Beverly Hills Chamber of Commerce Economic Summit
BEVERLY HILLS - Representatives from some 750 Beverly Hills’ businesses attended the annual Beverly Hills Chamber of Commerce’s Economic Summit at the Beverly Hilton.
This year’s summit was titled: Temporary Upheaval or Paradigm Shift” as six key prominent business members came together to discuss the current economic crisis. On the panel were David W. Berson, senior vice president and chief economist & strategist for PMI Group Inc.; Dagen McDowell, an anchor at Fox Business Network; Gary Schlossberg, vice president & senior economist with Wells Capital Management, Jeffrey Saut, managing director and chief investment strategist with Raymond James Financial; and Bill Curtis, chairman & CEO of CurtCo Media Labs, LLC. The panel was moderated by Donald H. Straszheim, principal, Straszheim Associates, Inc.
Asked to put their finger on the key issues currently facing everyone, Berson spoke directly to the housing issue. “How many of you own a home… and how many of you wish you didn’t?” he asked. With too many homes still for sale, Berson said the 2009 stimulus plan should rather be called 2010 insurance plan.
However, Schlossberg argued that healing is already beginning to take place, stating that one of the catalysts to putting the economy back on track is the value of purchasing power and that the health of the financial markets is key. “There has to be a further thawing in the credit markets as a pre requisite to recovery,” he argued. “But the rule of thumb is that the deeper the recession the stronger the recovery.”
Saut also had a fairly upbeat view arguing that three steps are required to put the economy back on track, the first being to stabilize the banking system, which, he argued has already been done; to counteract the drop in private economic activity which, he said, is currently being done; and “ to get the banks to start lending. The government can talk all it wants about injecting funds into equity,” Saut said, “but banks do not lend with their equity, they lend with their deposits.” While he conceded that unemployment would worsen in the near future, he maintained that the economy is indeed on the mend. “This is not a typical recession,” he stated.
Dagen did not concur with Saut, saying that nobody can tell what the future holds, how the economy will look and “nobody can plan.” She also said that half of what everyone is going through in the current crisis is psychological.
However, Curtis aid the focus for Beverly Hills must be on the luxury brand that comes with the city’s cache and that in the luxury market – which is what counts in Beverly Hills – things are doing extremely well. “The Obama inauguration saw more private jets landing in Washington than ever before,” he noted. In addition, he revealed that BMW sold 70,000 cars in January, high end jewelry stores such as Cartier and Bulgari are selling six-figure limited edition pieces, Charles the Tailor on Olympic Blvd. is overbooked selling suits at anywhere between $4,000 and $15,000 a piece, and all high-end restaurants in the city are doing well.
Curtis said it’s crucial that Beverly Hills be ready to embrace its’ luxury customers. “Half the reason people buy luxury is for the buying experience even in this market,” he said. “If people are depressed and exhausted they are not available for our luxury message. We need to find the right mindset.”
Curtis argued that way to do that is to create unique VIP events, mine the city’s core databases and invite the city’s best customers to profound events, “because the ultra-luxe customer will rebound first when the economy picks up,” he said to great applause.
Saut argued that there is indeed a paradigm shift that he believes will last a long time because statistics reveal that air travel is down and bus travel is up. Once upon a time, he argued people always said, ‘Never underestimate the American consumers’ ability to spend money when they don’t have it,’ but trends now show that Americans are saving their money and that they don’t want to go into debt.
However, Curtis dismissed that argument, saying, there is no paradigm shift. “The underlying motivation is that it’s short lived. We’re preserving our capital out of fear and we will continue to do so until the media says something other than there’s an alligator in your backyard.”
Alligator or no, there was definitely a clear distinction between the 2008 economic summit and the 2009 summit. This year’s panel was comprised of economic strategists, financial investors and business journalists. Last year the event was billed as a “luxury summit” and the panel consisted of luxury names including representatives from Van Cleef & Arpels. Clearly, this year’s panel title alone had already taken a stab at answering its’ own question of whether the economy was merely in temporary upheaval or experiencing a paradigm shift.
This year’s summit was titled: Temporary Upheaval or Paradigm Shift” as six key prominent business members came together to discuss the current economic crisis. On the panel were David W. Berson, senior vice president and chief economist & strategist for PMI Group Inc.; Dagen McDowell, an anchor at Fox Business Network; Gary Schlossberg, vice president & senior economist with Wells Capital Management, Jeffrey Saut, managing director and chief investment strategist with Raymond James Financial; and Bill Curtis, chairman & CEO of CurtCo Media Labs, LLC. The panel was moderated by Donald H. Straszheim, principal, Straszheim Associates, Inc.
Asked to put their finger on the key issues currently facing everyone, Berson spoke directly to the housing issue. “How many of you own a home… and how many of you wish you didn’t?” he asked. With too many homes still for sale, Berson said the 2009 stimulus plan should rather be called 2010 insurance plan.
However, Schlossberg argued that healing is already beginning to take place, stating that one of the catalysts to putting the economy back on track is the value of purchasing power and that the health of the financial markets is key. “There has to be a further thawing in the credit markets as a pre requisite to recovery,” he argued. “But the rule of thumb is that the deeper the recession the stronger the recovery.”
Saut also had a fairly upbeat view arguing that three steps are required to put the economy back on track, the first being to stabilize the banking system, which, he argued has already been done; to counteract the drop in private economic activity which, he said, is currently being done; and “ to get the banks to start lending. The government can talk all it wants about injecting funds into equity,” Saut said, “but banks do not lend with their equity, they lend with their deposits.” While he conceded that unemployment would worsen in the near future, he maintained that the economy is indeed on the mend. “This is not a typical recession,” he stated.
Dagen did not concur with Saut, saying that nobody can tell what the future holds, how the economy will look and “nobody can plan.” She also said that half of what everyone is going through in the current crisis is psychological.
However, Curtis aid the focus for Beverly Hills must be on the luxury brand that comes with the city’s cache and that in the luxury market – which is what counts in Beverly Hills – things are doing extremely well. “The Obama inauguration saw more private jets landing in Washington than ever before,” he noted. In addition, he revealed that BMW sold 70,000 cars in January, high end jewelry stores such as Cartier and Bulgari are selling six-figure limited edition pieces, Charles the Tailor on Olympic Blvd. is overbooked selling suits at anywhere between $4,000 and $15,000 a piece, and all high-end restaurants in the city are doing well.
Curtis said it’s crucial that Beverly Hills be ready to embrace its’ luxury customers. “Half the reason people buy luxury is for the buying experience even in this market,” he said. “If people are depressed and exhausted they are not available for our luxury message. We need to find the right mindset.”
Curtis argued that way to do that is to create unique VIP events, mine the city’s core databases and invite the city’s best customers to profound events, “because the ultra-luxe customer will rebound first when the economy picks up,” he said to great applause.
Saut argued that there is indeed a paradigm shift that he believes will last a long time because statistics reveal that air travel is down and bus travel is up. Once upon a time, he argued people always said, ‘Never underestimate the American consumers’ ability to spend money when they don’t have it,’ but trends now show that Americans are saving their money and that they don’t want to go into debt.
However, Curtis dismissed that argument, saying, there is no paradigm shift. “The underlying motivation is that it’s short lived. We’re preserving our capital out of fear and we will continue to do so until the media says something other than there’s an alligator in your backyard.”
Alligator or no, there was definitely a clear distinction between the 2008 economic summit and the 2009 summit. This year’s panel was comprised of economic strategists, financial investors and business journalists. Last year the event was billed as a “luxury summit” and the panel consisted of luxury names including representatives from Van Cleef & Arpels. Clearly, this year’s panel title alone had already taken a stab at answering its’ own question of whether the economy was merely in temporary upheaval or experiencing a paradigm shift.
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