Keller's 'tilting at windmills' targets 'pent-up demand'

October 24, 2008
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Gov. Jennifer Granholm and other area VIPs are scheduled to join Fred Keller of Cascade Engineering today at the Frauenthal Center in Muskegon to celebrate the first Michigan installation of a Swift Wind Turbine.

The small turbine, mounted on the roof of the five-story building, began producing electricity for the Community Foundation for Muskegon County in August and is a gift from Louis and Ann Eklund of Fleet Engineers Inc.

Cascade Engineering is about to begin full-scale manufacturing of the Swift, which is small enough to be mounted on the roof of a house. One generates up to 1.5 kilowatts of power and will cost from $10,000 to $11,500, installed and ready to go.

The Swift was originally designed by a company in Scotland. Cascade Engineering now has the manufacturing and distribution rights for North America.

The original Swift rotor blades were made of an expensive composite, said Keller, but "we converted that to an injection molded product" — which, of course, is what Cascade Engineering does so successfully.

As of October, Michigan has a new "net metering" law that will help sales of the Swift. If a turbine is generating more electricity than the homeowner can use, the excess can be fed into the power grid, essentially running the owner's meter backwards. The federal government also recently enacted a tax credit for homeowners installing a wind turbine.

Keller said there is "pent-up demand" for home wind turbines, and that has increased with the surge in energy cost lately.

"When I first got into this a couple of years ago, I think some people thought we were tilting at windmills," he joked. "And I think today they are thinking we are pretty smart."

A stimulating deal?

Well, it’s reassuring to know that the nation’s crippling mortgage crisis hasn’t lowered the value of every home here. Kent County Commissioners agreed last week to buy a two-story house in Grand Rapids at 1226 Bradford St. NE for $149,500, not necessarily an exorbitant price. But the home’s State Equalized Value this year is listed at $65,000, which means the market price is closer to $130,000 than what the county has agreed to shell out.

“I suspect that these folks are getting a little more than they expected,” said County Vice Chairman Richard Vander Molen of the homeowner. “It’s a great time for them to sell.”

County Facilities Management Director Robert Mihos said the purchase is part of an ongoing strategic buy, as the house is lodged on the north end of the county’s Fuller Avenue Campus, which is situated between Fuller and Ball avenues.

The county will use the property, as it has others there, for future expansion of the campus, which is home to the new animal shelter and the old, but soon-to-be newer, jail.

Mihos said there will be only two homes left on the south side of Bradford after the county closes on the deal. He added that the county moves the houses it buys, if it can find a good home for it, and donates the furnaces and appliances to nonprofit organizations.

Network 180, the county’s designated substance-abuse service provider, has agreed to contribute $14,580 to the purchase of the Bradford house, as the home sits north of the agency. Those dollars reduce the county’s actual cost to roughly $134,000 plus $1,100 in closing costs, which brings the deal close to the market value. Let’s call the difference an economic stimulus package for the homeowner and taxpayer, OK?

Battle stations, everyone

Metro Health’s decision to partner with the University of Michigan Health System for radiation oncology at a new cancer care center at Metro Health Village in Wyoming reportedly was met at Spectrum Health with the enthusiasm of a cut in Medicare payments. Now one of the Spectrum Health fold has been appointed director of radiation oncology at Metro Health. Dr. Julie M. Forstner will work with the U-M’s Radiation Oncology Network to provide the Michigan edge for cancer patients south of 28th Street, says Metro Health Vice President of Growth Strategies Brian Jepson. An open house in her honor is scheduled for Nov. 5 and the first radiation patient is anticipated on Nov. 17. Dr. Michael Zakem is in charge of medical oncology.

Find a belt to tighten

It doesn’t matter whether Americans put Sen. John McCain or Sen. Barack Obama in the White House: Neither one of them will be able to do a darn thing in the wake of the credit tsunami, says Joseph Battipaglia, chief investment strategist for Washington Crossing Advisors. The federal government has huge deficits and people are angry: McCain won’t be able to cut taxes and Obama won’t be able to raise taxes because they have to face the clear and present danger in the economy that has been created by the inevitable bail-out of the economy itself, Battipaglia told a group of Stifel Nicolaus clients Wednesday evening in a presentation on the state of the market at Western Michigan University’s conference center on the East Beltline.

“The remedies being applied now are the right ones to thaw out the credit system, but it’s going to take quarters, not days, to do it,” he predicted.

The resolution ultimately comes with home prices stabilizing and default rates and foreclosure rates leveling off, he said, but then the country has to face the recession because once the credit system is working again and interest rates actually fall, who’s going to want credit? The consumer peaked out in the second quarter of this year in the demand for credit.

As consumers have this liquidity preference and they recapitalize themselves, as the banking system sorts through the bad and the good assets, and as corporations retrench, the seeds are being sown for the next bull market, Battipaglia said.

The expectation for inflation is greatly diminished in the world we’re moving to because the speculative excess and the added capital that was going to be redundant in the investment mainstream is being scraped out of the system, he observed. While that goes on, it incentivizes central bankers around the world to keep interest rates lower for everybody.

According to Battipaglia, consumers will ultimately see better mortgage rates and better costs for capital when they need it— not today, but in the future. Down the road, business will see a stable price environment and abundant capital.

“What we’re creating is a hard dollar world,” Battipaglia remarked. “Those who’ve been savers and have cash and assets will rule the world. Those who are debtors will feel pain and will suffer for quite a while.”

Battipaglia advises investors to prepare for the next bull market. He said he doesn’t know when it will come but it will. What investors have to do now is take their stocks and “hold them up to the light.” 

“Do you know what you have in your portfolio and whether those companies can weather the recession? When recovery comes in 2009, 2010 and 2011, can they get back on track and be a performer to create value for you? If the answer is yes, they’re keepers. Now is the time to straighten it out.” 

Set those alarms

Improvements to the railroad line used by the Amtrak Pere Marquette will result in a temporary change to the schedule of the westbound train, effective Oct. 27. The schedule of the eastbound train is unchanged for the period. 

Through Dec. 4, Train 371 will depart Grand Rapids one hour earlier, making all scheduled stops in West Michigan, and arrive in Chicago an hour ahead of the regular schedule. 

The temporary schedule change will permit CSX, the owner of the track used by the Amtrak Pere Marquette in Michigan, to make infrastructure improvements that “will improve ride quality and reliability.”

Amtrak operates the Pere Marquette under a contract with the Michigan Department of Transportation and with the support of Westrain, a grass-roots coalition. For the 12 months ending Sept. 30, 2008, ridership increased 66 percent versus the previous 12 months, totaling 111,716 passengers.

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