Is Washington just spinning bad news to the media instilling fear in the public? Should we stop believing all this doom and gloom and start being more confident? See interesting article from cnbc.com below.
Why This Recession Seems Worse Than '70s and '80s
By: Albert Bozzo, Senior Features Editor 13 Feb 2009
If you think this recession is the worst since World War II, chances are you weren't born or working during the downturns of the 1970s and '80s, you're listening to President Obama too much or you're a white-collar worker in financial services.
If all three are true, you may even think we’re on the verge of another Great Depression.
At this point, the only thing that may be true is your age and employment status.
“The current situation has nothing in common with the Great Depression,” says economist Steve Hanke of the Cato Institute and Johns Hopkins University. “The sooner they [in Washington] stop spinning the bad news story and say nothing, the sooner we’ll be more confident.”
Hanke is not alone in dismissing what appears to be a potent cocktail of misinformation and doom and gloom, wherein the current recession—now in its 13th month—is already considered worse than the 16-month ones of 1973-1975 and 1980-1982.
“We were pretty scared in ’82; things looked horrible for awhile," says Bob Stovall of Wood Asset management and a 55-year veteran of the securities business. “I don’t think you can say it’s worse than then; its different. You have changed the landscape but you did that in the Midwest when you forced a lot of rust-belt companies to the wall."
“This time it's financial firms going out of business, instead of manufacturing ones, and the jobs are going with them," explains Stovall.
“I do think that's part of it,” says Robert Brusca, chief economist at Fact & Opinion Economics, saying that. “They’re the ones making the pronouncements. People in the financial sector are getting crushed.”
They’re not the only ones selling doom and gloom, though.
“I don’t remember a president talking down the economy as much as President Obama,” says economist Chris Rupkey of Bank of Tokyo-Mitsubishi. “The economy is very psychological. There’s a herd instinct.”
That herd instinct kicked into overdrive after the sudden collapse of Lehman Brothers, when many say the economy fell off a cliff and a classical cyclical downturn merged with a nasty one-of-kind credit crunch. So yes, economists agree things are bad, but they need to be put into perspective.
Employment
At this point, the current recession is worse than those of the '70s and '80s by only one statistical yardstick, and that’s the unusually quick ascent in the jobless rate—from 4.4 percent in March 2007 to 7.6 percent in January 2008.
“People are reacting so adversely to this is because the job market has become so weak,” explains Brusca.
But even though the sharp decline in payrolls over the past three months has been stunning, it is not as bad on a percentage basis as one period in 1974-1975, according to David Resler, chief economist at Nomura International. Resler says the economy would have to lose some 767,000 jobs a month over a three-month period from the current employment level to match that miserable performance.
During the 1973-1975 and 1980-1982 periods the unemployment rate almost doubled (4.6-9.0 percent, 5.6-10.8 percent, respectively), which means a peak of about 8.6-8.8 percent this time around. In further contrast, during a ten-month stretch in 1983-1983, the jobless rate was above 10-percent.
Nevertheless, that’s nothing compared to the Great Depression when the unemployment rate went from 3 percent to almost 25 percent in four years and national income was halved, notes Hanke in a recent column.
GrowthThought it may be little consolation for the millions of unemployed, GDP is considered by economists to be the best and broadest gauge of a recession.
That may seem also peculiar since the economy actually grew in the first two quarters of this recession, but some of that had to do with the Federal Reserve's early and aggressive interest rate cutting and the federal government’s first stimulus plan which quickly put money into people’s pockets.
More For Investors
Given that backdrop, GDP contraction thus far has been modest. It’s down 1.1 percent vs. 3.1 percent in the 1970s period, says Chris Rupkey.
And though the economy shrunk at a 3.8 percent annualized rate in the fourth quarter of 2008 and is expected to decline another 4.0-6.0 percent in the first quarter of 2009, imagine the reaction today to the 7.8 percent plunge in the second quarter of 1980 or consecutive swoons of 4.9 percent and 6.4 percent in 1981-1982.
"Half of the workforce until now hadn't seen more than 16 months of recession—total," quips Resler. The past two short (eight months) and relatively shallow.
During the 1990-1991 recession, the deepest quarterly GDP decline was 3.0 percent; in the 2000-2001 one it was 1.4 percent.
“GDP hasn’t been that weak because the productivity increase is one of the best,” says Brusca. “You get a quarter or two that really knocks the level down,” he adds, and it looks like we’re at that stage now.
This time other fundamental factors are playing a bigger role than the past.
“Consumer spending will be bad,” says Resler. “We haven’t three consecutive quarterly declines in consumer spending since the 1950s.” He’s definitely expecting a repeat of that.
It’s Still Bad
Comparisons aside, no one is saying the current recession isn’t a painful one, and some see very little reason for optimism.
“I can't identify anything than looks good,” says Dean Baker, co-director of the Center for Economic Policy And Research, adding that business investment—which appeared to be holding up—posted its sharpest decline in 50 years in the final quarter of 2008.
“I'd be shocked if we have growth this year,” says Baker, even though he expects the Obama administration’s stimulus plan to have a sizable economic positive impact.
So may the words of the President and his advisors, say economists.
“It’s not surprising that politicians exaggerate this,” says Resler, who predicts “The tone of the message is going to start changing immediately; now that we have the stimulus in hand, you enhance it by saying positive things.”
Tunnel Thinking
For all the comparisons with other recessions, exaggerated or not, the most meaningful one may be its duration. It is also the toughest.
The consensus is this recession will end sometime between the second half of 2009 and the beginning of 2010. The pessimists say wait till next year—period.
David Jones, CEO of DMJ Advisors, is among those who see “hints of stability.” By that he means, the rate of decline in areas like retail appear to be slowing.
“We'll see the same thing happening on the housing side in the next couple months,” says Jones.
“I'm just waiting for the shift in people’s expectations,” adds Rupkey.
Monday, February 16, 2009
Monday, February 2, 2009
Interesting trends reported for Routt County
A consultant who analyzed data about the economic, environmental, civic and social indicators accumulated from Routt, Moffat and Rio Blanco counties was optimistic about the future. See article below as seen in the January 31, 2009 Steamboat Today:
Study backs economic trends across region:
Steamboat Springs — Scott Ford says he’s never met a chart he didn’t like.
Ford has had plenty of chances to test that informational romance theory while poring through data about Routt, Moffat and Rio Blanco counties for Yampa Valley Partners’ Community Indicators Project. The annual report, which appears in a magazine in Sunday’s Steamboat Pilot & Today, includes sections on economic, environmental, civic and social indicators. Ford, a consultant who collected much of the data, sat down recently to discuss the economic trends.
A big one, he said, is the residential lifestyle economy. People are migrating to Routt County and often aren’t dependent on the local economy for their livelihood, Ford said.
“That migration is probably going to be one of the more significant economic drivers for us as we move into the future, so it was important to quantify it,” he said. “Like most things in the economy, nothing is independent. They’re always highly related. This residential lifestyle economy has emerged because we’re a beautiful place to live, but we’ve also created a lot of cultural things that people can enjoy.”
For the first time, Ford was able to measure that in-migration this year. He could see new Routt residents’ former locations and income, as long as more than 10 tax returns were filed from the person’s previous county.
Routt County tends to see an influx of people during recessions, Ford said. That’s partly because people who can afford to do so leave their jobs and head for a beautiful area. Ford said that lifestyle economy group could butt heads with industries that rely on, say, skier visits and Triple Crown.
Wealthy migrants to the area often are seeking relative solitude rather than the crowds that drive a tourism-based economy.
In 2007, Routt County gained $23.5 million in personal income because of migration, according to the report. Moffat’s gain was $900,000, and Rio Blanco’s was $400,000.
The people coming in are richer than those leaving, Ford said. According to Internal Revenue Service information, the average adjusted gross income of the tax returns was about $63,000 for people entering Routt and about $47,000 for people leaving.
“There’s no value judgment placed on this,” he noted. “We never say that’s a good thing, that’s a bad thing. We just say this is happening.”
Audrey Danner, the outgoing executive director of Yampa Valley Partners and a Moffat County commissioner, said the report provided a valleywide view.
“As we look at the relationships from Moffat to Rio Blanco and Moffat to Routt and what that looks like as far as work force movement, dollars, the changing economy and the types of jobs available in those counties … it’s a very unique perspective,” Danner said.
The group formed a larger team this year to prioritize and gauge the issues, she said.
“Our intention is to have this report be useful for decision makers, whether it’s a business looking at how they can strengthen their business within a community, within an area … and also the fact that local governments can see the dollars and the movement of people,” she said.
The report sometimes provides data backing what people already see, Ford said. Routt County exported $47 million to other counties in 2006.
Moffat imported $62 million the same year. The information also shows that hundreds of Moffat residents worked in other counties in 2000.
“A lot of things we talk about anecdotally, we actually have facts and figures for them,” Ford said.
Another crucial trend, Ford said, is economic diversification. Regions can determine diversity in part by looking at their top industries. As those account for less total income and fewer jobs, the economy grows more diverse.
The Community Indicators report shows that in 2006, construction, accommodations and food services, and real estate and leasing represented 42 percent of private-sector jobs in Routt County. That’s down from 44 percent in 2001.
“Where we’re diversifying is in the growth of these location-neutral businesses and location-neutral employees,” Ford said.
Diversification will help the economy along during the national recession, he noted.
The information in the Community Indicators report gives Ford reason to hope for the best.
“From a practical standpoint, I’m real optimistic about where we’re headed,” he said. “It doesn’t mean we don’t have our challenges. … The list is long, there’s no doubt about it. But our issues — there are communities across the nation that would trade for our problems.”
Study backs economic trends across region:
Steamboat Springs — Scott Ford says he’s never met a chart he didn’t like.
Ford has had plenty of chances to test that informational romance theory while poring through data about Routt, Moffat and Rio Blanco counties for Yampa Valley Partners’ Community Indicators Project. The annual report, which appears in a magazine in Sunday’s Steamboat Pilot & Today, includes sections on economic, environmental, civic and social indicators. Ford, a consultant who collected much of the data, sat down recently to discuss the economic trends.
A big one, he said, is the residential lifestyle economy. People are migrating to Routt County and often aren’t dependent on the local economy for their livelihood, Ford said.
“That migration is probably going to be one of the more significant economic drivers for us as we move into the future, so it was important to quantify it,” he said. “Like most things in the economy, nothing is independent. They’re always highly related. This residential lifestyle economy has emerged because we’re a beautiful place to live, but we’ve also created a lot of cultural things that people can enjoy.”
For the first time, Ford was able to measure that in-migration this year. He could see new Routt residents’ former locations and income, as long as more than 10 tax returns were filed from the person’s previous county.
Routt County tends to see an influx of people during recessions, Ford said. That’s partly because people who can afford to do so leave their jobs and head for a beautiful area. Ford said that lifestyle economy group could butt heads with industries that rely on, say, skier visits and Triple Crown.
Wealthy migrants to the area often are seeking relative solitude rather than the crowds that drive a tourism-based economy.
In 2007, Routt County gained $23.5 million in personal income because of migration, according to the report. Moffat’s gain was $900,000, and Rio Blanco’s was $400,000.
The people coming in are richer than those leaving, Ford said. According to Internal Revenue Service information, the average adjusted gross income of the tax returns was about $63,000 for people entering Routt and about $47,000 for people leaving.
“There’s no value judgment placed on this,” he noted. “We never say that’s a good thing, that’s a bad thing. We just say this is happening.”
Audrey Danner, the outgoing executive director of Yampa Valley Partners and a Moffat County commissioner, said the report provided a valleywide view.
“As we look at the relationships from Moffat to Rio Blanco and Moffat to Routt and what that looks like as far as work force movement, dollars, the changing economy and the types of jobs available in those counties … it’s a very unique perspective,” Danner said.
The group formed a larger team this year to prioritize and gauge the issues, she said.
“Our intention is to have this report be useful for decision makers, whether it’s a business looking at how they can strengthen their business within a community, within an area … and also the fact that local governments can see the dollars and the movement of people,” she said.
The report sometimes provides data backing what people already see, Ford said. Routt County exported $47 million to other counties in 2006.
Moffat imported $62 million the same year. The information also shows that hundreds of Moffat residents worked in other counties in 2000.
“A lot of things we talk about anecdotally, we actually have facts and figures for them,” Ford said.
Another crucial trend, Ford said, is economic diversification. Regions can determine diversity in part by looking at their top industries. As those account for less total income and fewer jobs, the economy grows more diverse.
The Community Indicators report shows that in 2006, construction, accommodations and food services, and real estate and leasing represented 42 percent of private-sector jobs in Routt County. That’s down from 44 percent in 2001.
“Where we’re diversifying is in the growth of these location-neutral businesses and location-neutral employees,” Ford said.
Diversification will help the economy along during the national recession, he noted.
The information in the Community Indicators report gives Ford reason to hope for the best.
“From a practical standpoint, I’m real optimistic about where we’re headed,” he said. “It doesn’t mean we don’t have our challenges. … The list is long, there’s no doubt about it. But our issues — there are communities across the nation that would trade for our problems.”
Saturday, January 31, 2009
96th Annual Winter Carnival
The 96th Annual Winter Carnival will start on Wednesday, February 4th and end on Sunday, February 8th, 2009. Beginning in 1914 the Steamboat Springs Winter Sports Club has organized this fun event for the whole family. Highlights include ski jumping, the diamond hitch parade and a night show with fireworks. A Winter Carnival button is required to participate or attend any of the Carnival's festivities and your contribution supports the Steamboat Springs Winter Sports Club. Hope you enjoy checking out this unique tradition and don't forget Lincoln Avenue will be closed for street events from 5th Street to 11th Street on Saturday, Feb 7th and Sunday, Feb 8th from 6am to 12:30pm.
Sunday, January 25, 2009
Potential five-star hotel gets strong support from city planning commission
Artist rendering of the proposed Thunderhead projectA recent article in the Steamboat Today shows the artist rendering for the proposed five-star hotel at the base of the Steamboat Ski Area. With strong support from the city planning commission the project will be reviewed by the Steamboat Springs City Council. See below for more details.
January 23, 2009 article in the Steamboat Today:
The proposed Thunderhead project at the base of the Steamboat Ski Area will proceed to the Steamboat Springs City Council with a strong positive recommendation from the city Planning Commission.
Commissioners voted, 5-1, to support the 390,000-square-foot project requesting substantial height variances from the city in exchange for a variety of public benefits. In explaining their support, some of the commissioners said they believe that the city’s height limitations in the Community Development Code are outdated and inconsistent with subsequent area plans that have called for increased density at the ski base.
“Precedent has already been set,” Commissioner Karen Dixon said, noting other approved base area projects of similar heights. “ We are obligated to respond to context.”
Commissioner Rich Levy cast the dissenting vote.
“Because of the height, I would be looking for extraordinary public benefit,” he said, “and I’m not seeing that.”
People packed Centennial Hall on Thursday night for Planning Commission’s review, which stretched late into the night. The height variances, aesthetic issues, economic impacts and more were among the items that drew the large crowd of supporters and critics.
The Atira Group is redeveloping the former Ski Time Square and Thunderhead Lodge properties that it demolished last year. Atira has decided to submit separate development applications for the projects, with the 390,000-foot Thunderhead site coming first. The application anticipates 100 residential units averaging about 2,300 square feet, along with two restaurants and shops.
Atira requested several variances for the project including overall heights about 30 feet above the 73-foot maximum prescribed in the Community Development Code for the gondola two zone district. Atira also is requesting a five-year grace period instead of the standard three years before it must pull a building permit, and plans to build a turnaround driveway in the city’s Ski Time Square Drive right of way.
City planners recommended approval of the project, believing the project’s public benefits are commensurate with its requested variances. Proposed benefits include a commitment to earn a silver certification from Leadership in Energy and Environmental Design, or LEED, for green building practices in the construction of the two eight-story buildings; public amenities such as seating areas, restrooms and outdoor fireplaces; the gifting of space to Yampa Valley Medical Center to relocate its injured skier transport center; and economic sustainability in the form of short-term rentals.
Several in the audience and others who wrote letters, however, disagreed with city staff’s recommendation.
“I haven’t heard anything about why this height is necessary to achieve these goals,” said local attorney Ron Smith, who is representing homeowners in the Bronze Tree condominium building north of the proposed project. “Where is the public benefit that large?”
Bill Jameson was strongly opposed to allowing Atira to construct a driveway in the public right of way.
“Scale the building appropriately, and it doesn’t have to be in the public right of way. Move it back,” he said. “Don’t just give away public property. This is valuable property up there.”
City planner Jonathan Spence said the width of the city’s right of way on Ski Time Square Drive is excessive.
“The idea was that we were going to vacate portions of that right of way to allow for more interesting streetscapes,” Spence said.
While most residents who own condominiums near the proposed project wrote or spoke out against it, others were supportive. Thunderhead also received endorsements from business owners, other developers, a Ski Corp. executive and others.
“The project is a critical component for the overall plan for a renaissance at the base area,” said Chuck Porter, former general manager at the Sheraton Steamboat Resort. “It’s important to remember that high density was desired at the base.”
Planning Commission postponed a review of Thunderhead’s community housing plan to Feb. 8 due to the late hour.
Letter of intent signed for new five-star hotel.
An operator of five-star hotels has signed a letter of intent to run a new property at the base of the Steamboat Ski Area. See below for a recent article in the Steamboat Pilot explaining the public benefits vs. some of the challenges faced to get this project built.
January 18, 2009 article in the Steamboat Pilot:
If Atira Group wins approval from the city of Steamboat Springs to redevelop the Thunderhead Lodge and Condominiums, it will ask for a five-year grace period instead of the standard three years before it must pull a building permit.
Atira Vice President of Development Mark Mathews said Thursday that his company was eager to begin marketing and building the twin eight-story condominium hotel buildings that would replace the old Thunderhead at the base of the Steamboat Ski Area. He was speaking before about 30 people during the first of three successive presentations in the Sheraton Steamboat Resort.
Mathews acknowledged the challenges of moving forward in the current economic climate.
“Our goal is to begin construction as soon as we get entitlements, as well as the market permits,” Mathews said.
City Planning Services Manager John Eastman said earlier Thursday that as soon as Atira wins approval for its final development permit, the clock begins running on the three-year period the company has to pull a building permit.
A variety of fees come due at that time, including tap fees and $2.6 million in affordable housing fees in lieu of actually building affordable units.
“We’ll ask for five years,” Mathews told his audience at the Sheraton. “There are millions of dollars (that come due) at that point. We have strong, strong partners and financials. What we don’t want is to do it get halfway into it,” and have an issue.
Atira also would like to begin marketing presales soon and will continue studying market trends reflected at its nearby project, Edgemont, before launching a sales effort, Mathews said. He confirmed that the ideal time to market a ski property is ski season and added that timing is particularly important in a challenging market, a sign that presales aren’t likely to begin before December 2009.
Height questions
Atira has been working with city staff on its application since April 2007. The group will take another big step Thursday, when it goes before the Steamboat Springs Planning Commission to seek a recommendation of approval for its development plan.
The application anticipates 100 residential units averaging about 2,300 square feet, along with two restaurants and shops in 390,000 square feet.
Mathews said an operator of five-star hotels has signed a letter of intent to run the new property, but he declined to identify the company or the financial backer for the project.
The Thunderhead Lodge and Condominiums, which dated to the 1960s, were torn down in late summer 2008, with much of the material left by the demolition recycled.
Mathews told his audience the care taken in demolition was the first evidence of Atira’s commitment to seeking Leadership in Energy and Environmental Design, or LEED, silver certification for green building practices in the construction of the new eight-story buildings.
Green building is among several categories of public benefit that Atira promises to provide, in part to satisfy requirements needed to win a building height variance the company is seeking on the Thunderhead site.
Under the community development code, the maximum allowable building height in the zone district at the base of the gondola is 73 feet. Atira is proposing to build one building to 104 feet and the second to 102 feet.
Public benefits to offset the variance include providing economic sustainability and achieving the goal of removing obsolete buildings as called for in the city’s Base Area Plan, Mathews said.
Documents on file at the city’s planning department mention a public seating terrace adjacent to the ski area, public restrooms, a public fireplace and a small performance venue — all among public benefits with an aggregate construction value of about $1.7 million.
Senior City Planner Jonathan Spence pointed out that the nearby One Steamboat Place development, which topped out early this winter, is 106 feet tall.
Some neighbors of Atira’s project already have registered their opposition to the variance with the city. They include condominium owners in the Bronze Tree building on the north side of Ski Time Square.
Clayton Thomas, a member of the board of directors of the Bronze Tree Homeowners Association, and his wife, Bonnie, wrote to Planning Commission Chairwoman Kathi Meyer to register their opposition to the Atira plan.
“What a tragedy this will be if this height and building shape is approved,” they wrote. “This building is on the very edge of the ski slope and disregards the interests of other property owners whose views would be reduced or eliminated. It is like putting the tallest and widest people in the front row for a class picture!
January 18, 2009 article in the Steamboat Pilot:
If Atira Group wins approval from the city of Steamboat Springs to redevelop the Thunderhead Lodge and Condominiums, it will ask for a five-year grace period instead of the standard three years before it must pull a building permit.
Atira Vice President of Development Mark Mathews said Thursday that his company was eager to begin marketing and building the twin eight-story condominium hotel buildings that would replace the old Thunderhead at the base of the Steamboat Ski Area. He was speaking before about 30 people during the first of three successive presentations in the Sheraton Steamboat Resort.
Mathews acknowledged the challenges of moving forward in the current economic climate.
“Our goal is to begin construction as soon as we get entitlements, as well as the market permits,” Mathews said.
City Planning Services Manager John Eastman said earlier Thursday that as soon as Atira wins approval for its final development permit, the clock begins running on the three-year period the company has to pull a building permit.
A variety of fees come due at that time, including tap fees and $2.6 million in affordable housing fees in lieu of actually building affordable units.
“We’ll ask for five years,” Mathews told his audience at the Sheraton. “There are millions of dollars (that come due) at that point. We have strong, strong partners and financials. What we don’t want is to do it get halfway into it,” and have an issue.
Atira also would like to begin marketing presales soon and will continue studying market trends reflected at its nearby project, Edgemont, before launching a sales effort, Mathews said. He confirmed that the ideal time to market a ski property is ski season and added that timing is particularly important in a challenging market, a sign that presales aren’t likely to begin before December 2009.
Height questions
Atira has been working with city staff on its application since April 2007. The group will take another big step Thursday, when it goes before the Steamboat Springs Planning Commission to seek a recommendation of approval for its development plan.
The application anticipates 100 residential units averaging about 2,300 square feet, along with two restaurants and shops in 390,000 square feet.
Mathews said an operator of five-star hotels has signed a letter of intent to run the new property, but he declined to identify the company or the financial backer for the project.
The Thunderhead Lodge and Condominiums, which dated to the 1960s, were torn down in late summer 2008, with much of the material left by the demolition recycled.
Mathews told his audience the care taken in demolition was the first evidence of Atira’s commitment to seeking Leadership in Energy and Environmental Design, or LEED, silver certification for green building practices in the construction of the new eight-story buildings.
Green building is among several categories of public benefit that Atira promises to provide, in part to satisfy requirements needed to win a building height variance the company is seeking on the Thunderhead site.
Under the community development code, the maximum allowable building height in the zone district at the base of the gondola is 73 feet. Atira is proposing to build one building to 104 feet and the second to 102 feet.
Public benefits to offset the variance include providing economic sustainability and achieving the goal of removing obsolete buildings as called for in the city’s Base Area Plan, Mathews said.
Documents on file at the city’s planning department mention a public seating terrace adjacent to the ski area, public restrooms, a public fireplace and a small performance venue — all among public benefits with an aggregate construction value of about $1.7 million.
Senior City Planner Jonathan Spence pointed out that the nearby One Steamboat Place development, which topped out early this winter, is 106 feet tall.
Some neighbors of Atira’s project already have registered their opposition to the variance with the city. They include condominium owners in the Bronze Tree building on the north side of Ski Time Square.
Clayton Thomas, a member of the board of directors of the Bronze Tree Homeowners Association, and his wife, Bonnie, wrote to Planning Commission Chairwoman Kathi Meyer to register their opposition to the Atira plan.
“What a tragedy this will be if this height and building shape is approved,” they wrote. “This building is on the very edge of the ski slope and disregards the interests of other property owners whose views would be reduced or eliminated. It is like putting the tallest and widest people in the front row for a class picture!
Tuesday, January 6, 2009
Saturday, January 3, 2009
Happy New Year!
If you like to play in the snow, now is a great time to visit us in Steamboat Springs, Colorado!
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