Thursday, April 23, 2009

"I Blog What I Eat"

I had the pleasure of meeting Matt from I Blog What I Eat last night. I found Matt's blog recently when I was looking for a photo of Bobby Flay's new burger place in Paramus (that's Matt's photo I've borrowed above; my digital camera is on the fritz and I've been procrastinating about getting it fixed) and of the new Whole Foods, which is in the same mall, Bergen Town Center1, in nearby Paramus2. Matt was more impressed with the Bobby Blue Burger than I was, but we both like Five Guys and Danny Meyer's Shake Shack, so there's some overlap in our burger joint preferences.

I was going to use the photos of Bobby's Burger Palace and Whole Foods in a post about local businesses that seem to be doing well during the current recession, but I'll make the point here. Both businesses opened outposts in Paramus within the last month, and both seem to be doing pretty well. Every evening we've been by (usually on our way to Whole Foods), there's been a line out the door of Bobby's Burger Palace. The Whole Foods cafe has been consistently busy as well.

1This mall used to be called the Bergen Mall, and it was the ugly stepchild of malls in Bergen County. Vornado Realty Trust bought it several years ago and spent $171 million renovating it and expanding it.

2I'd remembered reading once that Paramus -- a town of about 25,000 residents -- generated more retail sales than any city in the U.S. aside from Manhattan. Paramus's Wikipedia entry says that, in 2005 Paramus generated more retail sales than any other zip code in the country (which is consistent with what I remembered, since Manhattan has plenty of zip codes, e.g., before the World Trade Center was destroyed, each of the twin towers had its own zip code).


JK said...

This guy eats out for every meal? That has to be terrible for his health.

Regarding local businesses doing well, (I'm not too far from you) the other day I had a chat with a home renovation contractor who said business is booming this year like never before.
Yesterday at the gym I met a local R.E. investor who also testified to robust activity in the housing market, the only problem being banks not wanting to lend. He's resorted to cold calling for angel investors now.

Those who are not in danger of getting laid off seem to be spending money at a nice clip, a boon to small businesses who survived by keeping their books in order before the recession.

I think we may be in for another hollow recovery coupled with an asset bubble, like we had in 04-06, before the long recession hits. As long as government is solvent enough to avert disaster, they will do so...but I don't see government being solvent enough next time around.

My intuition tells me we need to retest bottom before we uptrend for good though. This latest rally doesn't have the kind of volume you usually need to see for a change in trend, and we're lagging below the moving averages still.

DaveinHackensack said...

And another local business to the doing well list: Chipotle. There was a line snaking along three walls in the place tonight.

Interesting about the boom you mention in renovations. I wonder if people with discretionary income are deciding to put less of it into investments and more of it into tangible stuff.

Re real estate investment, the fellow I had been working with last year on his alternative lending business is now working to put together a private placement to raise money for a real estate/distressed asset fund. He went to Florida last week and said he could buy 20 one bedroom condos in Orlando from a bank for less than $1 million.

Re your prediction about the weak recover, that seems to be the conventional wisdom (except in the White House, where their budget projections depend on a stronger one). What asset class do you figure will have a bubble next?

I could see us having a weak recovery, followed by a double-dip recession in a few years, as the Fed raises rates to ward off inflation. But a lot will depend on who the next Fed chairman is. If Bernanke gets reappointed next year, I think he'd have no qualms about raising rates. But an Obama appointee? I don't know. He might try to hold off until after the 2012 elections to tighten up. We'll see.

JK said...

I think we could see another commodity bubble, or a smaller stock bubble led by the emerging markets or clean energy sectors. More likely the emerging market sector, IMO, esp China, despite the large correction they had recently. The Indian exchanges are already in somewhat of a bubble now, a Mumbai colleague of mine is a daytrader and has been showing me around the Indian financial media. Stocks there are very overvalued, and frequently trading based on projected earnings 3 years out!

^*One country I predict will have a major boom in the near future will be the Philippines. Outsourcers, including my employer, are flocking there from India for their call centers, because the people there speak both spanish and english. It is also a major hub for Pacific transportation. There is only one Philippine ADR, I've been trying to figure out if its possible for a US citizen to open a brokerage account down there.

It is a good possibility that an Obama appointee would wait until after 2012 to raise rates. Carter took heat for Volcker's rate hikes, and the first George Bush also ran into political trouble when the fed raised rates. The average american doesn't really get that high rates are needed sometimes to fix problems, they just know they have to pay 100s more on their credit cards each month.

DaveinHackensack said...

Speaking of China and commodities, in Thursday's FT, Goldman's chief economist, Jim O'Neil, said he was upping his estimate for China's GDP this year and next. He said he thought they were doing everything right in dealing with the global recession.

JK said...

I see China as being the US of last century. By the end of this one they will have passed us in global power or be on par with us, depending on the choices the US makes.

I think they are doing everything right (recently) also. They are hedging their huge dollar holdings by buying up commodities, which will offset a decline in the dollar. Also, their stimulus is having more of an impact because they are forcing their banks to lend the money immediately. Not a democratic way to do things, but effective. They'll be fine in the long run but good times lead to bubbles because of human nature. There is still a lot of scamminess and corruption out China there is a saying that businesses have 3 sets of books, one for investors, one for the tax man, and one for the owners eyes only. India is quite corrupt also, government employees are the best paid citizens, it is taken for granted that they make all their money from bribes. Anyway, all this money they are printing is in the big boys' hands, and they have to put it somewhere before it trickles down to the rest of us and the purchasing power is diluted. They are going to put their money where the fundamentals are good (China) and inflate asset values, creating another bubble. I'd rather have a China bubble than a U.S. bubble, and I think that is more likely.

DaveinHackensack said...

"I see China as being the US of last century."That's what Jim Rogers has said. He says investing in China today is like investing in the U.S. in 1909. Some feel that China will get old before it gets rich, due to the one-child policy, but Goldman's Jim O'Neil doesn't seem to be one of them. In any case, good news for China's economy in the near term ought to be good news for the world, particularly Australia. We've talked about this before, but the more I think about it, the more I like Australia as a place to invest: it's levered to the growth in China and India, it's got the commodities to hedge against inflation, but it's also a first world country with rule of law, and, unlike most first world democracies, its government has a great balance sheet.

JK said...

I agree, that is a good bull case for Australia.

Anonymous said...

has anyone heard of the hackensack pastry? Well if you have dont go there. The owner has created havoc for the residents of hackensack. They close 6months out of the year and feel that every resident, in this time of financial crisis has complained to the city of hackensack to give out violations to everyone. They should mind their own business and keep their mouth shut. Boycott their pastry shop. Also if they dont like wat they see in Hackensack then they should move out.