Bank Failures Threaten Small-Business Lending
This is a telling article about how tough it is for small and mid-sized businesses out there, but it goes to what I have been presenting for about two years now. It is possible, because I do it all the time with clients, to manage a business without the need for loans or accessing credit cards. I teach clients and have made presentations to many business groups on how this is possible. My clients are much more successful today using my processes.
By this article, lending is becoming increasingly difficult and it is not going to get better. Sure, the economy is changing, slowly, but it is not going to change overnight where managing and actually finding working capital in our businesses now has become very important. Buisness owners cannot go to the bank as some think they can.
If you own or operate a small to mid-sized business ($5mm-$300mm) you simply will not be able to access working capital via a bank loan.
Sure, some of you think you’re bank will give you $$ based on inventory or assets and they will but note that the bank will now own your business via that agreement. Trust me, I see it all the time. Banks want tow things from us; 1) interest payments 2) capital assets to sell at a later date.
It’s true.
By DARRELL A. HUGHES, Wall Street Journal
The U.S. Treasury Department is concerned the steady pace of bank failures could keep many small businesses from gaining access to new credit as the economy rebounds and companies seek to expand.
Assistant Treasury Secretary Alan Krueger said small and medium bank failures are disrupting long-standing business relationships that drive lending to small businesses.
“We’ve been concerned that small businesses, which are particularly dependent on bank financing because they typically don’t access corporate bond markets, will face and have been facing difficulty getting credit,” Treasury’s chief economist said.
Since the beginning of 2008, 192 banks have failed, with 27 coming so far this year. Total lending by U.S. banks fell 7.4%, the steepest drop since 1942.
According to Raj Date, executive director of Cambridge Winter Center for Financial Institutions Policy, there will be a lending shortfall for small businesses of as much as $250 billion to $500 billion as the economy recovers.
Read more at WallStreetJournal.com
- Can You Manage Your Business Without Bank Loans?
- Why Banks Can’t Lend: U.S. Financial System “Not as Good as Wall Street Says”
- Obama Says Small Businesses Must Be at Forefront of Recovery
- Geithner: ‘The credit crunch is not over’
- Where’s my stimulus?
Slowly, Americans are regaining their lost wealth
This is an interesting article related to this economic bounce back. I have always said that good or bad news about the economy depends on who you talk to. Some people are so angry and yet, some are tickled pink for their own reasons.
This article is stating the fact the some of us, and I stress some of us learned how to manage our money better than others during these last fifteen months such that now, some of us are reaping the benefits. Not me of course, I’m not that savvy, or am I? Either way, there is a light at the end of the tunnel. Things are getting better but I must caution that by saying that this recovery will take a very very very long time.
In the past I’ve blogged about how we need to get used to the way things are just as we did in the ’70s. In the seventies, most of us had a credit card or two and little to zero debt. Why can’t we live like that again? I know why. Because we are used to living with ten credit cards and a mountain of debt. Ever notice the way you drive to work and the way you drive home after work? Stressed, that’s how you do it.
This economy is changing for the better but it will be years before things get back to normal. Besides, what is normal?
Read this article:
Jeannine Aversa and Dave Carpenter, AP Business Writers, On Thursday March 11, 2010, 3:27 pm
WASHINGTON (AP) — Americans are recovering their shrunken wealth — gradually.
Household net worth rose last quarter, mainly because the healing economy boosted stock portfolios. But the gain was slight. And it was less than in the previous two quarters.
The Federal Reserve said Thursday that net worth rose 1.3 percent in the fourth quarter to $54.2 trillion. It marked the third straight quarter of gains. But economists say consumers would need a stronger and more prolonged increase in their wealth to persuade them to ratchet up spending.
Net worth had risen by a more robust 4.5 percent in the second quarter of 2009 and an even faster 5.5 percent in the third quarter. Net worth is the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards.
Even with the gain, Americans’ net worth would have to rise an additional 21 percent just to get back to its pre-recession peak of $65.9 trillion. That illustrates Americans’ vast loss of wealth from the worst downturn since the 1930s.
Growth in stock portfolios delivered the biggest lift to net worth in the October-to-December period. The value of stocks rose by nearly 4 percent to $7.7 trillion. Higher home prices helped a bit. The value of real-estate holdings edged up 0.2 percent.
Read more at YahooFinance.com
- Americans Keep Racking Up Debt
- Walking away from credit cards
- Consumers Debt Falls for 7th Month in Row
- GDP up 3.5 percent; jobless claims fall
- U.S. Economy: Confidence Rises as Consumers See Brighter Future
Unemployment Fell in Nine U.S. States as Michigan Made Headway
This is an interesting report as some still believe the U.S. economy is in the toilet. What is the right indicator to determine whether the economy is doing better or worse? Some people say that unemployment numbers are not a true depiction of the economy because claims are expiring. Others would say that the economy is improving slowly but surely. Who’s right?
By Timothy R. Homan
March 10 (Bloomberg) — Unemployment decreased in nine U.S. states in January, led by an improvement in Michigan that demonstrates factories are driving the economic rebound.
Michigan’s jobless rate fell to 14.3 percent, still the highest in the nation, from 14.5 percent in December, according to figures issued today by the Labor Department in Washington. New York and New Jersey were among the eight states where unemployment decreased by a tenth of a point.
The “most stable economies are those more exposed to manufacturing,” said Steven Cochrane, director of regional economics at Moody’s Economy.com in West Chester, Pennsylvania. “This is a recovery that’s really kind of concentrated.”
Efforts to stabilize inventories and rising exports are prompting companies like General Motors Co. to call back some dismissed workers. The jobless rate climbed in 30 states at the start of 2010, signaling the thawing of the labor market is not broad-based and indicating it will take years to recover the 8.4 million jobs lost the recession began in December 2007.
Payrolls fell by 36,000 last month following a 26,000 decline in January. The loss of jobs during the recession has been the biggest of any economic slump in the post-World War II era.
Read more at BusinessWeek.com
- Job losses slow to 247,000; jobless rate dips
- New jobless claims fall more than expected to 550K
- Greenspan predicts economic growth to hit 3 percent or higher
- Drop in Unemployment Claims Indicate Market Stabilization
- Jobless rate down for first time in a year
Why Banks Can’t Lend: U.S. Financial System “Not as Good as Wall Street Says”
This is an interesting article. As I have always said, banks are not lending and they are not in any position to do so. What are we to do? From a business perspective there are many ways to get around needing a bank loan and I have many clients to prove it. Some would say that I am like a Dave Ramsey in that I create systems for business owners that remove the reliance on business loans.
As for consumers, I just don’t know. Listen to Dave Ramsey for that.
Read this article and watch the video.
YahooFinance.com
Posted Mar 08, 2010 12:55pm EST by Heesun Wee
Forget the unemployment rate, durable goods orders or the Baltic Freight Index. Veteran market watcher Richard Suttmeier says the FDIC quarterly banking profile is “the single most important leading indicator for the U.S. economy.”
Released about 55 days after the end of each quarter, the FDIC report offers a bird’s eye view of lending activity in America, especially among smaller Main Street lenders and small businesses. “It’s a balance sheet of our economy,” says Suttmeier, chief market strategist at Niagara International Capital and ValueEngine.com.
Based on the latest quarterly profile, for fourth-quarter 2009, the state of the banking system is “not as good as Wall Street is saying. Particularly when you get beyond the ‘too big to fail’ banks,” Suttmeier tells Aaron in the accompanying clip.
More at YahooFinance.com
- Obama to refocus bailout on small businesses
- Geithner: ‘The credit crunch is not over’
- Bank Failures Threaten Small-Business Lending
- Where’s my stimulus?
- Walking away from credit cards
Could the economy be at risk of a double dip?
Should we be concerned that upcoming economic reports continue to show worrysome data or is that we are still adjusting to an economy similar to the 1970’s?
NY Times writer by David Leonhardt, writes:
Wednesday, March 3, 2010
We’re now in the midst of the worst run of economic news in almost a year. Home sales have dropped. So has consumer confidence. Stocks peaked on Jan. 19.
This Friday may well bring the darkest piece of news yet, at least on the surface. Forecasters are predicting that the Labor Department will report that job losses accelerated in February, perhaps back above 100,000. The main reason will be the temporary hit from the big snowstorms last month. Yet there is reason to wonder if the economy also has bigger problems.
The weekly data on jobless benefits are narrower and less consistent than the monthly jobs report, but they have the advantage of being more current. From early January to late February, the number of workers filing new claims for jobless benefits rose 15 percent. Over the previous nine months, this number was generally falling.
Economies rarely move in a straight line, and — as the better-than-expected numbers on Tuesday on vehicle sales suggested — the recent run of bad data is probably overstating the troubles. But whatever you thought at the start of the year about the recovery — strong, moderate, fragile — you probably need to be more pessimistic today.
Read more at NYTimes.com
- New jobless claims fall more than expected to 550K
- Retail sales rise much more than expected
- Drop in Unemployment Claims Indicate Market Stabilization
- Greenspan predicts economic growth to hit 3 percent or higher
- Slowly, Americans are regaining their lost wealth
Economy grows
Fed: Economy grows, but snowstorms hurt some areas
Fed Beige Book survey: Economy grows though snowstorms crimp activity along the East Coast
Jeannine Aversa, AP Economics Writer, On Wednesday March 3, 2010, 4:13 pm
WASHINGTON (AP) — The economy is growing slowly, but snowstorms crimped activity along the East Coast last month, according to a Federal Reserve report.
The Fed’s Beige Book survey, released Wednesday, showed that the nation’s recovery is managing to plod ahead though not at a strong enough pace to persuade companies to ramp up hiring. The Fed said “economic conditions continued to expand … although severe snowstorms in early February held back activity.”
Of the Fed’s 12 regions surveyed, nine showed improvement. The Richmond district, which includes Maryland, Virginia and the Carolinas, was hurt the most by the bad winter. That region reported economic activity had “slackened or remained soft across most sectors” because of the weather.
The economic setbacks from the weather come at a fragile time: The economy is struggling to recover from the worst and longest recession since the 1930s.
After a big growth spurt at the end of 2009, many economists believe the recovery lost steam in the first three months of this year. They predict it will grow at a pace of around 3 percent from January to March. That won’t be fast enough to drive down the unemployment rate, now at 9.7 percent.
The jobs market “remained soft throughout the nation,” the Fed reported.
Read More at Yahoo.com/finance
- U.S. recession seen ending in third quarter
- Worst recession since 1930s appears to be over
- GDP up 3.5 percent; jobless claims fall
- Could the economy be at risk of a double dip?
- Fed survey finds recovery gaining momentum
Wall Street lifted by jobs report
By Masa Serdarevic in New York
Published: March 3 2010 15:38 | Last updated: March 3 2010 15:38
Investors were comforted by a report showing US companies cut the fewest jobs in two years in February and by slightly easing concerns on Greece’s sovereign debt, helping Wall Street rise for the third consecutive session on Wednesday morning.
The economy lost 20,000 jobs last month, said ADP Employer Services, a private monitoring company. Job losses during January were revised to 60,000 from an initial estimate of 22,000.
Less than an hour after the opening bell, the S&P 500 was up 0.4 per cent at 1,122.67, the Dow Jones Industrial Average had gained 0.4 per cent to 10,442.41 and the Nasdaq was 0.3 per cent higher at 2,287.02.
Pfizer inched down 0.6 per cent to $17.50 on reports that the pharma giant could make an offer for generic-drug maker Ratiopharm worth about $4.08bn.
The stock was also under pressure following reports that Dimebon, the Alzheimer’s disease drug it jointly developed with Medivation, did not meet targets in a late-stage trial.
Medivation shares fell 67.3 per cent to $13.18.
Shares in Merck were 1.1 per cent higher to $37.79 after the company reported positive results of a late-stage trial of its drug to treat grass pollen allergies in children.
Read more at FinancialTimes.com
- DJ industrials pass 10,000 for 1st time in a year!!
- Slowly, Americans are regaining their lost wealth
- Dow 10K Lives to Fight Another Day
- Is this the begining of the end?
- Stocks climb on upbeat earnings, economic reports
Ford returns to the number 1 spot
Ford said it sold 142,285 cars and trucks in its home market in February, a 43.1% surge that puts the company back atop the mass automotive market it built more than century ago.
“A month in which Ford outsells General Motors is a very rare month indeed, at least in the last 80 years,” Kelley Blue Book analyst Jack Nerad said. “And a month in which it occurs when GM is not in the throes of a strike is even more rare.”
The seasonally adjusted annual rate of sales for the industry came in at 10.38 million vehicles, according to Autodata. That’s up from a paltry 9.17 million in February 2009.
Ford car sales surged 54% and truck sales rose 36% from a year earlier. The company, which continues to thrive in the wake of competitor bankruptcies and mounting quality woes, reached a total U.S. market share of perhaps 17%. That’s an increase of about three percentage points from a year earlier.
“This might be Ford’s best lineup of vehicles ever,” TrueCar.com analyst Jesse Toprak said. “GM is on the right path, but Ford has a distinct advantage right now and will likely remain the leader for the foreseeable future.”
On the production front, Ford said it plans to build 595,000 vehicles in the second quarter, up 144,000 vehicles, or 32%, from the same period a year ago. Ford left its first-quarter production plan at 570,000 vehicles, unchanged from the prior forecast.
More at Marketwatch.com
- Operational Accounting Consulting
- Retail sales rise much more than expected
- Dow 10K Lives to Fight Another Day
- Americans Keep Racking Up Debt
- Stocks climb on upbeat earnings, economic reports
Stocks climb on upbeat earnings, economic reports
Stocks climb after upbeat earnings from Deere, stronger housing numbers boost recovery hopes
Associated Press
By Tim Paradis, AP Business Writer , On Wednesday February 17, 2010, 5:40 pm EST
NEW YORK (AP) — A stream of good news has the stock market back on an upward path.
Encouraging corporate and economic reports Wednesday raised hopes that a recovery is taking hold although investors are still concerned about unemployment in the U.S. and debt problems in countries like Greece.
Deere & Co. and Whole Foods Market Inc. jumped after their profit reports topped expectations and the companies raised their forecasts. Upbeat reports on home construction and production at factories also helped lift the market.
The Dow Jones industrial average rose 40 points a day after it jumped 170. That rally was also in response to stronger economic and earning news. Treasury prices fell Wednesday as demand for safe investments eased.
Investors could get more insight into the economy Thursday from Wal-Mart Stores Inc. and Goodyear Tire & Rubber Co., which are scheduled to report earnings.
Stocks have fallen over the past month on overseas concerns, including Greece’s debt crisis and moves by China to keep its economy from growing too fast. Investors are still uneasy, but they’ve been able to turn their attention to a stronger domestic economy.
Read more at Yahoo Finance
- Manufacturing, banking reports lift stocks
- DJ industrials pass 10,000 for 1st time in a year!!
- Google: Worst is behind us
- Dow 10K Lives to Fight Another Day
- Slowly, Americans are regaining their lost wealth
Americans Keep Racking Up Debt
People, people, people, what are you doing? Why so much credit card use? Didn’t you learn your lesson in 2009? Come on people. It is possible to live without credit. Do you know that credit card companies make just as much from fees and interest rates on what you spend? Read this article.
Americans Keep Racking Up Debt
By Althea Chang, Mainstreet @ The Street.com
Credit card balances for some consumers have risen by more than 30% in the last half of 2009, according to one study, despite reports that some card holders did chip away at their debt last year.
According to the U.S. Consumer Credit Score Climate Report from Credit Karma residents of Indiana, Michigan, Oklahoma, Pennsylvania and Tennessee saw an increase of 30% on average in their credit card debt in the latter half of 2009.
Philadelphia had the highest debt increase nationwide at about 40%. Overall, Americans with credit cards saw their debt increase about 18%, Credit Karma reports.
And as debt levels went up, credit scores went down, Credit Karma found. Since July, credit scores have dropped two points. For the full 2009 year, scores were down six points to an average of 671 in a market where an excellent credit score of 740 may not get you the best deal on a credit card, mortgage or car loan.
After several months of paying down credit card balances, many consumers were forced to turn to credit cards towards the end of the year,” noted Credit Karma CEO Ken Lin in a press release. “Credit Karma anticipates consumers to return to frugality in early 2010 and that credit scores will continue to remain stable until the economy picks back up.”
Read More MainStreet @ The Street.com
- Walking away from credit cards
- Slowly, Americans are regaining their lost wealth
- Consumers Debt Falls for 7th Month in Row
- Manufacturing, banking reports lift stocks
- Stocks climb on upbeat earnings, economic reports