Archive for November, 2011

U.S. Homebuyers And Business Owners Need A Sense Of Urgency

Wednesday, November 30th, 2011

 I am proud to announce that I am now a contributor on’s Investing Channel. Below is my first post, which can also be read here on Editor Stephen Schaefer’s Exile Wall Street Blog. Your thoughts are welcome.


A key driver in most businesses is a sense of urgency. It forces management to kick up the thought process to think about risks whether real or perceived, and in a compressed time frame. Complacency kills businesses.

The current state of our economy has created a dangerous sense of stability. That stability is encouraged by seemingly intractable problems such as high unemployment, low GDP growth, low interest rates, and a general sense that things will not change. I believe that thinking this will always be the case, is a mistake.

It has been typical that when we are in a prolonged period with a unidirectional focus, passive inertia sets in. Shock occurs when things change, most probably in a somewhat violent and unpredictable manner.

A good example of this is how most business owners and consumers today are not concerned in any way about the direction of interest rates. Today, we will likely see low numbers for New Home Sales and tomorrow’s FHFA House Price Index will likely show prices are still low. It’s clear that homeowners do not feel a sense of urgency that interest rates may rise, and also sense that home prices will continue to fall. This situation cannot continue indefinitely. Rates are artificially low, with the Federal Reserve working overtime to keep them there. Home prices remain depressed mostly because of overbuilding and oversupply, coupled with a shadow inventory of foreclosure units. Both of these events have created one of the most favorable entry points for those looking to buy a home…So why isn’t there more excitement around these facts? It’s because a sense of urgency is missing. No one believes that current conditions will be changing anytime soon.

But let’s look at some of the facts. Interest rates can rise, and may do so despite all the efforts of the Fed. With the crisis in Europe, a real possibility exists that European Banks will no longer be buying U.S. Treasuries. Add a slight increase in GDP growth, and the 10-year U.S. Treasury Bond Yield could be substantially higher than today, which could in turn lift mortgage rates. Additionally, the latest data show that building permits for new homes actually increased over 10%, and some markets actually saw increased prices in housing costs.

Some small business owners seem frozen in their fear with respect to the condition of the economy even though they have been able to not only survive, but actually grow in this environment. Some of the worry may be about matters outside their control, and may in fact be needless. Many business owners we speak to are so consumed with the goings on on the national and global scene that they leave no time to consider the issues important to this dynamically changing environment. Complacency and fear are a dangerous combination.

A genuine sense of urgency would clearly help the general economy as potential homeowners would move off the sidelines, and business owners would start to lean into upcoming growth by hiring ahead of the growth they are experiencing instead of managing for as long as possible in an understaffed position.

So, let’s not be lulled into this negatively-biased complacency, and instead look at the changes that are occurring around us, and employ a sense of urgency in all the decisions we make. There are many positive developments beginning to surface in this economy, and those prepared will be best positioned to take advantage. The rest will be stuck playing catch up…

Signs of Life in Housing?

Thursday, November 17th, 2011

With today’s news on housing starts and new building permits, I thought it would be an opportune time to again discuss how important it is to stay focused on local events and circumstances. At NJCB we are seeing some encouraging signs from various segments of the economy, specifically with our contractor and homebuilder clients. While we do not feel that we are out of the woods just yet, we certainly are beginning to see the edge of the forest. Land prices are at depressed levels, materials and subcontract services are more competitive now, and of course, interest rates are at historic lows… Most important, we are seeing increasing confidence in a more stable economy.

So, while all the news channels are focused on Europe, The Debt Commission, The Presidential Race and other national or global events, we continue to focus on the developing building of confidence in our own local markets.. I discussed this issue today on Bloomberg Radio and in the CNBC Power Lunch interview below.




Bank Transfer Day – What Does it Mean for You?

Friday, November 4th, 2011

Tomorrow is “Bank Transfer Day” and certainly reminds me that one of the greatest assets of our business environment is the freedom of choice. While other countries may only have few banking options, here in the US we have over 7,000 banks to choose from. Those banks range in size from a few tens of millions to multi-trillion dollar banks. In these times of changing bank priorities, regulations, and business models, one should always keep focused on the banks that truly create lasting relationships with their customers. You have a choice.

At NJCB we hold the customer in the highest regard.  Creating relationships is the business we are in. We have always provided products such as checking and debit cards for free along with many others that ran counter to the business plans of many other banks. It is our high customer retention rate, combined with the enormous word-of-mouth referral base that lowers our costs and allows us to provide the high level service at little to no cost to you.

Take this opportunity, especially if you feel you are in an “abusive relationship” with your own bank to move your account to a bank that cares about you, and sees you for more than just a source of fee income.

So on Saturday, November 5th make plans to move your money to your local community bank… Here at NJCB, WE will be open on Saturday from 9AM to 1PM and are ready to serve you, and make your transition smooth & effortless. If you are near one of our offices, stop by enjoy a cup of coffee at our coffee bar, and feel free to chat with one of our staff about why we are “a better place to be.”