Thursday, November 13, 2008

Fairy dust....

What was interesting about the Bulletin stories today is how completely the tone has changed from a couple of years ago. What isn't being said anymore, and what is finally being said outloud. But the Bulletin still can't resist sprinkling a little of the magic fairy dust...

First story, "REDMOND AIRPORT SCALES BACK EXPANSION: 2 Fewer Gates Will Save $600k...."

Sure, it's only a savings of 600k from 40Million, but still.... A couple of years ago, the story would have been: "REDMOND AIRPORT WILL ADD FAIRY GOLD DUST TO GATES: Just Because We Can...."



First off, let me say I hope to god they succeed, because there are swarms of teenagers running around downtown, and they're looking for trouble...

But doesn't anyone else see the exact flow of the opening and closings of these clubs? How they parallel the boom and bust cycle of the last decade?

Let's see, they start with one club in 1995, following the economic trajectory up with openings in Redmond, Prineville, Terrebonne, Madras, Warm Springs and La Pine and another in Bend.

"But not too long ago, the clubs were forced to close their doors. It started with La Pine in September 2006, and later, Madras, Prineville, and the Warms Springs clubs stopped operating..."

If that was a business, you'd have to say the business model failed.

But, as I've been trying to say, beware of models that work only when things are going well.



A huge load of hooey. Talks about how "...Tetherow is strong, sales have been robust..." and then proceeds to give no evidence of that. Whatsoever.

The real thrust of the article is in the same sentence, because they really don't want you to think too much about 'sales': "...and, most importantly, the incredible Scottish style golf course has exceeded everyone's expectations, from golfers to environmentalists."

The next 8 paragraphs are all about David Kidd, the Scottish golf architect, and his incredible Scottish golf course.

Have I mentioned it's Scottish?

Not only Scottish, but sprinkled with with Leprechaun gold fairy dust, I guess. How did Bend get so lucky to get all this fairy dust?

Maybe because we built the Shire?

Also interesting is that the "Editorial" by the 'owners representative' (not an ad or a promotion, mind you, but an editorial) points out that they got the Bulletin to make a correction for having the audacity to say that Tetherow is "stalling."

"Stalling" is the right word. Where's the Hotel? Oh, yeah, stalled. Big time.

Sad that the Bulletin would 'correct' the truth because a builder demands it.



I've been saying for awhile now, the CRE boom in Bend, if anything, was bigger than the housing boom. I zeroed in on the 'retail' part: "Vacancy in the city's retail sector grew from 6.8 percent in the second quarter to 9.7 percent in third quarter."

"Additionally, higher vacancy rates will result in lower rents and incentives..." and "If your lease expires in 2009, you are a winner."

Well, we can hope. But so far I think they're still just saying that, while sticking pretty firmly to the higher rents. They may be more willing to arrange a balloon payment schedule, as one of the owners detailed, but really, they still want the old prices.

What I found ironic, and which should be pointed out because it pretty much contradicts the emphasis on 'building' that our media and government leaders have been expounding as important to our economy, was this:

"The good news is very little building is planned for 2009, so vacancy rates are expected to flatten in Redmond and Bend..."

"There's very little reason to build anymore because there is excess capacity with every product type..."

Well, which is it? More building is good? Or more building is bad? Or is it only building that has the fairy dust of the boom involved that's good?



"Until recently, ...(BEST BUY)...has largely been immune from the dwindling economy that has felled other retailers, including its closest competitor Circuit City, which filed for bankruptcy this week."

This is another thing I've been trying to point out for the last year or so about retail.

If the #2 Category Killer is failing, the Circuit City's, the Linen's and Thing's, the Borders Book's, etc. why do the #1's think they're immune?

It's like saying that my neighbors all died of the plague, but we're just fine.

Maybe they've sprinkled their business with...fairy dust. We're #1, we're #1! The plague wouldn't dare touch us! We're protected by fairy dust!



Wow. Apparently, these planes are actually built from fairy dust, they will be the first to come back, everything will be fine....quit asking.


All in all, a very different tone, mixed with fairy dust, from a couple of years ago.


RDC said...


This is the hangover after a 20 year credit binge. Of course it will impact most areas. Things will need to drop back into a normal level that will reflect a much more limited supply of credit (good credit ratings, ability to repay, etc.). That kind of reset will have impacts.

The Japanese market dropped from 39000 to 7500 during their similar deleaveraging during the early 90's. The entire world is going through this one so there will be impacts.

On the other hand this is not the end of all things, life will go on. There have been other economic crises. The country have gotten through those, just as we will get through this one. Just as those have had levels of pain involved so will this one. Probably a bit more because of how long we have tried to delay facing the pain. But it is not insurmountable.

Duncan McGeary said...


Go take a cold shower; rinse that fairy dust off.

Actually, I mostly agree. But lordy, lordy, even I don't think we'll drop 80% in the stock market.

We aren't Japan. I don't believe we could survive that well.

I'm more or less an optimistic guy.

I hadn't been reading the economic blogs so much since the stock market APPEARED to stabilize and the election was over.

Lordy, lordy, talk about doom and gloom! And not the fringe guys anymore, but the mainstream types.

In fact, it seems to me that the fringe guys have gotten more optimistic, and the mainstream guys more pessimistic.

To meet in the middle somewhere?

So...I'm really looking at the possibility of a depression as a possibility for the first time.

I thought Bend would have some rough times, but I'm beginning to wonder if it won't be worse.

On the other hand, I saw a guy on Charlie Rose the other night who seemed to be one of the guys who guessed right about the economy over the last couple of years, who clearly saw the current problems, and yet who was actually optimistic about the future.

So, capitulation sometime next spring?

RDC said...

Need to split long term from short term. In the long term (5 to 10 years) I think that we will do ok, not great but ok.

However, in the short term (for those of you that remember Lost in Space) Danger Will Robinson. This is not a normal 6 month V shaped recession. This one will hurt.