Friday, October 10, 2008

Winds of change, indeed

Yesterday we had a big low pressure system spin up in the Gulf of Alaska. As usual, the winds were getting a little brisk by late afternoon, and it was downright cold because the temps were just barely above freezing. It wasn't too bad at home (thank heavens we are out of the main "wind tunnel" effect that is this broad valley) but still, the horses were a little unsettled and one of my hens has gone missing.

This morning the first thing I did was check Wunderground. Oh my, what a day it is going to be at work-South Palmer station reported a gust to 39.7 mph as I was looking at it, slightly lower gusts to the west were reported. As the first official big wind of the winter, I am very glad to see temps have risen to 42 at my place, even if it means spitting some rain too.

The temps rise so steeply when we get these lows due to the downsloping effect created by the mountains and passes. Since my office is located at very nearly the bullseye between two major passes, it is sure to be just howling there. Its just that we are all at the mercy of these systems and the geography, and there is not much you can do but batten down the hatches and wait it out-and pick up what got strewn around afterwards.

Winds of change are upon us. If you live under a tree in the Bush, you have probably heard about the financial crises. Over the past couple of days it has rocketed around the world and the Dow was down 700 points right after the opening bell this morning. Its up, but still in negative territory this morning....with hours to go yet. Across the world, some markets are closed in Europe and the FTSE (London) and the NIKEI (Japan) are following in our footsteps, right into huge losses. I had sort of expected the Dow to settle out around 8500 (no idea why, but that seemed reasonable considering the history) but I have a hunch its going to get much worse.

I am reading across BBs and very large forums that most are expecting an outright depression. This pessimism is a self fulfilling prophecy since it's investor confidence which fuels the market for the most part. I am trying not to get overly worried because I am still a good ways out from retirement, but of course I am fearful about the economy. Oil seemingly slid down under $80 a barrel, which is a good thing.....but when people freak out over how much money they have lost and runs begin on banks-I can only hope we are somewhat isolated from the rest of the US up here. I know the majority of our banks are in good shape, credit wise and are relatively solvent. But I also know this is not the case in other areas, due to the sub prime mess.

Alaska has historically had long periods of depressed economic activity, and we have weathered these before (1986, anyone?) and most of us stuck it out and made it through just fine. And too, our economic activity is cyclic just due to the construction season. I had already expected our Suothcentral unemployment numbers to jump way up, due to the influx of folks leaving villages because of the high energy costs. I do expect Anchorage to go to the state for emergency help before too long, as the social services and schools are stretched to the breaking point.

As the cold wind of realistic growth blows through the financial markets, I can only hope we are spared the worst up here.

2 comments:

Unknown said...

Oh, yes, I weathered the 80's here in AK. Wasilla was like a ghost town for awhile.
Malls sitting empty, homes abandoned.
Luckily (as now) our home was paid for and dad always kept the pantry stocked.

I will say though that groceries and fuel are *way more* expensive now.

suvalley said...

I have confidence that most Alaskans are fairly well prepared.

Heck, most of us remember empty store shelves when there were containers lost overboard on the barges...I can recall the empty spaces at the old Foodland in Fairbanks as a kid for that very reason, and my husband does too. Of course, we are talking the 60s-ancient state history to a lot of the newer residents here.

A lot of undercapitlized businesses will fold, including the flight-by-night types who came up here to make bank-they will start to trickle out. But if you live here in the Valley you have surely seen all sorts of equipment for sale, they are everywhere along the roads. The folks who weathered the mid 80s will be fine, their equipment is probably paid for and they can afford to turn the keys off for a good long while.

We should have seen this coming when those foreclosure auctions took no bidders on those subdivisions and condo projects. Some of my customers are hurting, and some have more work than they can handle-it's very erratic and I would describe the business here in the same way: erratic. Definitely way off from last year, yet I still have days when I am slam dunked and there is more than the two of us can handle.

I think my company will be fine, we've been down this road before.