Do you believe Kern's economy will recover earlier than other places? - Money Talks - MoneyTalks's Blog - Bakersfield.com

Jun 30, 2009 at 08:06 PM : I don't know...

I don't know where these guys are getting their numbers from.. we have a relatively high unemployment rate, one of the worst markets as it pertains to foreclosures, and the oil industry is sluggish, at best.

I'd love for things to improve pronto, but I don't have my hopes up.. not until I see oil-related business up significantly.

Jun 30, 2009 at 08:06 PM : Is two and a quarter...

Is two and a quarter years break neck speed? What a mess!

Jun 30, 2009 at 08:06 PM : I thought the stimulus...

I thought the stimulus was supposed to pull us out... More lies?

Jun 30, 2009 at 08:06 PM : Give it a rest, Ron

Give it a rest, Ron

Jun 30, 2009 at 08:06 PM : What do you mean Bobby...

What do you mean Bobby Bowden?? I thought that is why we were printing so much money. I thought that was why the Porkulus had to be passed immediately, without legislators reading it.

I thought this was supposed to pull us out of the recession??

Jun 30, 2009 at 08:06 PM : I have an...

I have an idea - why don't you go to D.C. and pitch your alternative plan.

Our local issues have nothing to do with Obama and everything to do with Oil companies who wasted millions of dollars a year on fluff, and now that times are tough, they've tightened the belt more than most anticipated.

Jun 30, 2009 at 09:06 PM : Amen. What Observer...

Amen. What Observer said @ 8:59

The fabricated cheerleading optimism I've seen in the last two years has been nothing more than self-interested people trying to use the Jedi-mind trick. I was sitting in a vacation property that we couldn't sell in the summer of 2007 and reading EVERY article pertaining to these crises and Forbes, Fortune, Money, and Bob Brinker ALL said back then that no real recovery would happen until the fourth quarter of 2009 at the earliest.

And guess what? It's even WORSE than what they predicted back then.

Jun 30, 2009 at 10:06 PM : Our local issues...

Fluff?? So just what was fluff?? Or maybe they are just going to wait things out and see if the democrats are stupid enough to push a $10/bbl tax on California crude...

Surely that $8.5 million dollars in stimulus to GET bus is going to rocket us right out of this recession. All praise Obama...

Jul 1, 2009 at 06:07 AM : Which stimulus plan...

Which stimulus plan are we talking about here? Bush's or Obama's?

Jul 1, 2009 at 06:07 AM : Fluff??&...

Fluff?? So just what was fluff?? Or maybe they are just going to wait things out and see if the democrats are stupid enough to push a $10/bbl tax on California crude...

Up until about October/November of last year, many of the oil companies were not paying attention to where a lot of their money went as it pertained to acquisition of parts and other materials. Much like the corporate banks, they threw away money as if it were toilet paper.

Finally, they're pinching pennies, and it's not just by throwing service companies off the fields or investing less in new wells - they're finally leaning their entire spending system.

But what do I know... I only service a ton of oil related business, and up until recently, one of the biggest oil fields in the county..

Jul 1, 2009 at 07:07 AM : Up until...

Up until about October/November of last year, many of the oil companies were not paying attention to where a lot of their money went as it pertained to acquisition of parts and other materials.

You mean to tell me they were trying to make as much money as possible when oil was $140/bbl??

You mean the call by progressives that oil companies were purposefully limiting production were outright lies?

Question remains. Why hasn't OBAMBI's stimulus package, which had to be passed immediately before anyone read it, not doing a darn thing for this states economy, except for Joe Schlub who will be getting $8.5 million to change oil in get buses?

Jul 1, 2009 at 07:07 AM : You mean to...

You mean to tell me they were trying to make as much money as possible when oil was $140/bbl??

You weren't paying attention to what I was saying. Here, let me put it bluntly: many of the oil companies were not paying attention to the price they were paying to run their business because they were more focused on raking in the profits. When oil took a nose-dive, the prices they were paying for goods and services began to eat a huge chunk into what profits they had left, and they finally realized that they needed to cut the fat, so to speak. Whereas for years prior, they were not keeping a good eye onto the invoices they were paying, now they are pinching every penny, and a lot of that pinching has directly resulted in the layoffs of thousands of local workers - mostly in maintenance and other mechanical environments.

There's not a day that goes by that I'm not walking into one of my customers who's just been forced to lay off another mechanic or technician because the fields have tightened the belt. I've seen servicing companies belly up locally and close their doors, shipping everything back east. Somehow, these companies were doing fine before the rollercoaster of oil prices over the past few years.. which leads me to believe my argument even more. But once again, what do I know.. I'm only a vendor who deals with this on a daily basis.

Good question - why don't you go ask Arnold?

Jul 1, 2009 at 08:07 AM : Kern County is still a...

Kern County is still a major agricultural economy. Los Angeles is not. Farm labor is seasonal and one of the most insecure, temporary jobs available--when they are. Unemployment rates always go up when farm jobs decline. Could it be statistics and projections don't take into account the factors that produce the numbers?

Jul 1, 2009 at 08:07 AM : catpaw - I'm sure...

catpaw - I'm sure the water issue is having a negative affect on job growth as well..

Jul 1, 2009 at 08:07 AM : Whereas for...

Whereas for years prior, they were not keeping a good eye onto the invoices they were paying, now they are pinching every penny,

Hmmm... Seems like the service companies were finally caught cooking the invoices. I guess it was good while it lasted....

Jul 1, 2009 at 09:07 AM : It has nothing to do...

It has nothing to do with the service companies and everything to do with the process in which many of the oil companies purchased their goods and services. I've witnessed and heard of a big shift in how they internally make decisions, and how they will spend their money from now on, and it has little to do with what service companies and vendors were charging. There are hidden costs associated with purchasing which many businesses either aren't thinking about, don't see or don't care to think about. The oil companies are finally identifying these hidden costs (i.e., the invoicing process, purchase order process & contracts processes) and moving to work more efficiently, thereby reducing un-needed costs. For example, some companies are shifting from a p-card system, where there's little real control over what's being spent, to a purchase order system via the internet, such as Ariba, which makes it easier to track and control company spending.

Part of this process meant they'd have to cut out a lot of new drilling to ensure they could offset the costs they've incurred over the past number of years.

As an aside.. I heard a story about an engineer that was asked to relocate from Bakersfield to somewhere back east. He had just purchased a home and asked the company what would happen with his house - they bought the house from him, even in this economy, and have been paying money each month to maintain the property until it sells. Personally, I'd say that's a big waste of money right there.

Jul 1, 2009 at 09:07 AM : Thanks mostly to...

Thanks mostly to the county's relatively mild housing bubble

What planet did the author use as a reference?

The last time I checked, Kern County was still in the top 10 for foreclosures nationwide. And we’re still two years away from peak resets of Alt A mortgage loans.

A large fraction of our peak employment stats were derived from the housing bubble boom. BTW: That bubble was powered by over 10 trillion dollars in phantom money, created by the Federal Reserve and our Ponzi banks. Many thanks to the previous administration and the yes man congress for the prudent economic management. And some are shocked by the stimulus package? It’s all phantom money, regardless of whether it’s created by the Federal Reserve for banks, or the Federal Reserve for government, (which actually just funnels the money to the same banks).

The Alt A resets, along with a climbing default rate of traditional fixed rate mortgages, we are a long way from the situation stabilizing.

http://www.nytimes.com/2008/08/04/business/04lend.html?_r=1

http://globaleconomicanalysis.blogspot.com/2009/06/home-loan-delinquencies-double-on-prime.html

http://www.bloomberg.com/apps/news?pid=20601087&sid=amq8v.M.ak60

Part of this process meant they'd have to cut out a lot of new drilling to ensure they could offset the costs they've incurred over the past number of years.

This is occurring worldwide. This just insures another energy price spike once any real net recovery begins, and a world wide recovery will be choked off as prices rise. It will provide a partial cushion for Kern County, but a full overall recovery is unlikely.

Jul 1, 2009 at 09:07 AM : In Cox's...

In Cox's article on our economy, he stated: "according to a recent report" citing some "global" source and another Northeastern crystal ball expert. There was no comment by trustworthy Gary Crabtree, our local expert . I am sick and tired of so-called "reports" and polls that have poor or skewed samplings and downright false data, coupled with analyses that cannot be anything but deceptive, misleading propaganda. Politics, government and economics by polls and skewed data reporting has a lot to do with our current decline and chaos.

Jul 1, 2009 at 10:07 AM : Ah, yes. ...

Ah, yes. Gone are the days of a vacuum truck company charging 8 hours to project X, 8 hours to project Y and 8 hours to project Z, and all with the same vacuum truck on the same day.

Oil companies did pretty well when oil was $30/bbl. But then they weren't getting screwed by service companies. Now that it is in the $60 range, they are going to make doubly sure the service company raping doesn't get out of control.

Jul 1, 2009 at 10:07 AM : Shafter has the best...

Shafter has the best air. Kern County has the fastest recover. What next, we have a river with water in it?

The Chamber of Commerce must be working overtime!

Jul 1, 2009 at 12:07 PM : takes about 30 seconds...

takes about 30 seconds to google "best worst cities recovery" to find and see (Forbes included in data) why Bako is near the bottom of the worst side.