Turning the Corner?

Last week as I was reviewing our financial statements before publishing for our Board of Directors, I noticed that there was an strong indication of the potential start of a recovery trend. Shortly after the analysis, I started to notice some prognosticators are saying we are past the recession and have started the recovery. The most famous of these: author, television host, and economist Larry Kudlow. The old rule of thumb is that the stock market will signal the recovery by trading higher 6 months prior to the justifying economic data. In case you have been too busy (probably working 4 times as hard as layoffs have increased work loads), the Dow Jones Industrial average which tracks 30 stocks that is designed to give a fair representation of the US Market has traded from 6,500 to 8,500 this year. I believe this is speculative trading in hopes of positive third quarter GDP however even in my organization we are seeing signs of a turn around. The turn around I am seeing is in our loan delinquency, loan charge offs, and our allowance accounts. There appears to be a curtailment in non-performing assets. So what does this mean? This further supports the current stock rally as well as give businesses and consumers hope that this is all behind us. The bad news is that all the pseudo government help that is no longer needed will continue to plague the economy in the form of capped growth. For every floor (government stimulus), there must be a cap. The cap will not be removed until the government realizes that people make mistakes to learn from them and improve. We don't need the intervention, focus on balancing the budget or reducing our national deficit and not on running our corporations. Lastly, I cannot post this blog until I bring attention to an area of the financial services sector that the media and government refuse to recognize. Credit Unions have not caused the tax-payers any money, has required no government intervention, and continues to thrive. President Obama, you are looking for a "new" financial structure to cure our ailing financial system; here is your answer--Turn banks into Credit Unions. The not for profit financial cooperative movement has been successful for over 100 years and continues to be the only beacon of light in the present economic storm.