Well I showed up at the AzAmp and AMLA luncheon and was worried I had come to the wrong room as there was only 4 table set up for lunch. “What a small crowd” I thought. It is obvious that the industry has been affected when you cannot get more than 20 people from both the broker and banker groups together for one lunch.
On a brighter note, they added tables and I think there must have been 30 to 40 people in attendance by the time it began. It was good to see so many old faces that I had not seen in the last few years while I have been in Law School study hell. Nothing like old friends. I took some notes as to what Wayne said. I am not a reporter but will do my best to convey what I heard.
* He made a big recommendation to rent or buy the movie “Waiting on Superman” a movie about the Charter School movement. We have the finest Colleges in the world but the worst High Schools. Education is a major issue in our recovery.
* Unemployment numbers for those that have only a high school education exceed 10% whereas for those with advanced college degrees is barely above 5%. So, get out of High School and get to College.
* “NEVER FIGHT THE FED” Say what you will about the Fed, this country should be thankful that we have Dr. Ben Bernanke. (his words, not mine) The point being is that our problems are both Fiscal Policy and Monetary Policy and we should not confuse the too. Fed does not control Fiscal and Legislators do not control Monetary. hmmmmm
* One of the great things that just happened for next year is that FICA was reduced from 6.8% to 4.8% and Wayne shared that this should add up to 1% to our GDP growth. This had not received much attention amongst the noise of the Media but his huge to our economy.
* We need to stop focusing on reducing the debt until we get our Monetary Policy under control. It makes no sense to try to pay down the debt if we are not growing as an economy. Debt reduction will always create recession pressure.
* Wait till we have a direction of growth going up before we begin to implement a strong Fiscal policy to reduce the debt.
* Great things are coming out to of the Joint committee and we need to implement NOW. If we don’t take the advice of that joint committee on Fiscal changes the stock market will drop 1,000 points
* Don’t see Treasuries getting to 4-6%. but, if they were to, it would mean that our economy was booming
* The discount rate is not going up till Unemployment goes down and GDP goes up
* Interest Rates are Abnormally low they must come up at some point.
* We will need a “glass steagall act” like act to stop the Bi-Polar high frequency trading that is making investors too nervous about the stock market. I think criminal was mentioned.
* Another solution would be to just tax High Frequency Traders at a rate of 1% and we would pay off the debt.
* Exchange Traded Funds are fine and only for professionals but we must ban the Double and Triple Shorts and Longs as they represent the single biggest risk to another Flash Crash
* We must repatriate money that our US companies have abroad but do not bring back to this country due to high 35% tax. A Bush era concept that was used back in 2004 should be considered where a moratorium was issued and that money came back, $300 Million, and was an amazing improvement. The condition was that the money must be used on Equipment, Capacity, facilities and production. No Dividends, Stock repurchase, bonuses etc. There is $1 Trillion in monies out there to bring back.
* Bottom line, US must start producing TODAY! We are now the 3rd largest exporter in the world behind China and Germany. This must improve and the US must stay resilient.
Overall, great info, not all rosy but a true believer. The mortgage ranks may be smaller but it was interesting the people in the room that I recognized from the early to mid 90′s are still here and still doing it. Good Job.