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LOCAL REACTION: Concern about jobs, health care, spending

Rocky Mountain News

Published October 6, 2008 at 12:58 p.m.
Updated October 6, 2008 at 3:05 p.m.

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Local executives, brokers and others reacted to the stock market’s plunge today with a variety of opinions:

*John Imbergamo, founder and head of restaurant consultancy The Imbergamo Group

“Really, the best part about a day like today is people will drink more -- and that's good for bars and restaurants. Other than that, it’s not so hot.

To be more serious, any uncertainty in the market certainly translates to uncertainty in terms of retail decisions that people make -- and that includes restaurants. Anyone who is thinking of opening a restaurant or is in the process of opening a restaurant is going to have a much tougher time getting credit or financing the deal. Those who are established and have done well for the last couple years perhaps have more of a cushion. Recessions are when a restaurant closes and new restaurant doesn’t open up in that space, and so far we haven’t seen that.

The easy analysis is that the early week business is going to suffer a bit and people are going to celebrate on Friday and Saturday nights, but we haven’t even seen much evidence of that happening yet. Then again we've have all of these events -- the including the DNC and CEDIA conventions -- that have made it difficult to look at this year versus last year.”

Joyzelle Davis

*Don Wills, owner of two 7-Eleven stores in Denver and Silverthorne and the franchisee of two more stores in Frisco and Breckenridge

“We’ve seen horrible sell-offs in the stock market happen before. It will take a few years to come back but it will come back. These are paper losses. And to the extent the stock market moves up, they will recover their value over time.

“I have adopted a hold-and-pray strategy. I saw the big sell-offs in 1987 and after Sept. 11. And each time the market came back.

“The approach of the presidential election and all the talk about the economy being on the verge of recession is not helping the market. The negative talk is casting a pall over the average investor.”

Roger Fillion

*Jim Reis, president and CEO, World Trade Center Denver

“Yes, I expected the market to plunge. I hope it doesn’t go down too far,” Reis said. “People have lost all confidence in the market and the government and its effort to solve the problem. Congressmen have destroyed their credibility by putting earmarks in the $700 billion bailout plan - a $2 million tax benefit for makers of wooden arrows for children, a $100 million tax break to benefit auto racetrack owners.

“I was talking to my counterpart in Boston. He said the Massachusetts people are saying, ‘If Congress is so interested in solving problems, why approve earmarks in the bailout plan for wood arrow manufacturers? What kind of signal does that send to the public?’”

Reis said people wonder whether the approved $700 billion bailout will really be spent as a solution to the financial problem or will it be used by lawmakers to “get a few more votes when election comes around.”

“It’s frustrating to me and to the general public. It will be a heck of a challenge for the next president, whichever party wins,” he said.

Reis said he’s an “eternal optimist” and hopes the bailout plan will be enacted in a responsible way.

“But there’s nothing they can do immediately,” he added. “What bothers me is that a bunch of people are acting with a 1929 mentality in 2008. They are going about it foolishly, withdrawing money from bank deposits when those deposits are guaranteed.

“What will they do with the money? Put it under their mattress? There’s lot of irrational activity going on, but it can’t go on for much longer. Rational thinking will prevail after a while.”

Gargi Chakrabarty

*Lynn Whistler, Metro Brokers - Team Whistler

“I’m absolutely aware of it. I’m not surprised. I think those of us who are aware of the economic situation in this country realize that things have been going up, but now they are not going to be able to maintain that same high level of living. Things have come down a lot. There are things going on at a worldwide level and nationally that are affecting the economy” in the Denver area.

She said the $700 billion bailout is “absolutely necessary,” but it is not an “end-all” solution.

“I hope we can work through this, and I think it is going to be slow. Hopefully, we will see some improvements in the next six or eight months.”

Whistler said she doesn’t really put money in the stock market.

“Because I’m in real estate, I tend to invest in real estate. And that has been a very difficult market. I’m waiting for it to turn. This is an excellent time to be buying real estate. If you can buy right now and hold on to it, you will make a lot of money. Good buys are all over. You can buy homes right now in the north area that need some work for $60,000 on up.”

John Rebchook

*Mimi Hull, president of the Association of US West Retirees

“I was concerned that it would (plunge) — just because the effects seems to be rippling through the world markets,” she said. “I think everyone is panicking.”

Hull said every retiree she’s talked to about the situation is very concerned about jobs, health care costs and the prospect of having to stretch their retirement money further.

“Hopefully, it’s temporary and we’ll have some recovery down the road,” Hull said. But in the meantime: “It’s not pretty. We don’t seem to have any leadership at the top of our government.”

Hull and the retirees group have railed often about excessive executive compensation and companies moving jobs offshore. Now, it seems, the country “is reaping all that’s been sown.”

She said she “hated” the bailout plan, but “I’m assuming it’s necessary.” But she said that articles she’s been reading have said $700 billion won’t be nearly enough.

Jeff Smith

*Steve Bailey, CEO of Powderhorn Ski Resort, near the Western Slope town of Mesa

Bailey called the latest market drop “disheartening” but not necessarily surprising.

After taking over the bankrupt ski area a decade ago, Bailey and his business partner paid back mountains of debt and now operate their business “within cash flow,” he said.

At the same time, his industry depends on the ability of consumers to spend money on recreational pursuits. But he has yet to see an impact on advance sales of season passes.

“The last thing people quit doing is having fun,” he said. “It makes them feel better when times are tough. Maybe I’m an optimist, but I just don’t think Americans are ready to accept failure.”

The small amount of real estate Bailey has for sale near the slopes has still been moving. He closed on one property recently and the sale of two others are pending. “Maybe people are deciding to put their money into hard assets,” he said.

Joanne Kelley

Comments

  • October 6, 2008

    1:37 p.m.

    Suggest removal

    Sensible writes:

    Ms Whistler -

    WTF!!!

    Please add some intelligent insight as to why the FU(* the $700 billion bailout is “absolutely necessary"!!!

    To keep your real estate cash-cow afloat no doubt.

  • October 6, 2008

    1:47 p.m.

    Suggest removal

    Americans4Liberty writes:

    Paulson taps [35-year old] former Goldman Sachs executive to run $700 billion rescue program

    WASHINGTON (AP) -- The administration has selected a former Goldman Sachs executive to be the interim head of its $700 billion rescue effort for financial institutions.

    Neel Kashkari, the Treasury's assistant secretary for international affairs, was selected Monday to be the interim head of Treasury's new Office of Financial Stability.

    The designation was made by Treasury Secretary Henry Paulson, who was the head of Goldman Sachs before he joined the Bush administration in 2006. Kashkari, 35, will head the office created by the emergency legislation enacted Friday to fund the largest government bailout in history.

    **********

    Brilliant move Paulson! As we used to say in the military -- BOHICA! (bend over, here it comes again)!

  • October 6, 2008

    1:51 p.m.

    Suggest removal

    UteBill writes:

    A note to Jim Reis -

    People are pulling their money out b/c they want to actually SEE it. It's all that they freaking have, YOU IDIOT!

    How is that irrational?

    It's "guaranteed"? Yeah right, just like the government is garanteed to look out for the people's best interests.

    I DON'T THINK SO!

  • October 6, 2008

    2:01 p.m.

    Suggest removal

    Staalhjerte writes:

    It's not just about real estate. It's about some businesses being able to continue to meet payroll. It's about farmers being able to borrow enough to plant crops. It's about ranchers being able to borrow enough to buy cattle and feed. It's about new businesses being able to start up and bring new jobs. The real estate market might have all of the glamor and spotlight in this mess but the effects go way beyond that.

    So many people can't see the forest (the economy) for the trees (the real estate market and banking greed) that we've just about squandered our chance to move fast enough to do something about it.

    In a way this is exactly like a forest. The bad investments and corporate greed are like the pine beetles that nibble away at the overall health of the forest and then it only takes a spark of lightning to send the entire thing up in flames.

    I'm worried that we're going to lose jobs in my family. I'm worried that you will lose jobs in YOUR family. Please, quit the partisan bickering. Get Real people. Get Real Right Now. I say we throw the far right and far left out of both parties so we can sit down and figure this mess out without one side cleaving their Bibles to their chests while screaming about abortion and imaginary terrorists and the other side wanting to make one giant Nanny State where we can't walk outdoors without writing an environmental impact statement.

  • October 6, 2008

    2:02 p.m.

    Suggest removal

    almostarmy2003 writes:

    Americans4Liberty writes:

    Brilliant move Paulson! As we used to say in the military -- BOHICA! (bend over, here it comes again)!

    We were using that term last year when I got out. LOL!!
    Good Times

  • October 6, 2008

    2:18 p.m.

    Suggest removal

    gs writes:

    Just three months ago the Fed was concerned about inflation with the cost of raw materials increasing. I don't think that is a concern anymore?

  • October 6, 2008

    2:34 p.m.

    Suggest removal

    LOUIE writes:

    "One toke over the line sweet Jesus, one toke over the line. Sittin' downtown at a railway station, one toke over the line..." , such a hard fall, from Dom Peron to Manichevitz (sp), least the cheaper of the two is blessed by a Rabbi.

  • October 6, 2008

    3:28 p.m.

    Suggest removal

    Marshdale writes:

    Day traders will be offing themselves in droves.

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