Sunday, July 11, 2010

Being right doesn't make it hurt any less.

The Bulletin of 2010 finally comes around the thinking of the Bubble Bloggers of 2007.

Is there a gracious way to say, "I told you so?" Probably not. I certainly take no pleasure in others misfortunes.

And it's not have if my own business and finances haven't been impacted by this downturn.

The only real difference was I clearly saw it coming, and prepared for it. While others were expanding or adding expenses, I was cutting back on overhead; while others were piling on the debt, I was cutting it down to zero.

And to be honest, even I, careful as I was, took on a bad second loan that could've come back to haunt us. I was taking care of business at the store, but still let my desire to improve my home overcome my misgivings.

I knew it was coming, just not exactly when.

Nevertheless, it's like having the knowledge that someone is going to come up and smack you in the face. It doesn't hurt any less. You just may have the bandages and medication ready.

But, honestly, go back to third quarter of 2007 and read what Bend Economy Man, and a little later -- Bendbubble Two and me -- were saying, and compare that to what the local media and experts were saying. All our alarmist talk was, if anything, an underestimation.

So pardon me if I take a little pride in that.

It's not been as clear as that ever since, by the way. I keep holding to my original observations that:

1.) The bust lasts longer than you expect.
2.) It goes deeper than you expect.
3.) Get on with your life and don't expect a turnaround anytime soon.
4.) If there is a recovery, it will happen so slowly that you won't notice until it's already here.

I mean, this has lasted so long now, that most of the bubble bloggers have even disappeared. Also, people are usually folding up and leaving Bend without a whole lot of fanfare, so you could almost put a gauze over the lense and pretend she's still pretty.

It takes a lot of guts to write what Andrew Moore wrote and I give him credit. I also will credit the Bulletin for looking the problem square in the face. I don't think they were trying to fool us three years ago, I just don't think they believed it would happen.

We've got a long way to go. Years, probably. Years of dragging sales, foreclosures and bankruptcies.

The one prediction that most of us bubble bloggers missed was downtown. I had a suspicion that downtown wouldn't empty out, but I couldn't be sure. I think I have an explanation for that, too. In my next blog.

21 comments:

blackdog said...

Everybody in Bend is not an idiot. There were plenty of people here who could see the bust coming but didn't say anything about it. Why not?

They were riding on the best gravy train they'd ever seen and they were hoping to keep it rolling as long as possible. And they didn't want to be ostracized for being "negative."

The second motive was probably the more important one. This is a go-along-to-get-along town. If you're part of the local power structure, or aspire to be, you don't want to be the one who points out that the emperor is bareass naked.

Carl said...

But did anyone notice that Costa in his column didn't fess up to the role the Bulletin had in the bubble? They were cheerleader numero uno.

Duncan McGeary said...

I don't think I agree, Bruce.

You don't have to be an idiot to buy into a bubble. You just have to have a lack of experience.

I think many if not most Bendites truly bought into the notion that their houses would continue to rise no matter what, "especially" in Bend, "especially" in West Bend, because we're special.

I think many others realized something was off, but totally underestimated it.

A third group knew it was off, but thought they could manipulate the situation when the time came. "Their" investments were safe.
"Their" investments were conservative.

The only reason I had -- besides logic, which pales in comparison to greed and desire -- to believe it was a bubble was because it looked an awful lot like a "fad" to me, and I'd had plenty of experiences with THOSE.

Duncan McGeary said...

I think everyone is still being too optimistic about a 'recovery' in Bend.

Too much of the money that was keeping Bend fueled was from the building industry; not just the framing, flooring, roofing, electrics, plumbing, landscaping, selling, financing, etc. etc. but everything that comes with it, the dinners out, the furnishings and 'art', the....well, just about everything.

Those jobs aren't coming back any time soon, if EVER.

We'll continue to have retired and wealthy, probably, who will generate minimum wage jobs, but the people I know who were building houses were getting GOOD money.

So where's the recovery?

New industry and high-tech and all that?

Sure. Why not.

It's kind of like visiting downtowns all over the Northwest saying -- gee, if they just filled up the way downtown Bend filled up, they'd recover.

But just how does that happen? When every other small community needs the same thing?

So...I'm expecting an 80's style recovery in the length of time it will take -- but fortunately for me and my store, downtown Bend is an exception to the worse, (so far) and we're not starting from scratch.

Duncan McGeary said...

Commercial Real Estate is interesting.

From what I'm reading, "Pretend and Extend" is now standard for the CRE industry.

That may work in places that actually recover in the next few years, but you have to wonder if they can Pretend and Extend long enough around here.

If we keep getting the churn downtown, maybe. But if the backlog of stores that want to open start to dry up, watch. I could see rents actually being lower in a couple years than now, which are already lower than a year ago. (When I signed my lease, dammit.)

Pedro Hemes Valdes Ortega said...

Well I honestly expected to see 'more plywood' during this recession downtown, but lets be 'honest'. We're so GOD-DAMN FUCKING EARLY in the game. Sure there is a moron for every exit so far, but eventually Bledsoes humidor will close, and no one will be found for Staccatto, ...
Sure for every cougar-parlor(beauty-shop) that goes down a boutique comes in and why not there still is a lot of CALI money to be spent their still are a lot of trophy wives whose husbands aren't broke. This one is going to be BIG dunc, ..

As we have said all along resets for ARM's don't even come clean until 2012. So that's 2-3 years before BOTTOM right there, ... the big thing about the BULL now is that absolutely NOTHING is now selling in Bend, NOTHING. The bottom is now ready to fall, homes that do 'sell' are selling on short-sale, but even that shit there is too much. It's now peak summer, and the buyers really aren't even fucking looking.

Real-Estate has been the blood of the BULL, and now advertising doesn't pay, NO AMOUNT OF MARKETING now pay's in Bend. So yes, the END is HERE for the BULL and RE. But to suggest for a moment dunc that downtown has escaped the wrath is BULLSHIT, because we're so fucking early. The biggest trend that fascinates me is the best places to eat&drink now for locals are NOT downtown. So DUNC, I don't want to SHIT on your parade, but just WAIT another 1-2 years and the plywood downtown is Ah-CUMMMIN.

Pedro Hemes Valdes Ortega said...

Thanks 'carl' yes NEVER FORGET that the BULL&SORE are the #1 cheerleaders bought and paid for by BOSS-HOLLERN & Co. The problem now is we're 2-3 years into the down-trend and money is running out to keep Brooks-Resources office humming and Amerititle, and all the other infrastructure, so many folks that work in CORA/COBA/COVA related area's in Bend will soon be without funding, now unlike most municipality's in today's USA.
Had an interesting talk with a Bulgarian friend today that came over here when Russian collapsed, just before the collapse they increased 'fees' for everything so the government had revenue. Not unlike what Bend&Oregon are doing today. Make no mistake its all going down. Most interesting my friend said that right before the end cop's we're going door-to-door asking folks how they could get food without a job, and of course if they said they had money, they had to share with the cops. My point is that our law-enforcement will 'go freelance' once their paychecks start bouncing.

Yep the BULL&SORE were the biggest cheerleaders for the bubble, now lets see what service they can do during the collapse? Certainly a rational conversation in order to prevent the type of crimes that took place in the collapse of the Russian empire would be most useful in our community.

blackdog said...

"I think many if not most Bendites truly bought into the notion that their houses would continue to rise no matter what"

Many, for sure. Most? No way to know that without getting into a time machine and going back to 2006 and taking a poll. But I'm convinced that, even if most of the ordinary schmucks were taken in, the "movers and shakers" in this community knew what was going on and, for the reasons stated in my earlier post, kept their mouths shut. Witness Oran Teater's statement a year or so ago that "we knew this wouldn't last." Yeah, he knew, and many others knew, but they didn't want to rock the boat. They were going along to get along. Now, after the fact, they're admitting it.

There was also massive fraud going on during the bubble era, but nobody said anything about that either until the indictments and arrests started.

"Yep the BULL&SORE were the biggest cheerleaders for the bubble"

Yawn. You change your alias, Buster, but you never change your style or your rhetoric.

Yep, THE BULL was waving its pom-poms and shaking its cute little ass energetically for the bubble, but how was "the SORE" a cheerleader for it? We didn't (and don't) even have a real estate section, and real estate ads were (and are) a minuscule portion of our revenue.

blackdog said...

"Too much of the money that was keeping Bend fueled was from the building industry"

And the development industry, and the real estate industry, and the investment (aka "flipper") "industry."

There was a hell of a lot of easy money sloshing around. Bend was like a gold rush town. Now it's like a gold rush town after the gold has played out.

Pedro Hemes Valdes Ortega said...

Yes, 'big fucking yawn', pay no attention to the BULL&SORE and their one trick-pony show conjoined. Pay no attention to Boss-Hogg-Hollern and his little entitled PIGS that run the BULL&SORE.

Yep, a fucking yawn. Trouble is now the BULL&SORE are going to be preaching austerity for years to come, the same MOFO's that brought us the fucking bubble.

Let's not forget that the bar's in Bend were full of flipper's in 2006, guys that had quit their job, and only had to buy a house a year for $300k, and flip for $350k the same week, and some ante-d and played again, ... NOBODY in fucking Bend wanted the game to end. It was a classic PONZI all the old-timers were playing and all the new-timers caught on quick. The holy-grail was to sit in the bar's all day and talk about flipping.

Leave it to the fucking BULL&SORE to tell us now that these past events never fucking happened.

Leave it to the BULL&SORE to now tell us how to bite the bullet and increase fee's and pay more taxes so folks like HBM can enjoy their entitlements.

Pedro Hemes Valdes Ortega said...

In a normal post gold-rush town, folks slowly leave.

But what-if, what-if city-hall had an extortion racket? Say outrageous water-bills, that they could tax&fine&fee the citizenry indefinitely and then plug story's about 'new gold finds' in national media with citizenry dollars? What-If city-hall called this outfit COVA or COBA or CORA?? and what if the city-hall used all its law-enforcement power to tax&fine the citizens to keep marketing the little gold-town?

There are NO end to fools in this great nation, and they not know that Bend gold is gone, ... it just takes placement story's written by guys like HBM to tell what a 'great bargain' and retirement mecca is a Bend, and then the gold-panners will keep coming, even though those already here are destitute and have no hope of finding gold.

In a rational spent gold-mining area, once the pay-dirt is Bend-Gone(tm) folks would leave, hell even the Mayor himself would bail and find a new town that had growth, but Bend is an anomaly, Bend is a 'company town' ran by Boss Hogg Hollern who controls the 2 toilet-papers we call BULL&SORE.

What if classic gold towns had a Bend like structure & national marketing the citizens always paid the tab for Real-Estate marketing? Might the gold-rush town not become a ghost town? Or would the citizens just bleed to death from taxes, fee's, and fines? That latter is my guess.

blackdog said...

Buster/Pedro has this obsession that Mike Hollern is the Godfather of Bend and I'm ... well, I'm not sure. Luca Brasi? Clemenza?

Although I don't expect an answer I'll ask you again, Pedro: How was the Source cheerleading for the bubble?

"Bend was like a gold rush town. Now it's like a gold rush town after the gold has played out."

What makes it even more pathetic is that there never was any real gold to begin with.

Marge said...

Pedro, you sound soo familar. Actually, there are a few familar voices..What do you think Dunc?
I really think the good old blog should come back for the second leg down of Bend. We are so far from the bottom. Median prices hovering just below 200K. Here we go another 100k down. Too many fools are still buying, thinking we hit some sort of bottom. Glad I am not in anymore. Hey interest rates are great compared to 18% in the early 80's. Must be a buyers market. Suckers are buying investments. Dumb...Dumb....Dumb...Dumb...Doobie ah ba something!

IHateToBurstYourBubble said...

Nice to see the old gang back together!

And there does seem to be a sublime sense of cruel irony to know that of the last 2 RE reporters for the Bully, the former (David Fisher) was fired for reporting it existed, the latter (Andrew Moore) succumbed to it.

Rock on Marge, you little minx.

blackdog said...

"Leave it to the BULL&SORE to now tell us how to bite the bullet and increase fee's and pay more taxes so folks like HBM can enjoy their entitlements."

What "entitlements" are you talking about, Buster/Pedro?

Ginger & Jerry said...

We made that mistake with our home in San Diego. We lived off the equity. Then when we had a chance to still realize something before we lost everything we sold it and moved to where we could afford to live. So, I guess we learned the first time we made a mess.

We came to Bend right before everything thing went up, up, up. We were so grateful to have escaped the financial noose we were in, that we have never again been tempted to take anything out on our home when we could have, buy a car on time, or run up any charge cards.

Now I see so many people in trouble. Friends have actually lost their jobs and homes.

I just don’t subscribe to the theory anymore that things are always going to get better and I can bank on making more and more each year. I don’t know if that comes from age and wisdom, or learning from one really bad scare looking at one bad thing happening to make you and all your kids becoming homeless. All I know is I’m glad I figured it out in time.

Every year I cut back a little more on little things and I’m finding I don’t miss them at all. I value the peace of mind far more.

Duncan McGeary said...

Peace of mind. Exactly. Spend a little less, feel a little more secure.

We went way in debt on our credit cards to bail out our business. We ended up with a couple of good businesses, so it wasn't a totally bad idea, but, I never, ever want to be in that compound pounding again.

Bend Economy Man said...

My blog started 4th quarter of 2005. Just sayin'.

blackdog said...

Still waiting for Pedro / Buster to explain how the Source was cheerleading for the bubble.

Awfully quiet in here ...

blackdog said...

"I just don’t subscribe to the theory anymore that things are always going to get better and I can bank on making more and more each year. I don’t know if that comes from age and wisdom ..."

Age (if not necessarily wisdom) is part of it. You come to understand that having a lot of STUFF doesn't make you happier. Most of the time it's just a big hassle to take care of it.

"The American Way of Life: Spending money you don't have on things you don't need to impress people you don't know." -- Thomas Merton

blackdog said...

"it just takes placement story's written by guys like HBM to tell what a 'great bargain' and retirement mecca is a Bend"

When have I ever written a story like that, Pedro/Buster?