Posted inPhoenix

Reality bites

You know times are tough when even the JPMorgan Chase outlook luncheon, which for years was an orgy of boosterism and denial, sounds like a post from Rogue Columnist. ASU economist Lee McPheters said Arizona may not recover until 2014. McPheters is one of the genuinely intelligent ASU economists who usually pulled his punches because of past Kookocracy threats against honesty, especially the nuts' vendetta against the truth-telling Tom Rex. Elliott Pollack, the booster rubber-chicken-circuit fixture whom the Info Center consistently refuses to identify as the developer he is, even sounded clear-eyed about the dire situation. (You can read the entire report here).

Unfortunately, Phoenicians have two emotional speeds: irrational optimism and suicidal depression. While they should take this highly establishment verdict on the situation as a call to arms, I fear they will break out the cyanide capsules or just go to the booster sweat lodge chanting…all together now…Please, God, just give me one more real estate boom…

The reality is that things are even worse than the luncheon crowd heard. Phoenix is in a depression. I've created a searchable tag for it if you're on Twitter (#PhoenixDepression) to catalog all the news and data (my Twitter feed is jontalton). Yes, as my readers have heard for years, the region is too dependent on real estate and now has an inventory of houses and spec commercial space that will take years to work out. And, yes, contrary to the "Goldwater" Institute's sock puppet on the Info Center's editorial page, Arizona has been hit harder than any other state by job losses. Indeed, metro Phoenix led the nation in job cuts in October compared with the same month in 2008. Alas, the troubles run much, much deeper.

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Posted inPhoenix

The Coles affair: Unsustainability is now

Once again, the Wall Street Journal goes to Phoenix to report on the most pathological aspects of our economic troubles. It does the in-depth, sophisticated and contextual story on the suicide of Scott Coles and the collapse of his Mortgages Ltd. that the local press will not allow its reporters the time and expertise to do. And remember, the Republic’s in-house diktat is, "say something positive about the community" (and use streaming video!!).

The personal story of Coles is the stuff of a tragic novel, albeit for our tawdry era. He was 48 when he wrote a goodbye note, donned a tuxedo, climbed into bed, and apparently committed suicide. His company was in trouble, and with it some of the highest-profile projects in "the Valley." His 20-year-younger second wife, whom he had met in Las Vegas, wanted a trial separation. The darkness he must have felt merits our compassion and prayers.

But the business story must also be told, for it illustrates not only how Phoenix got into its worst downturn in perhaps decades, but also the peril of Ponzi Scheme Nation.

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