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Rust Belt Revival - From Doom To Boom

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The locals call it "The Pointes."
Gross Point was one of the highest rent neighborhoods in the country. It sits between Detroit and Lake St. Clair. Its wooded scenery, mild summer weather, and proximity to market areas have made it a favorite residential neighborhood for market titans for a century.

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The Pointes was one of the hottest real estate markets in the 1920's. You had to have a mansion in Gross Pointe If you were an executive in Detroit's booming auto industry.

Flash send 90 years and we've got a wholly distinct picture. There are "for sale" signs hanging off a lot of houses. As Big Auto downsizes, slashes salaries, and hangs on for survival, the rich have left town. In the process, they're creating a great occasion to get in at the bottom.

Thanks in part to the big problems at general Motors (Gm:Nyse) and Ford, getting rough in Gross Pointe. But it's probably worse in Detroit. More than one million residents have fled Detroit since 1950. When the jobs left, the habitancy did too.

First it was premise automation eliminating jobs. Now it's a sharp decline in inquire for the Big Auto's Suv's and an inability to compete against cheaper (and sometimes more efficient) foreign labor. The habitancy of Detroit is now less than 900,000.

Recently, Home Properties Inc. (Nyse:Hme), a residential real estate speculation trust (Reit), unloaded 5,000 Detroit apartments on Lightstone Group. Home Properties said the sale was "consistent with our strategy of focusing our operations in...higher-growth markets."

They've left Detroit for dead like a lot of others. The mass exodus has caused real estate prices to fall. Vacancies have climbed. With the aggressive selling, there are a lot of huge sales. Mansions that originally sold for million just a few years ago are going for million.

It's not just in Detroit though. The entire U.S. Midwest, also known as the "Rust Belt," is facing the same challenges. Towns that sprouted up around manufacturing centers have been abandoned in the same way as Detroit. Gradually but surely, that's all starting to change.

A revival in the Rust Belt is appears to be starting Gradually but really and investors could be in for a pretty solid payoff.

You see, when manufactures rolled out of town, Rust Belt factories we shut down, boarded up and left for dead. That is...until the next U.S. market revolution really ramps up and brings the Midwest back into prosperity.

It may surprise you, but one of the fastest growing and manufacturing industries are staying right in the United States. They're not headed to the dank low-cost, labor-intensive factories of Vietnam, Mexico, or China, they're staying right here.

In fact, the migration has already started. Big Auto's keen out of its factories across the Ohio River Valley and Big Solar is keen in. The way things are going; the United States is set to come to be the manufacturing hub of the billion solar industry.

Fortune says, "Nearly all the United States' current solar manufacturing capacity is in the Midwest."

And they're really right. With the exception of Nanosolar's thin film premise under construction in California and Ausra's premise in Las Vegas, all solar panels made in the U.S. Are built in the rust belt.

First Solar (Nasdaq:Fslr) has been one of the first to start tapping into the rust belt. The billion solar panel builder recently announced the expansion plans for its Ohio factory.

Germany's Flaberg is slated to build a new solar panel-making premise in Pittsburgh, Pennsylvania.

The customary U.S. Of solar panel developer, power Conversion Devices (Nasdaq:Ener), operates three manufacturing facilities in Michigan. On top of that, power Conversion Devices has also laid out a plan to approximately duplicate yield duplicate capacity in one of them.

These solar powerhouses have spotted the value in the rust belt and are taking full advantage. power Conversion Devices Ceo says, "Our processes really need high productivity, so what makes it competing here in the Midwest is that we have a great labor force that is eager to work and well-trained already."

Frankly, there aren't too many other places in the world offering a willing, ready, and able manufacturing labor force. Considering Big Auto's financial troubles and scheduled shutdowns, there will be fullness more space and trained labor arrival ready to the solar industry. And if any manufactures needs more capacity, Big Solar does.

There were 2,800 Megawatts (Mw) of solar power capacity installed last year. There were only 1,700 Mw of new solar power brought on line the year before. That's way up from a mere 21 Mw in 1985.

The solar manufactures is growing...fast. They need more capacity. The rust belt will help fill that void.
The rust belt will return to prominence with the help of the solar industry. Let's face the facts. Oil isn't going back to a barrel anytime soon. Midwestern labor is getting cheaper in order to stay competitive. The U.S. Dollar is not going to be regaining its drive for a long time (if ever) manufacture U.S. Goods cheaper in the global marketplace.

Over the long run, the rust belt's problems will get sorted out. The U.S. May not have been an early mover in developing a solar power industry, but they're cutting the big checks to get caught up. There are billions of speculation dollars flowing into the solar manufactures and the rust belt will be getting a big chunk of that investment.

The rust belt is not doomed to economic oblivion. It just has to change with the times like all of us have to do.

The rust belt will be arrival back to life soon. Investors willing to buy shares in clubs that are taking benefit of the situation or willing to buy up real estate assets at dirt cheap prices will be well rewarded within the next five to ten years.

Companies like the Lightstone Group, which bought all of those Detroit apartments, see the potential here. They have an benefit though. As a underground firm, Lightstone has the luxury of a genuine long-term outlook. A publicly traded firm like Home Properties does not. It has to record to a short-sighted Wall street every three months.

Investing in the rust belt is a long-term proposition, but all the fundamentals are there. At the moment, I haven't found any easy, highly liquid pure plays on this occasion yet. But the situation does remind us of how to be good investors.

There aren't too many habitancy willing to put much money into the region now, prices are depressed, and this is the time to buy low. And it's that type of "buy low" opportunity, which creates the low-risk/big-upside upside odds, that gets the Prosperity Dispatch team very interested. As all things plays out, there will probably be an occasion to sell high. In the end, that's what investing is all about.

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