By RANDALL CLEMONS The Tennessee Bankers Association held its annual convention in New York this week at a time in the history of our country when everyone is trying to gain insight about the future of our economy.
Our country is experiencing the longest and deepest downturn since the 1930s. The main question is where are we now in this downturn?
As Tennessee Bankers listened to different economists, the consensus was that we have begun recovery from this downturn. The stimulus package will now begin to make a difference, as we see consumer spending stabilize. We will see less decline in the Gross National Product in the second quarter due to inventory levels being low. We are seeing an increase in consumer confidence and the sense of panic is over.
We will continue to see unemployment be a problem with job growth predicted for the fall. Our biggest challenge continues to be in the housing sector. There is currently some improvement in housing permits and sales with greater stability needed in home prices. The nation is currently seeing the most affordable housing market we have experienced in many years with extremely low mortgage rates.
There remains great concern about our government spending, deficit and debt. Our government will see less tax revenue as a result of corporate profits being down nationwide. As a result, we will see greater inflation as we look toward 2012.
Looking at our current banking environment, we see that 95 percent of the banks in our nation are well capitalized. We now have 8,500 banks that remain a safe place to keep your money, with no insured depositor losing a single dime in the 75-year history of the FDIC. It is important to remember that traditional banks didn’t cause the problem of recent months. Banks have more money to lend than ever with the personal savings rate up to 5.75 percent.
As we are coming out of this downturn we each can make a difference as it is important for each of us to move forward with a positive focus on the future. Editor’s Note: Randall Clemons is chairman and chief executive officer of Wilson Bank & Trust.