Quarterlies

2011-07-27 | Edit | Delete

Dear Neighbors and Friends,

Greetings from Jim Sauble Construction.
We have had a busy winter, work wise, and look forward to a busy Spring and Summer despite the difficult times we are in.

Good news in construction includes very low interest rates, fuel costs are 50% lower than just seven months ago and real estate bargains abound. Material costs are down as is lead time on projects. The bad news is that I do not expect these conditions to last long, and I'm not alone in seeing the writincg on the wall. I firmly believe the state and federal governments are currently making things worse for the long term by not correcting root causes.

Inflation and continued higher than desired unemployment will likely follow for a time. Energy costs will shoot up again as we continue to believe that artificially high energy costs are good for the economy and that the planet is warming. Based on the unadulterated facts, neither is true. No economy has ever prospered long under high (even subsidized) energy costs and the planet is actually in a typical 7+ year cooling trend due to decreased sun activity.

Whether the long term trend is warming or cooling or the government insists that record debt is the solution to bad decisions, there are things you can do to keep your house comfortable, maximize it's value, save money and prepare for the unexpected.

Perhaps you or someone you know is currently thinking about postponing a move up. Instead, it may be a better time to catch up on repairs, scale back on the dream remodel project or otherwise prepare for the market to turn around. Others may be positioned to acquire an investment property - it's a perfect time to buy - and get it ready for the correction which will come. Still others may choose to set up quarters for an aging parent and consolidate residences and expenses or add ADA ammenities. Others just need some advise on how to tackle a home project themselves and minimize what gets hired out. This past summer our family upgraded our windows and added a geothermal system which also preheats the hot water and warms the mother-in-law apartment. What a difference!

Whatever your situation, our family looks forward to helping you endure and even prosper in this time.

Kind regards,

Jim and family

2011-07-27 | Edit | Delete

Friends, Neighbors, Customers Near and Far

'These are the days that try mens souls' seems to sum up my sentiments over current events. Opportunities to improve our lives do exist now but the opposing current is strong and swift. Consider a summary of state and national challenges:

1. California is beyond broke. The other day the teller machine said: "if you have a Calif warrant (I.O.U.) to deposit, please come inside and talk with us, first". California doesn't know how to control spending or promote business.
2. Oregon House and Senate passed the largest tax increase in our history. Kulongouski took over three weeks to sign the bill thus giving the voters that much less time to get the increases on Novembers ballot (and vote this insanity down again).
3. Oregon is now third in the nation in unemployment down from second place last month. Authorities in charge are pleased the rate didn't go higher. You have got to be kidding me! There are 47 states with a better employment record than Oregon ! This can only mean our state has been led down the wrong economic path for some time. Oregons combined governments grew over 8% this past year, the only entity in the entire state to grow. All other sectors of our economy shrank or lost ground.
4. Portland's City Mayor is a disgrace with too many questionable issues to list here. The biggest problem is his lying to get elected. Oregon voters who continue to promote perversion will get more of the same leadership or lack thereof.
5. Nationally, we continue to run as fast as possible in the opposite direction of what made this nation great. We have forgotten / neglected / scorned our national heritage. Our Founding Fathers, without exception, understood that God and God alone was the source of our success. Now we are led to believe that only man is that source, to our detriment. This kind of thinking leads to Socialism, Marxism, Communism and all sorts of other "isms". Under our currect leadership, our national debt which was already high has soared, government regulation is outside Constitutional authority (taking over private companies). We are told every problem we face is an emergency and must be solved "right now!" with mulitple 1000 page plus bills which our elected 'representatives' have not read and don't understand. Higher taxes and energy costs, prolonged job losses will continue through coming winter.

Globally we are facing what many true scientists (not propagandists) believe is continued record breaking cold, snow, ice and rain. Our sun has reached record lows in magnetic field strength and sunspot activity relative to records kept into the 1750's. None of this is reported by the mainstream media. I know, the record hot spell we had in July seemed to indicate the opposite of a waning sun. But the bigger picture often gets overlooked by the immediate.

My degree is in Business and Physics. I have served as a Certified Quality Engineer and Quality Manager for four different Oregon manufacturers with an emphasis on Statistical Process Control, Design of Experiments, and a plethora of means to control processes, reduce costs, and help guide suppliers to do the same. I understand cycles, trends, patterns, overcontrol etc. Every process in nature and under man's control has short and long term variation as well as desirable and less than desirable trends. Some are controllable. Many are not. The current trend in earths weather is: COOLER.

Man's view toward God runs in cycles too but naturally trends down. The Bible says God controls the weather not man. That is the biggest picture possible. A simple cross country flight in any aircraft will lead any sensible person to realize this - unless all you know and see is city life.

What does all this have to do with the construction industry and your next project? Only that we aren't pulling out of these hard times anytime soon. We must hunker down for the long term and do what we can. We must carry on, maintain homes, control our total spending and prepare ourselves for continued stormy economic and physical weather ahead. Many homeowners are adding in-line generators to limit home business and lifestyle interruptions. Thousands of homes went out of power even this summer because our electrical consumption is not being met with increased capacity. Our leaders think solar and wind generators, electric vehicle hybrids and bicycles will offset forced removal of dams and essentially no additional conventional energy generation. (Next quarterly we will discuss the "green movement" - stay tuned.)

Weatherization and efficiency upgrades continue to receive the attention they should . Many homes built during the most recent booms are needing sizable maintenance and repairs (see Tips at home page).

Because I've been underemployed as many of you, our family has had time to tackle a long awaited remodel on our place, adding a bedroom and a playroom while making our roof simpler and attic and old farmhouse walls insulation happy. Our family will be more comfortable this winter while saving energy with the new windows and geothermal heating (and cooling) system installed last summer. The barn is FULL of firewood for the coldest nights and certain power outages.

You may not agree with my birds eye view of what our country is going through now, and that is okay. But our family stands ready, as always, to come alongside our neighbors, friends, and customers during life's many ups and downs.

Have a great rest of the summer.

Jim

2011-07-27 | Edit | Delete

Not much change from last report. Economic trend continues to be very volatile if not downward despite what the Obama administration continues to tout. Stimulus benefits continue to be overstated with virtually any gains coming in the form of government jobs, more programs, and temporary government related contruction jobs. The economy is not growing.

Fuel prices have been pretty steady for 5 months as indication of a stagnant economy with at least five refineries recently shut down due to cut demand. Commuting is down and dscretionary incomes are down - all affecting consumption.

Government "T" bills recently went unsold @ 0.0000% interest. Big investors (other countries) don't want them because they question whether even the principal will be paid back. U.S. Dollar value continues to slide longterm with a slight uptick last week when gold dropped due to major unrest in Europe. That doesn't indicate American economic growth!

Christmas eve, the U.S. Senate rammed through the Democrat Health Care Bill - 2400 pages worth. I don't know about you, but I don't trust ANY legislation that big that virtually no one voting on it reads in it's completion. Big bills = bigger government, exclusions, special priveleges, pork, more power for special interest groups, and a lawyer's delicatessen. Root causes of high expenses for the world's best health care aren't being addressed : tort reform for frivolous lawsuits, open markets, less government intrusion and oversight. Health insurance is not the major problem. True, insurance makes things more expensive due to system red tape delays (overhead). But the primary role of insurance is to transfer cost from one party to another. Not one conservative or moderate voted for this bill and Americans by a large majority don't want it.

Cash for Clunkers was a hugeflops, costing far more than forecast and helping a tiny few, most who were already in the market for a new car and then were subsidized by you and me. H1N1 was also a flop; 10's of millions of vaccine doses are finally now available after the proper window and in spite of a non event.

Our leaders just spent millions of dollars in a failed bid for a very expensive Chicago Olympics and a failed global warming summit in Copenhagen when they should be figuring out how to get out of the way of private enterprise and thus stimulate the economy.

Congress has just voted to extend our national debt ceiling by 1.X trillion dollars. Boy, wish I could do that and make things better! Yet this same administration can't expedite short sales of homes and businesses. And now, 6 months later, "write down's" on overleveraged homes are succeeding about 3% of the time. Indications are strong that the housing market will get sicker not better, especially when the latest round of selective home purchase credits ends in April 2010.

Then there's Oregon. Measures 66 & 67 just passed by the voters will indeed be the shots that blow off both feet. It is not possible for the government class to put additional load on the creation class and the system be able to sustain it. Watch for increased layoffs and businesses moving. Government never has enough. We now hold the 2nd highest combined tax rate in the world according to a recent Wall Street Journal report.

Oregon's green energy subsidy program costs balooned many times the original limit and again, all at taxpayer expense. Some of the bigger company's that benefitted are not out of business. I have serious concerns about the entire Green Energy Religion. And that is what it is; putting faith in that which does not pay it's way for energy independence and requires subsidies to stay afloat. The most renewable resource Oregon has is: water power and wood. Yet those in charge along with extreme environmental groups treat both with contempt. At the same time, wood stoves, Astoria's natural gas terminal, BPA's new transmission line, offshore and ANWR drilling (etc.) are all being discouraged in favor of less efficient, less reliable, more expensive, unproven sources.

And now record snows and cold have crippled the NE , midwest and even SE. A second record-setting snow has justed halted commerce on the east coast. Portland area has enjoyed an average warmer winter but the cold snap in December broke a bunch of water pipes, like in our church in McMinnville.

A few weeks ago we blew extra insulation into our mother in law quarters, our main attic, and in the new addition. One more skill learned. Speaking of new skills, our eldest son has a new 360 degree virtual tour photography business (see our website ). Emily, our eldest daughter has made great strides toward making our farm more self sufficient. We are prepared to hunker down in 2010 if need be.

These are days where fathers and husbands, mothers and wives must be extra resourceful. This is the time we must each determine the direction our respective family must take when severe hardship settles in. Are we going to make government our master and succomb to even bigger tax and spend masters? Or will reason prevail and liberty be pursued (dare I say, 'reclaimed'?) Do we really want our country ruled every conceivable law or teach reason and accountability to ourselves then our children?

I sincerely believe we are entering days comparable to those our founding fathers wrestled with. After much OPEN debating, wrestling and soul searching, they committed 'their lives, fortunes, and their sacred honor' for their cause of liberty and for those who would come after them. By contrast, we have become a nation that only thinks of me, myself, and I. The term "generational" is a byword and no longer an element of vision. It is time to use our remaining liberty to pursue selflessness and freedom, integrity and honor.

Jim

2011-07-27 | Edit | Delete

Howdy everybody! Been awhile since last report but we are still here, modifying our plan a bit to fit the changing times. In this report I'll address: Government changes, the "green movement", cultural changes, Jim Sauble Construction adaptations, and energy. In reality, all these subjects overlap. In the early 90's American saw a ramping up of globalization; now the web of economic intracacy is multiplied many fold.

Government We are no longer licensed in the city of Portland for construction work. We've done permit jobs in Portland in the past but in the past five years, the overall difficulty of doing business in Portland precludes efficiency. I wanted to cleanly wash my hands of the political elite in our biggest town and no longer even indirectly support their 'perverted weirdness'. We have nothing in common and I have a family to support and influence for the better. We are still licensed in all other cities across our state with metro license # 8455 and CCB license # 163459. Liability insurance and bonding are all in effect.

Everywhere I turn, government is in the way of productivity and efficiencies. I took out a permit for a big garage/breezeway job last summer in Washington County. In three trips to the county, I was the only one in the waiting room on two trips, second person on the last trip. Government workers came out of the woodwork to help me out though in the end, they weren't much help. First they said I couldn't build where the owners wanted it because it infringed 5' into the right of way of the dirt access road. We had to move the garage from where they've been parking for 20 years to a different location. Then the county said you have to have extra engineering for the gable end because of the breezeway. It turned out our additional $700 cost wasn't necessary; the standard sheathed gable end truss was sufficient. Then they said the permit cost was based on what they said the garage was worth, not the contract price. Our relocation cost us dearly as we tried to hold costs to the original bid. One week ago we received the bill to file our LLC papers with the State: $100. Last years fee: $50. And now an automatic 6 cents per gallon fuel tax to give us the same lousy roads we've been accustomed to! Do they not understand that to stay in the red a business owner has to pass on fees, taxes, and the bevy of mandates imposed on us? That's besides knowing what he's doing in his trade?

"Green" Green is one of my favorite colors. Our house is green, our fields our green, the money I receive for a job well done is green. And that's where it stops. Recent radio spots for Solar World's products sum it up: 'act now and receive up to 80% public money to install one of our systems'!!! That is not a free market product. I love ingenuity, risk, and all assortments of energy this great country can come up with; but each needs to grow from it's own viability in the market place; not with government mandates or public subsidy. Not biodiesel, not solar panels, not mass transit, not bike paths, not electric cars. A recent positive developement happened when the State reconsidered their moratorium on biomass electricity generation plants for another three years. We are a state that God Himself has blessed with an abundance of trees. Year after year we watch thousands of acres go up in smoke because we refuse to allow proper utilization of these resources. Anybody traveled down 97, 42, or even 26 in the last decade? Mile after mile of undermanaged forests waiting to go up in smoke, again!

Can I introduce Government Motors new Chevy "Volt"? At over $40k, it requires nearly $8,000 in public subsidy to enter the actual car market. I predict it to be a huge failure in time. It's 40 +/- mile electric only range is far less than the 70 miles it's owners, the U.S. Government, touted. Likewise, the $2k + public subsidy the Prius enjoyed for it's first ten years ran out last year. Toyota, based on Toyota's CEO own remarks, is still running in the red on this model though individual owners love it's MPG. But everyone else helped pay for it's popularity. The actual total cost of it's production is more than it's sticker price. Hmmmm. No one in authority on the all electric vehicle bandwagon has addressed the biggest issue: if we keep demolishing damns, curtailing coal or natural gas fired plants and continue to nix nuclear plants, where is the enormous electric need going to come from? Our electric grid is already at brownout stage in deep winter and deep summer. PGE recently received permission to raise rates in the NW 14%. One of the reasons given by the utility commissioners is the high cost of bringing solar and wind power into the existing grid - not to mention continuing hight state and federal public subsidies to produce the wind and solar stations themselves.

I like so- called 'green' solutions if they compete in a free market economy without mandates and without need for subsidies. My Dad, a general contractor, produced one of the first solar systems (for our home) in the entire Intermountain area of northern California in the mid 70's. It was a tremendous success and he was able, through his experimentation, to offer this service to his customers. A growing economy requires increasing amounts of energy not a conservation only mentality. All forms of energy are needed - in an open, free market. My observation of the hard-core green-at-any-cost advocate is their dislike of free market concepts, dislike mankind except themselves and wish everyone unlike them would just minimize and blow away - into their wind turbines. They tend to actually worship the creation in a vacuum apart from the Creator Who gave us all things, including unending sources of energy and creativity.

Here are some of the green ideas incorporated into my business.

1. Cater to work within 10 miles of my shop. This not only keeps costs down but helps me get to know neighbors and my community better- not to mention better time with my family. If I'm asked to look at an out of town job, I'll often recommend a closer contractor.
2. I'm not a recycling fanatic but do so consistently. This ugly economy is forcing area recyclers and related manufacturers to close down. Huge stockpiles are going unused across the country.
3. I try to make every movement in business count. The primary benefit is less labor, not necessarily less energy.
4. I do good work and stand by it. A shoddy job always costs more in the long run - sometimes gobs more. Also, less time is required when keeping customers happy. A content client brings repeat business and new customers and takes less time than generating cold leads. Same is true for a generalist; I can handle almost any kind of job and thus save clients time. A specialist often has to travel extensively to stay busy.
5. Our shop is heated mostly with wood scraps from jobs.
6. This past Fall we created our first water storage irrigation system, simple as it was. I'm very interested in varieties of single family energy sources to prepare our family for coming energy shortages / price spikes. The NW "greenies" are famous for touting water efficiencies. Fine with me. But something is seriously wrong when Portland has the third highest water rates of all metropolitan areas in a region with copious amounts of rain/snow water equivalent.

Cultural The government continues to feed the 'new' cultural norm: "it's not my fault!!". 'Listen', they continue to advertise on the airwaves, 'we'll help pay for that mortgage you couldn't afford up front even though we were the ones that mandated that you be allowed to 'qualify' '. Appliance stimulus, car stimulus, energy saver stimulus, out and out bailouts of 'too big to fail companies'. A culture of corruption and selfishness. 2 1/2 years in his Presidency, Obama is still blaming his predecessor for our country's ills. The infamous Lame Duck Session of 2010 was just that: lame. We will see if the new House is able to push back some of the massive deficit spending and "investments" and courts push back unconstitutional mandates. I do not believe the false reports of an improving economy coming out of Washington. Nothing has changed at the top. Nor at Oregon's top. Kitzahaber's counselors are mostly the same ones who ruled with him before. Oregon's unemployment continues to be among the highest in the nation and frankly has been in that 'wonderful' state for the 30 years I've lived here. Is it possible we need a paradigm shift in managing the public sector? Do I hear an "Amen"? My primary construction materials supplier, Probuild in Newberg shut down November 2010. Parr has shuttled at least one Portland yard. Commercial lease signs are abundant. As a people we must take responsibility for our actions. We must be allowed to fail when we don't meet expectations. The government must decrease it's grip on this country's producers including the rich.

Have a nice Spring... if we get one!