Sept 2012 final
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Transcript of Sept 2012 final
Economic Indicators:
An Update for the 7 Rivers Region
Poll: What is the biggest immediate threat to ...
Economic Indicators:
An Update for the 7 Rivers Region
I’ve been sent by the Obama campaign to tell
you that you are better off now than you were
4 years ago.
I’ve been sent by the Romney campaign to tell
you that you are worse off now than you were
4 years ago.
Non-Standard Disclaimer:
-8%
-6%
-4%
-2%
0%
2%
2008Q1 2010Q1 2012Q1
Change in GDP since Q1 2008US
-8%
-6%
-4%
-2%
0%
2%
2008Q1 2010Q1 2012Q1
Change in GDP since Q1 2008US
France
Germany
Spain
Italy
Euro Crisis
0
4
8
12
16
1/1/1990 1/1/1994 1/1/1998 1/1/2002 1/1/2006 1/1/2010
Interest Rates on Gov’t Bonds
Spain
Italy
Germany
France
Euro Crisis
$0.50 $1.00 $1.50 $2.00 $2.50
New MexicoMississippi
AlaskaLouisiana
West VirginiaNorth Dakota
AlabamaSouth Dakota
KentuckyVirginia
MontanaHawaiiMaine
ArkansasOklahoma
South CarolinaMissouri
MarylandTennessee
IdahoArizonaKansas
WyomingIowa
NebraskaVermont
North CarolinaPennsylvania
UtahIndiana
OhioGeorgia
Rhode IslandFloridaTexas
OregonMichigan
WashingtonWisconsin
MassachusettsColoradoNew YorkCaliforniaDelaware
IllinoisMinnesota
New HampshireConnecticut
NevadaNew Jersey
Federal Spending in State per Dollar of
Federal Taxes Collected from State
Euro Crisis
The Fiscal Cliff
Table 1. Tax Relief from a One-Year Extension of Bush Tax Cuts and
AMT Patch
Extension with
AMT Patch
Extension without
AMT Patch
As a Share
of Income
Per Tax
Return
As a Share
of Income
Per Tax
Return
Iowa 3.65% $1,882 2.27% $1,167
Minnesota 4.76% $2,833 2.48% $1,474
Wisconsin 4.19% $2,196 2.33% $1,224
$5
$8
$10
$13
$15
$18
$20
$23
Tri
llio
ns
Source: U.S. Congress: Congressional Budget Office/U.S. Department of Commerce: Bureau of Economic Analysis/FRED
GDP versus Potential
0
5
10
15
20
25
30
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Millio
ns
Unemployed and Underemployed
Unemployed
Involuntary
Marginally
70
75
80
85
90
95
100
105
110
115
120
Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12
Employment Growth By Sector
Healthcare
Construction
Manufacturing
Federal
Finance
State/local
1990 recession
2001 recession
2007 recession
1981 recession
97%
100%
103%
106%
-18 -14 -10 -6 -2 2 6 10 14 18 22 26 30 34
Sh
are
of
tota
l jo
bs,
sta
rt o
f re
co
very
= 1
00%
Length of recession (months) Months since recession's end
Total job change for public-sector
workers since the start of recoveries
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
1/3/2007 1/3/2008 1/3/2009 1/3/2010 1/3/2011 1/3/2012
Tri
llio
ns
Federal Reserve Balance Sheet
Mortgage
Backed
Securities
Long Term
Treasuries
Traditional
Securities
Lending
$5
$8
$10
$13
$15
$18
$20
$23
Tri
llio
ns
Source: U.S. Congress: Congressional Budget Office/U.S. Department of Commerce: Bureau of Economic Analysis/FRED
GDP versus Potential
Drought 2012
Access to Capital
Poll: What is the largest source of business i...
80% Internally
Financed
0 10 20 30 40 50
Bank Loans
Bonds
Non-Bank Loans
Stocks
US Sources of External Finance 2000
0 25 50 75 100
Bonds
Bank Loans
Non-Bank Loans
Stocks
Sources of External Finance 2004
US
Germany
Japan
Eight Basic Facts
1. Stocks are not the most important sources of external financing for businesses
2. Issuing marketable debt and equity securities is not the primary way in which businesses finance their operations
3. Indirect finance is many times more important than direct finance
4. Financial intermediaries are the most important source of external funds
Eight Basic Facts (cont’d)
5. The financial system is among the most heavily regulated sectors of the economy
6. Only large, well-established corporations have easy access to securities markets to finance their activities
7. Collateral is a prevalent feature of debt contracts
8. Debt contracts are extremely complicated legal documents that place substantial restrictive covenants on borrowers
Not everything should be
funded
Some ideas are
Bad.
Market Failure?
Informational Asymmetries?
Non competitive market?
Principal-Agent Problems?
Externalities?
Public Goods?
Expanding Access to Capital
Akin to Expanding Home Ownership
Marginal Investments
Informational Asymmetries
Video
http://www.kickstarter.com/projects/97103764/capture-camera-clip-system?ref=live
Launched Projects: 27,086
Successful Projects: 11,836
Dollars Pledged: $99,344,382
Rewards Selected:
1,150,461
Total Visitors:
30,590,342
Project Success Rate: 46%
$0 $10,000 $20,000 $30,000 $40,000
Fashion
Art
Games
Theater
Technology
Publishing
Comics
Music
Photography
Food
Film&Video
Dance
Design
Funding Per Project
0.0% 10.0% 20.0% 30.0% 40.0% 50.0%
Film&Video
Music
Design
Art
Publishing
Technology
Theater
Games
Food
Photography
Comics
Fashion
Dance 100 Million in funding by Category
0 10 20 30 40 50
Our Accountant
Our Bank
Small Business Development Center
Chamber of Commerce
County Economic Development Staff
Other
Turn to for financial advice...
1 2 3 4 5
availability in the region of capital from banks
availability in the region of angel investors
The financial programs/incentives offered by local or county
government
The financial programs/incentives offered by your state government
1 - Poor to 5 - Excellent for your Business
Panelists
GREG FLOGSTAD
Mississippi River Regional Planning Commission
(MRRPC)
COLIN FLEMING
State Bank Financial
STEVE TIPPINS
UW-L Department of Finance
Question:
Please share some of the challenges and
successes you and your organizations
have faced assisting people trying to
access capital.
Question:
When unable to access
capital, which factor is typically cited as
limiting a business from accessing
capital?
Questions
What is the most important action we could
take in the region in the next six months
that would have the greatest impact on
improving access to capital in the region?
Questions
What role – if any – can the government
play in increasing access to capital?
Poll: What can we do in the 7 Rivers Region to...
Thanks.