Usually on these weekly posts, I wax on about how awful it's going to get. But I read the following piece, and this week I figured I'd wax off.
Read this.
Great Depression in the United States
I. Introduction
Great Depression in the United States, worst and longest economic collapse in the history of the modern industrial world, lasting from the end of 1929 until the early 1940s. Beginning in the United States, the depression spread to most of the world’s industrial countries, which in the 20th century had become economically dependent on one another. The Great Depression saw rapid declines in the production and sale of goods and a sudden, severe rise in unemployment. Businesses and banks closed their doors, people lost their jobs, homes, and savings, and many depended on charity to survive. In 1933, at the worst point in the depression, more than 15 million Americans—one-quarter of the nation’s workforce—were unemployed.
The depression was caused by a number of serious weaknesses in the economy. Although the 1920s appeared on the surface to be a prosperous time, income was unevenly distributed. The wealthy made large profits, but more and more Americans spent more than they earned, and farmers faced low prices and heavy debt. The lingering effects of World War I (1914-1918) caused economic problems in many countries, as Europe struggled to pay war debts and reparations. These problems contributed to the crisis that began the Great Depression: the disastrous U.S. stock market crash of 1929, which ruined thousands of investors and destroyed confidence in the economy. Continuing throughout the 1930s, the depression ended in the United States only when massive spending for World War II began.
The depression produced lasting effects on the United States that are still apparent more than half a century after it ended. It led to the election of President Franklin Delano Roosevelt, who created the programs known as the New Deal to overcome the effects of the Great Depression. These programs expanded government intervention into new areas of social and economic concerns and created social-assistance measures on the national level. The Great Depression fundamentally changed the relationship between the government and the people, who came to expect and accept a larger federal role in their lives and the economy.
The programs of the New Deal also brought together a new, liberal political alliance in the United States. Roosevelt’s policies won the support of labor unions, blacks, people who received government relief, ethnic and religious minorities, intellectuals, and some farmers, forming a coalition that would be the backbone of the Democratic Party for decades to come.
On a personal level, the hardships suffered during the depression affected many Americans’ attitudes toward life, work, and their community. Many people who survived the depression wanted to protect themselves from ever again going hungry or lacking necessities. Some developed habits of frugality and careful saving for the rest of their lives, and many focused on accumulating material possessions to create a comfortable life, one far different from that which they experienced in the depression years.
The depression also played a major role in world events. In Germany, the economic collapse opened the way for dictator Adolf Hitler to come to power, which in turn led to World War II.
II. Causes of the Depression
It is a common misconception that the stock market crash of October 1929 was the cause of the Great Depression. The two events were closely related, but both were the results of deep problems in the modern economy that were building up through the “prosperity decade” of the 1920s.
As is typical of post-war periods, Americans in the Roaring Twenties turned inward, away from international issues and social concerns and toward greater individualism. The emphasis was on getting rich and enjoying new fads, new inventions, and new ideas. The traditional values of rural America were being challenged by the city-oriented Jazz Age, symbolized by what many considered the shocking behavior of young women who wore short skirts and makeup, smoked, and drank.
The self-centered attitudes of the 1920s seemed to fit nicely with the needs of the economy. Modern industry had the capacity to produce vast quantities of consumer goods, but this created a fundamental problem: Prosperity could continue only if demand was made to grow as rapidly as supply. Accordingly, people had to be persuaded to abandon such traditional values as saving, postponing pleasures and purchases, and buying only what they needed. “The key to economic prosperity,” a General Motors executive declared in 1929, “is the organized creation of dissatisfaction.” Advertising methods that had been developed to build support for World War I were used to persuade people to buy such relatively new products as automobiles and such completely new ones as radios and household appliances. The resulting mass consumption kept the economy going through most of the 1920s.
But there was an underlying economic problem. Income was distributed very unevenly, and the portion going to the wealthiest Americans grew larger as the decade proceeded. This was due largely to two factors: While businesses showed remarkable gains in productivity during the 1920s, workers got a relatively small share of the wealth this produced. At the same time, huge cuts were made in the top income-tax rates. Between 1923 and 1929, manufacturing output per person-hour increased by 32 percent, but workers’ wages grew by only 8 percent. Corporate profits shot up by 65 percent in the same period, and the government let the wealthy keep more of those profits. The Revenue Act of 1926 cut the taxes of those making $1 million or more by more than two-thirds.
As a result of these trends, in 1929 the top 0.1 percent of American families had a total income equal to that of the bottom 42 percent. This meant that many people who were willing to listen to the advertisers and purchase new products did not have enough money to do so. To get around this difficulty, the 1920s produced another innovation—“credit,” an attractive name for consumer debt. People were allowed to “buy now, pay later.” But this only put off the day when consumers accumulated so much debt that they could not keep buying up all the products coming off assembly lines. That day came in 1929.
American farmers—who represented one-quarter of the economy—were already in an economic depression during the 1920s, which made it difficult for them to take part in the consumer buying spree. Farmers had expanded their output during World War I, when demand for farm goods was high and production in Europe was cut sharply. But after the war, farmers found themselves competing in an over-supplied international market. Prices fell, and farmers were often unable to sell their products for a profit.
International problems also weakened the economy. After World War I the United States became the world’s chief creditor as European countries struggled to pay war debts and reparations. Many American bankers were not ready for this new role. They lent heavily and unwisely to borrowers in Europe, especially Germany, who would have difficulty repaying the loans, particularly if there was a serious economic downturn. These huge debts made the international banking structure extremely unstable by the late 1920s.
In addition, the United States maintained high tariffs on goods imported from other countries, at the same time that it was making foreign loans and trying to export products. This combination could not be sustained: If other nations could not sell their goods in the United States, they could not make enough money to buy American products or repay American loans. All major industrial countries pursued similar policies of trying to advance their own interests without regard to the international economic consequences.
The rising incomes of the wealthiest Americans fueled rapid growth in the stock market (see Stock Exchange), especially between 1927 and 1929. Soon the prices of stocks were rising far beyond the worth of the shares of the companies they represented. People were willing to pay inflated prices because they believed the stock prices would continue to rise and they could soon sell their stocks at a profit.
The widespread belief that anyone could get rich led many less affluent Americans into the market as well. Investors bought millions of shares of stock “on margin,” a risky practice similar to buying products on credit. They paid only a small part of the price and borrowed the rest, gambling that they could sell the stock at a high enough price to repay the loan and make a profit.
For a time this was true: In 1928 the price of stock in the Radio Corporation of America (RCA) multiplied by nearly five times. The Dow Jones industrial average industrial average—an index that tracks the stock prices of key industrial companies—doubled in value in less than two years. But the stock boom could not last. The great bull market of the late 1920s was a classic example of a speculative “bubble” scheme, so called because it expands until it bursts. In the fall of 1929 confidence that prices would keep rising faltered, then failed. Starting in late October the market plummeted as investors began selling stocks. On October 29, known as Black Tuesday, the worst day of the panic, stocks lost $10 billion to $15 billion in value. By mid-November almost all of the gains of the previous two years had been wiped out, with losses estimated at $30 billion.
The stock market crash announced the beginning of the Great Depression, but the deep economic problems of the 1920s had already converged a few months earlier to start the downward spiral. The credit of a large portion of the nation’s consumers had been exhausted, and they were spending much of their current income to pay for past, rather than new, purchases. Unsold inventories had begun to pile up in warehouses during the summer of 1929.
The crash affected the economy the way exposure to cold affects the human body, lowering the body’s resistance to infectious agents that are already present. The crash reduced the ability of the economy to fight off the underlying sicknesses of unevenly distributed wealth, agricultural depression, and banking problems.
III. Economic Collapse (1929-1933)
The stock market crash was just the first dramatic phase of a prolonged economic collapse. Conditions continued to worsen for the next three years, as the confident, optimistic attitudes of the 1920s gave way to a sense of defeat and despair. Stock prices continued to decline. By late 1932 they were only about 20 percent of what they had been before the crash. With little consumer demand for products, hundreds of factories and mills closed, and the output of American manufacturing plants was cut almost in half from 1929 to 1932.
Unemployment in those three years soared from 3.2 percent to 24.9 percent, leaving more than 15 million Americans out of work. Some remained unemployed for years; those who had jobs faced major wage cuts, and many people could find only part-time work. Jobless men sold apples and shined shoes to earn a little money.
Many banks had made loans to businesses and people who now could not repay them, and some banks had also lost money by investing in the stock market. When depositors hit by the depression needed to withdraw their savings, the banks often did not have the money to give them. This caused other depositors to panic and demand their cash, ruining the banks. By the winter of 1932 to 1933, the banking system reached the point of nearly complete collapse; more than 5,000 banks failed by March 1933, wiping out the savings of millions of people.
As people lost their jobs and savings, mortgages on many homes and farms were foreclosed. Homeless people built shacks out of old crates and formed shantytowns, which were called “Hoovervilles” out of bitterness toward President Herbert Hoover, who refused to provide government aid to the unemployed.
The plight of farmers, who had been in a depression since 1920, worsened. Already low prices for their goods fell by 50 percent between 1929 and 1932. While many people went hungry, surplus crops couldn’t be sold for a profit.
Natural forces inflicted another blow on farmers. Beginning in Arkansas in 1930, a severe drought spread across the Great Plains through the middle of the decade. Once-productive topsoil turned to dust that was carried away by strong winds, piling up in drifts against houses and barns. Parts of Kansas, Oklahoma, Texas, New Mexico, and Colorado became known as the Dust Bowl, as the drought destroyed the livelihood of hundreds of thousands of small farmers. Packing up their families and meager possessions, many of these farmers migrated to California in search of work. Author John Steinbeck created an unforgettable fictional portrait of their fate in the novel The Grapes of Wrath (1939).
IV. Initial Response to the Depression
The initial government response to the Great Depression was ineffective, as President Hoover insisted that the economy was sound and that prosperity would soon return. Hoover believed the basic need was to restore public confidence so businesses would begin to invest and expand production, providing jobs and income to restore the economy to health. But business owners saw no reason to increase production while unsold goods clogged their shelves. By 1932 investment had dropped to less than 5 percent of its 1929 level.
Convinced that a balanced federal budget was essential to restoring business confidence, Hoover sought to cut government spending and raise taxes. But in the face of a collapsing economy, this served only to reduce demand further. As conditions worsened, Hoover’s administration eventually provided emergency loans to banks and industry, expanded public works, and helped states offer relief. But it was too little, too late.
The epitome of a “self-made man,” Hoover believed in individualism and self-reliance. As more and more Americans lost jobs and faced hunger, Hoover asserted that “mutual self-help through voluntary giving” was the way to meet people’s needs. Private giving increased greatly, reaching a record high in 1932, but charitable organizations were overwhelmed by the enormous number of people in need. To many, government assistance seemed the only answer, but Hoover was convinced that giving federal relief payments would undermine recipients’ self-reliance, and he resisted this step throughout his term.
The tension between citizens seeking government action and Hoover’s administration came to a head in June 1932. More than 20,000 World War I veterans marched on Washington, D.C., to ask for early payment of government bonuses they had been promised. But the government refused, and when some members of the so-called Bonus Army didn’t leave the capital, federal troops used tear gas and bayonets to evict the men and their families (see Bonus March).
Hoover and most of his Republican Party firmly supported protective tariffs to block imports and stimulate the American economy by increasing sales of American-made products. In 1930 they enacted the Hawley-Smoot Tariff, which established the highest average tariff in American history. This was a crushing blow to European economies, which were already sinking into depression. Other nations retaliated by raising their own tariffs. This action helped to worsen and spread the depression by choking off international trade. Between 1929 and 1932 the total value of world trade had declined by more than half.
V. International Effects of the Depression
Like Hoover, leaders of other nations around the world were determined to balance their budgets by raising taxes and slashing government spending. Germany, struggling to pay reparations imposed by the peace settlements after World War I, suffered to a larger extent than any other major industrial nation. Nearly 40 percent of the German workforce was unemployed by 1932. In these desperate economic circumstances, large numbers of Germans began to listen to the tirades of Hitler, who blamed the depression on Jews and Communists and promised to restore Germany to economic and military strength. After his Nazi (National Socialist) Party became the strongest political force in Germany, Hitler was named chancellor in January 1933. He soon seized absolute control of the German government.
In Britain the effects of the depression were not as dramatic because the nation had been suffering from high unemployment through much of the 1920s. Unlike the United States, Britain already had unemployment insurance and government welfare payments to ease the burden on the jobless. The depression took longer to hit hard in France because it was less industrialized than the United States, Germany, and Britain. Also, because so many French men had died in World War I, the workforce was very small, and it took a severe economic decline before the demand for workers fell below the small supply.
VI. Roosevelt and the New Deal
By the election year of 1932, the depression had made Hoover so unpopular that the election of the Democratic presidential candidate Franklin Delano Roosevelt was all but assured. Confidence—Hoover’s elusive goal—was Roosevelt’s most abundant quality. Declaring in his inaugural speech that “the only thing we have to fear is fear itself,” Roosevelt quickly lifted the nation’s spirits with the rapid and unprecedented actions of the New Deal.
Within days of his inauguration Roosevelt called Congress into a special session, during which many pieces of emergency legislation were passed. Following the example of many states, Roosevelt proclaimed a nationwide bank holiday, closing all banks to stop panicky depositors from withdrawing their money. A few days later he broadcast the first of many fireside chats on the radio, reassuring Americans that all banks that were allowed to reopen would be safe.
The New Deal produced a wide variety of programs to reduce unemployment, assist businesses and agriculture, regulate banking and the stock market, and provide security for the needy, elderly, and disabled. The basic idea of early New Deal programs was to lower the supply of goods to the current, depressed level of consumption. Under the Agricultural Adjustment Act of 1933, the government sought to raise farm prices by paying farmers not to grow surplus crops. Parts of the National Industrial Recovery Act created codes for many industries that regulated competition while guaranteeing minimum wages and maximum hours for workers.
The New Deal also tried to increase demand, pumping large amounts of money into the economy through public works programs and relief measures. Public works projects not only provided jobs but built schools, dams, and roads; the innovative Tennessee Valley Authority provided electric power and improved living conditions in an area of the southeast United States.
However, Roosevelt never embraced the new ideas of British economist John Maynard Keynes, who argued that intentionally unbalancing the budget to a significant degree would boost demand to the point where recovery would take place. The U.S. gross public debt increased from $22.5 billion in 1933 to $40.44 billion in 1939, but Roosevelt was reluctant to accept any more deficit spending than seemed absolutely necessary to prevent mass suffering. He did not create an unbalanced budget on the scale Keynes advocated until World War II forced it upon him. Once the government started spending at the levels Keynes had suggested, the depression ended.
The New Deal helped people to survive the depression, but acted as a painkiller rather than a cure for the nation’s economic ills. Unemployment was reduced, but remained high through the 1930s. Farm income rose from a low of $1.9 billion in 1932 to $4.2 billion in 1940. The demands of the depression led the United States to institute social-security programs and accept labor unions, measures that had been taken decades earlier in many European nations.
VII. Life During the Depression
The Great Depression had a substantial and varied impact on the lives of Americans. Physically and psychologically, it was devastating to many people, who not only lacked adequate food, shelter, and clothing but felt they were to blame for their desperate state.
Although few people died from starvation, many did not have enough to eat. Some people searched garbage dumps for food or ate weeds. Malnutrition took a toll: A study conducted in eight American cities found that families that had a member working full time experienced 66 percent less illness than those in which everyone was unemployed.
The psychological impact was equally damaging. During the prosperity of the 1920s, many Americans believed success went to those who deserved it. Given that attitude, the unemployment brought by the depression was a crushing blow. If the economic system really distributed rewards on the basis of merit, those who lost their jobs had to conclude that it was their own fault. Self-blame and self-doubt became epidemic. These attitudes declined after the New Deal began, however. The establishment of government programs to counteract the depression indicated to many of the unemployed that the crisis was a large social problem, not a matter of personal failing. Still, having to ask for assistance was humiliating for many men who had thought of themselves as self-sufficient and breadwinners for their families.
Because society expected a man to provide for his family, the psychological trauma of the Great Depression was often more severe for men than women. Many men argued that women, especially married women, should not be hired while men were unemployed. Yet the percentage of women in the workforce actually increased slightly during the depression, as women took jobs to replace their husbands’ lost pay checks or to supplement spouses’ reduced wages. Women had been excluded from most of the manufacturing jobs that were hardest hit by the depression, which meant they were less likely than men to be thrown out of work. Some fields that had been defined as women’s work, such as clerical, teaching, and social-service jobs, actually grew during the New Deal.
The effects of the depression on children were often radically different from the impact on their parents. During the depression many children took on greater responsibilities at an earlier age than later generations would. Some teenagers found jobs when their parents could not, reversing the normal roles of provider and dependent. Sometimes children had to comfort their despairing parents. A 12-year-old boy in Chicago, for example, wrote to President and Mrs. Roosevelt in 1936 to seek help for his father, who was always “crying because he can’t find work [and] I feel sorry for him.” The depression that weakened the self-reliance of many adult men strengthened that quality in many children.
The depression’s impact was less dramatic, but ultimately more damaging, for minorities in America than for whites. Since they were “born in depression,” many blacks scarcely noticed a change at the beginning of the 1930s. Over time, however, blacks suffered to an even greater extent than whites, since they were usually the last hired and first fired. By 1932 about 50 percent of the nation’s black workers were unemployed. Blacks were frequently forced out of jobs in order to give them to unemployed whites.
Yet the depression decade was one of important positive change for blacks. First lady Eleanor Roosevelt and several leading New Deal figures were active champions of black rights, and most New Deal programs prohibited racial discrimination. These rules were often ignored in the South, but the fact that they were included at all was a major step forward. Blacks were sufficiently impressed with the New Deal to cause a large majority of black voters to switch their allegiance from the Republican to the Democratic Party during the depression years. See also African American History.
Other minority populations had experiences similar to those of blacks during the depression. Native Americans were even less likely than blacks to notice a downturn when the depression began; they already fared poorly by virtually every social or economic indicator. But Native Americans, like blacks, were brought into New Deal relief programs that in theory did not discriminate, and an attempt was made, through the Indian Reorganization Act, to enable tribes to reestablish their identities and cultural practices. In industrial cities such as Detroit, Gary, and Los Angeles and in agricultural regions such as California’s San Joaquin Valley, Mexican Americans were seen as holding jobs that should go to whites. Repatriation (meaning deportation) programs were instituted to persuade Chicanos to return to Mexico, often through intimidation.
Groups of white Americans also faced discrimination during this era. Poor farmers evicted from their land or fleeing the Dust Bowl were often despised and abused when they arrived in California and other western states. They were commonly labeled “Okies,” whether they came from Oklahoma or other states.
VIII. End of the Depression
Although economic conditions improved by the late 1930s, unemployment in 1939 was still about 15 percent. However, with the outbreak of World War II in Europe in September 1939, the U.S. government began expanding the national defense system, spending large amounts of money to produce ships, aircraft, weapons, and other war material. This stimulated industrial growth, and unemployment declined rapidly. After the United States entered the war in December 1941, all sectors of the economy were mobilized to support the war effort. Industry greatly expanded, and unemployment was replaced by a shortage of workers.
IX. Legacy of the Depression
The impact of the Great Depression and the programs of the New Deal dramatically altered the relationship between the American people and their government. The federal government expanded its role in many social and economic areas, becoming larger and more powerful. Americans came to accept government involvement and responsibility in caring for society’s most needy members and regulating many aspects of the economy.
The New Deal’s social programs reflected a shift in American values created by the shared hardships of the depression era. The depression experience discredited the extreme individualism and pursuit of self-interest that characterized the 1920s, and revived an emphasis on community, cooperation, and compassion. These values were reflected in the popular culture of the day and in political and labor movements that developed and expanded during the 1930s.
One of the most far-reaching New Deal measures, the Social Security Act of 1935, guaranteed government help to citizens who were unemployed or disabled, to older Americans, and to mothers and children. The National Labor Relations Act (1935) provided protection for union activity, which contributed to the rise of labor unions in mass-production industries such as steel and automobile manufacturing. Unions and racial minorities, who had benefited from the New Deal, were among the groups who became staunch supporters of the Democratic Party, changing American politics for decades to come.
The literature, films, and art of the depression era demonstrated the desire for a more cooperative, less fiercely competitive way of life. Many celebrated the common people, who were contrasted with greedy, powerful interests. Examples included films such as Mr. Smith Goes to Washington (1939), directed by Frank Capra, and Stagecoach (1939), by John Ford; paintings by Norman Rockwell; songs by folk singer Woody Guthrie; and novels by such writers as John Steinbeck.
While many conservatives believed the New Deal was turning the United States toward socialism, other Americans felt it did not go far enough and sought more revolutionary change. Political movements to the left of the New Deal enjoyed considerable support during the 1930s. Among them were the Minnesota Farmer-Labor Party, which offered radical proposals challenging the capitalist system, and the unsuccessful campaign by novelist Upton Sinclair to be governor of California in 1934, proposing essentially socialist programs to “End Poverty in California.” By alleviating some of the worst effects of the depression, the New Deal helped defuse tensions and preserve a democratic, capitalist system at a time when other nations turned to fascism or socialism.
The return of prosperity during and after World War II revived some of the forces that divided society and promoted self-interest in the 1920s. But the experience of the Great Depression left a lasting mark on the United States in the forms of a much greater role for the federal government, a new political alignment in which Democrats would retain the support of a majority for most of the next half century, and a general feeling that the free market must be regulated in order to avoid another such economic catastrophe.
Contributed By:
Robert S. McElvaine, B.A., M.A., Ph.D.
Elizabeth Chisholm Professor of Arts and Letters and Chair of the Department of History, Millsaps College, Mississippi. Author of The Great Depression: America, 1929-1941.
"Great Depression in the United States," Microsoft® Encarta® Online Encyclopedia 2008
http://encarta.msn.com © 1997-2008 Microsoft Corporation. All Rights Reserved.
© 1993-2008 Microsoft Corporation. All Rights Reserved.
OK, at what point does this thing get a little eerie? OK, I'll agree it's not a carbon-copy of today. But it's Close. The Past is Prologue, folks. Get ready.
Sunday, January 25, 2009
Sunday, January 18, 2009
Free At Last, Free At Last, Thank God Almighty!
Welp, if it's Sunday morning and I'm hung over, well then it must be time for a post.
And we are Free At Last! Free from endless Jew rants about AIPAC (whatever the fuck that is)? Well maybe, for now. Nope I mean we are free of Gee-Dub, perhaps the Worst President of My Lifetime or any lifetime. My God, what a turd. Nope, we're on to the next guy.
Yup, by this time next week, we'll be an Obama-Nation. OK, this guy is going to have his flaws, but he simply cannot be worse than what we have just endured. Twice! We have only ourselves to blame for the past 4 years.
And I'd be lying if I didn't admit that I am at least a little excited about this guy. I mean we're behind the 8 ball, and GeeDub has been a useless sack of shit. If anything, we could have at least used some Reagan-esque "One for the Gipper" speeches from G-Dub, but we're only getting them from The O-bomber.
Well, not much to do but wait... but it'll be nice to know that the next time I post it'll be with a chain-smoking black dude as our Prez. And we'll also have a Flilf in there too!
"I break with thee... I break with thee.. I break with thee.. and then throw dog-poop on her/his shoes" (Steve Martin... and hbm)
Well, we officially got dumped by hbm. How we'll survive is another issue, but his parting shot was rather interesting:
...why are you afraid to put your name on your posts, asshole?
Oh, I know -- you're afraid Mike Hollern and I will order a "mob hit" on you. Fucking psycho.
I'm through with this blog -- too many psychotic trolls eaten up by hate and spite with nothing to do but vent it here on any target that offers itself. I'll read it, but I'm done commenting on it.
Good bye.
And he seemed pretty serious. I mean he only commented about 30-40 more times, and that was it!
What's funny is that "hbm" really could be anyone. EVERYONE is anonymous on here. I mean, people put "handles" to comments, and some are quasi-public figures that many of us would recognize. But were it not for Buster, I wouldn't have a clue who "hbm" is.
But it's curious Why hbm would make all these statements to begin with. This thing has always been anonymous, for obvious reasons. Read the title: it's a blog about the implosion of really the only large-scale industry in this one horse shithole. And as we've seen, "continued prediction" of it getting ever worse by the minute is not a Make Friends And Influence People sort of recipe.
hbm jokes about MOB HITS... well, everyone who posts on here knows DAMN WELL commenting on here could have almost nothing but negative consequences if identities became known. Even BendBB hides his identity. Curiously he also harvests IP's.
So hbm, your accusations of Anonymous Comments = Worthless Blog, is itself pretty fucking worthless. You, and everyone else here, knows Damn Well the RE Juggernaut would not be above offing someone to clam them up. These fuckers are Killing Themselves over bad deals.
OK next: This idea about claiming that unless every comment is backed up by a litany of Courthouse-Ready facts then it's 100% USELESS, is again Bullshit. Your blog went on and on and on about what a TURD Gordon Smith was. OK, I agree... but none of that shit is PROVEABLE.
But hbm, I can agree with you on one thing: You open up a blog to Zero Moderation, and you're going to get some pretty lame shit, as was witnessed Ad Nauseum in the past weeks comments Re Jew Bullshit. Was that you hbm? Cuz if so, point made. I mean whoever posted that shit makes me want to ease back on the Jew Bashing... whoever posted that inane shit is doing enough J-bashing for both of us. My God.
I've said this over and OVER: I cannot & will not "moderate" this blogs comments. First, I can't do it effectively. There's way the fuck too many comments. I think if I turned my posts and All Comments into a PDF, the thing would stack 3-4 feet tall. Just writing this fucker is hard enough... it's like pushing a gigantic hemorrhoid back in: UNPLEASANT BUT IT'S GOTTA GET DONE.
Second, I would NOT be a good moderator, I wouldn't know what to leave in or out. I probably would have nixed early JR-comments. Even City Hall & City Councilor stuff may have seemed outside the fray. But clearly a hell of a lot of shit that doesn't seem relevant, is. The BAT buses? The water lawsuits? Fuck, we're going bankrupt as a town, and that sort of shit is a prime contributor. The finances of this town & the people in it are very interconnected in ways that aren't readily apparent at first blush.
Finally, I just don't like moderated forums. I mean BEM moderated OUT a lot of my comments back in the day, and I assume others. And a lot of people complained about that, and the fact that NOTHING got posted until he approved it... which goes back to #1. And BEM only had 30-40 comments a week or so. This fucker regularly breaks 500 a week. Without the immediate feedback of Immediately Live Comments, a lot of the vitality & back-and-forth "conversations" would just die.
So hbm, you've got a point: Anon unmoderated forums have their problems, but so do the rest. I actually think that hbm sees the writing on the wall, and sees this blog as somewhat of a "competitor" to TSW. Not in any sort of stolen readership or financial way... but just that Bully-Bashing brings a decent audience for both. For better or worse, our beloved hometown paper is a last bastion of journalistic ethical selling out.
And people are pissed about that. And this forum is Wide Open to bitching about it, something hbm also does on occasion. So he & I are birds of a feather really... but with the advent of blogging & open comments, combined with the irrevocable decline in print papers, there can arise the need to Impugn The Legitimacy Of Any Competitor.
Which is sort of funny. As was said in the comments, this thing ain't about me... people like pics of big tits so they know where the end of my interminable rants are. It's about the comments, good, bad, ugly, or interminably idiotic, Thank You Jew-Busting Buster, or whoever you are.
I do wish there was a solution to this. It would have to be Individual User Moderated though. Something where each individual could blacklist comments from given IP's... not me, mind you. You. Something that would simply mask or minify comments from user-selected IP's, or usernames, or something. I don't know.
As can be seen, No User Tracking System Is Perfect and hence no comment masking system would perfect. Ask Becky Breeze over at BendBB. So I hear you hbm. But you declaring this blog Unfit For Your Pedantry Presence because of the Anony-Troll nature of the comments is simply a declaration that Only Your Opinion Really Counts And It's The Only Opinion That Should Count. Which I have to say, I disagree with.
And you can disagree with me. As vehemently as you want. Cuz the comments are wide open.
Well, you've probably noticed but the Bubble Implosion has started to take a toll so heavy that it's Damn Hard to even keep track of it. Used to be that there would be only one or two decent scale shutterings every month or 3. Now shit is closing, or there are large scale layoffs or hourly cutbacks, happening so often that I can't even keep track of it all.
So, if possible, I need you guys' help to keep track of this stuff for the RIP board, which I am going to make a New Years Style Effort (short-lived) to keep updated. So maybe put in comments the term "RIP" and a list of closed down businesses, or places making layoffs or mandatory hour reductions.
I know the Bully has already instituted mandatory days off each month. I have to agree with this route, if it has to be done. Lots of places layoff people who they have expended lots of money to get proficient at their jobs, and with layoffs, this investment is gone forever, and you have to expend it again when things turn up.
I guess everyone knows that Gottschalks declared Chap 11, something I think Dunc spotted early. And once I looked at it, it seemed pretty clear to me they were going down. You know something is wrong when a company of 60-odd stores spends 3X on one crappy store in Bend OR ($6 mill) over what Wall St values the whole shotting match at (sub $2 mill now).
But anyway, I have a terrible memory, and the failures are coming fast & furious, and are too much to really keep up with. And, of course, rumors are Welcome! I know hbm, I'm opening this thing up to LIARS! Well, it's always been that way, and a whole lot of those rumors had a way of coming true. Even KTVZ has started to "speculate" on the true scale of the Cessna layoffs, cuz the company doesn't want a mass exodus of people they actually want to keep.
So rumor has it's place. Shitloads of the Negative Rumors put here actually happened, and even legit rags like TSW print rumors. But those are supposedly more believable cuz the rumor-monger golfs with hbm, or some shit.
But I would like to know if anyone has heard any other juicy nugg's on Cessna. Last I heard it was another 1/3rd of the workforce, for a total of 2/3rds canned. And it'll happen in March. Is that right?
I know The Bull has instituted 1 Mandatory Day Off per month for everyone. It's my prediction that they will start instituting large-scale layoffs there. Place isn't financially viable otherwise.
On a smaller note, I'd also predict that these "Dinner Express" places will start to close. 4 of these sprang up overnight, and this town can barely support one.
I know of some decent sized gyms are going to close. One is a biggie on the East side. Same reason as above, ridiculous overcapacity.
Walked by the new Subway/Coffee Shop downtown. Very nice inside. Not a single customer though.
I guess everyone knows the "temporary" closure of the Speedshop & Fireside Red are 100% bullshit. Always suspect someone who is closing down for CHRISTMAS. OK, that is retarded.
I know 12 O'Clock Tart is also gone, lunch delivered to you by The Hotness Owner. Too bad, she was hot.
And there probably a long list of other small 1 and 2 man shops like this that are just gone one day. So send them along in the comments with title "RIP" so I can search for them.
OK, you can stop scrolling! You've reached the comments!
I wanna get titty-fucked by Obama!
And we are Free At Last! Free from endless Jew rants about AIPAC (whatever the fuck that is)? Well maybe, for now. Nope I mean we are free of Gee-Dub, perhaps the Worst President of My Lifetime or any lifetime. My God, what a turd. Nope, we're on to the next guy.
Yup, by this time next week, we'll be an Obama-Nation. OK, this guy is going to have his flaws, but he simply cannot be worse than what we have just endured. Twice! We have only ourselves to blame for the past 4 years.And I'd be lying if I didn't admit that I am at least a little excited about this guy. I mean we're behind the 8 ball, and GeeDub has been a useless sack of shit. If anything, we could have at least used some Reagan-esque "One for the Gipper" speeches from G-Dub, but we're only getting them from The O-bomber.
Well, not much to do but wait... but it'll be nice to know that the next time I post it'll be with a chain-smoking black dude as our Prez. And we'll also have a Flilf in there too!
"I break with thee... I break with thee.. I break with thee.. and then throw dog-poop on her/his shoes" (Steve Martin... and hbm)
Well, we officially got dumped by hbm. How we'll survive is another issue, but his parting shot was rather interesting:
...why are you afraid to put your name on your posts, asshole?
Oh, I know -- you're afraid Mike Hollern and I will order a "mob hit" on you. Fucking psycho.
I'm through with this blog -- too many psychotic trolls eaten up by hate and spite with nothing to do but vent it here on any target that offers itself. I'll read it, but I'm done commenting on it.
Good bye.
And he seemed pretty serious. I mean he only commented about 30-40 more times, and that was it!
What's funny is that "hbm" really could be anyone. EVERYONE is anonymous on here. I mean, people put "handles" to comments, and some are quasi-public figures that many of us would recognize. But were it not for Buster, I wouldn't have a clue who "hbm" is.
But it's curious Why hbm would make all these statements to begin with. This thing has always been anonymous, for obvious reasons. Read the title: it's a blog about the implosion of really the only large-scale industry in this one horse shithole. And as we've seen, "continued prediction" of it getting ever worse by the minute is not a Make Friends And Influence People sort of recipe.
hbm jokes about MOB HITS... well, everyone who posts on here knows DAMN WELL commenting on here could have almost nothing but negative consequences if identities became known. Even BendBB hides his identity. Curiously he also harvests IP's.
So hbm, your accusations of Anonymous Comments = Worthless Blog, is itself pretty fucking worthless. You, and everyone else here, knows Damn Well the RE Juggernaut would not be above offing someone to clam them up. These fuckers are Killing Themselves over bad deals.
OK next: This idea about claiming that unless every comment is backed up by a litany of Courthouse-Ready facts then it's 100% USELESS, is again Bullshit. Your blog went on and on and on about what a TURD Gordon Smith was. OK, I agree... but none of that shit is PROVEABLE.
But hbm, I can agree with you on one thing: You open up a blog to Zero Moderation, and you're going to get some pretty lame shit, as was witnessed Ad Nauseum in the past weeks comments Re Jew Bullshit. Was that you hbm? Cuz if so, point made. I mean whoever posted that shit makes me want to ease back on the Jew Bashing... whoever posted that inane shit is doing enough J-bashing for both of us. My God.
I've said this over and OVER: I cannot & will not "moderate" this blogs comments. First, I can't do it effectively. There's way the fuck too many comments. I think if I turned my posts and All Comments into a PDF, the thing would stack 3-4 feet tall. Just writing this fucker is hard enough... it's like pushing a gigantic hemorrhoid back in: UNPLEASANT BUT IT'S GOTTA GET DONE.
Second, I would NOT be a good moderator, I wouldn't know what to leave in or out. I probably would have nixed early JR-comments. Even City Hall & City Councilor stuff may have seemed outside the fray. But clearly a hell of a lot of shit that doesn't seem relevant, is. The BAT buses? The water lawsuits? Fuck, we're going bankrupt as a town, and that sort of shit is a prime contributor. The finances of this town & the people in it are very interconnected in ways that aren't readily apparent at first blush.
Finally, I just don't like moderated forums. I mean BEM moderated OUT a lot of my comments back in the day, and I assume others. And a lot of people complained about that, and the fact that NOTHING got posted until he approved it... which goes back to #1. And BEM only had 30-40 comments a week or so. This fucker regularly breaks 500 a week. Without the immediate feedback of Immediately Live Comments, a lot of the vitality & back-and-forth "conversations" would just die.
So hbm, you've got a point: Anon unmoderated forums have their problems, but so do the rest. I actually think that hbm sees the writing on the wall, and sees this blog as somewhat of a "competitor" to TSW. Not in any sort of stolen readership or financial way... but just that Bully-Bashing brings a decent audience for both. For better or worse, our beloved hometown paper is a last bastion of journalistic ethical selling out.
And people are pissed about that. And this forum is Wide Open to bitching about it, something hbm also does on occasion. So he & I are birds of a feather really... but with the advent of blogging & open comments, combined with the irrevocable decline in print papers, there can arise the need to Impugn The Legitimacy Of Any Competitor.
Which is sort of funny. As was said in the comments, this thing ain't about me... people like pics of big tits so they know where the end of my interminable rants are. It's about the comments, good, bad, ugly, or interminably idiotic, Thank You Jew-Busting Buster, or whoever you are.
I do wish there was a solution to this. It would have to be Individual User Moderated though. Something where each individual could blacklist comments from given IP's... not me, mind you. You. Something that would simply mask or minify comments from user-selected IP's, or usernames, or something. I don't know.
As can be seen, No User Tracking System Is Perfect and hence no comment masking system would perfect. Ask Becky Breeze over at BendBB. So I hear you hbm. But you declaring this blog Unfit For Your Pedantry Presence because of the Anony-Troll nature of the comments is simply a declaration that Only Your Opinion Really Counts And It's The Only Opinion That Should Count. Which I have to say, I disagree with.
And you can disagree with me. As vehemently as you want. Cuz the comments are wide open.
Well, you've probably noticed but the Bubble Implosion has started to take a toll so heavy that it's Damn Hard to even keep track of it. Used to be that there would be only one or two decent scale shutterings every month or 3. Now shit is closing, or there are large scale layoffs or hourly cutbacks, happening so often that I can't even keep track of it all.
So, if possible, I need you guys' help to keep track of this stuff for the RIP board, which I am going to make a New Years Style Effort (short-lived) to keep updated. So maybe put in comments the term "RIP" and a list of closed down businesses, or places making layoffs or mandatory hour reductions.
I know the Bully has already instituted mandatory days off each month. I have to agree with this route, if it has to be done. Lots of places layoff people who they have expended lots of money to get proficient at their jobs, and with layoffs, this investment is gone forever, and you have to expend it again when things turn up.
I guess everyone knows that Gottschalks declared Chap 11, something I think Dunc spotted early. And once I looked at it, it seemed pretty clear to me they were going down. You know something is wrong when a company of 60-odd stores spends 3X on one crappy store in Bend OR ($6 mill) over what Wall St values the whole shotting match at (sub $2 mill now).
But anyway, I have a terrible memory, and the failures are coming fast & furious, and are too much to really keep up with. And, of course, rumors are Welcome! I know hbm, I'm opening this thing up to LIARS! Well, it's always been that way, and a whole lot of those rumors had a way of coming true. Even KTVZ has started to "speculate" on the true scale of the Cessna layoffs, cuz the company doesn't want a mass exodus of people they actually want to keep.
So rumor has it's place. Shitloads of the Negative Rumors put here actually happened, and even legit rags like TSW print rumors. But those are supposedly more believable cuz the rumor-monger golfs with hbm, or some shit.
But I would like to know if anyone has heard any other juicy nugg's on Cessna. Last I heard it was another 1/3rd of the workforce, for a total of 2/3rds canned. And it'll happen in March. Is that right?
I know The Bull has instituted 1 Mandatory Day Off per month for everyone. It's my prediction that they will start instituting large-scale layoffs there. Place isn't financially viable otherwise.
On a smaller note, I'd also predict that these "Dinner Express" places will start to close. 4 of these sprang up overnight, and this town can barely support one.
I know of some decent sized gyms are going to close. One is a biggie on the East side. Same reason as above, ridiculous overcapacity.
Walked by the new Subway/Coffee Shop downtown. Very nice inside. Not a single customer though.
I guess everyone knows the "temporary" closure of the Speedshop & Fireside Red are 100% bullshit. Always suspect someone who is closing down for CHRISTMAS. OK, that is retarded.
I know 12 O'Clock Tart is also gone, lunch delivered to you by The Hotness Owner. Too bad, she was hot.
And there probably a long list of other small 1 and 2 man shops like this that are just gone one day. So send them along in the comments with title "RIP" so I can search for them.
OK, you can stop scrolling! You've reached the comments!
I wanna get titty-fucked by Obama!Sunday, January 11, 2009
The Collapse of Bend, Continues...
Well, it's coming fast & furious now, Folks.
A seeming swarm of layoffs from all corners. Epic Aircraft & Jeld-Wen should come as no surprise. But Cascade Heatlhcare? That stuff is supposed to be immune, right?
No, seems when you do not have money, that visit to the doctor that used to be required can become "elective" pretty quick. You won't see a lot of folks out China Hat Road way clogging St Chas waiting rooms.
Nope, nothing is immune, not healthcare, not recreation, nothing. We've seen store closings of little guys (Westside Video, Bond Street Market, childs clothing seller Bonkerz), big guys (Office Depot, Linens N Things), and we'll see more in the near future of all kinds (Gottschalks, Cessna, City of Bend, The Bulletin, Les Schwab).
Retail is just the "face" of a slowing economy. There's plenty of "back office" type businesses closing; little public face, but quite a few jobs lost just the same. Even our little local Gubmint is in a constant state of layoffs.
We're at 10% unemployment, businesses are closing so fast it's hard to keep count, we've watched our local medians drop from $396,000 to $226,000. OK, this is the shit storm this blog has been yammering on about for 2 years as INEVITABLE. It's here. This is it. And NO, it is not even close to ending. The damage is not even close to being done.
So what would you do, if your own personal life looked this shaky? Do you fall back on (hopefully) saved up reserves? Do you keep piling up the money in a Federally Insured bank account, if you're lucky enough to still have a job? Do you scale back your eating out? Do you scale back the wine from $40/bottle to $15? Do you actually, God forbid, start cutting some of this stuff out entirely?
Or, do you borrow to the last of your ability and buy a new SUV? Do you expend the last of your reserves on building a fence around your back yard? Do you go for broke, and throw it all down on a new investment house with negative cash flow for as far as the eye can see?
See, to me, the answers to these questions are just ridiculous. It's pretty obvious. You STOP spending. OK, you do that whether you still have an income source or not. There are some people who do this innately. They're called Rich People. Well, they are at least financially insulated. People I know who are doing well right now have been saving their pennies. And I mean pennies. They don't make a King's Ransom. But they do save, quite a bit more than most people. They aren't really "cheap", they just have "lean" tastes.
But not our City Council. Not our local Paper. No.
No, they are advocating that we all spend as much as we can as fast as we can.
Yeah, we'll get great stuff, like a shed to house our broken down bus fleet. Or some blown up rock out in the Juniper Ridge badlands.
Costa is trying to convince us that we should run out and BUY cars with incentives that actually don't exist West of the Rockies. And by gum, with medians in the low $200's, "Some interest rates also at historic lows, could drive buyers back into Bend market".
Uh huh. Read the piece, and you'll find that "Some" interest rates applies to Bill Gates' FICO, not yours. Costa just doesn't get it.
Brucey posted in the comments that we're getting 100+ NOD's a week. That's 100 people (well, maybe not quite, but you get the idea) who will not be able to buy shit on credit for 7-10 years. You can lower the rates to ZERO (or less), and these people WILL NOT get extended one cent.
The Fed can (and has) pushed the interest rate/monetary policy string as far as it can (rates at 0%), and nothing has changed. What's funny is that this country is simply returning to "normal". We're returning to fairly "normal" credit restrictions.
But there's the rub. For about 7-8 years we extended credit to "non-normals", people who could NOT afford it. No income to afford the debt service. So how did it go on for all those years? Easy, simply "co-mingle funds", ala Summit 1031. Make "refi" money your New Income Stream. All that nasty old loan debt, is replaced by an even bigger loan, and what's great, is I Get Paid To Do It! Old $350K loan replaced by $500K refi loan and 2 years from now with a crooked appraisers help, I get another $175K, ad infinitum. Presto, Huge Income, No Work, Forever.
Well, the Minsky Moment arived on this Enormous Teetering Edifice, and the whole thing began toppling the middle of last year. And NO WHERE did it stand taller, grander, more magnificently than Bend Oregon. No where. It literally DEFINES this place. Scam piled on graft piled on deceit piled on fraud piled on schemes.
No where in the USA is the local economy more exposed to the crushing forces overwhelming our national economy than right here. I've said it before, Sit Back And Witness The Horror, Ladies And Gents. You are about to see an entire small city rip itself to pieces.
The Hollern/Moss/Costa Triad is crumbling. Hollern drank the Kool-Aid and bought Ironhorse & Yarrow. Moss financed that, and much, much more. Costa is in a 100% Dead industry, and is desperately trying to hold the buggy-whip edifice that is The Bend Bulletin together.
Again, you are about to witness a town completely implode on itself like nothing that has happened to any major town in the USA in 80 years. It's going to happen right here. This town will be the stuff of Legendary Collapses. This town will be the stuff of future editions of "Extraordinary Popular Delusions & the Madness of Crowds".
You're seeing it now. Our unemployment rate is at 9.9%. That's just amazing, but it will get Far Worse. It's going to get worse than you or I thought possible. The Viscious Cycle of the Great Deleveraging will take down HALF this town.
Of course, Costa will tell you with the Last Dying Breath of The Bulletin that Aspe... errrr uh, sorry, Bend is made up almost completely of multi-millionaire transplants from Saudi Arabia, Dubai or somewhere, and so employment doesn't really apply to this place.
Ummmm, OK, a little test. I work for a living. Do you work for a living? Do most of the people you know work for a living? Of course, I do know retirees around here. But not many, certainly not many in proportion to the number of people I know who Have To Work For A Living. This is a WORKING TOWN. Employment DOES matter.
And Bend has NEVER had a decent employment base. This place is built on low-wage shit jobs. And those are being lost in waves. No big deal, it's always been that way. But now we're losing the small, core base of family-wage level jobs. Fuck Gottschalks, we're losing jobs at St Chas & Les Schwab corporate.
Head over to BendBB (anon proxy ONLY!), and check out recent price changes. Used to be that you'd see only a few price cuts in the double digits. Now their practically ALL double digit percentage cuts in price. And it's worse than it appears. Some of those homes have been flipped between Realtors like the crack-whores of RE that they are. Desert Skeeze listings can be counted on to have changed hands several times.
When you look at the DOLLAR CHANGE in prices, you are looking at INCOME REDUCTIONS. These reductions USED to be INCOME GAINS, and these gains fueled Deschutes County growth for the better part of 30 years. This place slowly but surely went from one of the most undervalued to The Most Overvalued RE market in the country. The whole REFI-AS-INCOME game was played NOWHERE more intensely than it was here. And it was played far, FAR longer. In fact, a very precious few can attest to even pretend to remember the Bad Old Days of the laste 70's. This Game has been going on for 3 DECADES in Deschutes County. Not 5 years. Not 10 years. 30 YEARS.
Don't think the Great Unwinding will be over here when the rest of the USA is done, it won't. Here's the point:
There won't be a recovery here. Not in the way you think about it.
Remember last year, early, when the market started cracking here? People who dodged the bullet renting (Timmy, etc) started talking about buying at fantastically lower prices? Like "$250K"?
OK, so we all know NOW that is a suckers game. It's become clear. But that Speculative Mindset is STILL HERE. The idea that I will BUY AT THE BOTTOM in Bend.
And what? What comes after? It's unspoken, but it's there...
Yes. That little SPECULATIVE VOICE that tells you that YOU will make a great deal on a house... and then... the market will recover... AND YOU WILL GET RICH! Yeah!
OK, this very vague and almost unspoken mindset subtley infects EVERYONE HERE. Everyone reading this blog probably has some deep-seated desire to scoop up the bargain of a lifetime at what seems to be a ridiculous bargain prices.
BEWARE. OK. This is NOT going to happen.
Here's a little chart from the Jap Bubble:
You can see that once the collapse began, it was still going strong 17 YEARS later. Bend is going to have a Hockey Stick decline. It'll fall for years & years. And then it'll just flatline. Dead as a doornail, no Big Recovery, no Return to Normal, no Speculation, no Good Times.
The malls will be half empty, as will downtown. Most of the STD's ringing the Eastside will have been sold off piecemeal, and will have weed-infested half-built shitshacks sitting on them. HALF the retail will CLOSE. HALF the restaurants will close, at least. Cascade Business News is GOING TO CLOSE. The Bulletin is GOING TO CLOSE. Either Lowes or Home Depot will close. All these consumerist fueled nightmares are going down.
There isn't going to be a recovery here. It'll be like living in a depressed little version of Detroit, where the Heyday is over. Never to return. You will need your little shit job to pay for the little shit house on your little shit lot. And you will not make any money EVER on it. EVER.
I'm telling you folks, you will NOT recognize Bend in 10 years. Many, if not most won't be able to recognize it, cuz you'll have left.
OK, if you are thinking of buying RE, I ask you to think again. We're NOT EVEN CLOSE to fair value. Values are PLUMMETING. Rent-to-own ratios are STILL ridiculous. This town is going to go bankrupt. Industry & retail are being GUTTED as we speak. We're in a precarious period where it looks like a place you'll "want to be" for the long haul. But it's not going to be for long. Would you want to live in inner city Detroit at any price?
Because that's what Bend is becoming. And medians BOUGHT at $225K will seem like a HORRIBLE, TERRIBLE ERROR in judgement 7-10 years from now. Medians aren't going to $125K for no reason. They are going there, and they will STAY THERE, for abundant reasons.
No local incomes to support anything more. Burns-style entertainment. No restaurants. No fun places. Completely uncertain job prospects. No opportunity. Just straight depression. You WILL NOT want to be here.
What to do:
Speculative Bend is done. Over. We're in Survival Bend now. No one makes DEALS anymore. No sexiness, no flash. What 's befallen Summit 1031 will BEFALL THIS TOWN. Utter collapse, with NO HOPE OF RECOVERY EVER.
A seeming swarm of layoffs from all corners. Epic Aircraft & Jeld-Wen should come as no surprise. But Cascade Heatlhcare? That stuff is supposed to be immune, right?
No, seems when you do not have money, that visit to the doctor that used to be required can become "elective" pretty quick. You won't see a lot of folks out China Hat Road way clogging St Chas waiting rooms.
Nope, nothing is immune, not healthcare, not recreation, nothing. We've seen store closings of little guys (Westside Video, Bond Street Market, childs clothing seller Bonkerz), big guys (Office Depot, Linens N Things), and we'll see more in the near future of all kinds (Gottschalks, Cessna, City of Bend, The Bulletin, Les Schwab).
Retail is just the "face" of a slowing economy. There's plenty of "back office" type businesses closing; little public face, but quite a few jobs lost just the same. Even our little local Gubmint is in a constant state of layoffs.
We're at 10% unemployment, businesses are closing so fast it's hard to keep count, we've watched our local medians drop from $396,000 to $226,000. OK, this is the shit storm this blog has been yammering on about for 2 years as INEVITABLE. It's here. This is it. And NO, it is not even close to ending. The damage is not even close to being done.
So what would you do, if your own personal life looked this shaky? Do you fall back on (hopefully) saved up reserves? Do you keep piling up the money in a Federally Insured bank account, if you're lucky enough to still have a job? Do you scale back your eating out? Do you scale back the wine from $40/bottle to $15? Do you actually, God forbid, start cutting some of this stuff out entirely?
Or, do you borrow to the last of your ability and buy a new SUV? Do you expend the last of your reserves on building a fence around your back yard? Do you go for broke, and throw it all down on a new investment house with negative cash flow for as far as the eye can see?
See, to me, the answers to these questions are just ridiculous. It's pretty obvious. You STOP spending. OK, you do that whether you still have an income source or not. There are some people who do this innately. They're called Rich People. Well, they are at least financially insulated. People I know who are doing well right now have been saving their pennies. And I mean pennies. They don't make a King's Ransom. But they do save, quite a bit more than most people. They aren't really "cheap", they just have "lean" tastes.
But not our City Council. Not our local Paper. No.
No, they are advocating that we all spend as much as we can as fast as we can.
Yeah, we'll get great stuff, like a shed to house our broken down bus fleet. Or some blown up rock out in the Juniper Ridge badlands.
Costa is trying to convince us that we should run out and BUY cars with incentives that actually don't exist West of the Rockies. And by gum, with medians in the low $200's, "Some interest rates also at historic lows, could drive buyers back into Bend market".
Uh huh. Read the piece, and you'll find that "Some" interest rates applies to Bill Gates' FICO, not yours. Costa just doesn't get it.
Brucey posted in the comments that we're getting 100+ NOD's a week. That's 100 people (well, maybe not quite, but you get the idea) who will not be able to buy shit on credit for 7-10 years. You can lower the rates to ZERO (or less), and these people WILL NOT get extended one cent.
The Fed can (and has) pushed the interest rate/monetary policy string as far as it can (rates at 0%), and nothing has changed. What's funny is that this country is simply returning to "normal". We're returning to fairly "normal" credit restrictions.
But there's the rub. For about 7-8 years we extended credit to "non-normals", people who could NOT afford it. No income to afford the debt service. So how did it go on for all those years? Easy, simply "co-mingle funds", ala Summit 1031. Make "refi" money your New Income Stream. All that nasty old loan debt, is replaced by an even bigger loan, and what's great, is I Get Paid To Do It! Old $350K loan replaced by $500K refi loan and 2 years from now with a crooked appraisers help, I get another $175K, ad infinitum. Presto, Huge Income, No Work, Forever.
Well, the Minsky Moment arived on this Enormous Teetering Edifice, and the whole thing began toppling the middle of last year. And NO WHERE did it stand taller, grander, more magnificently than Bend Oregon. No where. It literally DEFINES this place. Scam piled on graft piled on deceit piled on fraud piled on schemes.
No where in the USA is the local economy more exposed to the crushing forces overwhelming our national economy than right here. I've said it before, Sit Back And Witness The Horror, Ladies And Gents. You are about to see an entire small city rip itself to pieces.
The Hollern/Moss/Costa Triad is crumbling. Hollern drank the Kool-Aid and bought Ironhorse & Yarrow. Moss financed that, and much, much more. Costa is in a 100% Dead industry, and is desperately trying to hold the buggy-whip edifice that is The Bend Bulletin together.
Again, you are about to witness a town completely implode on itself like nothing that has happened to any major town in the USA in 80 years. It's going to happen right here. This town will be the stuff of Legendary Collapses. This town will be the stuff of future editions of "Extraordinary Popular Delusions & the Madness of Crowds".
You're seeing it now. Our unemployment rate is at 9.9%. That's just amazing, but it will get Far Worse. It's going to get worse than you or I thought possible. The Viscious Cycle of the Great Deleveraging will take down HALF this town.
Of course, Costa will tell you with the Last Dying Breath of The Bulletin that Aspe... errrr uh, sorry, Bend is made up almost completely of multi-millionaire transplants from Saudi Arabia, Dubai or somewhere, and so employment doesn't really apply to this place.
Ummmm, OK, a little test. I work for a living. Do you work for a living? Do most of the people you know work for a living? Of course, I do know retirees around here. But not many, certainly not many in proportion to the number of people I know who Have To Work For A Living. This is a WORKING TOWN. Employment DOES matter.
And Bend has NEVER had a decent employment base. This place is built on low-wage shit jobs. And those are being lost in waves. No big deal, it's always been that way. But now we're losing the small, core base of family-wage level jobs. Fuck Gottschalks, we're losing jobs at St Chas & Les Schwab corporate.
Head over to BendBB (anon proxy ONLY!), and check out recent price changes. Used to be that you'd see only a few price cuts in the double digits. Now their practically ALL double digit percentage cuts in price. And it's worse than it appears. Some of those homes have been flipped between Realtors like the crack-whores of RE that they are. Desert Skeeze listings can be counted on to have changed hands several times.
When you look at the DOLLAR CHANGE in prices, you are looking at INCOME REDUCTIONS. These reductions USED to be INCOME GAINS, and these gains fueled Deschutes County growth for the better part of 30 years. This place slowly but surely went from one of the most undervalued to The Most Overvalued RE market in the country. The whole REFI-AS-INCOME game was played NOWHERE more intensely than it was here. And it was played far, FAR longer. In fact, a very precious few can attest to even pretend to remember the Bad Old Days of the laste 70's. This Game has been going on for 3 DECADES in Deschutes County. Not 5 years. Not 10 years. 30 YEARS.
Don't think the Great Unwinding will be over here when the rest of the USA is done, it won't. Here's the point:
There won't be a recovery here. Not in the way you think about it.
Remember last year, early, when the market started cracking here? People who dodged the bullet renting (Timmy, etc) started talking about buying at fantastically lower prices? Like "$250K"?
OK, so we all know NOW that is a suckers game. It's become clear. But that Speculative Mindset is STILL HERE. The idea that I will BUY AT THE BOTTOM in Bend.
And what? What comes after? It's unspoken, but it's there...
Yes. That little SPECULATIVE VOICE that tells you that YOU will make a great deal on a house... and then... the market will recover... AND YOU WILL GET RICH! Yeah!
OK, this very vague and almost unspoken mindset subtley infects EVERYONE HERE. Everyone reading this blog probably has some deep-seated desire to scoop up the bargain of a lifetime at what seems to be a ridiculous bargain prices.
BEWARE. OK. This is NOT going to happen.
Here's a little chart from the Jap Bubble:
You can see that once the collapse began, it was still going strong 17 YEARS later. Bend is going to have a Hockey Stick decline. It'll fall for years & years. And then it'll just flatline. Dead as a doornail, no Big Recovery, no Return to Normal, no Speculation, no Good Times.The malls will be half empty, as will downtown. Most of the STD's ringing the Eastside will have been sold off piecemeal, and will have weed-infested half-built shitshacks sitting on them. HALF the retail will CLOSE. HALF the restaurants will close, at least. Cascade Business News is GOING TO CLOSE. The Bulletin is GOING TO CLOSE. Either Lowes or Home Depot will close. All these consumerist fueled nightmares are going down.
There isn't going to be a recovery here. It'll be like living in a depressed little version of Detroit, where the Heyday is over. Never to return. You will need your little shit job to pay for the little shit house on your little shit lot. And you will not make any money EVER on it. EVER.
I'm telling you folks, you will NOT recognize Bend in 10 years. Many, if not most won't be able to recognize it, cuz you'll have left.
OK, if you are thinking of buying RE, I ask you to think again. We're NOT EVEN CLOSE to fair value. Values are PLUMMETING. Rent-to-own ratios are STILL ridiculous. This town is going to go bankrupt. Industry & retail are being GUTTED as we speak. We're in a precarious period where it looks like a place you'll "want to be" for the long haul. But it's not going to be for long. Would you want to live in inner city Detroit at any price?
Because that's what Bend is becoming. And medians BOUGHT at $225K will seem like a HORRIBLE, TERRIBLE ERROR in judgement 7-10 years from now. Medians aren't going to $125K for no reason. They are going there, and they will STAY THERE, for abundant reasons.
No local incomes to support anything more. Burns-style entertainment. No restaurants. No fun places. Completely uncertain job prospects. No opportunity. Just straight depression. You WILL NOT want to be here.
What to do:
- Keep renting. Do NOT buy.
- Pile up the cash. Don't BUY ANYTHING.
- Cling to a paycheck as long as you can. If it's already gone, YOU LEAVE town.
- List your EXCESS RE Now. And you mark it down BELOW MARKET. It'll be 20% lower in 12 months.
- Start looking for INCOME PROSPECTS outside of Bend. Keep your eyes open.
- Sell your cars. Sell your other toys. Sell your crap. Keep the money.
Speculative Bend is done. Over. We're in Survival Bend now. No one makes DEALS anymore. No sexiness, no flash. What 's befallen Summit 1031 will BEFALL THIS TOWN. Utter collapse, with NO HOPE OF RECOVERY EVER.
It's time to HUNKER DOWN.
DO NOT BUY ANYTHING
CONSERVE YOUR CASH.
REMEMBER THE FOUR B'S
IT IS OVER
"I just come from Bend Orygun, where they done titty fucked me atop Volo till I couldn't take it no more! I'm certainly glad I stayed as long as I did, with no visible ill-effects!"
DO NOT BUY ANYTHING
CONSERVE YOUR CASH.
REMEMBER THE FOUR B'S
IT IS OVER
"I just come from Bend Orygun, where they done titty fucked me atop Volo till I couldn't take it no more! I'm certainly glad I stayed as long as I did, with no visible ill-effects!"Thursday, January 1, 2009
A Look Back on our 2008 hero's: Hollern, Smith, Denton and Osama.
Wow.
I can't believe this crazy-ass blog has survived over 2 years! My first post was Dec 17, 2006:
And to explictly state what this blog is about: Bend Oregon Real Estate, whether it is or has been in a bubble or not, whether this bubble is/has burst, implications for residents, businesses and others, and just about any topic relevant to the Bend Oregon economy and the surrounding region, and housing in general. With unmoderated discussion, I suppose anything goes though. Hopefully, people will realize the value of staying on topic, and will minimize personal "flame-wars".
I was so much younger then. And naive. In fact here is a picture of me eating breakfast right after that first post:
"Hey, give that to me. I eat anything."
And the greatest harbinger of things to come were the fanatastic 2 comments I received:
Anonymous said...
charlottesville real estate Was the Site I arrived at when I was offered the best real estate deal in my life you must contact this company.
Anonymous said...
Nice Blog. I will keep reading. Please visit my blog at: The Internet Marketing Genius, Carael Knight
Both almost bought a tear to my eye, especially the blog-spam one. Oh right, they were both blog spam. Here's a picture of me crying, I'm so overwhelmed:
IHTBYB crying his eyes out. (I am directly behind Britney in this pic, and only partially visible)
My next post, the very next day, had precisely zero comments. I think I finished out the year with a post of such gut-wrenching emotion and tenderness that one commenter was moved to pen these touching words:
Anonymous said...
this post is so dull that, after reading it, i wanted to claw my eyes out.
That's when I knew I had found my true calling: Inflicting pain on strangers via real estate blogging. Judging from the number of gouged out eyes I've seen in Bend, I would have to say: Mission Accomplished:
I love Bend Bubble 2 and Osama!
So there were humble beginnings. And most of the initial postings & comments were of a "defensive" nature: Even the idea that Bend was in a Bubble was widely derided as Insane. And there were some people who even denied (Bubble deniers) that a nationwide Bubble existed. Remember that?
Cuz, if you really remember that time, and contrast it with today, and what has transpired since, it just seems unbelievable. Bend was still caught in just an endless euphoria about the future. Bend is Immune was the mantra.
And there is probably more. Much more. The point?
It's been a hell of an eventful couple of years. Most of the real crazy shit has happened in the last 6 months. I mean The Giants of The Financial Universe have been hobbled.
Cathy Bates administer Good Olde Fashioned Hobbling. Feels so good.
I guess my main point is this: Having seen how far we've come, how people like Jody Denton's business eyes were too big for their stomach, you might want to exercise some restraint. Because this thing is, AT MOST, about half over.
We have gone from $396K medians to $239K, that's down 40% from top to bottom. Another 40% down is Very, Very Easily possible, which would take us down to $143K.
Folks, when we hit medians in the $140's, and it will happen, Bend is not going to be a place that about 70-75% of the population even recognizes. The old codgers will, but it will be the 4 Bees that rule the roost: Butter, Beans, Bullets, and Bullion.
This place will be like a hyper-magnified version of much of the US. We aren't going to sink back into the Stone Age, like some have posted here (IMO), but we will NEVER return to the hyper-consumption-fueled prosperity of the past 3 decades. That time is over.
But you'd do well to read into Denton's comments about What He Is Doing Now.
“I had a very long and prosperous career before I came to Bend,” he said, “and I’ll do what’s best for me and my family. It will definitely be outside of the state of Oregon.”
He's telling us something.
When all is said and done, Bend, In The Best Of Times, left this very talented & decent person, completely broken. Broken financially yes, but worse, just broken from the experience.
“Getting to this point has been stressful and difficult,” the chef said. “For my wife and myself, there was a sense of relief once the decision was made.”
Once you make the decision, once you realize that you can stop fighting the impossible battle, there is a Huge Sense Of Relief. Denton is a talented guy, a guy with resources, a guy with a plan & the ability to execute: And this place broke him.
And I have to give him credit for one of The Best Lines Ever from a Bend Businessman quoted in The Bulletin:
“But the question became: How wise is it to keep feeding this thing when all it does is eat?”
I will leave it at that.
I hope no one notice I stuffed that motherfucking BendBubble2 blog in my humungous smelly twat! The coast looks clear! I gonna make a run for it! Happy New Year you fuckers! I hope you suffocate & die in my smelly cunt!
I can't believe this crazy-ass blog has survived over 2 years! My first post was Dec 17, 2006:
And to explictly state what this blog is about: Bend Oregon Real Estate, whether it is or has been in a bubble or not, whether this bubble is/has burst, implications for residents, businesses and others, and just about any topic relevant to the Bend Oregon economy and the surrounding region, and housing in general. With unmoderated discussion, I suppose anything goes though. Hopefully, people will realize the value of staying on topic, and will minimize personal "flame-wars".
I was so much younger then. And naive. In fact here is a picture of me eating breakfast right after that first post:
"Hey, give that to me. I eat anything."And the greatest harbinger of things to come were the fanatastic 2 comments I received:
Anonymous said...
charlottesville real estate Was the Site I arrived at when I was offered the best real estate deal in my life you must contact this company.
Anonymous said...
Nice Blog. I will keep reading. Please visit my blog at: The Internet Marketing Genius, Carael Knight
Both almost bought a tear to my eye, especially the blog-spam one. Oh right, they were both blog spam. Here's a picture of me crying, I'm so overwhelmed:
IHTBYB crying his eyes out. (I am directly behind Britney in this pic, and only partially visible)My next post, the very next day, had precisely zero comments. I think I finished out the year with a post of such gut-wrenching emotion and tenderness that one commenter was moved to pen these touching words:
Anonymous said...
this post is so dull that, after reading it, i wanted to claw my eyes out.
That's when I knew I had found my true calling: Inflicting pain on strangers via real estate blogging. Judging from the number of gouged out eyes I've seen in Bend, I would have to say: Mission Accomplished:
I love Bend Bubble 2 and Osama!So there were humble beginnings. And most of the initial postings & comments were of a "defensive" nature: Even the idea that Bend was in a Bubble was widely derided as Insane. And there were some people who even denied (Bubble deniers) that a nationwide Bubble existed. Remember that?
Cuz, if you really remember that time, and contrast it with today, and what has transpired since, it just seems unbelievable. Bend was still caught in just an endless euphoria about the future. Bend is Immune was the mantra.
- deep, now closed, hadn't even opened way back then.
- Sally Heatherton had not yet been "born".
- Forum Meadows owner turned down ALL auction "offers" for his sacred Bend homes, before going broke.
- Brooks resources blew out their River Wild condos at Mt Bach Village.
- Yarrow & Ironhorse hadn't begun sales.
- The collapse of the home builders stock prices was as bad as anyone thought it'd get.
- No Bend developers had committed suicide.
- At the time Columbia Aircraft was alive & well.
- No layoffs at Brightwood.
- Seaswirl still alive.
- No firings at City Hall.
- Fannie & Freddie in the in the $70's.
- The DJIA had yet to hit 14,000, and fall to the 7,000's.
- CACB hit $32 in the last week on 2006. Now $6 and change.
- The Shire was still the proud brainchild of The Hatchery.
- Becky Breeze still owned The Plaza.
- Residential sales in Bend were in the hundreds per month.
- Medians hit $396,250 in May 2007.
- BendBB had not yet stricken any of my comments.
- Buster had not called any of us Stincking Smelly Cunts.
- I had not yet uttered, "It will get worse than you can possibly imagine."
- People actually Raised their asking prices back then. Really!
- That Olive & Nut store had yet to open & close.
- I had not yet voted Dunc for Mayor.
- We barely knew what SubPrime is, and no one knew what Alt-A was.
- Citicorp was still the largest financial org the World had ever seen.
- No bailouts of banks, automakers, or anyone else.
- Lehamn was still alive & kicking. Smith Barney too.
- No Cessna layoff's locally yet. The buyout was a "huge success".
- Unemployment was below 4% in Bend.
- Not a one Single Family Home was below $100/sf in Bend. No a single one.
- I had not yet lost my bet to BendBB that medians would go below $300K.
- Renaissance Homes was still smitten with Randy Sebastians flesh-eating AIDS.
- Holtz-Tek had not yet blackmailed our fair city out of Millions for JR "Master Plan".
- BEM had not yet penned his "cure" for Broken Bend.
- I had yet to post my first Picto-Plummet.
- I had yet to introduce into our lexicon the terms "Cali-Banger", "STD's" or "Flipper Bait".
- The Oregonian had yet to run "Death and Specualtion in Bend".
- Pronghorn & Brasada were still above the fray, and "selling out" on Day 1.
- Volo was still a glimmer in Bledsoe's donkey-cum-encrusted eye.
- The WSJ had yet to expose man-birthing or clothesline propoganda to the World.
- The ferris wheel blackmail of Broken Top had yet to occur.
- Bend was still in the grips of Tuscan mania.
- The Redmond water park would save us all from Central Oregons terrible seasonality with high-paying lifeguard jobs.
- We did not yet know that NOW is "The best time to buy in 20 years".
- Bend was still the most overvalued city in the country.
- Baby Jeebus had not yet smited us.
- I had not yet declared Bend the Best 3rd World City ever.
- Trono's Mercato had it's Australian financing All Lined Up.
- Norma DuBois had sold out Franklin Crossing for the 18th time.
- Measure 37 made every hillbilly Oregonian farmer a land baron.
- Tiny Ashwood OR took the prize for most ambitious housing development: 5,500 homes in a town of 120 people.
- NAR economist David Lereah still encouraged the financial merits of home ownership.
- Crook County had not yet approved resort properties that would saddle the area with 75 years of inventory.
- We didn't have a fleet of busted BAT buses.
- The city hadn't lost multi-million dollar lawsuits regarding water systems and whatnot.
- The August 2006 inventory top was still "temporary".
- We still hadn't been shown how to get rich losing millions by Don Bauhofer (aka Bauhumper).
- The Incredible Hulce continued to pander to RE developers in her completely discredited rag.
- We were yet to be introduced to the merits of Capstone Turbine Buttplugs.
- We were yet to receive a lesson in thermodynamics by a dude who dragged a tire behind his car to power his car, a guy who turned water into gas, and a company that turned trash into fuel.
- I had yet to recommend Rent & Invest The Difference as The Only Investment Plan you could be sure of in a place like Bend.
- There were many, Many businesses, largely invisible, that were still open, that have vanished in the meantime. Most mortgage brokers are in this category.
- Re/Max was still open. So was Sunriver Realty.
- COBA, COVA & the rest hadn't BOUGHT our City Councilors election for pennies on the dollar.
- My prediction of a collapse in California RE was still widely ridiculed: "California is Immune."
- 1031, Merenda, deep and other accessories of wealth for Bend's elite still held their glistening facade.
- NOD's were not measured in the THOUSANDS here.
- We had yet to have our first 1,000+ comment week.
- The City was not perilously close to bankruptcy.
- Black dudes were known for beatin' they wives, smokin the cracker, fuckin, and shootin whitey, not being President.
And there is probably more. Much more. The point?
It's been a hell of an eventful couple of years. Most of the real crazy shit has happened in the last 6 months. I mean The Giants of The Financial Universe have been hobbled.
Cathy Bates administer Good Olde Fashioned Hobbling. Feels so good.I guess my main point is this: Having seen how far we've come, how people like Jody Denton's business eyes were too big for their stomach, you might want to exercise some restraint. Because this thing is, AT MOST, about half over.
We have gone from $396K medians to $239K, that's down 40% from top to bottom. Another 40% down is Very, Very Easily possible, which would take us down to $143K.
Folks, when we hit medians in the $140's, and it will happen, Bend is not going to be a place that about 70-75% of the population even recognizes. The old codgers will, but it will be the 4 Bees that rule the roost: Butter, Beans, Bullets, and Bullion.
This place will be like a hyper-magnified version of much of the US. We aren't going to sink back into the Stone Age, like some have posted here (IMO), but we will NEVER return to the hyper-consumption-fueled prosperity of the past 3 decades. That time is over.
But you'd do well to read into Denton's comments about What He Is Doing Now.
He's Leaving Bend, and He's Leaving Oregon.
“I had a very long and prosperous career before I came to Bend,” he said, “and I’ll do what’s best for me and my family. It will definitely be outside of the state of Oregon.”
He's telling us something.
When all is said and done, Bend, In The Best Of Times, left this very talented & decent person, completely broken. Broken financially yes, but worse, just broken from the experience.
“Getting to this point has been stressful and difficult,” the chef said. “For my wife and myself, there was a sense of relief once the decision was made.”
Once you make the decision, once you realize that you can stop fighting the impossible battle, there is a Huge Sense Of Relief. Denton is a talented guy, a guy with resources, a guy with a plan & the ability to execute: And this place broke him.
And I have to give him credit for one of The Best Lines Ever from a Bend Businessman quoted in The Bulletin:
“But the question became: How wise is it to keep feeding this thing when all it does is eat?”
I will leave it at that.
I hope no one notice I stuffed that motherfucking BendBubble2 blog in my humungous smelly twat! The coast looks clear! I gonna make a run for it! Happy New Year you fuckers! I hope you suffocate & die in my smelly cunt!
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