Just for kicks, we asked local experts about the worst-case scenario for the Charlotte economy. Here's what they said:
Mark Vitner, Senior Economist, Wachovia
"Wholesale bankruptcies in the airline industry, gas goes to $12 a gallon, people can't afford to fly. We have a deep recession that leads to huge cutbacks in financial services and stalls corporate expansions. Our worst-case scenario is everyone else's worst-case scenario, too. It's possible, but I don't think that's anywhere near the most likely scenario."
Tony Plath, Associate Professor of Finance, UNCC
"We lose control of Wachovia, the board's unable to pull out of the losses associated with that Golden West portfolio, they declare a big second-quarter loss, they have to go back into the capital market, ask for another $3 [billion] or $4 billion, and JPMorgan comes along and buys them for $40 billion. And we're no longer the second largest banking center in the country and we no longer have two big bank headquarters, and then Bank of America decides to pull its headquarters and go to that big building in midtown Manhattan it just built."
Don't go hitting the bottle just yet. We also asked about the best case:
Vitner:
"Charlotte continues to post some modest growth over the next couple of years, and growth ramps back up again once we move past the housing and banking troubles. . . . I think 2008 will probably be the most difficult year for financial services. And 2009 and 2010 will not likely be much better, but they're probably not going to be any worse. And we're probably not going to see strong growth return to the banking center until the early part of the next decade. That's not a life-changing event for Charlotte."
Plath:
"Real estate values stop falling, the real estate market bottoms out, foreclosures start to decline, and we enter into a period of economic growth, and the industry begins to recover. In the next twelve to eighteen months, that's where we'll be. A year from now, we're going to see the end is in sight, there's liquidity back in the capital markets, and the mortgage crisis, while it might not be completely over, it's peaked and real estate values have bottomed and are starting to rise."
