Thanks to reader DaveyDave for sending me this MSNBC news clip that aired today:
Visit msnbc.com for Breaking News, World News, and News about the Economy
It’s starting to look like we may be special after all… just not the way some folks imagined.
Entries Tagged as 'Seattle_is_special'
MSNBC on Super Special Seattle
By The Tim on January 29th, 2009 at 6:05 PM · 56 Comments
→ 56 CommentsCategories: Media
Tags: MSNBC, Seattle_is_special, video
Virgin: Maybe no bottom in 2009 after all
By The Tim on January 13th, 2009 at 9:27 AM · 45 Comments
A couple weeks ago we mentioned a recent Bill Virgin column in which he sorta kinda called a bottom for housing (and the economy) in 2009. Well, a lot has changed in Bill’s world in the last few weeks, and his tune has changed slightly.
Forecast of short recession looks shaky
It is a sobering reminder of one’s insignificant place in the universe when news that one’s employer and one’s job are likely to evaporate in 60 days counts as no better than the third most significant local economic story of the day.
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On the evening that news was breaking about the Seattle P-I’s demise, your business columnist was out on a speaking engagement at a meeting of a local business group, blithely propounding the view expressed two weeks ago in this space that 2009’s economic outlook is not hopeless, and that there are some reasons (lower energy costs, the eventual bottom to the housing market and bad assets in the banking system) to believe that the recession, as nasty as it is proving to be, may also be short-lived.Of the three panelists discussing the economy, that was the most optimistic outlook. Asked when there might be signs of a turnaround, said columnist predicted they could appear as soon as late in the second quarter.
Given the events of the last few days, Mr. Business Columnist, care to revise or extend your remarks?
There’s always the temptation to succumb to the notion that a recession isn’t all that bad, as long as it’s not happening to you, but once the floodwaters of the economy hit one’s own doorstep, it graduates to status of depression.
Other news would certainly tend to suggest a rethinking of the optimistic forecast.
As usual, Bill’s column is a thoughtful and engaging summary of the current economic issues facing our region. Read the whole thing.
Three writers I’ll miss the most with the end of the P-I: Bill Virgin, Mark Trahant, and Aubrey Cohen. Why does the paper with all the good economic/real estate writers have to be the one going under?
(Bill Virgin, Seattle P-I, 01.12.2009)
→ 45 CommentsCategories: News
Tags: economy, Seattle_is_special, Seattle_PI, Virgin
“The housing market is slightly undervalued” (except in Seattle)
By The Tim on December 4th, 2008 at 10:36 AM · 26 Comments
A recent report on the housing market across the country from Global Insight and National City contains some interesting bits that are worth noting:
Extreme overvaluation is now essentially nonexistent. … For the country as a whole, the housing market is slightly undervalued.
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Only the Pacific Northwest remains overvalued across a wide region.
Their analysis is based on population density, mortgage rates, incomes, and a “constant” for each city, that is roughly equivalent to the concept of desirability that we have discussed on these pages numerous times in the past.
Since they are claiming that most of California is already “fairly valued,” I think their analysis tends to lean somewhat in favor of more expensive housing. So while I can’t say I agree with their analysis 100%, I do find it interesting / amusing that the Pacific Northwest now sticks out like a sore thumb in their nationwide analysis.
You can play around with their nifty interactive map, read the full report, or check out the methodology pdf.
Update: Changed the map image above to the one directly from the pdf report, since the National City website is serving up different versions of the interactive map in a seemingly random fashion.
→ 26 CommentsCategories: News
Tags: Global Insight, National City, overvalued, Seattle_is_special, undervalued
Washington Banks Hit With More Bad Loans
By The Tim on November 18th, 2008 at 1:35 PM · 10 Comments
Kirsten Grind had an interesting piece about local banks in the Puget Sound Business Journal last Friday: Bad loans rising at Washington banks
Bad loans are up dramatically at Washington state banks, surpassing the national average and reaching levels that local banking experts say are unprecedented.
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Washington banks historically have seen lower levels of problem loans than their counterparts across the country. But their heavy construction lending has hit them hard in the wake of the housing slowdown, said Brad Williamson, director of the Division of Banks at the Washington State Department of Financial Institutions, which regulates state banks.
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How bad is it? Since the height of the housing market in the middle of 2006, Washington state’s 97 banks — both publicly traded and private — have seen their problem loans jump from an average of 0.42 percent to 2.71 percent of all assets, according to the most recent data available from the Federal Deposit Insurance Corp. That compares with a national average of 1.89 percent.As a counterweight to bad loans, regional banks are bulking up with more capital, which acts as a buffer to the problem loans. And most publicly traded banks across the Puget Sound region are considered well capitalized.
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But a well-capitalized bank can still fail, and several already have. Both Washington Mutual and IndyMac, of California, were well-capitalized by federal regulatory standards in their last quarterly reports before their historic failures this year.
The basic message seems to be that local banks are in slightly more pain than the national average in terms of bad loans, but that bad loans aren’t a particularly useful predictor of bank failures.
I was surprised to read that local banks actually have a higher percentage of bad loans than the national average. That would seem to fly somewhat in the face of the “Seattle is special” mantra of many local economists.
(Kirsten Grind, Puget Sound Business Journal, 11.14.2008)
→ 10 CommentsCategories: News
Tags: banks, Business Journal, Grind, loans, Seattle_is_special
Local Companies Tighten Belts, King County Cuts Jobs
By The Tim on October 14th, 2008 at 1:02 PM · 41 Comments
As the far-reaching economic consequences of the popping of the housing/credit bubble unfold, local governments are feeling the pain. Snohomish County faces a $9 million shortfall for 2009, forcing a hiring freeze. While down in King County, Ron Sims just announced that 255 jobs will be cut.
Financially ailing King County will send layoff notices to as many as 255 employees today, on top of 150 jobs already eliminated.
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Paring next year’s general fund to $644 million, Sims said, meant cutting $93 million from what would have been needed to maintain current levels of government service.
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The budget is out of whack because revenues from sales tax and investments have dropped while the cost of employee benefits, cost-of-living adjustments, fuel and new labor contracts have risen.
One large factor in the drop of sales tax revenues is probably the end of the housing ATM. As documented at Calculated Risk, Mortgage Equity Withdrawal plunged to near zero in the second quarter 2008.
Seattle Times columnist Jon Talton runs through some more ways that the economic crunch is weighing on Seattle.
In recent days, the gravity of the crisis for the Puget Sound region may have been overshadowed by the gut-wrenching gyrations of the stock market — itself a marker for the lost wealth in a place heavily populated by investors. But Microsoft’s announcement of re-evaluating its hiring situation is very big. Boeing and the striking Machinists, seeing the gravity of the moment, are talking again.
Nordstrom same-store sales falling nearly 10 percent in the five weeks ending Oct. 4 is a warning for what’s to come for other retailers based here. As retirement nest eggs are vaporized, jobs lost and houses foreclosed, those vaunted consumers can no longer prop up the economy.
Nor can we count on exports. The world economy is slamming into a recession, and last week the International Monetary Fund warned of “extremely serious” consequences, including famine.
Yikes. I guess when folks were going around touting Seattle’s economy as special and stronger than elsewhere, they didn’t really consider the far-reaching effects of the bursting bubble. The bottom line seems to be that this mess runs deeper than anyone really realized.
(Keith Ervin, Seattle Times, 10.14.2008)
(Calculated Risk, 10.06.2008)
(Jon Talton, Seattle Times, 10.12.2008)
→ 41 CommentsCategories: News
Tags: Ervin, home equity, Jobs, King_County, Local Economy, Seattle_is_special, Seattle_Times, Snohomish, Talton, tax revenues
