Chicken Little pays a visit.

WHEN THE FDIC SAYS WE'RE "AT-RISK," WE SHOULD BEGIN TO CLUCK

Is the sky falling?

I am just a little too chicken to make a bold pronouncement that the Denver and Colorado economies might be ripe for a fall, but I did note a recent report from the Federal Deposit Insurance Corp. that things here are "at risk."

And I note with even greater interest that some real estate folks are defending the building boom. I've heard this song before. It's like opera. The confident tenor sings of strengths, while the soprano goes off into the highlight aria filled with fear of imminent doom. I suppose it's no coincidence that most operas are tragic.

The FDIC warned in its report that Denver, along with 12 other cities, is vulnerable to overbuilding commercial real estate space, in part because of its exposure to high-tech companies. The report stated that "rapidly growing construction and development loan portfolios at banks and thrift institutions in at-risk markets raise concern." In addition to high-tech industries feeding the commercial building frenzy, the FDIC noted that Denver is heavily dependent upon the so-called FIRE sectors -- Financial, Insurance and Real Estate, business sectors closely linked to the volatile stock market. The report suggested -- strongly -- that a downturn in the market and WHAMMO, Denver financial institutions are sitting on a ton of loans susceptible to foreclosure.

We've been here before. In fact, several times. But one year is particularly instructive: 1984. Back in the early 1980s the Denver economy, based almost entirely on the shaky pillars of one industry -- energy -- was booming right along. Banks and thrifts were making commercial construction and development loans like they were going out of style. People joked at the time that the Colorado state bird must indeed be the crane, because there were so many of them soaring above the skyline. It all came down like a house of cards in 1984, in what seemed like an instant, when the bottom fell out of oil prices.

There were some people at the time who worried about overbuilding and vulnerability And there were many -- particularly those who were making incredible livings off construction and development and the lending thereto -- who thought the naysayers were either a little chicken or Chicken Little. The sky did fall, and we all paid a very dear price for several years, but those who warned of that possibility never did get their due.

Curiously one of the entities that didn't have a thing to say about the potential for overbuilding in 1984 was the EDIC. There had never really been a major bank crisis before the FDIC was set up in the 1930s, so the federal guarantee agency had little reason to believe that it would ever have to actually pony up some major funds when some banks took a nosedive. In the years that followed 1984, the FDIC owned so much overbuilt real estate that it must have learned something. Now it warns the banks, and the public, that things are amiss in some places. I believe the agency has earned some credibility -- repossessed brick by repossessed brick.

The economy has been very good for the past eight years or so, and especially good right here in Denver. However, I am reminded of the few other times in my lifetime when the economy got so good that people forgot that what goes up must come down. I, like many other people in the early 1980s, thought we were on an economic rocket ship to deep outer space. But I did an interview with an old economist late in the boom period who taught me an invaluable lesson: in economic terms: The word "boom" means "a period of unsustainable growth."

I look around here now and see signs of change. Dot-coins going out of business. Houses staying on the market an unusually long time. Interest rates rising. Layoffs and down-sizings.

And, frankly, too much commercial building.

Besides, I've been here long enough, and heard enough of these economic arguments, to know that people who criticize Chicken Little often end up eating crow.