As we dined at a full to the rafters Houston Galleria steakhouse, we could see the empty building across the way, the words Stanford Financial emblazoned in golden letter accross the front facade. One thought came to mind, that's the only empty building in this part of town.

Yet, the Stanford crisis and the price of oil are two of the reasons Houston's bustling activity is a major puzzle. Stanford was a major player in the financial activity of the city, and much of the economic improvement of the last few years had come on the back of rising oil prices. In fact, according to the most recent statistics, Houston is starting to feel the pinch of the recent unemployment problem accross the U.S., although its most recent unemployment rate of 6.5% is well below the nearly 9% national figures.

In the first quarter of 2009, Houston's housing boom came to a crashing halt, with new home starts falling by 35%. Recent stimates project that it would take 3.2 months to sell all vacant homes in Houston, compared to 3 months a year earlier.

As we drove in, on I-45, two things were clear. One, traffic is as heavy as ever. Even at noon on a Friday afternoon, 610 was wall to wall, even as 45, headed toward downtown was starting to clog.

We also noticed at least one former Chevrolet dealership that was empty. Yet, as we neared the booming Westheimer area near the Galleria, the Bentley dealership stood out, as did the number of upscale cars on the street, where BMWs seemed a bit opaque compared to Astin Martins and other five figure modes of transportation.

One thing is clear, Houston is a resourceful city. According to the Houston Chronicle, Houston based oil companies may have found a new, and way under reported boom, Mexico. Chron.com reports that Pemex, Mexico's state oil company, reeling from the lost oil revenue as its Cantoral field dries, has hired, Weatherford (NYSE: WFT), Schlumberger (NYSE: SLB) and other Houston based oil drillers and service companies to drill as many as 17,000 wells in the foothills of Venustiano Carranza, in a group of fields known as Chicontepec, near the Gulf of Mexico.

The area is described as a "Hail Mary" for Mexico's oil future, as it has yet to produce as much as Pemex had hoped for. So far, according to Chron.com: "Chicontepec’s production has reached just under half the 72,000 barrels of petroleum per day that planners hope for this year. But Pemex promises to increase the field’s production to more than 700,000 barrels per day within the next eight years." Pemex thinks it has something big, though, and is willing to put forth the effort to get it, as it projects that "Chicontepec holds nearly 40 percent of Mexico’s estimated petroleum reserves and about 18 billion barrels worth of currently extractable oil. Unlike the vast pools in Mexico’s offshore fields, however, Chicontepec’s oil is locked in small pockets, making it difficult to tap and to get to market."

The key in this kind of formation is to drill a large quantity of wells, which means that the countryside is dotted with oil company personnel and equipment as "Multiwell platforms several acres large hunker in the valleys on either side of the highway like the outposts of a conquering army. Drilling crews climb into the forest- and orchard-covered hillsides. An initial target of 350 new wells in the Venustiano Carranza area already has been nearly met, said Vicente Valencia, the 29-year-old mayor. In all, as many as 800 wells will be drilled near the town in the coming years, he said."

Meanwhile, the Westheimer area of Houston keeps growing, with restaurants, shops, and hotels dotting the landscape, and traffic clogging both sidewalks and streets, creating a surreal atmosphere in the midst of what has been a significant economic downturn elsewhere.

If you've read our recent installment of this series, in which we profiled San Antonio, and what we thought was a positive economy, think of what we saw in Houston as a five fold increase in activity.

Conclusion

Stanford Financial seemed to partially define Houston, a flamboyant, yet, welcoming and philantrophic Gulf town with an international feel fueled by oil money, and characterizing the maverick never say die nature of that industry.

Stanford's fall, clearly portrayed by the empty building coned off, dark, and empty, in the midst of a madhouse of activity, seems out of place, and at the same time is a symbol of what could be for a city that refuses to die, despite significant hardships.

As with other Texas cities, Houston depends on sports, at all levels, for its drawing power, and the Rockets in the NBA playoffs aren't hurting. Neither is an influx of several hundred junior tennis players and their families in for the weekend.

Yet, there is no telling how much money will disappear once the Stanford issue is sorted out. It is clearly a widespread phenomenon. A concierge at our, full to the rafters hotel, a Starwood (NYSE: HOT) property, told us that he had a small amount tied up with Stanford. He doesn't expect to see it again.

And although oil prices are on the rise, it's not clear for how long, or how much Houston will benefit, without some kind of improvement in the domestic oil industry.

There are subtle signs of weakness to be found also. We got our reservation for dinner, on a Saturday night, about an hour and a half before we got to the restaurant, which in previous years would have been impossible. And there was no dress code enforced, which means that the bar has been lowered in order to fill seats.

In other parts of town, away from the hustle and bustle of Westheimer and the Galleria, we saw another side of the city, with less fortunate folks standing around, and convenience stores and gas stations with wrought iron barred windows, sitting mosty empty, as the tennis players drove by to the public courts to do their thing.

Contrast, uncertainty, a little help from Mexico, and lots of testosterone seem to define Houston at the moment. We get the feeling that the city has a fighting chance, but that its Westheimer boom can't last forever without some help from other parts of the city. After all, it seems to us that no neighborhood can be an island forever.

In a sense, Houston seems to be a whole lot like America at the moment, a wounded giant that is trying to pick itself up without letting anyone know how bad the wounds are.

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