Archive for April, 2012

Don’t Look At The History Books For Insight Into This Recovery

Monday, April 23rd, 2012

While the mood was not somber as in years past, the discussion revolving around the economy at the Federal Reserve Bank of New York’s Community Bankers Conference was one of a transitioning set of fundamentals, and a deeper understanding of “why it is different this time.”

The economy is clearly on a path of recovery, and any chart of any metric would suggest the same. The astounding facts though, were of how this recovery was different than those of the past recoveries, and the data was compelling. Eleven consecutive quarters of positive GDP growth was offset by the level of slack still in the economy. While core inflation is running higher lately, forward-looking indicators suggest a slowdown in the inflation rate.

There may be a shift occurring in our economy and whether permanent or temporary, new norms will have to be considered. One such norm was the relationship between the unemployment rate, currently at 8.3% and the employment rate, currently declining to a rate of 67%. If the employment were to rise and become positive, the unemployment rate actually may settle to a previously unthinkable new higher normal in the 6 – 7 % range.

The other very interesting shift is the relationship between new housing starts, and the formation of new households, which might suggest that there is a shift taking place in the rationale for home ownership, with many delaying the decision.

These and other indicators point to a very gradual recovery, with much slack remaining in our economy, for now. Close attention needs to be paid to trends occurring in the present, with much less reliance on historical trends. We are seeing these trends play out in real life on Main Street as well…

Tell us what you are seeing in your business…


For more, check out my interview on CNBC’s The Kudlow Report or view this post on


Three Questions You Need To Ask About Your Bank…

Monday, April 2nd, 2012

In the past year the banking industry has received quite a bit of media attention. With countless stories on fee hikes, numerous new regulations, and bank failures, one thing has gotten lost in the whirlwind: you, the consumer.

In my most recent post, I discuss the three questions you need to ask about your bank, to evaluate whether you are getting the most out of your bank.

When was the last time you evaluated your bank?