For the past three years, the Toledo Business Journal calls for nominations of the ‘best of” in different business/professional categories…kind of like the People’s Choice Awards you see on TV. One of the 53 categories that people can vote “best of” is credit unions. I was informed this morning from the publisher that, for the third year in a row, Great Lakes CU has been listed in total votes of the” Best of Lake Erie West.” To make it clearer, the paper does not list who was first or second, just the top two vote getters and we were one of them. Either way, I am pleased of this acknowledgement that the community feels this strongly to vote for us as one of the Best CU’s of Lake Erie West. Thank you!

David Seeger

President & CEO

Great Lakes Credit Union

Consumer confidence is up 0.5%, personal income up 0.1%, Christmas spending is up…all great consumer signs. But, can we sustain this? That is the big question that faces us this year end season. We still have the Euro issue that could pull the world into recession/depression, you have a stubborn Congress that cannot agree on policy, you have 15 trillion in debt plus a continued deficit. WE have a tendency to go with the current flow of things as presented by the media. I hope things are going to change…and I think we have the chance that they will…but we still carry these very heavy anchors that are holding us back.

In this time of economic strain, the American consumer has changed some of their buying habits.  Instead of the more expensive, large ticket items, they are now opting for the smaller ticket items.  The top of the list?  They are wine/hard liquor and
higher grade of softer toilet paper.  So, our new measure of comfort….nicer drinks and softer bathroom tissue.  Signs of the times………..

We have heard a lot about the double dip recession that is or is not coming.  That infers that maybe were not quite out of the last recession and now a double dip type of thing,
etc.  Well, let’s put that behind us.  Double Dip?  No, but maybe it is just a plain old
recession coming our way.  Why do I say this?  Well, the Brookings Institute
reported that the Toledo Metro economic indicators have dropped for the past
two months while other regions in the US have seen small increases.  Goldman Sacks says that we will be in or at the brink of a recession in January 2012 or so.
Bloomberg Weekly reported a story on the economy with relationship to
the gap between the rich and the not so rich.  The margin is as wide as it has been since 1929…remember when we had the crash and the Great depression?  Also,
economic expansion during that historic time was considerably smaller than when
it was during the1960’s when the gap was much smaller.  We are talking 5.8 years for an average expansion versus 24 to 30 months…which would put us on track for a slow down
early next year. Our political leaders could not reach an agreement on debt
reduction and the Euro thing drags on.  But this continues on contrary to the general feeling that we feel from the local news media.  Unemployment in
Toledo has dropped to 9.7%, which is better…but is that because some people
have given up looking for work?  Although this is the beginning of the holiday season, we do want to have a pleasant outlook on the economy and our hope for the future.  And that is what I want as well.  I just wish the local economic numbers would support these good feelings we have.

Chrysler added to the good news about jobs in our community this past week. This was indeed welcomed news on top of what we have been hearing from GM over the past few weeks as well. While this does spell good news for our local community, the question remains if we have turned the corner. This good news will help a lot of people in N.W. Ohio. But these jobs do not make up for the total amount of jobs lost over the past decade. Well, that statement makes me sound like a wet blanket, but it is the reality of the matter. While this is good news, we have a long way to go in order to turn the local economic situation round. First of all, we need to change our mentality of ‘if we just could find another Jeep plant to come to Toledo.” Well, they may not exist and if we think that is the extent of our problems, then we have missed the problem all together. Our problems are structural in nature. Where is the discussion on what we think our community should look like over the next 10,15 or 20 years? Is green energy the way to go, or extracting gas from shale? Is our educational institution up to the challenge of educating our young people for the jobs of tomorrow? How can we when we don’t know where we are going to begin with????? IS industry committed to this community or are they willing to pull up stakes at a moment’s notice when another community will offer a better tax abatement? Our leaders need to have these discussions with the community. IF not, then these new jobs we have added will be a flash in the pan and not a down payment for our future.

If we did not have the Euro crisis, what would happen if…. If we did not have the Wall Street induced financial crisis 3 years ago, what would happen if….If we did not have persistent unemployment, what would happen if…..IF we did not have the fastest growth of neighborhood poverty in the US, what would happen if…. There are a lot of “ifs” above and it is nice to contemplate what it would be like if. The issue remains are these “ifs” the cause or the effect. We have been conditioned to think of our economic problems as cyclical and if we wait long enough, they will go away with the upturn in the business cycle. What if the “ifs” are not cyclical in nature? What if, these ifs, are actually
structural in nature? This may be one we cannot wait out. We are in a
deflationary period, not unlike Japan since the 1990’s, and no one really knows
what to do about it anymore nor do they know what to do about it in Japan. We
know a lot of our jobs have been either exported or replaced by robotics. We
know that deficits do matter and the burgeoning debt both political parties
have imposed on us makes a difference. Lowering rates to add supply only can do
so much. There is another side to the supply-demand equation which is obviously
demand. Weakness of demand is the key issue. And that will not change until
there is an increase in consumer confidence. There is money out there to be
spent and people can afford to do so….but where is the demand????? It is being
overshadowed by the lack of consumer confidence. What can be done? First of
all, the government can get their act in order on revenues and spending. Also,
come to grips with Medicare, social security and if it needs to be improved
Obama Care, not abandon it. That is the government’s fiscal job. Secondly, we
need to develop a plan/policy for infrastructure improvements, a solid energy
policy and yes, a manufacturing policy. We have none of this and should do so.
Why? Politics of course. Thirdly, we need a leader. A true leader. One that can
say we are doing the right things here as a nation by doing the above and
telling businesses and consumers, it is OK to do your thing. Get to it. Here is
where we are going…..I have the vision…..let’s be true to our roots and be
Americans and lead the way. What if…….

When we thought it was a done bailout deal, now the Greek government has decided to put it to a vote. Yep, to a vote. So if the people decide not to take the bailout deal and the reforms that come with it, there will be a collapse of the Greek economy with the potentiality of several more countries on the Euro to follow. And what will that gain? Absolutely nothing. And how much of that will spill over to the US markets?  Probably a lot. So just when we thought that our chances of a double dip have receded, they are now back front and center. Come on Greece, do the right thing.

A local economist says that unemployment highs will last until 2017.  Brookings Institute estimates that Toledo will lag behind other cities in Ohio when it comes to the recovery….if you want to call this a recovery.  So, it seems the only news we get is bad and more bad news.  So, what is the issue?  Why can’t we seem to get anything going here?  Two major reasons.  Housing itself is a huge anchor dragging down the economic recovery.  They haven’t even bottomed out yet!!!  It is only now that the politicians are talking about ways to help the individual homeowner through no fault of their own.  Why the wait?  I have no idea.  And then the biggest reason we have a lack luster economic recovery is…..demand, or lack thereof.  We talk around this glaring fact and touch on everything else, but this is it.  WE HAVE NO DEMAND IN THIS MARKET!!!!  Did you hear it??  We have no demand….mainly due to “fear.”  Fear to spend disposable income.  Fear that you too may lose your job.  Fear. Fear. Fear.  Didn’t one president we had years ago during the economic depression say, “the only thing we have to fear is fear itself” in an effort to lead us out of that economic downturn.  Today, we have no such leaders in our midst.

Manufacturing numbers continue to go up.  Car sales are still strong.  Employment numbers for September are slightly up.  Why?  No one knows for sure.  Particularly in this bleak economic climate, we see these slivers of sunshine through the clouds.  So, maybe this is due to pent up demand, or maybe, just maybe, this may be a rebound from the effects of the Spring Tsunami that Japan experienced and what the Fed Chair said was the reason of the global stall last Summer (2011).  This would make sense and if this is the reason, the recovery has a better foot hold than previously expected.  Not much more, but more none-the-less.  Too soon to tell, but let’s hold on to any hope.

Well, the double dip.  We are all looking for it.  Still may be coming, but what happened today?  Well, retail sales were up 1.1%, about 3 times the amount it was expected to be!!!  And manufacturing, their numbers do not look like there is a double dip on the horizon.  So, what is this all about?  The answer is, no one knows….  That’s right, no one knows for sure.  The most likely answer is that there is a degree of pent up demand which means that people will need to buy goods just because they have to as they have waited for so long.  This also may explain the strength we have been seeing in auto sales for the first time in recent US history, the average car on the road is over 10 years old!!!  Yes, so it does make sense that there is some degree of pent up demand..the question is how long will it last and will it be sustainable.  We live and hope…