it was 2005 and Bear Stearns would be a going concern. The Wall Street Journal's editorial page has repeatedly heaped blame on the Community Reinvestment Act (CRA), the 1977 law aimed at preventing redlining in minority neighborhoods. Fox Business Network anchor Neil Cavuto in September proclaimed that "loaning to minorities and risky folks is a disaster."

This line of reasoning is absurd on several levels. Many of the biggest subprime lenders weren't banks, and thus weren't covered by the CRA. Nobody forced Bear Stearns to borrow $33 for every dollar of assets it had, and Fannie Mae and Freddie Mac didn't coerce highly compensated CEOs into rolling out no-money-down, exploding adjustable-rate mortgages. Banks will lose just as much money lending to really rich white guys like former Lehman Brothers CEO Richard Fuld as they will on loans to poor people of color in the South Bronx.

But the best refutation may be provided by Douglas Bystry, president and CEO of Clearinghouse CDFI (community development financial institution), based in Lake Forest, Calif. Since 2003, this for-profit firm in Orange County—home to busted subprime behemoths like Ameriquest—has made $220 million in mortgages in the Golden State's subprime killing fields. More than 90 percent of its home loans have gone to first-time buyers, about half of whom are minorities. Out of 770 single-family loans it has made, how many foreclosures have there been? "As far as we know," says Bystry, "seven." Last year Clearinghouse reported a $1.4 million pretax profit.

Community-development banks, credit unions and other CDFIs—a mixture of faith-based and secular, for-profit and not-for-profit organizations—constitute what might be called the "ethical subprime lending" industry. Even amid the worst housing crisis since the 1930s, many of these institutions sport healthy payback rates. They haven't bankrupted their customers or their shareholders. Nor have they rushed to Washington begging for bailouts. Their numbers include tiny startups and veterans like Chicago's ShoreBank, founded in 1973, which now sports $2.3 billion in assets, 418 employees and branches in Detroit and Cleveland. Cliff Rosenthal, CEO of the National Federation of Community Development Credit Unions, notes that for his organization's 200 members, which serve predominantly low-income communities, "delinquent loans are about 3.1 percent of assets." In the second quarter, by contrast, the national delinquency rate on subprime loans was 18.7 percent.

Participants in this "opportunity finance" field, as it is called, aren't a bunch of squishy social workers. In order to keep their doors open, they have to charge appropriate rates—slightly higher than those on prime, conforming loans—and manage risk properly. They judge their results on financial performance and on the impact they have on the communities they serve. "We have to be profitable, just not profit-maximizing," says Mark Pinsky, president and CEO of the Opportunity Finance Network, an umbrella group for CDFIs that in 2007 collectively lent $2.1 billion, with charge-offs of less than 0.75 percent.

What sets the "good" subprime lenders apart is that they never bought into all the perverse incentives and "innovations" of the late subprime lending system—the fees paid to mortgage brokers, fancy offices and the reliance on securitization. Like a bunch of present-day George Baileys, ethical subprime lenders evaluate applications carefully, don't pay brokers big fees to rope customers into high-interest loans and mostly hold onto the loans they make rather than reselling them. They focus less on quantity than on quality. Clearinghouse's borrowers must qualify for the fixed-rate mortgages they take out. "If one of our employees pushed someone into a house they couldn't afford, they would be fired," says CEO Bystry.

These lenders put into practice the types of bromides that financial-services companies like to use in their advertising. "We're in business to improve people's lives and do asset building," says Linda Levy, CEO of the Lower East Side Credit Union. The 7,500-member nonprofit, based on still-scruffy Avenue B, doesn't serve the gentrified part of Manhattan's Lower East Side, with its precious boutiques and million-dollar lofts. The average balance in its savings accounts is $1,400. The typical member? "A Hispanic woman from either Puerto Rico or the Dominican Republic in her late 40s or early 50s, on government assistance, with a bunch of kids," Levy says. Sure sounds like subprime. But the delinquency rate on its portfolio of mortgage and consumer loans is 2.3 percent, and it's never had a foreclosure.

Ethical subprime lenders have to look beyond credit scores and algorithms when making lending judgments. Homewise, based in Santa Fe, N.M., which lends to first-time, working-class home buyers, makes credit decisions based in part on whether borrowers have scraped together a 2 percent down payment. "If customers build a savings habit to save that money on a modest income, it says a lot about them and their financial discipline," says executive director Mike Loftin. Of the 500 loans on Homewise's books in September, only 0.6 percent were 90 days late. That compares with 2.35 percent of all prime mortgages nationwide.

Since ethical subprime lenders know they're going to live with the loans they make—rather than simply sell them—they invest in initiatives that will make it more likely the loans will be paid back. Faith Community United Credit Union, which got started in the basement of a Baptist church in Cleveland in 1952 with members saving quarters on Sundays, now has $10 million in assets. In addition to making loans, "we teach people how to manage their finances and accounts," says CEO Rita Haynes. ShoreBank, as part of its energy-conservation loan program, offers free energy audits and a free Energy Star refrigerator when upgrades are completed. The theory: reducing energy bills makes it more likely people will stay current with their mortgages. Today, only $4.83 million of ShoreBank's $1.5 billion loans are in foreclosure, or just 0.32 percent.

Ethical subprime lenders are now expanding beyond mortgages. Ed Jacob, manager and CEO of Chicago's North Side Community Federal Credit Union, was alarmed to learn that many of his 2,700 members, most of whom have less than $100 in their accounts, were relying on the "second-tier financial-service marketplace": check-cashing outlets and payday lenders, which charge exorbitant fees. So he rolled out a Payday Alternative Loan (PAL), $500 for six months at 16.5 percent. The delinquency rate on the more than 5,000 PALs extended thus far is 2.5 percent. "For payday lenders, it's a success if customers keep taking out loans. To me, it's a success if they don't have to anymore," Jacob says. He believes such loans can build a credit history and help "move people to better products for them and us—auto loans and, eventually, mortgage loans."

Lending small amounts of money, carefully and responsibly, to working-class people isn't a recipe for riches or grand executive living. At the headquarters of ShoreBank, which occupies a former movie theater built in 1923, the window in one founder's office looks out onto a brick wall. Bystry, the CEO of Clearinghouse CDFI, earns a salary of $190,000, a pittance compared with the compensation of larger lenders. (Angelo Mozilo, former CEO of Countrywide Financial, was paid $22.1 million in 2007.) For all the growth, this remains very much a niche industry.

Still, the mortgage crisis has provided an opportunity for ethical subprime lenders to expand. ShoreBank has added staffers and in August 2007 rolled out a Rescue Loan program, which aims to move borrowers out of expensive adjustable-rate mortgages into fixed-rate loans. "We really believe we can help people caught in these bad mortgages," says Jean Pogge, executive vice president of consumer and community banking at ShoreBank. And with plenty of lenders having failed or pulled back from markets, new customers are flocking to their doors. "We're getting demand for regular co-op loans for the first time," says Levy of the Lower East Side Credit Union. In California, the news on housing may be unrelentingly grim, but through the third quarter, Clearinghouse CDFI made 161 loans for $48.4 million, up about 50 percent from the total in the first three quarters of 2007. Doug Bystry says, "This may be a record year for us."

With Andrew Murr in Los Angeles and Hilary Shenfeld in Chicago

URL: http://www.newsweek.com/id/169160

© 2008 

Houston is tops in adding jobs in America; Austin and Dallas are 2 and 3

Friday, September 12, 2008
Houston Business Journal - by G. Scott Thomas and Jennifer Dawson

A new national study naming Houston as the hottest job market in America confirms what some local economy watchers already expected.

The Bayou City rose to the top spot by adding 48,100 private-sector jobs from June 2007 through June 2008, according to data compiled by bizjournals, a division of American City Business Journals, parent company of the Houston Business Journal.

Houston has made a couple of quantum leaps since 2006, when the city ranked No. 28 in the first annual bizjournals survey. Houston vaulted to No. 5 in the following 2007 study.

Barton Smith, director of the Institute for Regional Forecasting at the University of Houston, says Houston would likely be experiencing additional job growth if it weren’t for the dismal housing market nationwide. People who might come here to work are stuck where they are because they can’t sell their homes.

“The housing market mess that we’re in has made labor much less mobile,” Smith says. “So many of the people cannot make a move because they have a home with negative equity. The only way to make a move is to foreclose on a property.”

He notes that homes sell for an average of $75 per square foot in the Houston area compared to an average of $300 per square foot in California, so less of a housing correction will occur here.

Eric Nielsen, managing director of the Houston office for employment firm Korn/Ferry International, says Houston is performing well because it has a leading position in many of the sectors within the energy industry.

In addition to oil and gas gains, Houston is seeing an uptick in pipelines, utilities, new power generation and the business of managing those commodities.

“I think you’re going to see continued job growth, especially in these sectors,” says Nielsen, who handles recruitment of top-level executives.

Patrick Jankowski, vice president of research at the Greater Houston Partnership, says Houston is also benefitting from the weak dollar because energy-related products and services that originate here are distributed throughout the world.

The dollar disparity applies to equipment, infrastructure project management, as well as legal and other professional services.

Says Jankowski: “It makes what we sell here more affordable.”

Three cheers for Texas

The entire Lone Star State is prospering at a time when the overall U.S. economy has been rocky.

Texas markets grabbed the top three spots in the bizjournals rankings.

The nation’s 100 largest metropolitan areas are measured according to a nine-part formula that analyzes employment trends derived from mid-year data compiled by the U.S. Bureau of Labor Statistics.

Austin, which added 11,600 jobs over the past year, came in at No. 2 in the latest rankings. Dallas-Fort Worth, which added 47,500 jobs, was No. 3.

The three Texas markets have added a total of 107,200 private-sector jobs since mid-2007, while keeping their unemployment rates below 5 percent.

The nation has seen 394,000 private-sector jobs slip away since mid-2007, equaling a loss of 7,570 jobs each week. The unemployment rate has shot up a full point during the same span — from 4.7 percent at the halfway point of 2007 to 5.7 percent this year.

Recent volatility in the U.S. economy has shuffled the standings dramatically in the past year. Phoenix, No. 1 in the bizjournals 2007 employment rankings, dropped all the way to 28th place this year. Six of last year’s 10 hottest markets have fallen out of the Top 10 this year.

Last place belongs once again to Detroit, which has ranked as the coldest job market in America for the past two years.

Heavy reliance on domestic automakers has reduced the Motor City employment rolls by 30,800 jobs since mid-2007.

jdawson@bizjournals.com

U.S. Senate to vote on Northwest Loop

By Jimmy Currier, Observer staff writer
Published on Sunday, July 13, 2008

U.S. Senator Jeff Bingaman, D-NM, reported that a key spending bill that contains millions of dollars in funding he requested for local transportation projects has cleared another hurdle.

The Senate Appropriations Committee has approved the fiscal year 2009 spending bill that funds the U.S. Department of Transportation. The bill, which can now be considered by the full Senate, contains $1 million for an access road in Sandoval County.  Funding will be used to help construct a two-lane gravel Northwest Loop access road that will bypass the metropolitan Albuquerque area by creating an alternate route from Interstate 40 to Interstate 25 via U.S. 550 to the North. Bingaman secured $955,000 for this project in FY 2008.

“This new access road will help alleviate traffic congestion in one of the busiest parts of Albuquerque,” Bingaman said.

Donnie Leonard, District 2 Sandoval county commissioner, is glad to hear the news.

“This is a great opportunity for us to move forward,” Leonard said. “This is something that has been 20 years in the making.”

The road will be 42 miles and 350-feet wide.

Leonard explained the project has been 20 years in the making and that the county has money from the 2007 and 2006 state legislature to use.

The Northwest Loop will alleviate traffic and help spur industry.

The road, combined with the county’s broadband initiative, desalinization plant and airport, will help grow the area.

“What this will do is help us open up land for industrial development,” Leonard said. “It will bring in employers that pay higher wages and we have an improved picture in industry.”

He described the Northwest Loop project as a long-range program.

“It is a multi-million dollar project and it will take years to complete,” Leonard said. “We have to continue moving forward.”

Leonard compared the road to Hwy. 101 in Phoenix that moves traffic out of congested areas.

“This is a win-win for the whole metro area when it comes to moving traffic.”

Once the gravel road is constructed, private entities have committed to funding the pavement of a permanent road.

Ultimately this 15 mile paved road will provide tremendous relief for traffic congestion at the intersection of I-40 and I-25. There is a timing issue, as the rights of way for the road are due to expire in 2007.

Centex Adopts Energy Efficiency Standards

by Lisa Marquis Jackson, July 8, 2008 - Builder Online

Centex Homes announced Tuesday that it will include a standard suite of energy efficient features in all of its homes nationwide by January 2009.

Centex targets first-time buyers and has been actively working on a comprehensive redesign of the company's product line. During the process, Centex decided to incorporate an energy efficient package as standard in order to keep costs down and create a unique selling proposition.

"With today's high energy costs, energy efficiency is front and center for home buyers," said Tim Eller, chairman and CEO of Centex. "Monthly energy bills are having a growing impact on the budgets of our home buyers, affecting overall affordability."

The builder commissioned the NAHB Research Center to study homes equipped with features included in the initiative—dubbed Centex Energy Advantage—and the results revealed an improvement in energy efficiency of up to 22% over comparable homes built to the most widely used energy efficiency code, the 2006 International Energy Conservation Code (IECC).

In addition, when compared to the energy efficiency of a typical 10-year-old home as defined by the U.S. Department of Energy's Building America Program, the Centex Energy Advantage homes in the study were shown to be up to 40% more energy efficient

The company expects the initiative to have impressive cumulative effects. For every 10,000 homes Centex builds each year, 17,800 fewer metric tons of carbon could be released than from comparable homes built to 2006 IECC standards. That's equivalent to greenhouse gas emissions from 2,957 passenger vehicles in one year, CO2 emissions from 1.83 million gallons of gasoline consumed, or the annual carbon absorption by 3,670 acres of pine or fir forest.

For its most recent fiscal year, the company sold nearly 25,000 homes.

"We designed the Centex Energy Advantage with a focus on two priorities," said Clayton Traylor, head of environmental affairs for Centex. "First, we want to provide our customers with homes that exceed today's energy efficiency standards while maintaining affordability. Second, we want to empower our customers with the tools and information they need to lower their energy use in the future."

Features of the Centex Energy Advantage standard package include: an energy monitor; Whirlpool or KitchenAid brand ENERGY STAR–qualified appliances; Lennox high-efficiency HVAC system; programmable thermostat(s); low-emissivity windows; radiant-barrier roof decking; R-38, R-40, or R-60 attic insulation (varies by climate zone); compact fluorescent lights in high-traffic areas; and information for maximizing energy efficiency and minimizing the impact of home operation on the environment.

Lennar: Homes For The 20th Century

By: Investing From The Right   Sunday, June 29, 2008

Yesterday, I attended a grand opening at a Lennar site in the desirable locale of Jupiter, Florida. A very large development of several hundred acres was being shown to the public for the first time. Even Radio Disney was present (the kids brought the parents - good marketing ploy). A catered lunch was provided and the well-trained and readily accessible Lennar staff was both in the model home and in the blazing heat at high noon ready to pitch the homes to be built. I spoke with four different sales representatives to get a sense of the development's presence.

Six home plans were offered with four being 4000 square feet or larger. Pricing was from the mid-$300g's for the basic 3000 sq. ft. home up to $600's for the Ford-Excursion type 5300 square foot behemoth.

Therein lies my questions for the sales force. What is Lennar thinking? McMansions, no green packages for conservation, stale floor plans, Home Owner headaches and higher fees ($270/month) for the usual pool, clubhouse and landscaping perks. I thought I was in a time warp.

Turns out, I was not far off in my thinking. The development had been in the planning stages for years since Lennar acquired the land within earshot of I-95. The Jupiter city government had demanded its stamp of approval on every aspect of the development, including exterior designs and colors, which they approved in 2004 (at the height of the real estate boom). Nothing in Lennar's master plan had been changed since, as it would have meant having the city entity in charge of these matters to review the entire project. Lennar has decided to just go ahead with the dated build-out idea.

Lennar has invested millions in land, all the infrastructure including water and sewer, a well-trained sales force and then drops the ball by offering product that is dated, inefficient and priced to perfection for 2004.What could this company be thinking?

If this large development is indicative of the company as a whole, lump LEN with Ford and General Motors. Scratch that - both auto companies may actually be thinking more creatively than Lennar.

Trading at $12.63 per share, LEN is the nation's second largest home builder. The company is actually in a better financial position than many of its competitors at this time. Lennar does take a longer term view with projects,building in 42metropolitan area locations for diversity. Cash flow at this time is not an issue, although losses are substantial, especially with cross-ventures.

To sum up,Lennar puts out a great sales force, brings in the kids for Disney and has a nice lunch buffet. It may have worked in the 20th century, but I was shocked at how little this company has not learned about the changing homescape. Selling homes that are the equivalent of SUVs in a Prius environment? Maybe my observations are off base, but personally I'll wait until Lennar takes a brief ride forward in the Star Trek time machine before I consider the purchase of this security.

Logistics firm adding 800 jobs

ATC ramps up at Fort Worth Alliance Airport with three new contracts

Dallas Business Journal - by Margaret Allen and Bill Hethcock
February 15, 2008

ATC Logistics and Electronics LP is in the midst of hiring 800 employees and has added 190,000 square feet of space to its Fort Worth Alliance Airport location as it ramps up to handle three new contracts.

The fast-growing third-party logistics firm, which provides everything from warehousing and distribution services to the handling of returns and repairs for its electronics customers, now has more than 1 million square feet of operating space and about 3,000 employees, almost all of whom are in North Texas.

Driving the company’s current spate of hiring are three new contracts, including two with existing customers. While the identity of two of ATC’s new customers is confidential, one is with portable global positioning devices provider TomTom Inc.

ATC Logistics and TomTom just signed a multiyear contract that puts TomTom among the logistics provider’s largest customers. ATC will be responsible for managing the purchase of packing materials and accessories for TomTom products before they are distributed to national retailers including Best Buy and Circuit City.

Expansion is likely to continue throughout the year if ATC Logistics secures even more business, said President William "Bill" Conley Jr.

While ATC Logistics has just signed a contract with Hillwood to lease more space at Alliance, the logistics provider will likely need another 200,000 square feet of space in Dallas-Fort Worth and could hire as many as another 400 employees in 2008, he said.

‘A good problem to have’

ATC is looking for a variety of warehouse employees, where jobs in this region are typically paying $11 to $15 an hour, say industry sources. A limited number of supervisory positions will also be added.

"We’re in a situation where if we sell one more piece of business we need another building," Conley said. "It’s a good problem to have."

Dallas-Fort Worth consistently ranks in the top four U.S. locations when Fortune 500 companies look at where to put their distribution centers, said Jon Cross, director of marketing for The Allen Group, which is developing the 6,000-acre Dallas Logistics Hub in southern Dallas.

"You can reach 70% to 85% of the U.S. population within two legal trucking days," he said. "That is huge."

Because of rising fuel costs, increasing environmental concerns and other factors, logistics plays an increasingly important role for companies, allowing Dallas-Fort Worth to benefit because of its central position in the United States, Cross said. That’s one reason The Allen Group believes the Metroplex can support two major logistics centers.

Transportation infrastructure, labor and land costs, the availability of the foreign trade zone and Hillwood’s flexibility to work with expanding companies all factor into companies such as ATC Logistics expanding, said Steve Boecking, vice president of international business development for Hillwood.

"It’s all of these things put together in a package," he said.

ATC Logistics is also looking at adding as much as 100,000 square feet on the West Coast as its customers request regional logistics and distribution services there, Conley said.

Founded in 1996, ATC Logistics is a subsidiary of Illinois-based Aftermarket Technology Corp. (NASDAQ: ATAC). The parent company remanufactures and distributes car and truck transmissions and related parts.

The logistics subsidiary supplies a full-range of logistics and distribution services to 15 manufacturers and telecommunications carriers, many of them Fortune 100 companies. Earlier this week, ATC Logistics reported 2007 sales of $293.9 million, a 12% increase compared to 2006. Net income last year reached $45 million, Conley said.

In mid-2007, the trade magazine Logistics Management named ATC among the most cutting-edge third-party logistics providers, saying it was a "standout" among the industry’s smaller, niche players.

ATC Logistics currently operates from five separate facilities in Texas and Oklahoma.

At Alliance, where it has three buildings and about 2,870 employees, it now occupies 375,000 square feet in one building, 180,000 square feet in a second, and 415,000 square feet in a third. In that building, it initially leased 225,000 square feet but just recently added 190,000 square feet.

ATC Logistics also has 50,000 square feet of space and 80 employees in Carrollton, and 100,000 square feet of space and 50 employees in Oklahoma City.

Focusing on electronics

The Dallas-Fort Worth area is the perfect location for nationwide logistics and distribution, Conley said, due to the central location and transportation infrastructure.

ATC Logistics receives its customers’ shipments of high-value electronic devices by air, rail or truck, and breaks them into shipments sent to national retailers and company-owned stores. ATC Logistics also handles its customers’ returns, any testing and repair, remanufacturing to original equipment manufacturer’s specifications, repackaging and proper electronic waste disposal.

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bhethcock@bizjournals.com |          214-706-7125      

Baylor Health Care buys land in Aperion's Terrell property

Baylor Health Care System says it has bought 53 acres in Terrell for what could ultimately become a regional medical campus.

"Over the next year, Baylor will study the needs of the community to determine the types of services and facilities to offer," said Baylor Chief Operating Officer Gary Brock in a written statement.

The land is at the northwest corner of Interstate 20 and Spur 557. Brock noted that Terrell, 40 minutes east of downtown Dallas, is expected to see its population increase by about 15% by 2011.

Baylor has an existing facility through the HealthTexas Provider Network. That center, which is more than 20 years old, provides newborn care, pediatrics, women's health services as well as adult care.

The site for the new Baylor campus in Terrell is within the town's tax increment reinvestment zone, which was established in 2007.