Newsletter from Scott Cantonwine/CEO

YEAR IN REVIEW

The political landscape has been established for another four years (two for next tern house seats) and the democratic ambush will create a new dynamic.  After eight years of runaway expansion the bubble has burst.  The rationale behind this abrupt downturn will be analyzed forever. Our money supply has never been so fragmented.  The world economy powered by never imagined communication speeds has created new forces on traditional national marketplaces.

The credit roulette played by institutions big and small has left over-leveraged portfolios of properties and business clusters worldwide.

The faster excess inventories of unsold, foreclosed, abandoned homes can be absorbed the quicker the slide will end.  The key without doubt is not spending time trying to figure out what happened  but making every attempt to right the economic ship as fast as possible.

Old school industries (auto producers) have been clothes-lined.  Years of corporate obesity have created a class of executive that is neither reasonable or sustainable.  Coupled with their equally cumbersome union arrangements, this group was destined to fail, even in moderately good economic times.  The steel industry learned years ago that significant downsizing and a complete overhaul of their business model was necessary to compete with foreign competition.  Tough love for the auto group.....start over.....get real.

The Federal level will start pushing infrastructure development as a job machine.  The need for new roads and bridges should have been a priority years ago.  Fortunately much of the planning phase is already underway so the process of implementation should be quick.

The documented pressures of excessive illegal immigration should not be set aside. We need to continue to realize that overbearing tax rates have a definitive impact on business development for the small to mid size entrepreneurs.

In many ways our National bailout money should be viewed as a nudge to other foreign countries, that have been subsidizing their airplane and auto production for decades, that we will do what ever it takes to  maintain some leverage in world markets.

The role interest rates play in the recovery must be revisited.  At some point an increase has to be attempted to create savings. Capital markets need to be encouraged to loan, but at reasonable levels with firm oversight.  This current wake up session didn't happen over night and will not correct itself without some diligent corrective measures.