For many years during the 80’s and 90’s Lynn and Irena Sopwith (founding members of Camel Financial) attended the Annual CFA conference. It was their one getaway a year from raising me and running Camel Financial. It was their thing. So as I became the managing director for Camel, I forged my own road and affiliated myself with other organizations. However, this year I couldn’t resist a trip to Austin. I love to travel and I have visited numerous places but Austin is truly my favorite. I am not “country” by any means, but I do consider myself a bit “weird”.
Austin has a strong history of being the Berkeley of Texas. But in many ways it is so much more. It has some of the best restaurants in the world….. (and I have lived in New York City) But better than that, it has a rich music history. The big draw to the conference for me was the opening night party featuring Lyle Lovett. I am not a huge fan but I was curious to see him in his hometown at the Austin City Limits and I can tell you it didn’t disappoint. He is an amazing performer, with true talent.
I was intrigued to see John Mackey, the Keynote Speaker. He didn’t disappoint. I found his message of Conscious Capitalism to be refreshing. Politics aside, I feel this country needs more corporate CEO’s that are concerned with more than the bottom line but also are champions for large business.
I found Shelia Baer, former FDIC chair, to be insightful of her recollection of the economic crisis. I thought her take on the topic regarding merging of banks and federal bail out to be on point and was happy to hear the federal governments thoughts at the time and in retrospect.
And finally the most memorable talk was from Tito Beveridge, founder of Tito’s Vodka. On my first visit to Austin numerous years ago, I had dinner in a charming little hole in the wall that fashioned itself as a speakeasy. Because vodka wasn’t offered in Speakeasy’s during this time, this place didn’t carry vodka except for Tito’s which was distilled right there in Austin. So the only way to get my Appletini (this was a long time ago) was with this mysterious brand. Fine, I thought, I’ll give it a try and have been hooked ever since. I was very excited to hear what this speaker had to say. I must say, he is a character. His story is classic and funny and a trip to listen to.
I am so glad I decided to follow in my parent’s footsteps and attend the annual CFA Conference. It was a great learning experience, as well as an entertaining trip.
The decision on increasing interest rates has been looming for quite some time now. There has been much back and forth action. When the Federal Reserve increase or decrease interest rates it affects many establishments. They set the pace for all future decision making. With the increase of interest rates, it comes with the decrease in bond prices. This is because higher interest rates convert into new bonds with higher coupons. If the economy is growing, people will be more willing to invest more and therefore more ready to pay the higher interest to borrow from banks. In addition, banks raise their rate, which directly influences mortgage rates, business loans, and other consumer loans. Lower interest rates usually will make borrowing easier. Higher interest rates in turn are meant to make borrowing harder.
The Federal Reserve has called to action their plans on reverting back to a more simple monetary policy. The new program will begin with a raise in the federal funds rate in hopes of having increased interest rates reaching a normal point. In addition, with the recent decrease in gas prices, consumers have more spending money in their pocket. The reduction came in just about the right time. People will be more willingly to spend if they have confidence in their savings and feel financially stable. This in turn will speed up the economy’s recovery, which has been concerning many Americans. Spending has been kept to a minimum for some time. With the holidays coming up, there is much anticipation for a growth in consumer spending. All these factors add to the positive buying environment and a major boost for the economy. Each year, the holidays have provided much revenue. Predictions of the holiday season expect to be the highest in the past few years. The economy waits in hope for similar results this upcoming holiday season.
The polls have gone in. With Tuesday’s election in the past, the U.S. has been undergoing improvements because of the truce on the budget conflict by Congress. These conflicts have caused monumental occurrences to take place such as the shutting down of the government in the past. A repeating of such an event would hinder the economy’s recovery and impair businesses and consumers. These uncertainties cause tension and consequences such as reduction in job growth, drop in stock market, and lack of consumer confidence. The election results show that America is deeply concerned about the economy. With the Republican win, it is evident that many are unsatisfied with how things are going and hope for a turn around.
RMA presents on November 13 a Luncheon with Congressman John Campbell. Please join. For more details Click Here
With the holiday season coming up, Apple released the new ipad mini and ipad air. Performance shows to be top of the line. Changes made from the previous ipads are not significantly different. Some view Apple products to be luxury items. Thus, not many people are running to go get the latest ipad. Sales have not changed drastically because there have only been design improvements. However, the price is tremendously higher than the Kindle Fire. Consumers are still easing back into spending. Those that can afford it, buy it because of the name. Apple has built their brand and established their reputation to the people. Therefore, they are still seeing positive results. The iphone stay remains Apple’s key product and is heavily focused on because it produces half of the company’s revenue and profits.
Gas prices have slowly been decreasing over the past few weeks. The national average gasoline price has been reduced by almost 49 cents a gallon. The reason for the drop in prices is because of the recent increase in the supply of crude oil. Also, it is partly because of the sudden growth in oil production happening in the United States. There are concerns about the economy’s recovery, which lead to lower demand for oil. For consumers, it will be beneficial because there is more disposable income to be used for other expenses. The savings consumers get back from gas prices will be slow but will be returned in the end. This will encourage consumers to start to spend again. Alternative lenders will gain more opportunities for gain business due to this change. Hopefully, the decline in gas prices is a sign in America’s upturn and everything will only go up from here.
Approximately half of loan applications are being approved by small banks while about two-thirds of loan applications are being granted by alternative lenders. Alternative lenders are more flexible with lower credit scores. Bank loans are not only difficult to attain, but also the processing time is longer. There is much risk in granting money to startup companies. Concern lies in the fact if whether or not the company will reimburse its investors. Another added factor is crowdsourcing; it has become competition for alternative lenders. Crowdsourcing is the method of acquiring necessary means through a third party separate from the traditional suppliers such as banks. It is a suitable option to get a company started. However, when startup companies seek assistance through crowdsourcing, it takes away the opportunities for the alternative lenders. There is already an established competition with big banks. With the addition of crowdsourcing, alternative lenders are facing a constant struggle for companies to aid.
America’s economy has been at an all-time low for the past several years since 2007, when the nation took the most detrimental financial downturn since the Great Depression. The Recession not only drastically affected America in many areas but also globally around the world. The Federal Reserve executed necessary measures and reacted promptly to the financial crisis, such actions include the reduction in interest rates to nearly zero. Businesses are able to spend and financially support themselves because of these low rates. Employment has progressively improved with passing time but still has not reached maximum potential. The Feds discussed about the delay of the increase of interest rates. The economy is still in recovery and patience is crucial at this stage. It’s possible it won’t be until 2016 that rates will be raised. When it comes down to it at this moment, job creation wins over inflation.
Apple strikes again with a new and innovative way of payment, Apple Pay. With this latest release, the company anticipates an increasing number of consumers utilizing this method. There are high hopes that the public will convert from the organic means of cash to this brand new, highly advanced process which offers consumers to pay with their personal electronics. Technology is progressing at an immense speed that consumers cannot keep up with. Every year, Apple releases a new generation of iphones. Every iphone owner has the capability to call, text, and facetime. Paying purchases will quickly be added on to that list. This is the future. The BitCoin community has their share of opinions. The difference lie in the fact that Apple Pay is a form of payment and BitCoin is a currency. BitCoin faces a challenge of lack of confidence with consumers. While, Apple is a well-established brand that people trust and feel secure investing their time and money in. However, the real concern is within the economy not the consumers. With success comes responsibility. High authorities are given power over money which can be mishandled and produce dishonesty and corruption. The economy has been down for a while. There must be some hope for a better tomorrow.