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Show Volume XV Issue XIV The Ogden Valley news Page 15 July 1, 2008 ECONOMY cont. from page 12 energy prices and a strong euro currency that has dampened exports. European communities and businesses that cater to American visitors during the summer are keeping their fingers crossed, as travel “across the pond” is now more costly. For now, Russian Prime Minister Putin and President Medvedev enjoy widespread support as enormous oil revenues have boosted the standard of living of millions of citizens. Whether they can “play well together” in coming months and years is the real issue. Putin will continue to run the show. Already enormous Persian Gulf oil wealth continues to accumulate. The Middle East? As always, tensions remain extreme. The Brazilian economy, which represents half of South American economic output, continues to strengthen its hand in agriculture. Recent huge oil finds will raise its stature further. Other nations struggle with high taxes and enormous business red tape. Venezuela suffers from misguided “leadership.” Canadian economic growth has stalled as a strong currency has hurt manufacturing and trimmed exports. Parts of western Canada are booming, tied to enormous investments into developing tar sands. The flip side? Environmental degradation is a major worry. Mexican growth is reasonable, but needs to strengthen to provide workers more opportunities at home. Modest Cuban reforms continue, with citizens now entitled to own cell phones. Computers are now legally available, although few can afford them. The Bottom Line? U.S. economic performance will be modest (at best) in coming months before likely improving (a bit) later this year and in ’09. We also expect: a much larger budget deficit…rising near-term unemployment… uncomfortable inflation pressures…stable short-term interest rates…soft housing markets…and an anxious but reasonably solid global economy. An Accident Waiting No shortage of ink has been used during the past year to dissect the root cause of the housing crisis that grips too many American communities… some focus on the idea that home prices simply went too far too fast in too many markets during 2002 to 2006, thus requiring the inevitable and painful downward move in home values …others focus on the fact that numerous Wall Street firms got too involved in slicing and dicing mortgage-backed securities into tranches (pieces) to be bought by aggressive investors around the nation and around the world…others take Wall Street firms to task for creating a myriad of securities based on complex mathematical relationships to help investors (in theory) offset risk in volatile financial markets. Such exotic securities ultimately worked very poorly (in many cases) as financial markets went through emotional gyrations unimagined by math geeks and their computer models…others criticize credit rating agencies such as Moody’s, Standard and Poor, and Fitch for their eagerness to put Aaa/AA ratings on subprime mortgage securities that were logically dubious in quality…. but generated attractive fee income for the rating agencies … others take the Federal Reserve and other regulators to task for their being asleep at the switch as various “accidents waiting to happen” in the lending sector were in their formative stages …still others take Congress to task for pressuring financial institutions to be more creative and more aggressive in helping people in lessadvantaged communities, and/or with lesser abilities to qualify for mortgage loans, to be able to have the American dream…owning their own home. The Lender’s Incentive One other factor is clearly at play, which doesn’t tend to get much attention… it involves the element of lender incentives. The traditional relationship of a mortgage lender and a customer was quite straightforward. A customer needed to demonstrate stable income and the ability to repay a loan. The lending person was traditionally compensated via the quality of loans. A lender was “responsible” for (and compensated for) the performance of loans in his or her portfolio. In recent years, a boatload of new lenders appeared on the scene, many of which specialized in subprime lending, or providing loans to people with less than glistening credit. These lending people were compensated on the quantity of loans made…the more the merrier. Some of these mortgage lenders encouraged their customers to borrow more money than perhaps needed, to overestimate their incomes and ability to repay in many cases, to actually avoid income documentation in many cases, to seek the loftiest appraisals on properties, and at times to make false statements in complex loan documents. Many of these mortgage lenders were not really concerned about loan quality because the loans were made to be sold. It was all about quantity, and little about quality. My favorite definition of economics is “people respond to incentives.” In this case, lender incentives were simply creating another accident waiting to happen. Event Schedule 1:00 p.m. 2:00 2:30 6:30 6:00 8:00 8:30 9:30 p.m. p.m. p.m. p.m. p.m. p.m p.m. A special Town Hall on the most pressing issues facing small business owners was held in Ogden on June 30 with U.S. Sen. Bob Bennett. The Eccles Community Arts Center event was hosted by the Utah office of the National Federation of Independent Business, America’s leading small business association. “Small business is the nation’s largest employer group and generator of almost every new job,” said NFIB/Utah State Director Candace Daly. “But we must never slacken in reminding the general public that small businesses are not smaller versions of bigger businesses, but instead have unique difficulties in remaining solvent. We are delighted Senator Bennett could make the time to meet with Ogden-area small business owners and exchange ideas on fostering a better small business climate, especially during this time of skyrocketing healthcare and fuel costs and immigration concerns.” The three biggest differences between a small and large business, according to Daly, are small businesses pay 45 percent more per 5K Run Children’s 1-Mile run Breakfast – Event Sign up Flag Ceremony Parade Arena Games i.e. Mutton Bustin ,Greased pig etc Rodeo ( 3 events ) Daytime Games; Stick Horse Derby, Sawdustfind, Chicken Catch, Fish Catch Couples Wheelbarrow Race, Dunking Booth Cake Walk, Dart Contest, Hula Hoop Contest and more. Arm Wrestling Afternoon games; Gunni Sack Race, Pie Eating contest, Watermelon Eating Contest, Egg toss, Tug-O-War, Hot Dog Eating Raffle ? - Prizes! Team Roping Events Dutch Oven Dinner Cow Pie Contest – Greased Pole etc Dance Video of days events Patriotic Show FIREWORKS AT DARK Questions? Call Ross Mertlich at 745-3731 for more information. Game or Craft Booth space still available! We are looking for volunteers. For booth information or other please contact Sharmain Croft @ 745-2700. employee than large firms do in complying with the same federal regulations; personal— not business—tax rates matter more to small business employers, since more than 80 percent of them are single filers; and Federal laws permit breaks for big businesses on healthcare costs that are legally prohibited for small business owners. NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists sends their views directly to state and federal lawmakers through a unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of its members to own, operate and grow their businesses. More information about NFIB is available online at <www.NFIB.com/newsroom> Stamp Sales Benefit Nation’s Most Successful Conservation Program In 1934 the United States Fish and Wildlife Service (USFWS) began a conservation initiative that is known today as the Federal Duck Stamp Program. This revenue stamp is produced by the United States Postal Service and is a required purchase—in addition to a state hunting license—for anyone 16 years or older who wants to hunt waterfowl in the United States and two of its territories. These stamps not only serve as a license, but also as a conservation tool for wetland conservation. Ninety-eight cents out of every dollar generated by the sales of Federal Duck Stamps goes directly to purchase or lease wetland habitat for protection in the National Wildlife Refuge System, benefiting not only waterfowl but many non-game bird species as well. This stamp serves as an entrance pass to Insight is released by A. Scott Anderson, these National Wildlife Refuges where admispresident and chief executive officer of Zions First sion is normally charged. Additionally, the National Bank, and written by Jeff Thredgold, stamp is a very popular item among stamp coleconomic consultant to Zions First National Bank and president of Thredgold Economic Associates. Graphics and layout are produced by Kendall Oliphant, with research by Shawn Thredgold. Copyright © 2008 Zions First National Bank. Reproduction without permission is strictly prohibited. For the latest news on the economy and financial markets, please visit www.thredgold. com and sign up for Jeff Thredgold’s free weekly e-mail update. Liberty Days July 4th 7:00 a.m. 8:00 a.m. 7:00 a.m. 7:30 a.m. 9:30 a.m. 10:00 a.m. 11:30 a.m. 10:30-3:00 U.S. Senator Bob Bennett Speaks to Ogden-Area Small Business Owners— lectors and art enthusiasts. The U.S. Fish and Wildlife Service partnered with Bass Pro Shops to unveil this year’s Federal Duck Stamp on the “First Day” of sale held Friday, June 27. Secretary of the Interior Dirk Kempthorn, Director of the U.S. Fish and Wildlife Service H. Dale Hall, other USFWS officials and politicians, wildlife organizations, sportsmen’s groups, waterfowl artists, as well as art and stamp collectors were on hand for a ceremony unveiling this year’s new stamp. The U.S. Postal Service was also on hand to earmark collector’s first day purchase of the $15 stamp, which added to its value. Duck stamps can also be purchased after the “first day” sale at refuge visitor centers and offices, and post offices, as well as by visiting www. duckstamp.com and <www.usps.com> For more information about the federal duck stamp program go to <www.fws.gov/duckstamps/> real estate group |
