2015-01 Bond Newsletter

by |


BOOM OR BUST… seems to be the central issue in every economic discussion. There is no question about the fact that 2014 was a “BOOM” in our South Florida market. There are naysayers who feel that we are headed for another “BUST”, particularly in the condo marketplace. The truth is, we have never had a condo bust in terms of over-building. What we experienced in 2008 was a national financial crisis that affected all markets including the real estate market. The approximate 10,000 unsold condo units that were on the market when our economy went over the cliff in the second half of 2008 were absorbed within the next couple of years, long before the end of the recession. So the answer to “Are we over-building condos” is “No” as long as we don’t experience another national economic crisis. Our condominium market is worldwide and unless we dive into a national or worldwide recession, there is a market for all the condominium units that we can build.

HOW LONG IS THE BOOM GOING TO LAST? First of all, no economic growth is consistently linear. In the best of times, it is always three steps forward and one step back. We have had and will always have every 7-8 years some retraction (recession) in our economy. In those times, growth may flatten or retract for a short period of time.

Let’s look at Florida not in the next 3-5 years, but for the next 25 years. In that regard, please note the following:

  1. 10,000 baby boomers each day reach retirement age. Obviously all do not retire, but many will and those who have not, are obviously on the cusp of retirement. Florida is arguably the most attractive state in the United States for the retirees to bring their 401Ks and settle in a condo, townhouse or ALF. When you consider the fact that Florida has no personal income tax, probably the best Homestead Exemption Laws in the country and, without question, the best weather of any state in the nation, Florida becomes a prime destination, not only for retirees, but for businesses who are looking to relocate.

  2. California currently has 38 million residents, Texas 27 million and Florida is the third largest state in the nation with approximately 20 million residents. Based upon more than one demographic study that has been done, it is projected that Florida will grow faster in raw population than any other state in the country in the next 25 years. One demographic study suggested that Florida will double its population in the next 25 years and those of us that are still here will be sharing Florida with approximately 40 million other residents. When you realize that there are 47 states in this country that don’t even have 20 million people today, the amount of infrastructure that it will take to accommodate 20 million people is almost impossible to fathom.

Once again, growth is never linear, but if you want to look at Florida from 5,000 feet, you would see nothing but growth and prosperity for the next quarter of a century and probably longer.

MIAMI-DADE COUNTY… is an economy unto itself. Florida may grow rapidly, but Miami-Dade County is on fire and will be for many years. Miami-Dade County is no longer a place for disenfranchised Central and South Americans to invest their capital (usually by buying a condo), but Miami-Dade County is now a worldwide destination with prospects for aggressive economic growth far into the future.

In 2014, there was a 52% increase in construction contracts awarded here in South Florida with a total value of these contracts coming in at approximately $10 billion. That was $3.4 billion more than was awarded in 2013. To give further credence to our projections for population growth, 2014 saw a 62% increase from 2013 in the residential sector.

IN CONCLUSION… construction in Florida for the next 25 years is going to be hot and Miami-Dade County is on fire for the foreseeable future. From my personal perspective, the entire State of Florida is wonderful, but Miami is truly paradise.


AFTER MY VERY OPTIMISTIC VIEW OF FLORIDA… I hate to be pessimistic, but the growing population on this earth does provide us with some challenges. After listening to the dire prognostications for the ability of Californians to flush the toilet next year if drastic measures are not taken to alleviate the water shortages caused by their four year drought, I did some research as it relates to “water”. In that regard, be advised that 97.5% or more of all water on earth is salt water. Less than 0.75% of the fresh water remaining is accessible to sustain all non-marine plant and animal life.

Peak water is the point where the demands for safe clean fresh water begin to exceed the combined abilities of nature and man to replenish and supply it affordably and without harming ecosystems. The term was coined by Hydrologists who in a 2010 peer-reviewed article distinguished between Peek Renewable, Peek Non-Renewable and Peek Ecological Water to demonstrate that although there is a vast amount of water on earth, sustainability managed water is becoming scarce.

Water scarcity is no longer just a third world problem. Drought, drilling, agricultural, industrial and other demands on an already stressed water supply have brought about an unprecedented levels of ground water depletion throughout the U.S. The Key Ogallala Aquifer, for example, is just one of many being over-pumped at unsustainable rates. And once depleted, natural replacement could take up to 1,300 years.

The environmental community is currently pushing very hard to put limitations on hydraulic fracturing based upon the fact that it does end up consuming tremendous amounts of vital potable water. The current environmental “war cry”, as it relates to “peak water”, is that we are almost to that point and that we are sacrificing tremendous amounts of water to get oil and we can’t drink oil, yet we keep sacrificing our drinking water to get it. Environmental hand wringing on many fronts is not that uncommon, but in this case their argument against fracking may be something to think about.


IN THE FIRST BOND NEWSLETTER OF EACH YEAR, WE ALWAYS HAVE A “CURRENT EVENT” TEST JUST LIKE YOU DID IN GRADE SCHOOL… There are a total of 23 questions with the answers at the end of the bond newsletter.

  1. Unhappy voters dealt the Democrats a devastating defeat in the November congressional elections, as Republicans captured control of the Senate and expanded their margin in the House. What issue, according to exit polls, was most on the voters’ minds?

  2. Within $500 million, how much did candidates, parties, and outside groups spend in total to influence voters in the 2014 midterm elections?

  1. The voter turnout for the midterms was the lowest for any election cycle since 1942. Within 5 percentage points, what percentage of the voting-eligible population voted?

  2. Fill in the missing word: Jonathan Gruber, an MIT professor who served as an architect of the Affordable Care Act, was caught on video saying the law passed because of the “ of the American voter.”

  3. About 70,000 people, mostly children, tried to enter the U.S. at the Mexican border this year. Which three countries, now overrun by drug gangs and plagued with violence and social breakdown, are most of these migrants from?

  4. The two Dallas nurses who were infected with Ebola while treating Thomas Eric Duncan of Liberia had contact with 344 people before they were diagnosed and hospitalized. How many of those 344 people later tested positive for Ebola?

  5. Russian President Vladimir Putin has repeatedly denied assisting rebels in eastern Ukraine. When confronted by photos and videos showing Russian troops in Ukraine, which of the following excuses did Russian officials not used?

  1. The soldiers were on vacation

  2. The images were Photo shopped and borrowed from video games

  3. The soldiers got lost and crossed the border by mistake

  4. The soldiers were actually Ukrainians pretending to be Russians

  1. Grover Norquist, the conservative anti-tax activist, caused surprise when he attended which countercultural festival this summer, where he drank absinthe and appeared at a talk on psychedelic drugs?

  2. Six young Iranians were sentenced to 91 lashes and up to one year in jail for the crime of making a hit YouTube video in which they danced to which feel-good song?

  3. A Turkish cosmetics company used a photo of imprisoned al Qaida leader Khalid Sheikh Mohammed in an ad without realizing who he was. What product did he inadvertently advertise?

  4. Facebook created a stir when it offered women employees a new health benefit. What was it?

  5. Two commercial flights had to make unscheduled landings because of out-of-control confrontations between passengers. What did two passengers want to do that infuriated the passengers behind them?

  6. What is the name of the new powdered nutritional drink that contains 35 essential nutrients and is being marketed as a total meal replacement, making it unnecessary to buy any prepared food?

  7. What word did Facebook COO Sheryl Sandberg say should be banned when describing assertive and opinionated girls and women?

  8. The first-ever global study of anti-Semitic attitudes this year found that what share of the world’s population openly admits strongly anti-Jewish views?

  1. 9 percent

  2. 25 percent

  3. 45 percent

  1. The average cost of college rose by what percentage from 1989 to 2010?

  1. 90 percent

  2. 180 percent

  3. 207 percent

  1. A Pew Research Center poll found that what percentage of American adults did not read a single book last year?

  1. 12 percent

  2. 23 percent

  3. 52 percent

  1. Vladimir Putin sent Russian troops to seize Crimea in February and formally annexed it a few weeks later. Until 1954, Crimea was part of Russia. Who gave the strategic peninsula to Ukraine as a gift?

  2. The new prime minister of which country was a polarizing choice because he was state governor during a 2002 massacre of Muslim citizens?

  3. Which two countries won rights to host World Cup soccer tournaments in 2018 and 2022 amid allegations of bribery?

  4. What is the meaning of “Boko Haram,” the name of the Islamist group that has been kidnapping girls across Nigeria?

  5. Oscar Pistorius, the double amputee Olympic sprinter, was found guilty of manslaughter in the killing of his girlfriend, Reeva Steenkamp. To how many years in prison was he sentenced?

  6. Name the three Latin American countries with women presidents.


WORLD WAR II WAS BOTH AN AMAZING AND TRAGIC PERIOD OF TIME IN AMERICAN HISTORY… I think we all agree that even a single serviceman killed or wounded in the line of duty is a tragedy. In a perfect world, there would be no wars with the inevitable death and destruction. I am amazed, as I read World War II history, how resilient our military was and how strong the American people were as they daily endured the severe losses that we did during that terrible war. On average, 6,600 American servicemen died per month during World War II (about 220 a day). People who were not around during World War II have no understanding of the magnitude of the war or the losses we suffered. Our ability as a nation to produce the weapons of war (ships, aircrafts, tanks, guns, etc.) is arguably why we do not all speak German today.

Just looking at the aircrafts and pilots that flew the aircrafts in World War II gives us an amazing look at what our manufacturing capabilities were and of the courage of the pilots who flew the planes that we produced by the thousands. The following are a few facts to highlight both our economic power and the courage of our pilots:

  1. During World War II, 276,000 aircrafts were manufactured in the United States.

  2. 43,000 planes were lost overseas, including 23,000 in combat.

  3. From Germany’s invasion of Poland on September 1, 1939 until Japan’s surrender on September 2, 1945 (2,433 days), America lost an average of 170 planes a day.

  4. A B-17 carried 2,500 gallons of high octane fuel and carried a crew of 10 Airmen.

  5. 9.7 billions of gasoline were consumed by the aircraft in World War II.

  6. 108 million hours of flying time were undertaken by our pilots during the war.

  7. 260,000 million rounds of aircraft ammo were fired overseas.

  8. 2.3 million combat flights were flown.

  9. There were 299,230 aircraft utilized and 808,471 aircraft engines used, including 799,972 propellers.

  10. Almost 1,000 planes disappeared on route from the U.S. to foreign countries during World War II.

  11. 43,581 aircraft were lost overseas, including 22,948 on combat missions (18,418 in Europe) and 20,633 due to non-combat casualties overseas.

  12. In a single 376 plane raid in August of 1943, 60 B-17s were shot down. That was a 16% loss rate and meant 600 empty bunks in England that evening

  13. In 1942-43 it was statistically impossible for bomber crews to complete the intended 25-mission tour in Europe.

  14. Over 40,000 airmen were killed in combat and another 18,000 wounded. Some 12,000 missing men were declared dead, including those “liberated” by Soviets, but never returned. More than 41,000 were captured. Half of the 5,400 held by the Japanese died in captivity, compared with one-tenth in German hands. Total airmen casualties were 121,867.

I could go on endlessly with World War II statistics, but to conclude, at its height in mid-1944, the U.S.A.A.F. had 2.6 million people and nearly 80,000 aircraft of all types.

Today, the U.S. Air Force employs 327,000 active personnel (plus 170,000 civilians) with approximately 5,500 manned and nearly 200 unmanned aircraft. That’s about 12% of the manpower and 7% of the airplanes of the World War II peak.


AS A PUBLIC SERVICE, I AM OUTLINING SEVEN (7) THINGS… that you might want to consider avoiding in 2015:

  1. Too much sugar…is a primary cause of obesity, diabetes and tooth decay.

  2. Artificial sweeteners…may be just as bad. A new study indicates that the additives can alter the body’s metabolism to make weight gain more likely, particularly around the mid-section.

  3. Pot smoking…can damage developing brains. Today’s more potent strains, in fact, can cause structural changes in a key region of the brains of people younger than 26.

  4. Pop stardom…leads to an early grave, an Australian study has revealed. Sydney University Professor, Dianna Kenny, looked at more than 12,000 popular musicians who died from 1950 to 2014 and found that their life spans were roughly 25 years shorter than the average American’s.

  5. Playing football…damages brains, even in players who don’t suffer concussions. Studies have shown that at least one-third of NFL players will develop some form of cognitive disorder.

  6. Low Vitamin D…levels can increase the risk of Alzheimer’s disease and other forms of dementia.

  7. An unhappy marriage…can break your heart – literally. A new study from Michigan State University indicates that people in contentious marriages are much more likely to develop heart disease or suffer a heart attack or stroke than their more happily wed contemporaries.


BASED UPON OUR REMARKABLE… Florida economy, contractors are testing the limits of their bonding programs more than they have since 2006. Nielson, Hoover & Company, Inc. is the largest surety broker in the Southeast United States in a large part due to our ability to constructively work with our accounts and their surety markets in extending aggregate programs. We understand, as our surety partners do, that the underwriting process is as much about management and organization as it is about the balance sheet.

If you have surety credit claustrophobia and are feeling penned in by the limits that your current broker and surety company are imposing on you, please give us a call and allow us to show you how we have opened up surety credit lines for so many contractors.


BEING A POLICE OFFICER… is a difficult and dangerous profession. The events of this last year magnifies the necessity for clear thinking and the ability to make split second decisions. The ramifications of making the wrong decision at the wrong time are obvious… People are injured or lives or lost. I am a great proponent of police officers wearing video cams as a way of protecting themselves and protecting the public. For a number of years, police car videos have been common in police departments around the country. In that regard, please note the following comments that were taken off actual police car videos around the country.

  1. You know, stop lights don’t come any redder than the one you just went through.”

  2. Relax, the handcuffs are tight because they are new. They will stretch after you wear them awhile.”

  3. If you take your hands off the car, I will make your birth certificate a worthless document.”

  4. If you run, you will only go to jail tired.”

  5. Can you run faster than 1,200 feet per second? Because that’s the speed of the bullet that will be chasing you.”

  6. You don’t know how fast you were going? I guess that means I can write anything I want on the ticket”

  7. Yes sir, you can talk to the shift supervisor, but I don’t think it will help. Oh, did I mention that I am the shift supervisor?”

  8. The answer to this last question will determine whether you are drunk or not. Was Mickey Mouse a cat or a dog?”

  9. Fair? You want me to be fair? Listen, fair is place where you go to ride on rides, eat cotton candy and corn dogs and step on monkey poop.”

  10. In God we trust, all others we run through NCIC.” (National Crime Information Center)

  11. Just how big were those two beers you said you had?”

  12. No sir, we don’t have quotas anymore. We used to, but now we are allowed to write as many tickets as we can.”

  13. I am glad to hear that the Chief (of Police) is a personal friend of yours. So you know someone who can post your bail.”


IN PARTING… let me leave you with five (5) undeniable facts:

  1. We all love to spend money buying new clothes, but we never realize that the best moments in our lives are enjoyed without clothes.

  2. Having a cold drink on a hot day with a few friends is nice, but having a hot friend on a cold night after a few drinks – PRICELESS

  3. Breaking news: Condoms do not guarantee safe sex anymore. A friend of mine was wearing one when he was shot dead by the woman’s husband.

  4. Arguing over a girl’s bust size is like choosing between Molson Heineken, Carlsberg, and Budweiser. Men may state their preferences, but will grab whatever is available.

  5. I haven’t verified this on Snoops, but it sounds legit… A recent study found that women who carry a little extra weight live longer than the men who mention it.


SOMETHING WE ALL INTUITIVELY KNOW… When the early Jesuit fathers preached of Hurons and Choctaws, they often prayed for forgiveness from the vengeance of the Squaws. Twas the women not the warriors that turned those brave explorers pale, for the Female of the Species is more deadly than the male. – Kipling


(1) The economy (2) $4 billion (3) 36.4 percent (4) “Stupidity” (5) Guatemala, Honduras, and El Salvador (6) 0 (7) (d) The soldiers were actually Ukrainians pretending to be Russians (8) Burning Man in Nevada (9) Pharrell Williams’s “Happy” (10) Body hair-removal cream (11) Paying to freeze their eggs for future in vitro fertilization (12) Recline their seats (13) Soylent (14) “Bossy” (15) (b) 25 percent (16) (c) 307 percent (17) (b) 23 percent (18) Soviet Union leader Nikita Khruschev (19) India (Narendra Modi) (20) Russia and Qatar (21) “Western education is forbidden.” (22) Five (23) Argentina (Cristina Fernández de Kirchner), Brazil (Dilma Rousseff), Chile (Michele Bachelet)

Charles J. Nielson




We are proud to introduce our new, fast and convenient mobile application “#1 Bond Request” for use with the iPad. This free app is now available for download on iTunes and allows you to quickly and easily submit a bond request from any location no matter how remote.

The app was created with several unique features including the ability to store your company’s information, saving you the hassle of having to re-type this data every time you submit a bond request, including a bid amount, bid bond percentage, duration, retainage, etc. In addition, integration with the iOS camera eliminates the need to scan and attach documents for bond requests.

Once a bond request is submitted, one of our surety specialist will have it prepared and sent to you. If you are not already a client, we will analyze your request and provide the right strategy to maximize your surety credit.

The “#1 Bond Request” app is free and available today at

https://itunes.apple.com/us/app/1-bond-request/id866492100?mt=8. You can also visit www.nielsonbonds.com to obtain a request form or you can submit the request electronically through our website.


Our new site has been created to offer a more user-friendly experience and to meet the demands of our mobile users. Some of the key features of the new design include the ability for visitors to easily navigate through the diverse risk management companies under the Nielson Hoover umbrella, including: Nielson, Hoover & Company, Collinsworth, Alter, Fowler & French, LLC, Collinsworth, Alter, Lambert, LLC and Suretegrity, the only company in the country with the technology to deliver all Surety Bond offerings instantly online.

The site’s refreshed look, combined with its easy navigation, enhanced content, and mobile optimization, helps emphasize the company’s commitment to our clients as well as provide a detailed overview of the products and services that the Nielson Hoover Group has to offer. In addition, the site allows you to easily and quickly make a bond request online or to reach out to any member of our team instantly online with the click of a button.

To take a look, go to http://www.nielsonhoovergroup.com