With some cool logic, a bank economist almost made the dark clouds go away last week with his predictions that by mid to late 2009 things will begin to bloom again in Seattle.

William B. Conerly is the consulting economist for small and vibrant Viking Bank, started a few years ago by a doctor who grew to dislike the way big banks operate. Now, with the economic tsunami upon us and growing larger each day, it is the small banks that seem to be the safe area for keeping our money and getting loans necessary to do business.

A Portland economist who has worked with Viking in the Seattle market for a decade, Conerly says we did some things better than the rest of the nation and that bodes well. For example many metro areas around the nation built houses and other living units like there was no tomorrow and home prices would continue to rise forever. Of course we found out that was not true and many cities are awash in unsold or at-risk homes and condominiums. Conerly puts the national housing vacancy rate at its highest in 40 or more years.

He suggests that commercial and industrial loans by all banks are being tightened, making it harder to get a loan to buy that new house or car. Add to that, Conerly says consumer confidence is near the basement.

What is more, predicted growth in the Gross Domestic Product (GDP) is in minus territory for the first half of 2009, with glimmers of hope for moderate growth in the last half of next year.

OK, so what is new? We all knew that, didn't we?

Sure, but the way the financial blogs, the newspapers and the talking heads of not-so-objective television yammer shows go on, you would expect a massive comet to be about to strike the planet and blow us all into dust particles. The Stock Market tanks at the least rumor, like the infusion of a half trillion dollars into the Chinese economy recently. That's bad? Well, the markets thought it was.

No says Conerly, the local economy is looking almost as good as it is in Texas (except for the oil patch world). Employment he says will move toward 1.9 million in 2009 (after hitting 8 percent unemployed).

We in Seattle overbuilt housing during the past few years, but not as badly as some areas and he thinks that around 2010 the housing supply and the housing demand will balance, so things will be "soft" for a year, then strengthen. Home prices will still decline, but far slower here. That will be offset Conerly says by the continued influx of new people into the Puget Sound.

He noted that not all the future is rosy, that Boeing is likely to be hit with cancelled and deferred orders in the 2010 - 2011 era.

No we are not back on the yellow brick road yet and we still have fear of fear itself to hamper our recovery. But Conerly and a lot of other people are betting that we will be the lucky ones in this financial blowout, that we will get back to growth - albeit much more moderate - in less than a year.

Feeling glum anyway? Well, we could be in Detroit.

- Jack Mayne

jmayne@robinsonnews.com