How stable is the local economy?

Brent Finnegan -- September 29th, 2008

There’s a Q&A with William Shobe, research director at UVA’s Weldon Cooper Center, in today’s News Leader about the proposed $700 billion Wall Street bailout as it relates to the economy of the Shenadoah Valley. There’s no mention of the local poultry industry, but Scobe does refer to small businesses and local banks.

NL: When can people expect to begin to see a potential disruption of the “real economy” locally?

Shobe: We already are seeing some effects on the everyday economy that means stuff to you or me. If credit remains tight, we will see the effects on borrowing by retailers, farmers and manufactures that can be quite damaging over the next few months. But how quickly a financial panic comes depends on so much, and I expect Congress to take action soon, which will restore confidence so we can weather through this storm […]

NL: How stable would you rate the local and state economy compared to the rest of the country?

Shobe: Virginia is a little bit insulated from economic downturns, because of its large exposure to federal spending and because of the large military spending in the state. So this spending will continue and boost Virginia’s economy a bit. However, there is bound to be a disruption to the local economy as the ripple of the budge crunch flows through […]

NL: With all the news of major banking collapses, how safe are the banks in the area?

Shobe: The lion share of assets in most banks are insured by the federal government so there really is no reason to take your money out if it’s in a (Federal Deposit Insurance Corporation) bank. Not all banks are in trouble either, and even when they do go broke, the people who have savings in them tend to recover the losses. This is because the bank that collapsed is usually sold to another bank, and that bank has every interest in making it healthy again.

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