So far, so good. Mostly.
Insulated by high oil prices and conservative lending practices, Alaska's resource-driven economy has softened this year but not snapped under the pressure of Wall Street failures and a global credit crunch.
Alaska is well into its 21st consecutive year of statewide job growth, albeit at a slower rate than last year.
Home foreclosures are up, modestly, but way below the staggering rates facing many other states.
Local banks are tightening some lending practices, but you can still get a loan in Alaska. Those deposits? Don't worry about your money. It's safer in the bank than in the mattress, and accounts are now insured up to $250,000.
Oil prices might have fallen in recent weeks, but they're still unusually high, and the state treasury is still doing nicely. Record-level Permanent Fund dividends, complemented by $1,200 energy rebates, put almost $2 billion into circulation or savings in the last few weeks.
City finances are in good shape too, with a $200 million investment savings account in case of emergencies.
And that's a good thing, because there are ominous shadows on the horizon.
Alaska isn't isolated from the big financial markets in the Lower 48; state and local governments, as well as many businesses, depend on them for bond sales and other borrowing. And some are pinched by the fear in global money markets.
The Municipality of Anchorage usually sells bonds about this time of year and hopes to market about $92 million in November, mostly for city roads and drainage projects, to continue Clark Middle School reconstruction and other school improvements.
However, the city probably will try to negotiate terms with specific buyers rather than put the bonds up for competitive bid, which "would be prohibitively expensive," Sharon Weddleton, the city's chief financial officer, said Friday.
The day before she said the major bond markets are not much of an option. "The market has really ceased to be functional."
The Alaska Housing Finance Corp. goes to bond markets for money to make home loans. About a month ago the big state agency backed off plans to sell $200 million in bonds and scaled back to $81 million instead, said Daniel Fauske, executive director.
"The pricing was so erratic," Fauske said. "We eventually got it down to a price that we liked, but we had to pull it once from the market ... The market has essentially just dried up, for a while."
The city also borrows about $100 million short term every year to cover expenses during the winter before property tax revenue starts to flow. On a good year, the city actually makes a profit on this borrowed money by investing it for a few months and receiving more interest than it pays on the loan. But because of the crazy credit markets this year, the city might draw from its savings accounts instead.
The credit crunch could threaten other big projects.
That new Dena'ina Civic and Convention Center downtown, Wells Fargo's Joe Everhart recently pointed out to the Anchorage Chamber of Commerce, "Do you think that would be possible in today's market?"
Or pipelines, bridges or big school bonds?
The cost of credit will have an impact on "projects that we're sitting here feeling pretty confident about," Alaska USA's Nancy Usera said.
"The expansion of BP, Conoco Phillips, the pipeline, TransCanada, all of those big projects have to find financing, and that's not something we're going to see right away. ... The private sector is not going to get into these projects unless they can make some money on it."
SOFTER HOUSING MARKET
But for the moment, Alaska is in good shape.
Expensive oil, and expensive North Slope pipeline fixes, helped keep employment levels growing this year, said Neal Fried, a state labor economist. Upticks in mining and military spending also helped compensate for slowdowns in construction and some other sectors, he said.
"Probably the biggest part of our growth in the last two years has been the oil patch," Fried said. "I'd call it pretty robust."
"Alaska's economy is strong," Fauske said. "Unemployment is low. So far, the effect (of the financial turmoil) has not been as immediate as we've seen in other parts of the country.
"I'm not saying we're immune," he added Thursday, noting that he had just watched the Dow Jones average slip below 9,000 for the first time in years.
Alaska's housing market is softer now but stable, Fauske and Wells Fargo regional president Richard Strutz said.
"When you're going 100 miles an hour and you slow down to 55, everything seems slow," Fauske said. Home foreclosure and delinquency rates here are among the lowest of all states, if not the lowest, they said.
That's true. Home foreclosures in Alaska are increasing, hitting their highest level in five years recently, according to a report by the state Labor Department, but that's still far below both the national average and foreclosure rates of almost all other states.
According to state Labor Department analyst Brian Laurent, 0.9 percent of Alaska mortgage loans were in foreclosure in the second quarter -- third lowest in the country behind North Dakota and Wyoming. In hard-hit Florida, 6 percent of home loans were in foreclosure.
Laurent said 3.8 percent of mortgage loans in Alaska were past due -- delinquent -- in the second quarter. That put Alaska in 44th place among the 50 states and the District of Columbia, Laurent said. Mississippi had the highest delinquency rate -- 10.4 percent.
LEERY OF THE FUTURE
Strutz said his bank has tightened its lending. Wells Fargo is more conservative with how much it's willing to risk in home-equity loans now and pays more attention to applicants with credit blemishes, he said.
"That's not to say we won't make a loan if you've had a problem in the past," Strutz said. "We do. But it's just a little more rigorous in the application process, looking at your credit, than it has been in the past."
Strutz and Scott Goldsmith, an economist with UAA's Institute of Social and Economic Research, said the Wall Street meltdown is scaring buyers and sellers too.
"Certainly, people are a little concerned about their net worth, the value of their homes, the value of their retirement accounts, and that, I'm sure, is causing some people to think twice about going out and making big ticket purchases," Goldsmith said.
"You can convince somebody today that the economy in Alaska today is good, house prices are good," Strutz said. "But you can't convince them that it will stay good in the future. So they become fearful and you see people sell houses prematurely to get their equity out. ... You see people slow down that upgrading to a bigger house."
Single-family house sales are down 15 percent through August this year in Anchorage and Mat-Su compared with the same months of last year. But average sales prices seem to be holding steady, according to Multiple Listing Service numbers.
Still, reassuring Anchorage and statewide statistics don't mean times aren't tough in many parts of Alaska, the economists and bankers say. Those high oil prices cut both ways.
"You almost have to look at the various communities in Alaska being as isolated from Anchorage as Alaska is from the Lower 48," Usera said.
"People in Fairbanks (and rural Alaska) are suffering. They've got this huge cost of energy. They're having a hard time paying their bills because it's all being consumed in the cost of energy," she said.
"Now, is that a result of what's going on in the Wall Street market? No. But nonetheless, I think that to say that all is good is an overstatement."
NO HOUSING MANIA
Significantly, Alaska's financial institutions mostly avoided what Fauske called "boutique" products snapped up in some other states -- seductive offerings like adjustable-rate mortages, zero-interest loans, "and all the other nonsense that overtook America.
"We didn't have much of that up here, and we didn't have the churning up here, as you've seen in Florida and other places where five and six different people owned a condo before anyone moved in," Fauske said.
"For whatever reason, Alaskans have always preferred fixed-rate, long-term loans," Strutz said. "Thirty-year, 15-year mortgages. And a lot of markets, in order to afford more expensive housing, they went to variable-rate loans that ... had low teaser rates" that bumped up significantly a couple years later.
Alaska USA's Usera and many others also point to the still painful memories of the late 1980s Alaska crash, when oil prices toppled to single digits and took the rest of the state's economy down.
"One of the advantages Alaska had over many places is that we went through the crunch in the '80s," Fauske said. "People remember those days ... and those are memories that myself and a lot of other people said, 'ooh, that wasn't any fun.' "
PART II: High oil prices have boosted Alaska, but the state faces risks from falling prices; and the state's Permanent Fund savings account is a victim of crashing stock markets.