Financial markets in turmoil: The view from Sonoma County

ROBERT EYLER

Director of the Center for Regional Economic Analysis at Sonoma State University

His view: Wall Street is suffering through wild times and the end result is still unclear, but it is nowhere near the meltdown of the Great Depression. At this point, Sonoma County does not appear to be exposed to much more risk than before the recent shakeup on Wall Street. Regional banks might suffer and some could close, but unemployment will likely remain relatively low.

“In the Great Depression, you have to remember you had massive unemployment,” Eyler said. “I don’t see an enormous loss of jobs in Sonoma County.”

President of Willow Creek Financial Services in Sebastopol

His view: Lots of business owners are worried about the financial health of their local banks. They worry about having more money in the bank than is covered by federal insurance. Owners also worry banks might not be able to provide short-term credit, which would make it hard for businesses to pay bills and order new materials before receiving payment from clients.

“They have a right to be concerned,” Dzieza said. “There is no such thing as a strong bank or institution anymore. People’s belief in the financial system is shaken to the core.”

Director of the Sonoma County Economic Development Board

His view: The financial turmoil will be felt broadly across Sonoma County, but will hit with varying degrees and not be earth shattering. Retailers will likely notice a slowdown this holiday season, and job cuts might be more severe in early next year.

“Short term, I think there will be some more pain coming,” Stone said. “Long term, this will work out to Sonoma County’s benefit because we will have a more secure financial system.”

Founder of TrimTabs Investment Research, a financial analysis firm in Healdsburg

His view: The tumult on Wall Street likely won’t impact Sonoma County much. The local real estate market is working through its issues with foreclosures, and more people are stepping in to scoop up bank-owned properties. People should consider this a good time to invest.

“I would invest in good companies and sleep well at night,” Biderman said. “The rest of the economy is doing fine.”

Vice president and senior resident director for Merrill Lynch in Santa Rosa

HIS VIEW: Large drops in the market usually happen quickly. The major indexes don’t free-fall for months at a time. After the last U.S. banking crisis in the 1980s you saw the financial institutions rally back considerably.

“You have to stay the course at this point,” Reuter said.

Chief investment officer at Exchange Bank

His view: In the short run, credit will become more difficult to obtain — even for credit-worthy applicants. While that is not good, in the long run the market will have rooted out risky practices that led to the downfall of Lehman Brothers and other investment banks.

“The landscape of the banking industry as we know it is being radically transformed,” Jahn said.

Chairman emeritus and founder of North Bay Angels, which invests in startup companies

His view: If the market downturn is short-lived, it won’t have a major impact on funding for startups in Sonoma County. However, wealthy investors might start pulling back from investing in risky startups if the stock market were to remain down 15 percent to 20 percent for three to six months.

“Angel investors will be less likely to invest in startups if they have less discretionary income because of a sustained downturn in the market,” Weiss said.