Do you remember 2008?

Apr 03, 2018 | Kevin O'Sullivan


I had just landed in the Turks and Caicos Islands (TCI), and was starting my new role as an Investment Advisor with Scotiabank in that country. It seemed like a dream job...

Where were you? What were you doing? What do you remember of that time?


I had just landed in the Turks and Caicos Islands (TCI), and was starting my new role as an Investment Advisor with Scotiabank in that country. It seemed like a dream job, and when I got on the ground there were many aspects of it that fulfilled that dream, and plenty that didn’t.


Arriving on the main island of Providenciales in June of 2008, meant blasting heat, the beginning of the hurricane season (though my wife and I didn’t know that at the time), an economy that was roaring with new luxury resorts exploding like mushrooms out of the ground, and a government that had been very loose with the finances. There were lots of other things going on that we learned about subsequently, but this was the main stage show on our arrival.


Our new neighbours were 1) the General Manager of the new Ritz Carlton, under construction on West Caicos Island, and 2) the General Manager of the newly finished Nikki Beach resort, a swanky, hip resort catering to the jet-setting Miami South Beach crowd. I felt a little like the mouse who had crawled out of my hole to find a full blown party going on in the main hall. I wasn’t quite sure if this was real or a mirage.


Early warning signs were that realtors who had flooded to the island to catch the wave of surging property values were now starting to abandon their dream and get out while they still had the airfare. The home we moved into had been vacated by a family of realtors. They had left in a hurry leaving the car with a car dealer to sell it for them. But that was still just a whiff of what was to come.


The construction sites were crawling with industrious workers, like ants on the hive. Fine dust swirled around in big clouds as huge trucks moved back and forth under the blazing sun and the constantly blowing trade winds.


I toured the island getting a sense of what was where, and trying to get a pulse on what was going on. I stopped at the site of newly planned development on the north side of the island, far away from all the other resorts and busy activity. The only building was the sales site. It was a very simple affair. I was the only one there as I walked on the boardwalk leading through the scrub brush, across the sandy soil to an elevated platform. I climbed the two flights of wooden steps to the platform perched just above the scrub. There was a thatched roof, with white canvas cloth walls on three sides, open to the front. The cloth was billowing in the stiff breeze, but it didn’t detract from the view over the white sandy beach and across the shallow turquoise water that stretched all the way to the horizon. It was truly a stunning vista. This was the beginning of the Shore Club, still an idea in the developers mind.


And then it all stopped.


We were hit by two hurricanes in the month of September, despite being assured that hurricanes never hit the islands. The destruction caused by the hurricanes was impressive, but the islands and the people soon recovered. But then the real storm hit. It was on September 15th, 2008, just after our second hurricane, that Lehman Brothers collapsed. The impact was almost immediate, like a big whump, and then quiet. Only the quiet was devastating. And then it got even quieter.


The Ritz Carlton GM started laying off staff, and a few months later he was also gone. The Nikki Beach GM lasted a big longer, but then he left too. The dust storms around construction sites were smaller, just mostly picking up fine sand from the untrodden ground. Most of the people had gone.


Developers had lines of credit to pay, but no one was buying any presales. Existing sales contracts were being cancelled. Tourists stopped arriving. Money that once flowed like a gushing river in spring time had dried up almost overnight. And the financial markets went into a freefall. But the falling markets were almost a distraction for most as they were desperately trying to keep their businesses afloat. Once flush entrepreneurs were pulling out all stops and taking desperate measures that were inconceivable just 6 short months ago.


I remember speaking with a long time resident of the island telling me that island was a tough place. He recalled taking a collection to simply pay for someone’s flight off the island and home. I came out of his office watching the dust blowing across the abandoned construction sites under the blazing heat.


Then the repercussions started. The TCI government’s activities came under scrutiny by the British overlords. Investigations began, trials got underway, and fingers were pointed in every direction. But the truth is even if you’re involved in the thick of it all, you know what is going on – even if it’s just a niggling feeling that you try your best to ignore. If something looks too good to be true it usually is, no matter the scale. In 2008, the bloated bubble finally burst for all of the ugliness to be revealed, and the extent of the ugliness was vast and had spread far around the world.


Hindsight identified the culprit, which came down to loose regulations and more to the point human excesses – at every level. Regulations were slowly changed to tighten controls over human inventiveness. But many people had been badly hurt, and the architects often had walked away unscathed. Those that were hurt were angry, and rightly so. But many were also being caught in a changing world were jobs were disappearing to advancing technology, and so they were trapped in an even nastier vortex. And so we find ourselves returning to an environment of looser money and regulations. Memories are short.


While history will repeat itself in the absence people paying attention, it is not always precisely predictable. Dangerous trends can take a very long time to build to a head, and meanwhile a very constructive environment can be building behind the scenes.


The construction of Shore Club finally went underway almost 10 years after its conception, and after many arduous battles. It’s safe to say that it lived up to the developer’s dreams and plans.


As we enter another unsettled period it’s important to be mindful of excesses, maintain our discipline and to stick with our long term visions and plans.


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