Newsletter by Chad P. Wilson

Greece Lightning

Volume VI Issue III – March 1, 2010

A monthly financial commentary for our friends, Clients and Advocates

Greece Lightning is more than a car from a movie in the early 80’s (and yes, I know you spell that kind of Grease differently). We all know that lightning strikes quickly, and thunder’s boom is never far behind. The financial troubles of Greece may affect the world fast as lightning, with financial thunder to follow. We’re not talking mass panic. But don’t take whispers that Greece is on the ropes too lightly. They are the unfortunate pioneers of what may be the inauguration of a worldwide debt crisis. As countries have borrowed more and more money to pull their economies out of recession, the world has grown more and more averse to lending it to them. The rate that Greece borrows at today on a 10-year bond is 3.55% greater than the rate that Germany borrows for the same term. Troubles in Greece directly impact their European neighbors. Being a member of the European Union, 26 other countries have a stake in Greece’s rise or fall. Since most of these countries share the same currency, weakness in Greece spells weakness for the Euro. More than likely the European Union, with Germany as the spearhead, will loan Greece the money they need to survive. But you can be sure that they will have tough mandates for Greece to make significant changes to address their fiscal problems. What effect will this have on the US? In the short term, it likely means a stronger dollar. This is not because things are particularly positive in the US, but because they are “less bad” here than other parts of the world. It would seem the US is still the place people invest when economic waters become tumultuous. That is good news for today. However, if fiscal restraint is not introduced at some point in the future, the US may see the markets more averse to lending us money, which would lead to higher bond rates – and in turn higher mortgage rates. This is yet another reason to encourage you that if you were ever going to borrow money for a long time period, now is the time to do it. Rates aren’t likely to get any lower than they are today.

The employment picture is still bleak. Jobs are always the last part of the economy to improve. So even though certain areas of the economy are perking up, most companies aren’t hiring. And there are headwinds to the job market’s recovery that still remain. One of which is the propensity of many business owners to expand with technology rather than people. An investment in a piece of equipment or software is much less of a financial commitment than bringing on a new employee. So I am afraid that this means a very slow recovery in the job market. However, there are certain bright spots in the country. North Dakota, South Dakota and Nebraska actually have unemployment rates of less than 5%. That is half the nationwide unemployment rate of 9.7%. So I guess, if things get worse, you can always move to the Midwest.

The 2010 Super Bowl beat the 1983 Mash finale as the most watched TV program in U.S. history. The 27-year record was broken as people tuned in to see if the underdog Saints could pull off an upset. 106 million viewers gave CBS a golden opportunity to maximize advertising revenue this year and in the year to come. Did you know that TIVO tracks which Super Bowl commercials were paused and replayed the most by homes with a digital video recorder. This gives advertisers a feel for how well their commercials are being received. Who was this year’s winner? Doritos. The little boy telling his mother’s boyfriend, “Keep your hands off my mom, and my Doritos” had 15% of all viewers pressing rewind.

Chad P. Wilson, CFP

Foundation Bank – Division of McKenzie Banking Company, McKenzie, Tennessee - 731-554-2423

The above is strictly informational and does not constitute any sort of recommendation.

Please consult your own financial advisor for specific loan or other investment advise.