In order to continue, we will have to convert it to a subscription only website beginning March 1. We hate to do it, but if we remain free, this website will cease to exist. We truly appreciate your understanding, and as always, the print edition is available free in over 300 locations throughout the Greater Columbia Metropolitan Area. Thank you!

Mike Maddock, General Manager
2005-09-09 / Business


by John Temple Ligon

Tarmac tips budget

Atlanta’s Hartsfield International Airport just finished its fifth runway, the one bridging over some of I–285. For each foot of its length, the runway cost $144,000, or altogether $1.3 billion.

Katrina’s gonna cost ’em, but they got it

Insurance industry estimates of Katrina’s insured damage appears to be climbing past $26 billion, which is just 6% of the insurers’ capital base. The insurance industry’s reserves total $425 billion. The full economic cost to the affected region could top $100 billion. Loss estimates include 150,000 properties flooded.

Speaking of reserves

The US does not need to hold dollar reserves as great as its trading partners because the dollar is the world’s main reserve currency. For instance, the US holds about $70 billion, while Japan holds $833 billion, the most in the world. China is second with $711 billion.

And entirely different reserves

Saudi Arabia is the world’s sole oil superpower with the most oil reserves, 263 billion barrels. Iran is second with 133 billion barrels. How much time does the world have left to run on oil? Daily world oil consumption is 84 million barrels, and the US share is one–fourth of that. What can we do? Worldwide, deep–sea proved reserves are estimated at 180 billion barrels of oil. Oceans are attractive because they don’t have high royalties and taxes like ventures in foreign countries. The 200–mile limit off Charleston could be particularly attractive. Meanwhile, ExxonMobil, the world’s largest energy group, forecasts oil production outside OPEC will reach its peak in five years.

Worst–case scenario

Robert Gates, the former director of the CIA, recently participated in a simulation staged by the National Commission on Energy Policy. At the start of the scenario oil was $58 a barrel, and at the end, summer of 2006, oil was $160 a barrel.

Fewer unemployed in US

The US unemployment rate fell to 4.9% in July. In June it was 5%. In SC in June it was 6.3%. Nonfarm payrolls rose by 169,000 for the month.

The cost of art appreciation

The world’s two largest auction houses, Christie’s and Sotheby’s, had $33 million in combined business in 1960 – $209 million in today’s money. According to, fine art prices were lifted by 13% in 2004. Last year, Christie’s and Sotheby’s together sold art worth more than $4.2 billion. Christie’s, 240 years old, reported its top six sales for the first half of 2005:

1 – Oiseau dans l’espace (1922–23) by Constantine Brancusi, $27.5 million.

2 – Chair Car (1965) by Edward Hopper, $14 million.

3 – Tête et main de femme (1921), by Pablo Picasso, $13.5 million.

4 – Sail Cloth (1949), by Willem de Kooning, $13.1 million.

5 – Les grand arbres au Jas de Fouffan (1885–1887) by Paul Cézanne, $11.8 million.

6 – Untitled (1964), by Mark Rothko, $10.1 million.

And the tax on all that, if the transaction took place in the US, is...

The big art auction houses are lobbying hard in Washington for a bill to reduce the 28% capital gains tax on art and collectibles. The capital gains tax on stocks, bonds, and real estate is just 15%, but President Bush’s tax cuts of 2003 left artworks at 28%. The Art and Collectibles Capital Gains Tax Treatment Parity Act would make art and collectibles taxed at the same rate as other assets. Also, for now, the generous artist gets penalized. For tax purposes, a collector can claim the fair market value of a work of art donated to a museum, but the artist can claim only the cost of paint, canvas, and other materials. The new act aligns the artist with the collector.

What if Liberty hears a better offer?

Two weeks ago, Liberty Corporation of Greenville announced its merger with Raycom of Birmingham, selling for $1 billion. If Liberty backs out before the deal is fully consummated, Liberty must pay Raycom $29.35 million in fees and cover up to $5 million of Raycom’s expenses.

Why Lake City is no longer in the wine business

Australia grew too many vines of grapes last year. Two years ago, the average price of a ton of grapes was a little more than $1,100. This year in Australia, a ton of wine grapes goes for about $115. Breakeven is about $1,000 a ton.

USC donations up

Private gifts and pledges in fiscal year 2004–2005 are up about 50% over last year. USC raised more than $95 million in the year just reported, up from $65 million the previous year.

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