Friday, August 31, 2007

A lot of these observations are going to seem obvious to those of you who actually get out of town and travel once in a while, but ....what the's my blog.

It's my blog and I'll do what I want to, do what I want to, do what I want to. You would blog too, if it happened to you......

Obvious Observation one. I was surprised to find a nice computer in the motel lounge. Pretty standard, I take it, but an eye opener to me.

When Linda and I go on these 3 day trips, we try not to take the direct route anymore, the fastest or easiest route. We try to find a secondary route, which takes us places we haven't been, which might take an extra half an hour and be windier and twistier, but more scenic. If there is a little town that requires going off the main road, we do that. Usually not much to see, but still curious.

It also tends to take us into rural Oregon. I don't care what country road you go down, there are people living back there. The question always comes up, what do they do for a living? They can't all be farmers and ranchers. Over toward Corvallis, there is still a lot of logging going on.

Obvious Observation Two. You just don't see the log trucks and evidence of logging that I grew up with in Central Oregon. I didn't realize the lack until seeing all the cut logs in the valley.

You see the obvious discrepancies in income and life-style. I hadn't realized just how 'yuppie' we've become until I compared the visitors to downtown Bend with what you see elsewhere. See, growing up, the 'Valley' was always the 'sophisticated' part of Oregon to me, but Bend has definitely caught up in some ways. I am sometimes tempted to think of lots of the newcomers as being retired folk, but you see plenty of sleek twenty and thirty somethings round here. And, as I've already mentioned, a preponderance of late model and very large SUV's and god help us, F%^@)*^ hummers.

If you stop at one of the local markets in these farm towns, people look at you as if you're tourists who got lost. As you wait in line watching people buy old fashioned artery clogging jojo's and malt beer at 10:00 in the mornings.

So that's Obvious Observation Three. There are some HUGE income discrepancies between rural and urban.

Obvious Observation Four: Most of these towns just aren't growing very fast, if at all. I was commenting to Wes that Bend only sold 109 houses in July. He laughed and said that Albany sold about 400 a year and was considered a very fast growing town. (If these numbers are wrong, it's me not Wes.) So a couple of years ago, Bend was selling almost as many houses in a month as Albany-- a fast growing town--- was selling in a year. It was obvious that most of the businesses in both downtown Albany and Corvallis had been there a long, long time. So there is stability, compared to Bend. But the creative destruction of the Bend retail also creates a vitality that is mostly missing in these towns. (I hate to be so imprecise, but Wes and I may have been talking about "housing starts" not sales, but the percentages work out to about the same....)

I always get a "WOW!" when I mention to store customers that I've been in downtown Bend for 27 years, "or 150 years in Bend years....." The same comment in Albany or Corvallis or Sweet Home doesn't even raise an eyebrow, because they are FULL of stores that have been around 20 or 30 years.

Obvious Observation Five. Not everyone wants to live in Bend, or envies us. You get a sort of mix of intrigued and horrified from most people in Oregon. I first noticed this on our trip to Lakeview. Everyone along the way said something along the lines of, "Too bad about Bend. It used to be a nice place...." I think places like Albany and Corvallis would like to fill in their downtown cores, but somehow avoid the craziness of Bend. We are an object lesson, folks.

Obvious Observation Six? I think the 'Trickle Down Theory' is playing out geographically. How are all the baby boomers going to retire? By moving down the rural chain. Big city folk can sell their houses and move to yuppified towns like Bend, Bendites can move to Baker City or LaGrande, Baker City people can move to Christmas Valley, and Christmas Valley people can move to...the desert?

It's a bit of a mind-blowing realization for someone who has always felt himself to be just scraping by to realize that I could probably liquidate the businesses, sell the house, and have enough money to go to some rural backwater and as long as I watched my pennies and never bought anything or went anywhere, actually survive without working. Not that I'd want to, weird is that?

Thursday, August 30, 2007

Credit where it is due.

I was rereading the Wandering Eye column that mentions my blog, (The Downtown Squeeze Tightens, The Source, Sunday, July 29) and realized that HBM makes the same point about the relative smallness of the Bend downtown compared to other towns. He says 6 square blocks, which is probably more accurate (I added in Franklin, Greenwood and Brooks). Somehow I missed that.

Meanwhile, the new tourism director makes the same point I've been trying to make for some time: that it isn't the most effective use of money and promotional efforts to add to the events in the busy summer months. I'd even suggest that it is counter-productive ( to everyone except the people putting on those events.) We've got people stumbling into each other, instead of leisurely browsing the stores and spending money. We need to put our efforts into the slow months, the non-peak hours, days, and weeks. I guess it took a new guy from out of town to see the obvious. We need to quit gilding the lily. The Bend Film Festival is a prime example -- it doesn't get in the way of our summer traffic, and may even generate new traffic.
A couple of more news snippets.

I noticed that Paul-doh noticed the same irony in the raising of fees just as the housing boom turns to bust. Haven't these people ever heard of economic incentives and decentives?

Borders has turned a 10% increase in sales into a profit loss. It's like the old saying, they lose money on every Harry Potter book, but make up for it in volume.

I never thought I could take the side of builders and developers, but the attitude of the inspection people would certainly be maddening. They don't see any reason to hurry, even though they are way behind. They don't think they're behind enough to warrant overtime. It would be like going to the DMV and seeing 3 'workers' sitting at their desks doing apparently nothing, while one 'worker' mossies up the counter once in a while to actually deal with customers.... Time is money, folks.
Before I get back to the trip, some quick reactions to five days worth of newspapers, in not any particular order....

The Handwritten Source. Well, it made me look at the ads more, just because they were easier to look at. The rest gave me a headache.

Buried in all the ink were the news snippets that two art galleries are closing (or trying to sell.) Wild Women and Shelly Hall Gallery. I'm wondering if I should keep a time-line of when businesses open and close in downtown, but it seems a little morbid.

State's problem gamblers.....does anyone think the poker fad is going to end well? How many families will fall apart, how many bankruptcies, how many houses foreclosed and cars repo'd.? Why do we have to relearn the lessons of past generations? But it sure looks fun and easy on T.V. !

Higher fees for Redmond and Bend. Yeah, let's wait until most of the bustle is over, then charge more just when the bust begins.

Mt. Bachelor raising prices. Once you've cut your customer base to the rich and/or the fanatical, you can pretty much charge more every year, right?

Broken Top. I'd thought Brenneke was just a stalking horse for the 'family trust' who were just trying to get out of a bad situation. I was thinking that the residents could just call his bluff, since I figured he probably didn't have the money anyway. But if they can stampede the residents into buying the place, they're all out from under, with a profit even. But after reading Sunday's article, it appears that he just so arrogant he thinks he's just going to be able to 'out-will' everyone else. Sorry, but he looks like a rich fool, with daddie's money.

Just can't get worked up about the east/west thing.

Same reaction as last year to the picture of the folk waiting in line at Bend Film. The beautiful people. Bleccch.

Picture of Lily Lake reminded me of what I was thinking on my trip. Nature is messy, but after awhile it starts to seem inevitable that it look that way. The longer you're in nature, the more the messy starts to seem proper. Does that make any sense?

The BAT. If we can handle the traffic with the smaller buses, why did we buy those monstrosities in the first place? Admit defeat, apply for a federal grant, and start over.

The closings of Hans, and the turnover at Kasey's and Giuseppes, etc. Personally, I have always counted change of ownership as restarting the clock. That is, since Donner's Flowers has sold in the last 20 years, it is not longer a 20 year business. I realize that the public, the press and almost everyone else looks at it differently.... It's a question of profitability. I have a saying that a truly profitable business doesn't close, and usually doesn't sell. But if it does sell, it means a restart to the investment and profitability timeline.

National poverty rate down, local poverty rate up. Says it all.

Wednesday, August 29, 2007

Lots of blog fodder on this trip. But I wanted to start with something that really leaped out at me.

The downtown core areas of both Albany and Corvallis were huge compared to Bend. If you count Wall and Bond and say Brooks, and Minnesota and Oregon, Greenwood and Franklin, we have maybe a total of 12 city blocks.

Albany looked at least twice the size, if not more, and so did Corvallis.

Which makes sense when you figure that during the time these zones were being created, Bend was probably 1/4 to 1/3 the size of either Albany or Corvallis.

What becomes very noticeable is that even when a block seems to be reviving -- slightly -- only a block or two away there are shuttered buildings. In other words, they have a steeper hill to climb, with such a large area to fill. They look like they are on the path, and making good choices, but I think that what happened to Bend is unusual, and at least some of it comes down to a town that is now BIGGER than either Corvallis and Albany, but with much less downtown space to fill up, which had never occurred to me before.

We were wandering around downtown Albany, and came across the Visitor's center. I casually asked the clerk was the average rent was, and she insisted I talk to the head of the retailer's Downtowners. I got my answer, about 1.00 or less than half Bend, and we kept talking -- at completely cross purposes. I'd start to try to describe downtown Bend, and he'd excitedly tell me that Albany had the same thing, and how Albany was starting to boom, and how high end everything was and how little vacancies there were.

Well, I'd just strolled through much of downtown Albany and it didn't look anything like Bend. Finally, I just said. "Look, you really need to visit Bend to get a true idea of what's happening...."

So, like I said yesterday, I think both Albany and Corvallis, while not dis functional, would kill to have Bend's look and feel and foot traffic, and, dare I say it, mix of retail.

I had a long talk with my friend Wes Hare, and we had a different take on how Bend revived. I think there was a large portion of luck, happenstance, and statistical anomaly. For instance, the first major impact on downtown did not come from the mass market, per se, or at least the usual culprits of WalMart and Target, etc. We had two malls open, which had some big anchor stores, (mostly department stores like Sears and Penny's and The Bon, which aren't quite the category killers that Walmart and Staples and Home Depot are) around 1980. But because of a recession, we had a 10 year moratorium on competition and downtown Bend had a chance to fill back up, mostly with Bohemian mom and pop types. How do you predict that a lone developer would attempt to renovate the old post office, or that the tunesmith of the Carpenter's songs would use some of his money to renovate the O'Kane building?

Wes, who is a city manager, (Albany) believes that Bend had some advantages and some visionaries and some good planning. He points to Mt. Bachelor, Sunriver, etc. as examples. But of course it is his job, his experience, his belief that managers plan and cities then evolve along their plans. I don't want to speak for him, or misrepresent his views, but I think the split between his view that it was both planned and inevitable, and mine that it was happenstance and luck, is pretty clear.

The truth, no doubt, is somewhere in between. But you can see what a huge obstacle these downtown cores have to surmount. Success breeds success, and empty storefronts breed empty storefronts. Personally, the outlying malls and outlet stores and big boxes that surround Albany and Corvallis are completely boring and uninteresting. It's hard to believe that American's have chosen that model of business to give their money to.

Tuesday, August 28, 2007

Went on a book scout expedition to Albany and on to Newport the last three days. I've decided that since this isn't an anonymous blog, that maybe I shouldn't telegraph when I'm not home. Learned all kinds of interesting things: my best friend from high school is the city manager of Albany, and I also talked to the head of the Albany's Downtowners.

One thing I'll say right now, though. I think our bookstore is nicer than any other bookstore I've seen out there, so far. Just in looks and feel. Inventory could be argued, but our bookstore just looks so much cleaner and organized, for some reason, and the books look newer.

Another thing, much as it may seem like I bitch about downtown Bend, I can tell you that Lebanon, Sweet Home, Albany, Newport and even Corvallis would KILL to have the same thing.

Full report tomorrow. (I haven't even read most of Sunday's paper, much less the Monday or Tuesday, though the BAT situation looks worse than ever....)

Monday, August 27, 2007

I've finished my comic orders for the month. I just drastically cut back on the endless and progressively lamer crossovers and tie-ins that Marvel and DC are offering. With a title like Daredevil or Batman, I have months and years of records about how many have sold. What do I do with one-shots and mini-series? I guess. I try to read my customers minds. I try to divine how good or how bad, how central and important, how timely each new title will be.

Screw it. I'll order enough for the counter, and those that want it the most will get it. Everyone else, I'll have to reorder for. I'm just eating way too many of these guess-work comics.

Sunday, August 26, 2007

I loved the article in the Bulletin on Saturday about the guy who had "No Idea" that he wasn't supposed to cut down the trees near the river.

Let's see. First his neighbors tell him. Then a Deschutes County sheriff's deputy tells him. Then a county code enforcement officer tells him. Then a Department of State Lands agent tells him. Then -- FINALLY -- the proper agency, the Oregon Parks and Recreation Department serves him a cease and desist order (because, if they just say it, he would insist he had 'no idea.')

"I had no idea there was gambling going on in this establishment!'

"Your winnings, sir....."

Saturday, August 25, 2007

If ever there was a more meaningless statistic than that home sales were up 2.8 in July from June, I don't know what it is. The statistic that counts is that sales were down 10.8 from 2006. But in usual grasping at straws manner, Norma Dubois find is "very encouraging." Never mind that Bend had it's lowest sales in five years.

But July is pre-crisis, pre-credit tightening. It's probably the last bit of 'good news' they are going to hear for a long, long time.

Friday, August 24, 2007

This sort of article drives me crazy. It isn't just the Bulletin, but all the news outlets.


Barnes&Noble Inc., the largest U.S. bookseller, said Thursday its second-quarter earnings rose 9 percent, boosted by sales of J.K. Rowling's "Harry Potter and the Deathly Hallows." The company also said it expects a loss in the third quarter but increased its yearly guidance to reflect tax benefits and lower-than-expected costs for closing a distribution center. The company's shares rose 90 cents, or 2.6 percent, to $35.*2 Thursday. The stock has traded between $30.01 and $43.80 during the past 52 weeks. Profit for the quarter ended Aug. 4 rose to $18.1 million, or 26 cents per share, from $16.6 million, or 24 cents per share, in the year-ago period.

Italics are mine.

How to read this? I know that the C.E.O. had announced in advance that they would lose money because of the Harry Potter discounting. (For all intents and purposes, they -- along with Amazon, Walmart, Costgo, and Borders among others sold millions and millions of books for near cost, or even below.)

So what the hell is the term earnings mean? I suspect it means sales, which has a different connotation altogether.

Then they talk about a loss -- but hey, it didn't cost as much to close a center as we thought and besides we can write it all off in our taxes....

My accountant always laughs when I talk about writing off losses in my taxes. "You either earn a profit or you don't....."

And finally, they are back to talk of profits in the last part of the paragraph. Again, I know from my store that there are "Gross" profits -- that is, the money you've earned from sales before you subtract costs, and "Net" profits which are what are leftover after all bills are paid. I have to assume the profits they are talking about at the end are the "Gross."

Very unclear, and seemed designed to mislead the unwary.

Thursday, August 23, 2007

I've always wondered if 'cold calls' are an indication of slow business out there. The boss is cracking the whip and saying, "If you ain't got any meat on the line, then call some fresh meat!"

It seemed like every other call today was a cold call; most of them automated. Does anyone actually listen to those?

Wednesday, August 22, 2007

So based on the idea that we built too many domiciles, I'm going to make some predictions. You can tell me how far off I am when they do or don't happen.

While the rest of the country, thanks to the Fed and a -- can't kill it stock market --, shakes off the effects of the 'bubble' in a year or two, Bend will see a decline that will continue for 3 or 4 years, then stagnant for another 3 or 4 years (a few rich people will begin quietly buying up property), then see a slow improvement (that won't be noticed at first, because by that time we will be so beaten down) for another 3 or 4 years. Somewhere around 8 to 12 years down the road, someone will announce a modest sub-division and we'll all be amazed.

Projects currently being built will be abandoned -- landscaping unfinished, houses half-built, turned into rentals. Many more projects will be quietly dropped without comment. There'll be a couple of spectacular bankruptcies, and Bend will gain a reputation as a place that really screwed up.

Rich people don't move to towns that screwed up. Rich people move OUT of towns that screwed up. Some of the major events will run out of capital, others will just cease. Les Schwab theater will start getting B and C acts, instead of A and B acts, etc.

Our population (our army) of real estate agents, title company workers, mortgage agents, bankers, builders, sub-contractors will start to drift away to greener pastures. Bend will actually lose population for a few years down the road.

But before that happens there will be a steady drumbeat of; "why can't you be positive? If we were all positive, everything would be o.k., we just need to be positive....which will turn into anger. It's all you negative peoples fault this happened. None of which will have the slightest effect on reality.

Housing prices will drift down. In another 3 or 4 years, prices will be about 1/3rd lower than the high.

New retail buildings in downtown Bend and the Old Mill will sit half empty, and then start to fill with the kind of businesses that don't normally go there. Restaurants and high-end stores will open and close on a constant basis. 3 close, 3 open, 2 close, 2 open but it takes longer, 4 close, 2 open and two sit empty for a noticeable time, 5 close, 2 open but both of them are 'antique' (i.e. junk stores....). Rents will start to drift down, eventually you can get a 'deal' with hidden incentives, even if the rents really go down only 25% or so. NO ONE will be kicked out.

Bend will slowly but surely become livable again. The jerks will leave, cause they were only here because it was cool.

For the vast majority of Bendites, who have jobs in schools and hospitals and so on, the traffic will get better, the snobs will become more humble, the fancy restaurants will be glad to seat you in your working clothes.

We'll have our poverty with a view paradise back.

Edited to add a couple more:

A couple of the better designed and capitalized 'destination resorts' will come on line and have modest success. (Phase 2's will be postponed). I expect them to be the Bauhofer and (despite BendBust's hard-on for Hollern) Brooks Resources. A couple of others will never be built. And a couple others will be part of the 'spectacular bankruptcies I mention above.

The west side will gain a 'toxic' reputation. Too many badly built immediately falling apart look alike faux craftsman crap built too close together. Your neighbors (five feet away) won't be other rich or middle class, but whoever the landlords can rent to. The bungalows on Columbia will revert to being huts. People will stop bragging about living on the west side.
I wanted to take a step back from the news headlines and the bubble bloggers and try to logic out what I think is going to happen here in Bend.

The liquidity crisis, while perhaps the mechanism that pops the bubble, is to some extent beyond the point. That is, whatever the Fed does to stop bank runs and reassure the stock market isn't going to change the housing bubble.

Here's what I really think: If the most optimistic real estate agents were right, and we have an endless flow of well-heeled baby boomers and yuppies who want to live in Bend, we STILL had a bubble. We STILL had too many houses to absorb.

Too frakkin many houses, which had risen too high, too fast in price. Never mind the Fed, the housing market in Florida, or the stock market.

Bend built too many domiciles.

Tuesday, August 21, 2007

Every August I get a vision of the promised land. The store works the way it's supposed to work, by god. Customers flow in the door, stuff is bought, reorders are easily absorbed, bills are paid without stress. Life is good.

And then September rolls along and slamdunks the store with a 25% drop.

It's an illusion, I know. If I was always doing the level of business I do in August, I have no doubt expenses would go up. But more importantly, my expectations would go up, and it would become the new norm.

I read once that when they survey people about how much more money would make them happy and secure, almost everyone mentioned a income about 25% higher -- it didn't matter if they were rich or poor, they saw a 25% shortfall.

It's also a bit of a dangerous time for me. I'm making orders for November, one of my slowest months, which means I have to squeeze my brain into a smaller jar. I have to stop reordering quite so much right about now, because whatever shows up only has about 10 days to sell, and the bills will come due on one of the worst weeks of the year -- the start of the school year.

Anyway, it's always very pleasant for a month or so. I'm trying to enjoy it.

Monday, August 20, 2007

I wanted to reproduce my April 6th entry in part:


Friday, April 6, 2007

In every bubble I've experienced, there is a period of grace at the end, when it is still possible to get your affairs in order. To escape. You have to be paying attention, you need to trust your instincts, but that moment is there.

I do believe it's possible Bend is at that moment.

A couple of days ago, there were three positive economic news items on the front page of the Bulletin. I then turned to my U.S.A. Today, and there were four negative economic news items on the front page.

It's spring, and if houses are ever going to start selling, it is now. But if they aren't selling, we aren't going to really hear about it for another few months. It's still a positive moment in time.

We are the second fastest growing urban area in America. But that information is from last year. You can ride that wave of positive news, but paddling out to sea expecting another big wave is more questionable. There will be plenty of people who will look at the improved sales this spring, and the positive news in the newspaper, and think the lull is over, good times will continue. That's what gives you your opportunity. You have a period of grace.

End Quote.

That window of opportunity is closed. The music has stopped, and if you aren't sitting down, it's too late. It is now common knowledge, and once everyone knows, there is no way to escape. The credit crunch is just the mechanism that ends the bubble; if it hadn't been that, it would have been something else. Because bubbles always pop.

I have learned to never wish for downturns. It hurts everyone. But I admit I'm really fascinated by what will happen now.

Is Bend infested with rich folk, who will laugh off the downturn and continue shopping in the high-end specialty shops downtown?

Or is it more likely that we have alot of live large and borrow off equity and keep up with the Jones? And how long are they going to keep buying seasons passes at Mt. Bachelor, and country club memberships and a new S.U.V. every year? How likely are they to keep a money losing store or resturaunt open when the house has just lost a third of its value, the no-doc second mortgage just jumped percentage points, and the wife has lost her job at the title company?

It is going to be interesting.
"What's important is that I know it."

Linda asked me what I mean by "it" in the last post.

I'm talking about the peculiar population dynamics of Bend. As I see it, we have two very unique differences: demographics and isolation. You can't just look at pure population numbers and averages to get at the truth.

We have way, way more motels and restaurants than any town our size should have, but that makes sense when you look at what our major industry is -- tourism. I'm not sure all the 'specialty' stores can be supported by the demographics --that remains to be seen -- but it explains why people are trying.

Anyway, anyone who moves here from somewhere else and doesn't spend some time investigating may very well get fooled by the population statistics alone.
Bend has gotten bigger. Bigger than I ever thought it would be.

But that doesn't mean we're BIG.

A constant reminder to me of this is the daily "On the Road" feature in Diamond Comic Distributers website. Some of the stores featured are on their second go around, by now. On the Comic Book Industry Alliance, stores are constantly talking about visits from their 'reps' from the comic companies, from game companies, from Diamond. They talk about different writers and artists who not only visit their stores, but are regular customers.

I've never been visited by a rep from any company except I think Top Shelf, and that was more or less happenstance. Even Dark Horse and Oni and other Portland companies tend to ignore us.

What would it take for a visit? Well, someone would probably have to start from Portland or Eugene or Medford and so they are looking at a minimum 5 hour drive to and from Bend, to visit ONE store.

I was going to google the distances from the valley to Boise, from the Washington border all the way south to Reno, because I believe I'm the only full scale, long term comic shop in all the area. But I think I'm safe in saying that there are THOUSANDS of square miles without comic shops.

A missed opportunity? Not unless you intend to sell comics to jack rabbits and coyotes. It's a big empty space.

So, as far as I'm concerned, my customers are the good people of the tri-county area and tourists. Maybe a couple of hundred thousand possible customers.

Now according to the big influential retailers, that ought be enough people for several stores. They count how many stores are in metro areas, and arrive at the figure that 50k or on the upside 75k out to be enough for a store.

I'm not sure what they're missing. The synergy of the metro population? A different demographic? But I can tell you that after 27 years of operation we still are only 2/3rd the sales in monthly comics as the 'average' comic shop. It's possible I'm just really doing a lousy job of it. But even that is somewhat compensated by the fact that probably 20% of my business comes from tourists.

But because they are the big retailers, they are listened to. I, being a small retailer, probably don't know what I'm talking about -- otherwise, I'd be a big retailer, right? Even though I'm like the perfect test case -- a store with a full inventory, isolated from all other factors.

What's important is that I know it.

Sunday, August 19, 2007

Spent the day reading comics. I'll tell you this -- anyone who thinks comics are 'simple' just hasn't read comics lately. Not to say that there aren't formulaic comics, just as there are formulaic novels and T.V. shows and movies, but that, if anything, there is more experimentation and exploration in comics than in just about any other form of creative arts. Maybe cause the costs of publication aren't so high, people try all kinds of new ideas and styles. Hollywood knows this, and so do the video game makers.

I started off by reading the first five issues of Joss Whedon's Buffy season eight. It's obvious he's enjoying the 'unlimited special effects budget' that comics give him. There are now 2000 Slayers, 500 Slayers in Buffy's charge. Xander is a Watcher, Willow an all powerful magic user, Dawn is a giantess who had sex with the wrong guy, uber-nerd Andrew is training all the nubile young Slayers. It's great fun, and a fix for those of us who love Whedon's Buffy, Serenity and Firefly.

After that, I read the Whedon and crew written Tales of the Vampire series.

Grant Morrison's Filth, which is either about a dirty old man who dreams he's a secret agent who cleans up others messes or a secret agent who takes vacations as a dirty old man. It is claimed that Morrison's Invisibles was the inspiration for the Matrix, and he certainly plays with reality. I kept hoping it would become clearer, but I was no wiser after the 13th issue. His ideas were strong enough to carry me through, but I wish I knew what was going on....

Read Ocean, by Warren Ellis, the kind of interesting SF that Ellis seems to be able to toss off in his sleep. Pretty good, but you know he could do even better.

First 3 issues of the Highwaymen, secret agents in the Vertigo world, old men who are activated by a message from the deceased 'President Clinton.'

"But I thought she....

"No, the other President Clinton..."


Interesting to me how often comics deal with the issue of age. This along with Welcome to Tranquility directly confronts the idea of aging superheroes or secret agents. Fun stuff, but not outrageously original.

Read the fourth Desperato's story, a mix of Western and Supernatural, which is a bit awkward, but I do like reading westerns for a change.

The big find for me -- a really great read -- was the first 12 issues of DMZ, by Brian Wood. I have read Local by Brian Wood, which I enjoyed. He is just my side of being able to read the Generation Z or whatever he is without being precious about it. I have to admit, some of the indy darlings are just too -- youthy, if I can coin a word Colbert-like.

It's about a young journalist intern who is inserted in a war-zone, which happens to be Manhatten island. There is a civil war between the "Free States," and the U.S.A. which has bogged down into an uneasy truce in N.Y. No one knows what's happening inside the DMZ. The entire crew that he is sent in with (as an afterthought) is wiped out, but he is taken under the wing of a young girl and becomes "The Journalist", the only one who is left alone to see what's happening. There aren't any really political sides taken (well, the U.S. government and big media comes off looking pretty bad.) It's really more about how people continue to live their lives, even in the midst of war.

Anyway, I'm really impressed, as I always am when I actually get down to reading comics. I come home tired, I pick up a book. When I have enough energy, I read comics.

Saturday, August 18, 2007

Went to work yesterday, meaning to ask Pat which days he was still going to be here so that Linda and I could fit in one more vacation. I had no employee lined up, and just figured I'd work every day for a while. Wasn't looking forward to it, but I've done it before, in fact pretty much done it the majority of time, and it becomes routine.

The next employee was going to need to be all the things I've looked for in the past, and also willing to take on 'tech' support and 'online' selling ventures.

Meanwhile, I was going to take every day off I could for the next few weeks.

But Pat surprised me by accepting my offer of being manager of Pegasus, with a raise that is halfway between what he is already earning and what I had offered him if I went and started Pegasus, Too.

I'm absolutely delighted. He's got the store down, right now. And he's still enthused. He's just eating up the pop culture of the place. D.K. left a box of Doc Savages with me, that I hadn't found room for, and Pat found them and starting reading them. He's discovered Flash Gordon, the new T.V. version, the old movie, and our collections of the old comic strips. One of the things I like about the kid is how curious and open he is to the old stuff.

I've teased him about not knowing who Fred Astaire is, among other old Hollywood actors. I forget how young he is. I expressed before that I consider it all part of one big campy fantastical world.

So with him there, I'll be better able to take on the new P.O.S. system this fall, as well as digging into the backstock and finding ways to exhibit and sell it all.

The store is clicking, right now. You go for years knowing that the store isn't quite performing right, trying to figure out what's wrong and how to fix it, and then you fall into a groove for awhile. It never lasts, but it's fun while it lasts.

It's now a full 7.5 years since the last NBT (Next Big Thing) and we are way, way, way overdue. For once, I'd be in a good position to take full advantage. I came across a beautiful statement, that expresses exactly how I feel about NBT's (or, if you will, pop culture bubbles). I think it was said by Galbraith, the economist. To paraphrase:

'Financial genius is leverage and a bull market.' I would add, and the wisdom to redeem that leverage in a timely manner....

Friday, August 17, 2007

Somehow I don't believe the Fed is going to solve the credit problem and thus the housing problem and thus the stock market problem (Well, maybe the stock market, who can understand their thinking?) with a wave of their interest rate wand.

Like in Stardust, the witch can turn a goat into an innkeeper, but he still eats the scenery. And every time she used her magic, she loses a bit more of her glamour spell.

There will be consequences down the road to making money easier to borrow. Isn't that how we got into this mess in the first place? Not saying they shouldn't have done it, just that it isn't the magic answer.

Thursday, August 16, 2007

Sometimes the news headlines say it all. Those of us who were yelling, "Watch out!", needn't say a word.

I'm going to relax for the rest of summer at the store. Then I'd like to try to apply even half the effort that I was willing to spend on a new store toward the old store. Plenty of things to do, even if it isn't as fun as starting with a fresh canvas.

I had a chat with my current landlord representative, and it was reassuring. I think they like me and my store. I'll just keep the faith that nothing changes too much in the next few years.

So what if I'm surrounded by umpteen clothing stores? Foot traffic is undeniably higher; which is what I have profoundly wished for for years. Heck, I may end up with even more business from all the people who aren't looking for a dress, shoes, handbag, painting or necklace.

My mind is already trying to figure out ways to make better use of the limited space I have. It's going to be all about the ergonomics from here on out. Maybe try to get the technology up the speed, (my supplier, Diamond Distributers is going to be offering us a POS system this fall.) Look at trying to sell online a bit more than I have.

I've even thought of having a "I'M NOT MOVING SALE!" Hey, by not moving, I need to unload the merchandise.

Instead of starting raw with a new space, I just will need to refine and be smarter about the space I have.

Wednesday, August 15, 2007

The Microwave Martians have got me. They've been shooting Lethargy Beams into the Lassitude center of my brain. I tried to get my wife to make me an aluminum helmet, because I couldn't stir myself to go down the hallway, but she went out for walk with a friend, who asked me if I wanted to go with them but I explained about the Microwave Martians, and for some reason she rolled her eyes and walked away.


What was I saying? Oh yeah. Went to work, and sat at the desk and watched Patrick deal with the customers. Offered him a raise to 10.00 an hour for the rest of the summer since he wasn't going to be manager after all.

"You already pay me 10.00 an hour."

"Oh.....well the thought was good."

I think without the sheer terror of opening another store, the Martians are able to penetrate. I feel like a rag doll.


I'm going to go take a nap. They can't get me while I'm sleeping.

Hey, maybe I'll run for mayor. If the Martians will let me.

O.K. I asked. I'm too valuable as a test subject. Besides, they tell me I'm way too weird.
I had been in limbo for some time over Pegasus, Too. That, in fact, was part of the problem. I'll try to explain what happened without casting blame, because I think the landlord and I were coming at this from two different directions. I understand his viewpoint, I just needed what I needed to get there and wasn't getting it.

We seemed to be working on two different time scales. From the time we first started talking, he seemed to think it was all going to come together fast, he could get me in there in October at the latest. I looked at the raw footage and thought he was being very optimistic. We settled on a November 1 starting date.

But then pretty much a month passed without my seeing any real changes. Now in talking to the landlord, I could see that he still wasn't worried, that November 1 starting date still looked easy to him.

The problem was, a month had passed without me being able to do anything because everything I wanted to do depended on a secure lease. I spent $4,000 in the first two weeks, called all my suppliers to see what deals I could get, I perused catalogs and outlined what fixtures I wanted to buy, and so on. But when I didn't hear anything, I started to slack off. I had signed the letter of intent on July 17, and I then called him on 26th, and then had to send my orders off on July 31. (A bulk of my NOVEMBER orders had to go out on that day.)

So that was problem number one. I had envisioned a 3 month span to do everything in a nice, measured manner, with reduced stress, time to really plan and think and order correctly, to try out different fixtures, to stockpile material (especially to take advantage of all the sales) and so on. And suddenly an entire month of that was gone.

Now I know from his perspective, nothing had changed. November 1 was still a go.
But from my perspective, I still wanted the 3 months, and that meant pushing it back to December 1.

Which leads to the second problem we had. Communication. I get the feeling that we are both personalities that prefer to have people contact US, rather than the other way around. I had dropped by the location 3 times following the Letter of Intent to chat; I called him on the 26th of July. (In which conversation he mentioned that he'd have the lease ready 'in a few days.') Then I felt it was his job to call me, because after all he was the one who knew where things stand, not me. At what point does my calling become nagging?

We connected almost by accident last Thursday, August 9th, though it happened through my outreach efforts (I was calling another tenant prospect to ask if she knew what was happening and he happened to be there.) Again he said he would have a lease ready by Saturday.

At this point I very clearly and distinctly asked for the lease starting date to be December 1.

I got the lease yesterday, Tuesday, August 14, and it still had the November 1 starting date. This, by my reckoning, would necessitate at least a couple more rounds of back and forth, and especially since he didn't really want to commit to the December 1 date, I figured we were at a stalemate.

The final breaking point for me was that the lease included a 180 day termination clause, at the landlord's sole discretion.

Now maybe I could've negotiated this away. But I was going to have to see a lawyer, clearly, and now

well, I'm done.

So there it is folks. No one's fault, just negotiations that from my temperament and standpoint went too long and got too complicated.

Tuesday, August 14, 2007

The deal for the second store is off. It was just taking too long, with too many complications.

I'm going to concentrate on my own store for the next couple of years, and hopefully I'll have made enough money to have some flexibility. I still like downtown.

I think the economy is going to be shaky for awhile, anyway. So maybe it's for the best.
I swore I wasn't going to rain on someone else's parade, but I can't help but comment on the Northwest Crossing Market. They are like the poster child for what not to do. Maybe, even, if they read the following, they might start some course corrections. Like, you know, STOP SPENDING MONEY! Buying your business cards two months in advance is exactly the wrong thing to do.

I always talk about the book, GROWING A BUSINESS, and that is the first example he uses about what not to do -- buying business cards makes you feel good, but does little to help your business at first. It is an easily dispensed expense. The few hundreds of dollars you spend on accoutrements will be money you wished you had later. But most importantly, it is a dead giveaway that the new business owner is about the PROCESS and not the actual business. A very bad sign.

I wrote the following on Bendbubble2.

About that market. I think people often under plan these ventures. In this case, they may have over planned.

We know they spent 75k on equipment, which they mentioned was almost equal to 'construction'; so we know they've sunk 150k in infrastructure, right off the bat. (Plus fancy business cards, etc. and god know what else....)

They are also paying 2.35 a ft. !!! and they don't mention triple net, which in my experience would be a minimum of .25. So 2.60 times 1500 sq. ft, equals 3900.00 a month in rent alone.

Just for fun, I googled up some industry averages.

For neighborhood shopping centers, the average sales per foot are:

General Merchandise; 100.36
Food 311.72
Food Service 182.61
Gifts/Specialty 148.75

Average 185.86

So 185.86 times 1500 sq. ft equals
278,790.00 annual sales.

The bigger the shopping center, the more per foot. So Regional centers make more than local centers who make more than neighborhood centers which make more than stand alones.

Benefit of the doubt, they are in a 'neighborhood center.'

Average margin on groceries (this includes the big boys) 32.2%.

So gross profit, not counting expenses, is 89,770.38, or 7480.86 per month.

O.K. So assuming that they have an 8 time turnover in inventory, they need about 25k, more, so lets say they're investing 200k altogether.

(By the way, 6% interest would earn them 12,000.00 a year, no risk, no work.)

After we take the minimum overhead of say, 5000.00 a month, they have
2480.00 left. So assuming no other expenses, and assuming they work every hour of every day, lets say 10 hour days times 6, and 6 hours on the seventh, they earn about 8.85 cents per hour.

But they are going to sell specialty foods and services. All the research I looked at said that ADDED to the Expenses, and LOWERED the margins.

In other words, they'd be better off selling, beer, soda, smokes and snacks.

I can't help but compare this to the Bond Street Market, here in downtown Bend. He sells the basics -- its a one man operation, no need for fancy coffee machines or ice cream makers, or whatever.

Beer, cigs, aspirin, soda, pencils, snacks, etc.

Maybe 800 sq. ft., just guessing under 2.00 per foot. So, say 1600 a month in rent. 150k in sales, industry average, 32.2% margin, 4800.00 per month sales. Say overhead of 2000.00 a month, also leaves about 2800.00 per month. One man operation, banker's hours, not bad.

The biggest advantage -- I doubt he sank even 15k into fixtures and startup costs. Probably leveraged the groceries out of the suppliers, and probably some of the equipment too.

One last thing about the Northwest Crossing: they mentioned they were holding on to their cash and paying with credit. So, my 30 year mortgage for 150k at 5.875 interest works out to more than 1100.00 a month. Kinda doubtful they are getting that long of terms, or that low of interest, etc. Never mind minimum wage, they're working for free....

Monday, August 13, 2007

Did anyone read the article in Saturday's Bulletin about "Independent Reading" (aka indy bookstores?) This was one of the limbo's I couldn't talk about. Pegasus is covered about 2/3rds into the article for about half a column. But I got interviewed for fifteen minutes, and about 30 seconds makes it into the paper and I never know which 30 seconds. David Jasper has always treated me fairly, I just didn't know what the slant of the article was.

I was pleased that I got the mention of the 'convenient' parking garage (no, really, it IS convenient...) which counteracted just a little the comment by Tina Davis that downtown is hard to get to.

What was most noticeable to me is that both existing bookstores really didn't try to hide how brutally hard it is to run a indy bookstore. And that Eugene, a town over twice the size of Bend, and a big university town at that, had only two bookstores. I tried to put a real positive spin on my comments, but I also said, it's an "uphill battle...." Welcome, Camalli Book Co.

Also interesting, and something I didn't know, was yet a third indy on the way at the Delaware Market building, Between the Covers, also selling candy. (It may be, the books will be the draw and the candy and food will make the money?)

I've been expecting this, because of the nature of the people moving here, and the nature of the types of businesses they want to open. Existing niche fillers hasn't stopped people from opening umpteen clothing stores on Minnesota Avenue.

Also got a kick out of the east side/wide side article. Somehow, I just can't see how Northwest Crossing or further out subdivisions are any more pedestrian friendly than the east side, at least as far as East 12th. All these neighborhoods are maybe 15 minutes from downtown. Indeed, I think it would take much longer for most of the neighborhoods past about West 8th street of so. Is this housing equivalent of name-brand jeans? I still think its pretty ridiculous.

As a lifelong resident of Bend, I can tell you there was NO bonus to living on the Westside, except the river and the hills, until this new wave of residents came to town. Perhaps, the opposite. In other words, I think it's all in your heads.

Walker? Come one. Most people drive, whether it's from the East or the West. But I think the East side neighborhoods, as long as you stay off of Highway 20, are just as walkable. The lack of through-fares? I don't see how that is a hindrance. The lack of neighborhood shopping? There is quite a bit, actually, though maybe not as much as the westside. But then, the westside to me still has to prove it can sustain that growth.

And finally, the credit crunch. What I'd foreseen was a bursting housing bubble. I didn't know what the mechanics of it would be. I purely looked at the curve and thought it wasn't sustainable, and looked at the underlying conditions (no real industry, no I-5, no university, etc) and wondered what people were going to do, and I looked at the fact that people have to sell their houses elsewhere to move here so if prices retreated, we'd be affected too.

What I personally didn't see was the way credit would dry up. But now that that is apparent, it is very clear to me that commercial credit is bound to dry up also, and that building more retail and office not only isn't going to save the local market but may exacerbate it.

I had (totally made up odds) a guess that we'd breeze through a downturn at 10%, that we'd crash depression sized at about 10%; and that we'd do somewhere in-between (with us doing better at higher odds than us doing worse) at 80%. I'd revise that to, 5% we'll breeze through, 25% that we are in for a local depression, and 70% in-between, with us doing worse at higher odds than us doing better.

For what it's worth.

Sunday, August 12, 2007

Saw STARDUST today. I didn't read the book. A strange omission in my Neil Gaiman reading. It seems like very few people realize that it started off as an 'illustrated' (by the nifty Charles Vess) novel.

It was fun. As I've heard it described, 'a slightly less clever Princess Bride with better special effects' which is pretty close to right on.

Meanwhile, from the coming attractions, it seems as though they are making every fantasy ever written. I expect to hear from Hollywood any day now. I figure Star Axe and Snowcastles and Icetowers have to be in the top 10,000 fantasies of the last 30 years, right? There've been that many, right? Somewhere out there is a 40 year old producer that loved Star Axe when he was 12 years old....

Saturday, August 11, 2007

"Best Bookstore: Honorable Mention."

Yahoo! Hey, baby. I got the silver! Second place in a......two man race....

Hey, I beat "None of the Above!"

Friday, August 10, 2007

Limbo, Limbo, Limbo. Most of the things I want to talk about, I can't talk about right now. That will all change -- for good or ill -- in the next week to ten days.

Meanwhile, it's always so interesting to me to see the range of responses to the economy. You've got the Bubble blogs, with the 'sky is falling' 'we're all dooomed..." comments, one after another, until you're ready to dive into a hole.

Then I turn on CNBC, and the commentators are definately riled and excited. The Fed pumps 38 billion into the system, over three injections, in one day, something that hasn't happened since 9/11. You got Cramer of Mad Money screaming: "THEY KNOW NOTHING!" and having what appears to be a breakdown which he is turning into gold. At least it appeared completely sincere.

It reminds me a bit of the October crash in 1987(?). I wasn't all that worked up about it until I watched the financial news that night. The commentators appeared scared, totally frightened, (George Jr. after 9/11 sized scared) in their eyes, and that alarmed me more than anything they said, which was typical blather.

And finally, I go to the major new sites, such as the U.S.A. Today, or this morning's Bulletin, and not only is it not on the front page, its not even headline news through the rest of paper. Still obsessed over the trapped miners, and bridge collapses.

So either their perspective is the right one, and the economy story is smaller than it looks, or the major news organizations are doing stories about local disasters while the national economy tanks.

Thursday, August 9, 2007

Fair is fair. Especially after my going after the mass market yesterday.

For years, in fact as far back as I can remember, there has been the suspicion that gas prices in Bend were artificially high. Occasionally there would be a gas war, which only seemed to confirm it. I remember passing through Madras and realizing that prices were considerably cheaper.

There was some mumbo jumbo about 'transit points' or something.

Now, I do believe that gas stations make very little money, but still...they were playing a very dangerous game that is now going to come back and bite them.

Fred Meyer opens a gas station and suddenly prices drop .35, at a time of year when prices usually go up.

What I really hate about this is that it seems to confirm every stereotype about greedy locals; it seems to confirm that the mass market serves a purpose in keeping prices down.

I know, that whenever I had a monopoly, I was very careful not to charge more than the standard market price. Sometimes it didn't matter -- if the mass market got involved, they often would go below cost as loss leaders, because what attracted them to the product was its 'hotness'.

So, even though I would be bending over backward to be fair, I would still look bad.

In the case of the gas prices, however, it's very hard to see that the local gas prices weren't gouging us for years.

Oh on a perhaps related note: the gas station I have always gone to, on the corner of 8th and Greenwood, has been shuttered. Hmmmmm....

Wednesday, August 8, 2007

I get into schticks at the store, every batch of tourists is a new audience. My latest is; the battle between the small independent stores and the mass market stores is over, and has been over for decades. It is only in the realm of public perception that the battle is still being fought.

It's not 50/50 small store vs big store. It's more like 5/95, or worse. I really believe this.

When I did that google search a few months back, and found that just about every popular arts type of small store hovered around 2000, (3000 for some, 1000 for others, but really in that range) it was a real eye opener. Bookstores, record stores, comics stores, game stores, toy stores, and so on. Even accounting for hybrids, I figure there are only about 20,000 people left in the U.S.A. who actually own a store that sells these things.

Think about that. In a country of 100's of millions, we have a total of 1/4th the population of Bend who are doing the old fashioned buying popular material from the manufacturers and selling to consumers.

There are tons more small business that are 'service' oriented. The reason for that is that they haven't brought back slavery, so they can charge for their expertise what they need to charge.

If there are only 20,000 shops selling popular culture items, the perforce all the rest are being sold by the mass market. This would fit into my experience with bookstores. Barnes and Nobles opened in Bend, and immediately started selling at least 6 or 7 times what all the independent bookstores were selling. (My guesstimates, but I don't think I'm far off.) That's not even counting the huge numbers of books sold by Walmart and Costgo and Fred Meyer and all the rest. And let's not talk about Amazon....

I don't believe I'm exaggerating; I'd love to have someone who could provide some contrary statistics.

I've made my own accommodation with this. I carry 8 different product lines, 7 of which the mass market do and so I can only pick up 'sideline' or 'incidental' revenue from -- so I have to carry 7 kinds of product, (with as much knowledge and selection and space as I can provide), in order to equal half of my sales. The other half of my sales, comics, the mass market hasn't figured is worth going after (yet) nor has it figured out a way to make it cost-effective (yet).

I'll often get the comment, 'the mass market carries only the best-sellers, but you carry the rest.' Well, think about that comment. Why don't they carry the rest?
Because they don't sell? So that's what we get to sell? Gee, thanks.

I don't think there is much the consumer can do about this -- now. It's really just too late. Keeping the thousands of small businesses alive 20 or 30 years ago would have been much easier than trying to find a way to reopen an equal number. I mean, support your small local businesses when you can. If you can find one.

Tuesday, August 7, 2007

As a completely casual observer -- I only know what I read in the newspapers -- I'm completely puzzled as to how Brenneke at Broken Top thinks he can possibly win against:

The current residents, who have verbal and written agreements, the sympathy of the public (as least as much sympathy as well-off gated community residents are likely to get), and residency being 9/10ths of the law.

Bauhofer and Tetherow, who also apparently have verbal and written agreements, as well as being at least as well-heeled and motivated to fight for what they want.

The city planning, who I would assume wouldn't look kindly to throwing out both the spirit and the letter of land planning.

What's his game? Is it a form of extortion? Look what I'll do, unless you buy me out?
The more outrageous his plans, the more motivated everyone will be to get him out of there. It seems to me that there ought to be a way to find out if he really has the where-with-all to buy the place, or it's just a big, empty threat. Money for nothing.

Meanwhile, over on the UGB front. The big boys are stepping forward and saying, hey, how about us? It sounds as though the boundary would have to be doubled to accommodate all of them as well as Juniper Ridge as well as prudent expansion.

Someone isn't going to be happy. But is the answer to double the amount of UBG?
Why not just throw out land planning altogether? Oh, wait. It's state law. Interesting, the way it will play out. Especially since we'll probably see some westside subdivisions turn into ghost towns, in the meantime. But I get the impression that we are talking small rich on the westside, and big rich at Tetherow, etc.

Monday, August 6, 2007

I forgot the biggest silver lining of all. But there is a dark cloud inside that silver lining. (Do I over analyze or what?)

Ignorance and apathy on the part of the house buyer.

I can't tell how many conversations I've had since the first of the year with potential home buyers. They are people who are thinking about moving here, are planning to move here, have just moved here, have been here for awhile and are thinking and planning about buying.

When I ask them if they knew that housing prices were starting to drop, they always act surprised. When I go to the Bend Economy Bulletin Board and show them the daily price changes, their eyes go wide.

This is one of the biggest financial decisions they'll ever make, and they apparently pay no attention to the news, nor have they done any research beyond talking to real estate agents!

By definition, they are the people who have managed to escape from California, or wherever, with equity capital.

The dark cloud is: the housing sales drop shows, I think, that when it comes time for the buyers to get serious, they do indeed catch on. They are either changing their mind, or holding back and waiting.

But based on my conversations in the store, there are still plenty of potential buyers either already in town, or coming to town. Some of them are going to buy eventually, so we may indeed see a 'soft' landing.

So our only hope is that we have a lot of buyers lined up who just don't know any better.....

Sunday, August 5, 2007

Looking for the silver lining.

Umm, maybe they're right. Maybe people want to live here beyond any other place. Maybe they'll be able to sell their high priced home in California, so that the housing prices look attractive here.

Maybe they'll be like the guy over on the Bend Economy Bulletin Board who had good credit and funds for a downpayment, who shopped for a season making bids for houses, and finally on the fourth try caught one. (which was much cheaper than a year ago.)

Maybe enough rich and retired will just ignore the surrounding economic climate and buy the house they want, even knowing they could get it cheaper in a year.

Maybe the developers really know what they're doing. They've mapped out exactly how many houses they can afford to build; how many to start, how many to finish. Maybe these destination resorts are marketed correctly, and the rich and not-worried-about-their-next-paycheck people will just ignore the housing downturn to buy their luxury condo.

Maybe the vast majority of real estate agents are doing it as a lark; and the real professionals will continue to sell enough houses to keep their offices open. Maybe the economy in Bend is indeed diversified, and there are oodles of people making their money online, tele-commuting, "non-placebound." Or working in small high-tech companies we haven't heard about. Maybe the softening of the market won't create a giant hole in the middle where all the contractors, real estate agents, mortgage houses, banks, title companies, insurance companies, home decor, plumbing, electric and roofing, fence builders, landscapers, etc. etc. used to be.

Maybe the national economy is so resilient, that it will shrug off the housing downturn, and so we'll just keep getting those folk from out of town.

Maybe the commercial building will carry the building trade through the downturn and won't be affected. Maybe the Fed will get so worried about credit climate that they'll step and help (without creating another wave of inflation.)

Maybe the people who moved here already have so much liquidity and equity that they can see their houses decline in value without worrying about it. They live in Paradise!

You know, I just couldn't summon the enthusiasm to do more than these lame maybes....
In my next post, I'm going to try to argue the other side. Just for fun. Not using the code words and phrases the housing boom guys are saying, but just looking for a gleam of a silver lining myself. It's getting so obvious, that now the contrary part of me wants to pop up.

I don't know what Paul-doh looks like, but I'm starting to envision him in sack cloth, long hair and beard, marching up and down in front of my store with the sign: THE END IS NEAR!

I'm not sure what this makes Bendbust? Inside a padded room, bouncing off the walls, screaming;


I'm the guy over in the corner, curled up in a ball.

Oh, yeah...and BEM, as the bearded professor who nods sagely at the mushroom clouds on the horizon. "Ah, yes. It is just as I predicted."
I've been teasing Linda for about 4 years now, since we opened the BookMark, that one of these days one of her customers was going to drive their car through the front door.

The parking spaces are exactly level with the building. All it was going to take was one little old lady hitting the accelarator instead of the brake, or one drunk forgetting to brake at all.

Sure enough, she's sitting at her desk yesterday when the whole building shakes and she hears a crash. Next door. 30 feet away.

See a danger, and it seems, more often than not it happens. Of course, if you're looking for danger all the time, you're going to be right sometimes, and you're not going to remember the times you were wrong.

Still, it seems to me that the downside happens way more often than most people realize.

What brings this to mind, is small business.

I believe that most everyone who opens a small business does so out of emotion, not logic.

Logic would be that you would find a product or a niche or a location that hasn't been filled. Except, I don't believe those exist, or exist very, very rarely. Every niche is almost immediately filled. Sometimes you can get in on the ground floor, but that is an emotional decision, too. Very few 'ground floors' ever add a second story.

So you open a business because you believe that you can create new business, or do the job better than anyone else. That isn't all that logical.

There have been, what, 4 or 5 wine shops downtown? All have eventually folded. But I have no doubt at all that very soon someone else will try. Were the other 4 or 5 owners all feeble-minded, incompetents? Are you such a super intellect and hyper competent that you can show them how to do it?

Eventually, small business success or failure does come down to the logic. Do you have enough people coming in the door? Are they spending enough money? Does your margin cover your overhead?

Charisma, will-power, and hard work will work for awhile, maybe long enough to get you over the hump. But eventually, the numbers have to work.

But no one opens knowing what those numbers are. You're doing it on emotion.

The other side of the equation is the owner him or herself. How many resources do they have? How important is it to them? When I tried to sell the store in Redmond years ago, everyone asked, "Can you guarantee me a profit?" I just laughed, and said, "Not only shouldn't you buy my business, I'd advise you to never open a business." Guaranteed profit my ass.

I've resisted commenting on the Camalli, the new bookstore in town. (By the way, the name is going to be a problem for them...I've tried to remember it several times over the last week, and I've gotten the spelling wrong every time...) A while back, when I commented that the new grocery in the Northwest Crossing was probably doomed, I was quite rightly chastised for prejudging, without any inside knowledge.

So I will only say this: (Based on the fact that 2 out of 3 independent bookstores went out of business in Bend when Barnes and Noble opened (with the 3rd downsizing to half it's size...), given the fact that almost half of the independent bookstores in America have gone out of business in the last decade.):

They are climbing a very steep, very slippery slope. I hope they have traction devices and the will and the desire and the stamina to get to the top.

Sometimes people overcome all the obstacles, sometimes they get lucky, sometimes they are indeed just smarter, harder working than anyone else. Whether you are that person is a decision that comes from inside.

Of course, if the numbers are on your side, you've got an even better chance....
Reading the Bulletin's article on the housing slump today, made me realize that pain -- especially other people's pain -- is easily forgotten. The article made the '80's slump seem so bloodless, just a blip, look at me now, ma.

I remember driving down Franklin from 3rd St. to Twelfth St. circa 1986 and it seeming like every other house was for sale. Well, guess what, the other day I drove down the same patch and seemed like every other house was for sale. What's more, I counted roughly 40% of the "For Sale" signs as FSBO. (By the way, in my neighborhood, I've noticed the same 4 houses for sale. But then the "For Sale" sign disappears....than a few days later, there is a 'new' listing, and the "For Sale" sign is back. Seems to me that there is some real game playing going on with the listings. 2200 houses could easily be way, way more than that.....)

So we take the couple grand of houses in the real estate listings, and all the houses that are being built, all the houses that are for sale but not currently listed, and the FSBO's and....Wow, just wow.

Who's kidding who?

It was a small town back then, but I can't help but think of the saying, the bigger you are, the bigger the fall.

I don't remember ANYTHING being built from 1980 to 1990. Obviously, something was being built, but I don't remember anything. Downtown's big news was a couple of renovations -- the old Post Office and the O'Kane building. That was it.

We didn't get a major new store in town for those ten years (though we got a series of 'want to be' major stores, who were immediately put out of business when the Fred Meyers and Walmarts arrived.)

As recently as the '90's, the owner of the Mattress Factory was lobbying to turn the space he was leaving into a soup kitchen. (Now, I'm kind of sorry I went against it -- it sure would leaven the mix! Jewelry store, art gallery.... soup kitchen.... art gallery....)

I've had an interesting week talking to customers about the Super Burrito. Every single one of them said something along the lines of, "Oh, yes. Too bad they couldn't make it...." Or "Yeah, it's too bad they couldn't afford the rent."

I wanted to yell at them: THEY WERE KICKED OUT! What part of KICKED OUT don't you understand?

Like I said, other people's pain.

Meanwhile, I keep thinking about the commercial aspect of this slump. Who is going to occupy the spaces in the new buildings downtown? There are two large buildings coming on line on Bond this year; the Franklin Crossing is still sitting there. Without bright-eyed bushy tailed newcomers who think, "Wow, 2.50 per foot! Where I come from, it's 4.00!" who is going to rent these spaces?

I have to believe that most locals know better, and any who have lived here any length of time, would already have opened their business.

So we are depending on newcomers.

We are teetering on the edge of the cliff and hoping an interest rate hike or a recession won't push us over? What kind of planning is that?

As Bruce Springsteen said, "The poets round here don't say nothin' at all, they just stand back and let it all be...."

Saturday, August 4, 2007

Was there more than the usual number of real estate ads in the Bulletin this morning? Or was I just noticing? Some of the homes are just so over the top, to me, that I'd be embarrassed to live in one. I'm just a puritan, I guess. Really just too too much.

Meanwhile, what can I say about the guest editorial in the Bulletin this morning? I don't know the guy, I don't want to attack the guy, but my god, could he have been any more smug about his "sweet" mcmansion and his "promised land." I don't have "envy" for he and Heather and their like minded ilk; I won't express what I feel. Actually, he said it himself. (At the same time he said "we don't care" and "leave the rest for someone else." By the rest, I think he meant picking up after him...) )

"Our middle-class counterparts initially viewed us with an animosity that was difficult to put a finger on. It was as if were getting away with something, they thought. We definitely rubbed some folks the wrong way at first. Still do sometimes..."

You think?

I don't think the guy has a clue why people's hackles are raised. He thinks we're envious. And, yes, I'm fascinated -- by the sheer arrogant self-absorption exhibited.

My wife says, don't attack the guy, address the message. If the message was, we moved to Bend for the small town life, better schools, safer streets, I wouldn't have had a problem with it. It was pure smug 'I got mine and the rest of you can eat my dust' attitude that got to me.

I guess I didn't realize the message of 9/11 was to hurry up and play more golf.

Friday, August 3, 2007

When it was announced that Super Burrito had been kicked out of their building, I wondered what kind of level of outrage or concern there would be. I suspected crocedile tears and some knowing nods, but not much more than that.

After all, while very important to Super Burrito, it's at worse an inconvenience to the rest of us. Maybe as an indicater of the changes downtown, it's resonates a bit, but really what BEM said on the Bubble2 blog says it all:

"About Super Burrito, yeah, that's too bad.

"I've been in Bend since I was a littl'un, so I don't really get too hung up on whether a store gets its lease pulled or moves or what have you."

Feel the emotion.

I understand. I'm pretty much the same way. I never ate at Super Burrito, my tastes are just too bland, and the look they gave me when I asked for ketchup sent me scurrying out the door never to return. I have always marveled at the steady stream of customers going in and out of the place. But, as BEM says, places come and places go.

Aside from my family, Pegasus is probably the most important thing in my life. At the very trough of the baseball card bust, back in 1992 or so, I realized I was on my own, to succeed or fail. No matter how many compliments we had gotten over the years, no matter how important people said we were, I knew that most of the public would shrug, say, "That's too bad." and move on. Heck, if all the people who told me after I left Redmond that they wish was still there had actually BEEN customers, I never would've left!

People lose jobs all the time, and this isn't all that different. What happens when someone tells you they lost their job? You feel a little sympathy, you might avert your gaze in embarrassment for a moment, then you wonder what happened and if you're old and experienced enough you realize it could be just about anything, and then you move on. Why should the success or failure of business be any different?

One of the comments about my saying that there had been turnover in the St. Clair building had me flummuxed. "What does that have to do with the landlord?"

Oh, I don't know, maybe because the landlord sets the rent, creates the atmosphere in which you survive or don't survive?

On the other hand, the question is legit. Businesses come and go all the time, always have.

Thursday, August 2, 2007

Dog days of summer. Googled the term this morning, and sure enough these are dog days. But I knew that when I woke up this morning. Time to lay in the hammock, go to the beach, anything but work. Don't the French just take off for the month?

Just like Christmas, this is actually the time I work more than usual. My guy is off for a week, and immediately following, Linda's guy is off for a week. We'll do our summer thing in September.

Wednesday, August 1, 2007

There once was a small little unique community that people were intrigued by. A lucky few already lived there, and a few other brave souls moved into that community, even though there wasn't much money there. But eventually, a few people saw a way to exploit that community for its uniqueness; and they moved into it in a big way, shoving aside those who had always dwelled there.

I'm talking about the comic community, of course.

All the talk at the San Diego Con seemed to have a subtext of; this is a great convention, too bad we have those comic nerds over in the corner. I wonder if we could change the name of this convention, and get rid of them. We really only care about movies and video games.....

I've figured out, if we could just move about 20k people down the river twenty miles or so, call it Bend. Then let the people call this town, New Malibu. Perfect solution.

Of course, we'd have to move the Redmond people to Madras, and the Madras people to Warm Springs, and the Warms Springs people into the middle of the desert. That's always been progress, right? Why stop now?