Wall Street reaches Main Street; economy takes local toll
No. 3 Top Ten Stories of 2008
The nationwide economic crisis became official over several Sundays in September, when astonishing announcements were made to Wall Street.
One such day brought the news of the U.S. Treasury Department taking over Fannie Mae and Freddie Mac, the huge government-sponsored mortgage companies. Another Sunday brought the desperate sale of financial services giant Merrill Lynch to Bank of America. An announcement that Lehman Bros. was bankrupt soon followed. And next, Washington
Mutual became the biggest bank failure in history.
Several turbulent Sundays turned into many weeks of chaos on Wall Street, where many stock portfolios still hang in the balance.
That Wall Street chaos soon edged its way onto Main Street.
Before the spiraling crisis, Western Slope residents were being hit by increasing grocery and gas bills, as was the rest of the nation. Then, home sales in Grand Junction — once insulated from a quickly declining national home market — were suddenly down by 28 percent, as announced in mid-summer.
“We’re feeling the effects of, basically, the overall economy,” said Bob Reece, owner of Advanced Title Technology, back in July.
Since then, the numbers have borne out that foreclosures are up at least 20 percent from what they were one year ago. Reece also announced a prediction that 1,100 construction jobs would not exist by the year’s end.
Word-of-mouth spread rumors of layoffs at area construction companies and contractors. Spec homes became almost obsolete.
Layoffs have been announced at several companies in other industries, such as Gateway Canyons and American National Bank.
Several mergers of local companies into larger national or regional entities continue to take place. Energy services giant EnCana Corp. announced budget cutbacks, as did a number of other oil and gas industry firms. Large commercial projects were halted, whether by vote or by uncertainty.
That said, sales tax revenue continued to roll in above previous years, and though tourism was down, it was not on the scale of other parts of the country, which have experienced dramatic drops in tourist dollars.
In short, the Western Slope can no longer say that it’s not feeling the national economic pinch.
Some financial advisers predict they’ll see the government’s ongoing financial bailout beginning to take effect sometime between April and July, 2009. Many CEOs, however, are speculating it will be a year or two.
In either case, western Colorado will predictably stand stronger ground than many other places across the nation.
When might there be a rebound?
“That’s the magic question,” said Reece, adding the earliest he foresees a rebound is the second half of 2009. “We’ll recover a lot faster than the rest of the world will, just because we have the economic boost from the energy business we have now. If there’s going to be a recovery anytime soon, it will happen here first.”
“The boys are still drilling, and I think the retail sales are still good here. That’s my measurement of health: What are retail sales like? So far, that’s been quite good.”