I live near Boston, and my bicycle is my primary means of transportation. For those of you not familiar with Boston, the city proper is actually quite small, and is surrounded by a number of other small towns that make up the Greater Boston area. I live in a suburb called Arlington, just up the road from neighboring Cambridge, home to both MIT and Harvard. Arlington is a very nice (if sleepy) town, but was once the site of the bloodiest fighting on the first day of the American Revolution.

At least a few times every week, I ride my bike from my home in Arlington down the main arterial called Massachusetts Avenue (Mass Ave), into Cambridge to run errands. Over the past few months I've noticed more and more "For Lease" signs cropping up among the businesses on the main drag.

Yesterday afternoon, with the Dow pushing 14,000, I decided to take the afternoon off and go out and document what I've been seeing with my camera. You'd think that with stock markets pushing all time highs that the economy would be booming. But as many observers have amply noted, fundamentals don't back up the strength in the financial markets.

Citing fundamentals, Mish issued a market-top call last week. Yesterday Robert Prechter, in a special note to subscribers, issued a warning as well. In his report, he notes that breadth during the latest rally has been weak, and advised, "Aggressive speculators should return to a fully leveraged short position now..." In other words, the end of this rally is nigh. (You can read the report as well as three months of back issues during EWI's special free week, until July 25).

Below are the pictures I took, investigating the "fundamentals" of my local economy. All of these pictures (aside from the last one) were taken on a stretch of road that I travel regularly, and would estimate to be about 2-1/2 to 3 miles long. Consumers may make up 70% of the economy, but they need jobs from business in order to keep spending. Businesses need places to do business, and this excess capacity shows that something is wrong with the real economy in Boston.

Commentary on the Pictures

1. Formerly an independent video store. The sign says it has "moved" but I've noticed that other branches of this particular store have closed down as well. 2200 SF for lease, and vacant for the past six months.
2. A Chinese Restaurant that's gone out of business. Granted, the food was terrible - I had the misfortune of eating there once. This spot has been empty for the past three months.
3. The Movie Café - Books, DVDs & a café. Empty for about two months.
4. A Dry Cleaner - just went under about a week ago. I had cleaning there that I'd forgotten about - the owner called me up to say come get your stuff because we're going out of business!
5. This was a big, fancy stand-alone Italian restaurant that has been sitting empty for about six months now.
6. Nondescript office space - I don't know what was there before.
7. The sign says Office, R&D, Warehouse - 40,000 square feet. I would imagine that it is an erstwhile American manufacturer losing out to globalism.
8. New construction - this is the first floor of a brand new condo project. This retail space has been sitting vacant for over 6 months now. They couldn't sell the condos, so they've been converted into apartments "for now."
9. A sleepy insurance office.
10. More nondescript office space...not sure what was there before.
11. Previously (surprise) a real estate office.
12. A vacant KFC/Taco Bell. You'd think that in hard times people would need cheap food, but maybe this has something to do with the rats at KFC/Taco Bell in NYC. I don't know if you can tell from the little picture, but it is a real piece of urban blight - the kind of which we're likely to see more of.
13. Formerly a New Age bookstore. Okay, so you might think that's a hokey business to begin with, but the store had been in business for 15 years prior to its closing! This has been sitting vacant for at least nine months.
14. Office space above the Post Office. I just noticed it - not sure how long it has been vacant, or what was there before.
15. Another fancy Italian restaurant. Business always seemed decent (not great), and the sign says they've moved downtown. But they haven't been able to sell the existing location, and it has been sitting empty for 9 months.
16. The Gap - this is right next door to the fancy restaurant described above. The Gap closed down a few months ago.
17. Random office space between Porter Square and Harvard Square.
18. This was formerly a health food store (Cambridge Naturals) that moved about half a mile away to a place with better (free) parking. Business seems to be doing fine at the new location, but this old location has been sitting empty for about a year.
19. Kabloom was a flower shop next door to the health food store. It looks like the whole chain has gone out of business - I've seen other stores around town shuttered. I would say fresh flowers are a luxury item for good times - they're expensive!.
20. Tower Records. Out of business - a victim of the new economy, and the rigid recording industry. The building is up for sale. This has also been empty for about nine months.
21. Some random office space next to Tower records in Harvard Square. Also has been vacant for several months.
22. New construction in Harvard Square.
23. I'm told this used to be a great big used book store, but this space has been sitting empty since I moved to Boston two years ago! If a used bookstore can't survive in a city with 50+ colleges (that's right!), in the middle of Harvard Square...Well, the rent is too high. There is a lot of space for rent in Harvard Square. The only one's who can afford it are the big corporate chains, which makes it kind of a boring place. You may as well just visit the mall for all the character you're going to get there.
24. Office space in new construction in Harvard Square
25. A former restaurant in Harvard Square
26. A former café in Harvard Square
27. A huge piece of office space / first floor retail in Harvard Square
28. A former Japanese Restaurant between Harvard Square and Central Square that has been empty since I moved to Boston two years ago!
29. 5,800 SF of Non-divisible space. I've seen this sign here for the past year and a half.
30. Office space in Central Square. I don't come to Central Square too often, so I'm not sure how long this has been vacant, or what was there.

I know that it is natural for busineses to go out of business, but the key point with these properties is how many there are, and how long they've been vacant. It was really kind of depression, and I couldn't help but think that if the Dow weren't hovering at 14,000, there would be more talk of how bad the economy really is.

What About Your Neighborhood?

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