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Thanks. You can get the WSJ, Barron's and Marketwatch for $2.50 a week for a year. At the end of the year just say you want to cancel and they'll give you the same deal again. Totally worth it for investors managing their own portfolio. Plus you can write it off if you're managing your own portfolio and itemizing deductions.
Ha ha, as long as it's not a Koi pond..:)
It's an excellent option as long as it's not competing with a land based install which is much less expensive.
Nick, if your software supports PPO, I've found it much more useful than MACD. I switched a couple of years ago.
Interesting, thanks. Also the second link to the NYMag article is excellent. The term I understand one of the FOMC members used sometime after the press conference was "hawkish pause". It makes sense that the Fed will pause in June if the CPE is inline with expectations and the May CPI is also inline or lower. It's no coincidence that the June Fed meeting is June 13-14 as CPI will be reported the morning of the 13th. As they always say; it's "data dependent".
As I've said previously my take on the April CPI numbers is that they were higher than the March numbers, (all items), and the same as the March core items. We seem to be stuck at 4-5% unless people stop spending. Also, wages are still catching up with inflation.
Cell phone traffic in downtown San Francisco is 70% lower than before the pandemic. Commercial buildings are following a similar trend. This reminds me of New York 30 years ago. I'm sure they'll rebuild but investors should be very careful with commercial REITs.
Absolutely will be but I wonder what the lag time will look like. It took close to a decade before the Internet really began to payoff WRT productivity. Maybe AI won't require as much infrastructure but it could require a lot of social change. It will be interesting times.
Good day for you Nick as the bulls and bears on Wall Street fought it out all day. It's not unusual for this type of battle to break out when a clearly defined short term wedge forms. We went way up, way down and then the bulls finally took over. All that said, we're still in the middle of a 200 point channel.
Lyin' George is innocent I tell ya. Plus he's too entertaining to lock up. Cryin' Kevin says he's concerned, but Lil' G is innocent until proven guilty. You can't make this stuff up.
I thought Uncle Joe was the market whisperer when he went 14th Amendment in his speech yesterday. So far market makers just used it as a selling opportunity. Apparently a .4% April CPI, (4.8% on an annual basis), trumps Biden..:) Sorry, I couldn't resist.
As you likely know, I don't trust any market makers. I much prefer outside analysts, fundamentals and TA. TA will show you what WS is doing not what they say you should do.
Technically speaking you should have a very short leash on a classically downward channel breakout. Price will often follow the upper channel line downward after the breakout. I don't follow CWH but here's my quick take on it.
Over the last two quarters they've made a total of 4 cents a share while disbursing $1.26. Expected earnings for upcoming Q2, always their biggest quarter are 81 cents, down from $2.16 last year and $2.51 the year before. It appears someone is eating their lunch; Dick's Sporting Goods?
It also appears the dividend isn't terribly safe as it was 2X as much in 2020 and 2021 and it was 4X as much in 2022. Maybe a pandemic meme stock? It's been falling since June of 2021. I would listen to the last annual meeting and the first quarter meeting to get a feel for how management is characterizing the issues. During the pandemic we traveled across the country twice to get to our boat. Once in 2020 and once in 2021. Both times we camped all the way. We sure as hell aren't camping now..:)
Another sanity check I use for any stock is price before the pandemic. This was a $13 stock. Fell to $3 and moved up to $34 by August. My take: We weren't the only people camping and avoiding airplanes and hotels.
Wall Street has CWH as a buy, Zacks a hold and Seeking Alpha a strong sell. I didn't look at their debt profile or their cash flow. I would be very cautious with an industry that appears to be consolidating after the camping, RV and boating rush - The how can I enjoy myself without being around other people rush.
My advice more generally, would be to initially put together a spreadsheet of everything you do before you buy a stock. This took me about 15 minutes but it was a no for me after 2-3. It doesn't fit my profile for a SWAN type investment. If I had liked what I saw it would take me the rest of the day to get close to a decision. Now I'm going to have to put this one on my watch list to see if I'm right, LOL! Hope this was helpful.
My concern with this is the cost and availability of debt. Future earnings are heavily discounted in a high rate environment. The Fed only has two mandates; keep unemployment and inflation low. As long as one is low and the other high, they only have one job. We'll know more after the June 14 meeting announcement. Is MSFT worth 33X in this environment? I'm not so sure.
Not sure I mentioned it on this board but I moved 80% of my investment funds to fixed income a couple of weeks ago. The other 20% is in preferreds. I'm sleeping much better now..:)
Morning Nick. I'm watching this chart of the SPX this week. We've been in a channel since the 1st of April with two wild swings caused by the so called banking crisis which is more about the FDIC living in the 20th Century while companies with millions or billions in uninsured funds are able to pull all of their money out of an institution in a few minutes. While it will be a pain we need to re-regulate the mid-size banks so these funds can be insured.
Back to the chart. There is a clear upper and lower bound but more interesting to me is that Wall Street has been accumulating shares during all of this nonsense and the VIX shows no fear. The two red lines exhibit a classic squeeze. Both VIX and A/D are pointing to a breakout to the upside most likely before the end of the week.
To anyone else, don't bet the bank on this. TA only points to the most likely outcome.
Nick, I told Ms. Market you need some volatility to make real money. So far, it's similar to watching paint dry.
The entire point of a well regulated militia as defined in the 2nd Amendment to the Constitution is to defend the US against an insurrection. This is not difficult to understand.
This snippet is from MSNBC of all places. I wouldn't characterize Biden's position as dogmatic but Democrats always give in to the other side's pseudo tantrums. Democrats are like bad parents, they've let Republicans get away with versions of this gambit for almost 30 years and expect the behavior to change. Of course, each time they get away with it they ratchet up the damage they're willing to cause. As several house members proved on January 6, they're now willing to destroy the country to maintain control. Best of luck Joe but I don't see this ending well.
When participating in an insurrection try to dress for the occasion. It's really convenient that none of these fools wore masks.
These are two of the better analysts on Seeking Alpha.
Looks like I may not be the only one that thinks the Fed may continue to raise rates. Of course if the congress critters allow a default, all bets are off. From this week's Barron's:
I think the movie Idiocracy describes our current path rather well. But it's not going to take 500 years.
I would suggest that current worker productivity is returning to mean after a massive uptick during the pandemic. Below is a chart that expresses the growth in worker productivity since 1990. A few ideas:
1. Worker productivity over this 33 year period grew ~80% because workers gained access to better tools and more efficient methodologies, not because they worked harder.
2. In the 1990s productivity lagged as all companies and workers learned how this new tool, the Internet could improve efficiency.
3. During the 2000s, Internet 2.0 increased productivity more quickly than average.
4. During the GFC, productivity bumped up because only the best workers kept their jobs.
5. After the GFC as the economy grew and workers were added, growth returned to mean.
6. The pandemic was GFC on steroids. Anyone who was still working was doing more work than they'd ever done before. This is not an assumption, it's expressed in the data.
7. Post pandemic, we're again returning to mean.
I would suggest that work from home is only coincident and not causal. More tools will have to be developed to assist off premise worker efficiency. Off premise work did not begin with the pandemic and I don't see it going away as there are too many benefits for employers, not the least of which is no longer providing office space, Internet connectivity and sometimes computers.
Personal story: One of our tenants, who works from home, has complained on a few occasions that when the lawn and garden maintenance show up it's too noisy. I finally had to explain that it was a house she'd rented not a home / office. That could be arranged at a higher price. No more complaints.
OT: Isn't it time we added a work requirement to receive Medicare and Social Security? It's only fair that every person work until the day they die. Now that corporations are people and money is speech, you're going to need that money to compete with corporations who always work until the day they die. Why stop there, shouldn't someone be gainfully employed in order to vote? And now that women don't have the right to their own bodies, they're not really people so why should they be allowed to vote?
And Dems are saying Republicans don't have a platform...:)
And now a word from the Republican who passes as a moderate:
Mitt Romney - Corporations are people
Thanks Nick but it's simply selling any value company that no longer covers their dividend with profits and more importantly cash flow. It's OK for a quarter or two if the reasons make sense but not for over a year. It's like holding a growth stock that stops growing. See ZM as a good example. I think DOCU fits that mold as well.
Enviva, EVA, was a core holding in my income and retirement accounts for several years. When I sold last summer I said this:
You're welcome. Glad to know someone other than me reads this stuff..:). As for my investing profile, I'm at the don't lose money stage of investing. My advice for both my kids is to stay 80% invested in the broad market with the remainder in treasuries in case I'm correct and the market takes a dive this summer. Then jump in and start building that 20% reserve again.
Thanks for the tip on FedNow. Sounds like they might have taken a que from the Atlanta Fed's GDPNow. When the MSM is lighting their hair on fire regarding recession or no recession, this is always a good place to check. They're almost always right. It's most useful at the end of the quarter as numbers can be all over the place as different data comes in.
https://www.atlantafed.org/cqer/research/gdpnow
Now that our debt is 120% of GDP, I'm concerned there's no way out that doesn't involve some type of reset. I'm not sure what that looks like but I don't think it will be excellent for anyone who's medical services and retirement paycheck comes from the federal government. It's apparently too complex for any of our politicos to run on an old-school platform of social liberalism, (or libertarianism), and fiscal conservativism.
It's a bit more understandable when one realizes this is a penny stock that's up 9 cents..:).
Here's another view of jobs. The red line in the chart below represents the average weekly unemployment claims for a few years prior to the pandemic. We can see that claims are above that area currently but appear to be range bound. It's another good data point to keep track of. It's not an issue now but if it pushes up above 260,000 for more than a couple of weeks it's likely signaling an economic problem. Over the next month the MSM will be focused on the debt ceiling clown show and may not report on less interesting items like this.
And today the finance sector is up almost 2%. The boys and girls on WS like to pull out the punch bowl for a day or two and then come back and buy bargains..:).
It has slowed down but so far the Fed can't kill this economy. Unless inflation falls between now and the June 13-14 meeting or McCarthy's raiders storm fort USA, the Fed may feel emboldened to raise rates another 25bp.
Probably a good idea. From the tone of the Q1 conference call it sounds like they've got one or maybe two more tough quarters while they sell off old inventory. All new inventory has been profitable.
Opendoor, OPEN is still moving through a lot of old inventory that has been costly to move. Same will be true in Q2. Newer inventory is profitable but overall they're still bleeding cash. Recently partnered with Zillow, Redfin and realtor.com. All good for exposure but will further challenge profits. Same with realtor partnerships. I've always liked the idea of OPEN but so far, not the execution as the obvious issue of owning billions in real estate in a down market are painful. See Carvana who has the same issue in the auto business.
Cedar Fair missed Q1 earnings as California parks were late to open and suffered an unseasonably wet winter season. The dividend was held at a low 30 cents per share or ~3% which won't get traditional FUN investors back on board. Management has decided to buy back additional shares at these low prices; currently ~$40. Barring an external event, FUN should do very well this summer but it may take a serious hike in dividend to move the stock up.
While I might trade an airline now and then, I never invest in them. Frontier Airlines, ULCC, had a horrible day today, down 18% to $7.82. I could not have told you they were still in business. Apparently Wall Street analysts love them with an average price target of $16.73 but not so much Wall Street itself. RSI is very oversold at 25. A trader might try to catch a bounce from here.
An article from Yale Climate Connections. Builders in Arizona have bypassed the requirement to prove 100 years of water availability by breaking projects into groups of five properties or less. It's at the breaking point in some areas. This report discusses a small community outside Scottsdale that's been cut off from water. Westerners have been fighting over water for well over 100 years but it's getting critical now.
‘It’s gotten really ugly.’ A community of freedom-lovers squares off against climate change in the Arizona desert
A legal loophole enabled residents of wildcat developments in the Rio Verde Foothills to live free from municipal taxes and regulations. But now they’re running out of water.
When I arrived at Karen Nabity’s place in Arizona’s Rio Verde Foothills on a spring afternoon, she opened the door and flashed a big smile. “Oh good!” she said, laughing as she ushered me inside. “You got here in time for happy hour!”
I’m not much of a drinker, but as it turned out she wasn’t talking about adult beverages for humans. Happy hour at the Nabity spread is when she tosses handfuls of birdseed onto her yard of crushed tan rock, attracting a variety of cacophonous desert birds. Even outside of happy hour, jack rabbits, coyotes, mule deer, and javelina, a distant desert relative of pigs, are likely to visit. (Nabity confessed she could do without the javelina, which devour her tall stands of prickly pear cactus and uproot the giant blue agaves.)
The wild beauty of the Sonoran Desert is a large part of why Nabity and her husband bought land just north of Scottsdale and built their dream retirement house here in 2014. “Our four children had flown the coop,” she said. “So we drew up our house plan and subcontracted it out. It was a blast. And now we want to live here forever.”
It’s easy to see why. The McDowell Sonoran Desert Preserve is a five-minute stroll from their front door. One of largest urban parks in the nation, it boasts 180 miles of hiking trails that wind around stands of the iconic giant saguaro and includes one trail that gains 1,300 feet in a short distance before ending at the base of a 200-foot-high granite spire that’s a favorite with rock climbers.
But it’s an open question how long the Nabitys will be able to live here, as they and their neighbors are faced with the intractable reality of a changing climate, a great drying of the West that recently caused their drinking water to be turned off.
‘The lifestyle is just different’
The Nabitys thought they had prepared for desert life. Their low-slung Spanish Mission-style house was built for the climate. It has a stuccoed tan exterior, high ceilings, and a tile roof engineered to reflect sunlight, all features that help keep the nearly 4,000-square-foot home surprisingly cool in the summer when temperatures soar into the sauna-like triple-digits. Karen Nabity’s favorite feature is the home’s enormous shaded patio, which is perfect for cookouts or just sitting outside and taking in the view of the rugged Mazatzal mountains 30 miles east as the raven flies.
But it’s not just the natural beauty that attracted them to Rio Verde Foothills. It’s also the absence of municipal regulations in the unincorporated community that gives the area an unfettered Wild West feel. Nabity didn’t disagree. “I’ve lived in the city,” she explained, “and the lifestyle out here is just … different. It’s a beautiful life.”
I’d heard Rio Verde Foothills called a libertarian stronghold but Nabity resists being pigeonholed.
“I’ll be honest,” she answered, “I’m not real political. People call us right, left, libertarian. I just know we’re freedom-loving.” That freedom takes many forms, from raising horses and donkeys on what was until recently rangeland for cattle to roaring down dirt roads on ATVs. Without streetlights, residents enjoy the kind of star-filled night skies that most Americans today have only seen in movies via CGI.
Whatever label you choose to pin on Rio Verde Foothills, the community’s Old West lifestyle that allows uncontrolled growth has run up against the defining issue of the modern era: climate change. And because this is still the West, that means a fight over water.
The crisis in Rio Verde Foothills was years in the making. But it only became impossible to ignore on Aug. 16, 2021, when the U.S. Bureau of Reclamation declared a first-ever “Tier 1” shortage on the Colorado River. It was an enormous flashing red light, warning the 40 million people in the arid West who depend on the Colorado River that deep cuts to their water supply were coming.
The day after the Bureau’s alert, Scottsdale became the first major city to activate a drought-management plan. There’s a good reason for that, according to Sarah Porter, director of the Kyl Center for Water Policy at Arizona State University.
“Scottsdale relies on Colorado River water more than other cities,” she said, “with something like 60% of their tap water coming from the river. It’s the first bigger city in the area that’s pushed conservation.”
In fact, Scottsdale had been preparing for this day since 1996 by pumping billions of gallons a year of its Colorado River allotment into underground aquifers, a process known as water banking. But as Scottsdale has grown, its heavy reliance on the river means it still doesn’t have as large of a cushion to count on as some other Western cities that are also two decades deep into the worst drought in 1,200 years. Or, as climatologists call it: the new normal.
The “old normal” was already deeply problematic. Arizona’s booming population grew at five times the national rate after World War II. Add to that the fact that groundwater pumping for irrigated farms tripled between 1940 and 1953, and by 1979 it was clear to many that a large part of the state was headed for disaster.
In 1980, Arizona’s then-Gov. Bruce Babbitt signed into law the most sweeping law of its kind in the nation. The Groundwater Management Act, or GMA, required residential developers to prove an assured water supply for the next 100 years before being allowed to build in or near population centers.
After the law passed, Scottsdale continued to allow outsiders to buy city water and haul it to their privately owned holding tanks. That wasn’t a problem in 1990 when just 33 people lived in the wild desert lands in what became Rio Verde Foothills. But the situation began to change in the mid-90s, Gov. Babbitt said in a phone interview.
“The GMA was based on the premise that the problem was traditional subdivision development,” Babbitt explained. “Rio Verde Foothills is the result of a loophole in state law that developers used to avoid compliance with the assured water supply law.”
That loophole was created by real estate lawyers who massaged the legal definition of a subdivision to mean parcels split into six or more lots. Developments kept to a maximum of five lot splits were under no obligation to show a water supply. These “wildcat subdivisions” turned parched desert land into fountains of money for developers.
As lot-splitting boomed in Rio Verde Foothills so did water consumption. By 2020, residents were using 38 million gallons of Scottsdale’s supply a year.
A feared calamity becomes reality
In 2014 when Nabity — a real estate agent herself — and her husband bought their land, she knew they’d be dependent on hauled water. That didn’t seem like a cause for concern. “Scottsdale’s been supplying us water for 50 years,” she remembers thinking. “They’re not going to cut us off.’”
Her attitude changed in 2018 when she heard rumblings about the Rio Verde Foothills’ precarious water situation. “I started doing research and learned about the background and everything,” she said. “That’s when I knew we needed to secure water for our property.”
Scottsdale had been warning nonresidents for years that someday the standpipe supplying Rio Verde Foothills with water would be turned off. On Nov. 1, 2021, what seemed to be a theoretical “someday” problem became a real and imminent calamity when Scottsdale issued a formal notice: “Water hauling for those unable to prove residency will cease at the end of December 2022.”
By that time, Nabity and some neighbors had come up with a plan. They’d request permission from Maricopa County to form a Domestic Water Improvement District, or DWID, a quasi-governmental entity designed to ensure a safe, reliable, and affordable water supply. Nabity and some friends started a petition in support of a DWID and soon a majority of the 500 households that relied on Scottsdale’s water had signed on.
Nabity was certain the DWID was the perfect solution. “It was a win-win-win situation,” she said. “Scottsdale wouldn’t have to share water, people with wells wouldn’t have to join the DWID, and people like us who depend on hauled water would negotiate with a new source.”
Fears of Big Government
A majority of residents — particularly those who don’t rely on Scottsdale’s water — considered the idea far from perfect, however. They had different objections, but they united around a common goal: to kill the DWID. Christy Jackman was one of the organizers of the anti-DWID movement and her basic objection was simple: “It gives too much power to too few people.”
Jackman lives 2.5 miles north of Nabity on a five-acre lot that’s also home to her business, Donkey Holler Ranch, a small equine boarding service. The power she referred to is inherent in the way a DWID works. An elected board of residents would control water sourcing and pricing. Though no one would be forced to join the DWID, it would technically have the power to condemn the property of members and nonmembers alike.
According to the Kyl Center’s Porter, it’s unlikely that would ever happen because Arizona law makes the process of condemnation difficult.
“To take the property from a resistant owner,” explained Porter, “the DWID would have to bring an action in superior court, and the court would determine both whether the taking is necessary and the fair compensation for the property.”
The possibility of having her well condemned, however remote, makes a DWID unacceptable to Jackman. The $40,000 she paid for it was a considerable amount of money for her and that was 2.5 years ago. The price of a new well has doubled, Jackman said, with no guarantee of hitting water.
To other opponents, the DWID represents something even worse than a threat to their property. It’s the dreaded camel of Big Government slipping its nose into the tent of freedom-loving Rio Verde Foothills. “I don’t believe government is ever a solution to anything,” one opponent wrote in an online petition against the DWID.
A state official who spoke on condition of anonymity said that Rio Verde Foothills residents are so suspicious of authority that “they don’t want the government to know how much water they have because they think we’re going to come and get it.”
Though Arizona is home to a large number of anti-government conspiracy theorists, Jackman objected to the official’s characterization of her community.
“People can be such asses,” Jackman said. “None of the residents I know have a deep suspicion of our government finding out how much water we have. Our problem is about the fact that overbuilding our fragile area is straining the resources we do have.”
The town split into opposing camps over the DWID as tempers flared both on and offline. Shouting matches erupted at community meetings. Friendships strained and broke.
I asked Nabity if the conflict ever got to the point where people stopped talking to each other. “Oh, God, yes,” she groaned. “It’s gotten really ugly.”
She hoped things would settle down once the DWID was approved. But on Aug. 29, 2022, two days before the board of supervisors would vote on the DWID, they held a listening session where supporters and opponents could voice their opinions. It quickly became clear that the two groups agreed on almost nothing — including the basic facts.
First up was Ted Malone, a 50-something engineer who said the issue would disappear if everyone just understood “the science behind everything happening out here.” Based on hydrological evidence, he claimed, there was no need for a DWID because there was plenty of groundwater available beneath Rio Verde Foothills. “The aquifer,” he said, “has actually, believe it or not, risen 4.7 feet on average per year over the last 20 years.”
DWID supporter and professional water hauler John Hornewer seemed not to believe him. “The mere thought that wells and aquifers are going up is asinine,” Hornewer scoffed, adding that he was already making deliveries to residents whose once-dependable wells had run dry.
So what does science say about the amount of groundwater available? I put that question to Scott Stuk, a hydrologist with the Arizona Department of Water Resources.
“That’s a really hard one,” he replied, “because there’s no general answer for the Rio Verde Foothills area.”
The land is mostly flat on the surface, Stuk explained, but below, it’s a very different story, with bedrock near the surface in some places and dropping hundreds of feet in others.
“You may have a well owner with a really high-producing well,” he told me, “and somebody right next door may have drilled a very poor-producing well.”
Another problem is the fact that the state monitors water levels over time in just four wells in Rio Verde Foothills. In two of these “index wells,” the water level has dropped. In the other two, it’s gone up. Stuk said it’s impossible to generalize about the current state of the aquifer beneath Rio Verde Foothills. One thing Stuk can say with certainty is this: “The more wells you put in, the more groundwater withdrawal you have. Over time, you’re going to reduce the groundwater supply.”
On Aug. 31, 2022, the county voted unanimously against creating a DWID, citing, among other reasons, the fact that a majority of Rio Verde Foothills residents didn’t want it.
With the dreaded cutoff date now just four months away and no solution in sight, the war of words climbed the chain of command as county and city officials blamed each.
But experts, like the Kyl Center’s Porter, say neither Maricopa County nor Scottsdale is ultimately at fault. “I can see why the county would say it’s not our deal,” she said. “Counties aren’t water providers.”
By the same token, Porter continued, “Scottsdale is very understandably saying, ‘It’s not our problem.’” She argues that Scottsdale is legally obligated to safeguard residents’ water supply, even if that means cutting off water to people who chose to live outside town and pay no taxes to maintain a water infrastructure that is both extensive and expensive.
On Jan. 1, 2023, with no entity having stepped up to help Rio Verde Foothills, Scottsdale shut down the standpipe, leaving hundreds of homes without a water supply. When I visited Karen Nabity, she was already into her third month without a water delivery.
Nabity rattled off a list of conservation measures she and her husband had taken. They only flush their toilet once a day, using rainwater captured in bins outside of their house. They shower once or twice a week at most. They eat off paper plates and use foam soap to clean their hands, “with just a drizzle of water to get the soap off.”
Those conservation measures have paid off. Nabity and her husband each use about 10 gallons of water a day on average. For comparison, Phoenix residents use over 100 gallons a day.
A few weeks later, I texted Nabity asking how they were doing. Her reply: “We feel all alone out here.”
What comes next?
Christy Jackman, the anti-DWID leader, is hopeful that a solution is coming. “We need to get this resolved,” she said, “and I think we’re close.”
In the short term, Jackman believes Scottsdale will allow EPCOR, the largest private water company in Arizona, to run its own water through the city’s pipes, with the company paying Scottsdale to treat it.
“A treat-and-transport agreement was looking good right up until December,” she said. “And then the mayor, for some reason, said, ‘No, we’re not going to do that.’ But I still think it’ll happen.”
Even if Jackman is right and Scottsdale agrees to the EPCOR interim plan, that still leaves a long-term solution unresolved. Jackman takes heart in the fact that EPCOR has an emergency application pending before the Arizona Corporation Commission to build a separate water standpipe for Rio Verde Foothills. But there are problems with that scenario, too, according to commission spokesperson JP Martin. “A lot of information is missing from the EPCOR application,” he said, including the location of a new well needed to serve residents and the cost of the water. When those issues are resolved, the new system will take two to three years to complete.
Some Republican state legislators have been trying to pass a law that would force Scottsdale to supply Rio Verde Foothills with water. An early version of the bill closed the loophole for wildcat development. Somewhere along the line, that provision was deleted.
Former Gov. Bruce Babbitt says the idea is a non-starter as it now stands. Yes, the people living in Rio Verde Foothills deserve help, but he maintains there’s a larger issue to consider. Providing water without closing the loophole that created the problem in the first place will only exacerbate Arizona’s water woes. “It will create an incentive for other developers to make the same mistake everywhere else,” he points out. “The law should prohibit the unregulated subdivision of land. Period.”
Rio Verde Foothills’ plight has been reported in national newspapers and magazines, on television, and online, where the story is often framed as a glimpse into Arizona’s inevitable future.
Kyl Center Director Sarah Porter says that view is rooted in a mistaken belief that desert cities are inherently unsustainable. “Some people have always had a kind schadenfreude about Arizona,” she says. “They’ve been predicting for the last 50 or 60 years that it’s going to dry up and blow away.”
John Shepard is familiar with the misconception about the viability of humans living in deserts. As a senior adviser to the Sonoran Institute, a leading U.S.-Mexico conservation group, Shepard often encounters this skepticism from people who live elsewhere. “But if you think of how population originally spread out globally,” he counters, “they’ve often been in areas that were semiarid to arid.” The fact that Indigenous communities have been living in the Sonoran desert for thousands of years proves it can be done.
Shepard admits that living sustainably in the desert presents unique challenges, including overcoming a long history of considering groundwater as exclusively a private commodity.
“The old way of thinking doesn’t acknowledge the hydrological reality that groundwater is a subterranean commons,” he said. “That one person can impact another. And it doesn’t acknowledge climate reality. That may have made sense 100 years ago, but it certainly doesn’t make sense now.”
The key in Arizona, as elsewhere, says Shepard, is having the political will to meet whatever challenges climate change brings. That starts with recognizing that humans must adapt to the environment, not the other way around. After all, hubris, as classical Greek storytellers knew, is a dangerous flaw anywhere. In extreme climates like a desert, it is almost certainly a fatal one.