http://www.nytimes.com/2008/10/15/business/15markets.html?_r=1&hp&oref=slogin

oh dear! I better hurry up and get my ass to blissful Chicago! The city where the unicorns roam free and homeless people simply don't exist!

Sizzlack, NYC is getting hit harder than any other city in the U.S. If you find a similar article about Chicago, you are more than welcome to post a link.

Chicago is falling into recession faster than the rest of the country.

Chicago's economy is poised to record its second-straight quarterly decline at the end of this month, which would mark the start of the first recession here since 2002.

Economy.com projects a 0.8% decline in the Chicago area's gross metropolitan product in the first quarter of this year, matching the fourth-quarter drop in the local equivalent of gross domestic product. A recession is defined as two straight quarterly declines.

The economic research unit of New York-based Moody's Investors Service Inc. also predicts local employers will shed 19,000 jobs in the first half of 2008. The last annual drop in local employment was in 2004.

The numbers confirm what many local business owners have observed over the past few months as the collapsing real estate market drags down other industries.

"I think we're already there," says Gary Belmonti, president of Chicago-based Precision Plating Co., which finishes and plates metal.

Anticipating a slowdown, Mr. Belmonti cut his workforce by 9% in recent months to 132. Now he's seeing orders slow, and almost a quarter of his customers are late on their payments by 60 days, he says.

Chicago is falling into recession faster than the rest of the country. National GDP expanded at a 0.6% pace in the fourth quarter and won't start declining until the first quarter, Economy.com predicts.

ENGINE STALLS

Construction, financial services and manufacturing are leading the declines, while retail, professional and business services are slowing, says Sophia Koropeckyj, economist at Economy.com. That represents the vast majority of the Chicago economy.

David Fisher, owner of D&F Print Services Inc. in Glendale Heights, has felt the slowdown. Some of his key accounts, including HSBC Bank USA, have cut back. "This year started out really poorly," Mr. Fisher says. "You have to hustle a lot more."

Executives here are pessimistic about the economy. According to a survey of 117 Chicago-area CEOs of small to mid-sized companies, 37% say it's headed toward a recession. For 26%, the biggest issue they face is economic uncertainty, says the survey by San Diego-based research firm Vistage International Inc.

Uncertainty has led Kurt Minko, president and CEO of Lansing-based Retro-Tech Systems Inc., which designs and installs energy-efficient lighting, to hold off on plans to build a new company headquarters. "I don't think it's the right time to be spending all of our capital," Mr. Minko says.

Big companies are anxious, as well.

"We worry about the current economic situation here in the U.S. market and the opportunities that exist for us to sneeze and give the rest of the world a cold," Scott Carson, CEO of Chicago-based Boeing Co.'s commercial airplanes division, said during an investor conference last month. "We're watching that very closely."

Caterpillar Inc. CEO James Owens worries the Federal Reserve will cut interest rates too much in its effort to revive the economy.

"The Fed has to be careful at this point about creating too much excess liquidity that they have an inflation problem down the road," Mr. Owens, a trained economist, told an industry group last week. He's projecting strong growth for his Peoria-based company over the next two years on demand for construction equipment overseas. He predicts U.S. sales to be flat to up 5%.

Economy.com's Ms. Koropeckyj says she believes the rate cuts and other moves by the Fed will help the economy rebound in the second half of the year. She predicts a 4.5% annualized rate of growth on average in that period, which is on par with Economy.com's estimates for the nation.

Craig Shields, president of Chicago-based industrial pump and filter maker Graymills Corp., hopes for a turnaround. With banks tightening lending standards, Mr. Shields worries that his customers will have a difficult time getting the money they need to purchase equipment. "That may mean expansion plans will be shelved," he says.

Cant talk...saddling up the unicorn to go for a ride around Lincoln Park.

Is that article even about New York?

Chicago is the new Detroit.

http://chicagobubbleblog.blogspot.com/2008/03/recession-hits-home-chicagos-economy-is.html

There is the link to the article. Once again Rufus is proved wrong in less than 30 seconds.

Rufus aways opens his mouth just big enough to fit his foot in...

http://money.cnn.com/2008/10/13/news/economy/Birmingham_brink_Whitford.fortune/index.htm?postversion=2008101504

California almost broke.

We're looking at something really big and bad across the nation, folks.

Agreed-- it will be a bumpy ride to the bottom.

On another thread, I saw a user signed up as RufusDufus. I thought Rufus changed his name and selected a more "fitting" username (finally). Although if I were him, I would have picked CluelessDufus.

Rufie, your mental health is really slipping faster even than it has in the past two months. The article you linked to has no more to do with New York's economy than would an article from one of your midwestern animal husbandry magazines.

By the way, what food shops are there near where you live in UWS?

And for what job did you move to NY? [And don't worry if you were fired from it -- we're very understanding and nonjudgmental here at Streeteasy. You can tell us the whole story.]

Sizzlack, I love the unicorn! Ha!

alanhart...whats the day count on those questions? I feel like it was two weeks ago he was asked about the food shops no? You'd think if he really did live where he says he does it'd take no more than 2 minutes to end the debate...but no.

Back to the unicorn.

Sizzlack, time has no meaning when you're an SSI recipient on psychotropic drugs, so we'll have to cut Rohypnol some slack on that one.

You know how Rufus sounds? He sounds like someone in denial. It sounds like Rufus badly wants to stay in NYC, but somehow could not and will not be able to stay, so he's been convincing himself that going back to Chicago is not so bad after all. I see no reason why he should be so interested in the real estate prices here, etc. if he never really cares. He probably hopes that someday he'll finally be able to live here permanently.

Good luck living with your ol' folks back in Chicago, Rufus! Sorry, you could not make it in NY.

cleanslate -- it's already been established on some of the many many other "rufus" threads that he has never been to NY.

It's conceptually correct to understand that he lives in the partially finished basement of his chainsmoking Walmart-parttimer mother's house in Hammond, Indiana.

Let the market crash, these thieves and cons made there bed. let them comfortable lie in it!
Billion dolla bail out is a joke!
Vic Parise

> You know how Rufus sounds? He sounds like someone in denial. It sounds like Rufus badly wants to
> stay in NYC, but somehow could not and will not be able to stay, so he's been convincing himself
> that going back to Chicago is not so bad after all.

Absolutely. Its called sour grapes.

I agree - it's called cognitive dissonance - Rufus really hearts NY!!

Why do Americans treat their different citys as if they were different countrys. As a foreigner to the US (British) I find this really quite bizarre. Surely the dire economic situation is going to affect all US citys. If NY is going down, then Chicago, Miami, LA etc will also be going down. Its like me comparing Manchester with London. Does it matter or am I missing something?

BWC

Oh, please brainwashed . . . the rest of the UK treats London like it wished it didn't exist. For example, you'll never hear a London weather report on BBC radio. It's always "in the capitol" or "in the southeast". Its absolute primacy is resented like nobody's business.

Similarly, "the capitol" doesn't care that cities in the North of England no longer have an economy.

Dear Alanhart. I fail to see your logic using BBC radio as an example. But if you wish to know more about regional radio in the UK and how its divided down, go to http://www.bbc.co.uk/radio/ and move your cursor over 'My Local BBC' which will give you subdivision of the regional radio networks and the local weather.
In case you missed my original point specifically evaluating the economy, I was wondering whats the point of comparing the citys when its a national crisis and the economy and property are going down in all citys.

BWC

Specifically to your point, each area has a largely independent economy. In California, Florida, Nevada and Arizona, the economy and property values crashed 2 years ago; it might get a little worse in those areas from here out, but only a little. In New York, it has barely begun. In fact, last year in NY, tens of thousands of jobs were added to the economy. Most agree that the next few years in NY and other markets that were not negatively affected in the past couple of years will be very rough.

In addition, laws vary from state to state, so that it can take forever to foreclose on a property in NY, but a matter of a couple of months to do so in California. That masks problems in a different way.

BBC was merely one example, but am I correct in guessing that you're not from London?

Brainwashed - the other point is Miami, LA, Vegas are very different markets than NY when we are talking about real estate. Miami has something like 2x being built during this housing boom as were built in the enitire 40 years before as well as massive exburbs being developed. My husband and I drove from Miami to the Florida Keys last February - the heart of subprime country - and saw literally development after development of huge houses, many of them have built, in pocket developments in the middle of nowhere a good 50 miles South of Miami, near not even a shopping center, with huge signs saying "zero percent down." It was completely eye-opening experience .. and this was before the sh*t really hit the fan ... my husbands works for a real estate fund and had been saying since 2003 the glut in parts of California, Florida, and Nevada is measurably worse than other places, and I finally saw what he meant. Real Estate is VERY MUCH a local game.

Again - not saying NY won't suffer - it definitely will. People were overstretching everywhere in the country. But at least NY there was a finite amount of land being developed and a huge demand. At least there is ALWAYS a price here (especially as a rental) , althought I think it is much lower than apartments are currently listing for. In parts of FL, CA, NV, one could make the argument that there aren't even enough people to fill those houses for years to come. There is a reason CA is getting federal aid.

Also, brainwashed, what you're hearing on this thread is not a truly sincere expression of New Yorkers' beliefs regarding Chicago. It's really all about counterattacking one troll, rufus, who has started many new threads (and hijacked many more) on this *NYC* Real Estate board for the sole purpose of denigrating all things NY and touting all things Chicago. You'll start out wanting to give him the benefit of the doubt, and then find yourself trying to shoo him away to Chicago, or at least a Chicago discussion board, and then . . .

kspeak - thank you kindly ma'am for your explanation. I have some awareness of what your talking about although I haven't actually seen it firsthand as you have. Indeed a lot of Brits got sucked in to investing in FL, CA and NV and are feeling the pain now.

So would you argue that NY or specifically Manhattan is probably the safest place in America to buy property due to the unique reasons you mention?
Thanks again
BWC

Alanhart thank you for your reply. You have brought up some very important points. In many ways the different States of the USA are like different countrys I suppose with the different laws.
Would one conclude that California, Florida etc crashed because of an oversupply of property and the ease of lending bad mortgages? NY was largely protected because of the reasons mentioned by kspeak. But in NY now things are looking rocky because of a deflation in stocks (partly due to the sub-prime/credit crunch of last year) and a loss of banking jobs?

You guessed wrong sir. Born and bred in South London and now living in the centre of London but spend a lot of time in Manchester working.

BWC

Alanhart - point taken about Mr Rufua. Its always good to have a character like this for sheer entertainment value.

I don't think Manhattan is that safe to buy in right now - prices have still more or less doubled since 2002-2003, and real estate hasn't fallen significantly yet (some reports show 5%-10% declines across Manhattan, I think one even 12%, but not much at any rate). To me, there are specific reasons NYC lagged the country in RE declines, aside from the difficult of building: 1) Wall Street bonuses paid in January 2007 were record-high and bonses paid in January 2008 were still relatively strong 2) foreign money propped up the market during 2008 3) rents have soared in recent years while financing costs have come down making buying more attractive although IMHO still more expensive than renting, and 4) co-ops in NYC demand buyers put more down/be more liquid/have better financials relative to what they were buying than in the rest of the country.

The first 2 reasons - Wall Street and foreign $$$ - are no longer working in NY's favor, and I think actually against it. Some Wall Streeter's won't be able to get new jobs, and will move elswhere and trade in their 2-3 bedroom here for a mansion in say Philly or Chicago (obviously some people love NYC but others were here for the $$$). I also think many foreign buyers will become sellers quickly. The dollar has strenghtened significantly, and many of them may feel somewhat strapped for liquidity given what's hapenning in their own countries, so they may sell their condo at a 20% loss in US dollars but still breakeven in their home currency because of the dollar's appreciation. The rent-vs-buying analysis will be hurt by falling rents (rents have already fallen) and higher financing costs on mortgages (check out jumbo rates these days, and this is where most Manhattan property falls). The last dynamic still sort of holds up, but there's been a lot of condo development, and I think the condo/coop markets are more similar than different (I for example would buy either one when I decide the time is right to buy).

So, no, I would not buy right now. Unless you want to bet on the dollar strenghtenining more relative to the pound/euro, which I think it will, but there are more liquid ways to do this. I actually don't know where I'd put my $$$ right now. We're sitting in cash on the sidelines. Eventually will get back in stocks but probably not for 1-2 years in the U.S. and maybe in emerging markets in 6 months-1 year. I personally think bad corporate earnings and corporate bankruptcies have not hit yet, so waiting for that to get priced in ... But, I'm no expert, just my thoughts.

HAAAHAHAHAHAHAHAHAH!!!

I have to admit- I've been watching this rufus character come in and have been entertained to some degree... but this takes the cake!

rufus got PWNED hardcore.