Comments on: Coffee Talk Time – Uncertain Times Edition

By: Brian

Brian — Sat, 07 Feb 2009 05:05:47 +0000

Is the economy bad, or does it just seem that way?

That’s a false dichotomy. The economy is bad simply because it seems that way. There is no reason why we shouldn’t be humming along, except people are scared and aren’t investing their money. Yes, some banks made some bad investments and some housing markets went crazy, but there’s really nothing else wrong.

We haven’t run out of fuel, we haven’t suffered a catastrophic natural disaster, our factories function just as well today as they did a year ago. The thing about the economy is that it is a gauge of consumer confidence. Businesses are failing because people are scared and are not spending their money. Oklahoma banks didn’t invest poorly. The only company that appeared to have ridden a bubble all the way down is Chesapeake, and they aren’t in near the situation that AIG or GM are in.

Our economy will continue to do well as long as our confidence remains high. There’s no magical secret code that makes economies work — it is simply people working and buying things and continuing to keep the wheels of commerce turning. Eventually, people will tire of the bad economy story, the media will start to focus on something else, and consumer confidence will gradually return.

By: Andrew

Andrew — Fri, 06 Feb 2009 04:45:54 +0000

Steve, I was all of 6 years old during the oil bust so I really can’t even formulate a comparison.

I would agree that the economy really is bad (Not just the stock market) but I would also agree that the media has exacerbated the situation.

Grant, good to see you here. I think you’re quite accurate regarding the local economy.

By: mike b

mike b — Fri, 06 Feb 2009 02:45:48 +0000

CNN Money reported OKC has the lowest unemployment rate for a metro area of more than a million people… The economy is not that great and the market proves it. it went from 14000 plus in Dec 2007 to 7900 and change now….I think OKC could be hit hard but it might take a little longer… devon lost a lot of money but their cash to debt ratio is still good… OKC will be playing the waiting game to see if it hits here or not big time.

By: slackmeyer

slackmeyer — Thu, 05 Feb 2009 21:40:44 +0000

No doubt, Mike. And I think the details of what’s going on at my own shop are well documented.

So my follow up question is, will it get as bad here as it did in the mid- to late-1980s. I’m hearing hope from some of you that it might not.

By: mike

mike — Thu, 05 Feb 2009 21:28:05 +0000

Steve, I think the above reponses should have answered your question by now: the economy really does suck.

By: Colin

Colin — Thu, 05 Feb 2009 21:16:20 +0000

We are already getting hit, but not as hard as the rest of the nation…we are insulated to a certain extent by a number of factors (strong banks, a diversified economy, a housing market that never got as insane as other cities) but we aren’t an island, and the national economy does and will affect us. I think the main thing we need to worry about right now is a shrinking tax base for the city, which could put a damper on some of the projects on our wishlist, but I don’t forsee a total economic collapse on the order of what California and the industrial midwest are experiencing. If there os potential for a major collapse somewhere local, I see it in Bricktown property values, because they have been inflated for a while, and this is the sort of economy that pops bubbles.

By: Grant Humphreys

Grant Humphreys — Thu, 05 Feb 2009 21:01:10 +0000

This is the most difficult time we’ve seen in the economy in more than 60 years. I don’t take it lightly, but I do feel hopeful about Oklahoma City’s weathering of this storm. I’m more optimistic now than I was 4 months ago. If we can hang onto energy prices > $45/oil and $5/gas, we can sustain our momentum and even see some growth through this season. If energy prices drop below those #’s for long, we could get hit hard. We haven’t been hit hard yet.

As far as downtown’s momentum goes, I think it still has a lot of strength. The NBA momentum is strong, Devon is moving forward on their phenomenal infusion of capital and the City is looking ahead at MAPS 3 with progressive initiatives that continue to invest in the urban core. So Downtown will continue to move forward and build momentum.

While one of our development projects, The Flatiron, was put on ice for 9-12 months last October, everything else is moving forward on schedule. I think this season of slower action allows business owners to take care of their business in a more responsible manner than they might have in the boom times. That’s a needed season of keeping your house in order. Some will get taken out during the downturn, but that will mostly be those with no foundation or staying power. It’s not a good time to be overleveraged.

Oklahoma City is still moving forward – slower, yes – but still relatively strong compared to the rest of the world. I’m happy to call this place home.

By: Michael H

Michael H — Thu, 05 Feb 2009 20:18:22 +0000

While the economy is definitely as bad as anyone can remember, I think OKC stands a good chance of weathering the storm. There are layoffs – I have a good friend who recently lost his job because of the downturn. We will definitely feel the effects, but I’m hopefully optimistic we will turn the corner by the end of year.

By: Philip

Philip — Thu, 05 Feb 2009 19:37:45 +0000

I agree with you Steve and I’ve been saying the same thing for some time. The talking heads on television tell everyone that we’re in for very bad times, the public worries and stops spending money to brace for the tough times ahead and low and behold things start spiraling down as the economy worsens. It becomes a self fulfilling prophesy.

They may not have been the initial cause of the problem but through sensationalizing the events, things become worse than they might have been otherwise.

By: Dennis

Dennis — Thu, 05 Feb 2009 19:15:03 +0000

Oklahoma’s economy may lag behind the national trend, and our bottoming-out might not be a low as elsewhere… but the decline is real whether exacerbated by the media or not. (Early on the media DID wave some unnecessary red flags, and I think did contribute to the slope of the downward spiral.)

Everything will slow down in OKC. Three people were laid off in my office last week and the remainder of us are shaking in our boots. Money that three months ago I would have spent on a night out is now going into my savings account.

Downtown won’t stop blossoming, but the frequency and rate of blossoms will definitely reduce.