Tag Archive for Economy

113th Congress Faces Contentious Issues

Originally posted on CUInsight.com

Guest post by Dennis Zuehlke, Compliance Manager, Ascensus

With the photo-ops and swearing-in ceremonies over, and the presidential inauguration now a memory, the 113th Congress is hard at work facing a number of contentious, but familiar, issues, one of which is tax reform.

To avoid a U.S. default on its debt obligations, the House of Representatives approved an extension of the debt ceiling. The Senate passed the measure shortly thereafter and President Obama is expected to sign the bill into law. The legislation suspends the $16.4 trillion limit on government borrowing until May 18 to give Congress time to reach a broader deficit reduction deal.

Next on the agenda, Congress and the White House must reach an agreement on nearly $85 billion in targeted spending cuts to avoid the automatic across-the-board cuts that would kick in March 1 if a deal is not reached. Agreeing on $85 billion in spending cuts will not be easy and reaching that figure means that potentially everything—including retirement savings incentives—is on the table. As Congress looks for ways to reduce the deficit, tax incentives for retirement savings are especially susceptible because they cost the Treasury more than the deduction for home mortgage interest and are second only to the exclusion of employer healthcare contributions. The Joint Committee on Taxation estimates that the exclusion of pension contributions and earnings in defined benefit and defined contribution plans will cost the Treasury $100 billion this year alone.

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Credit Union Industry Experts: What’s in Store for 2013

Originally posted on CUInsight.com

I like to say that one of a visionary leader’s most important functions is seeing over the horizon and recognizing opportunities and threats before anyone else does, and then shaping the strategy and tactics of the organization accordingly.

So for our year-end blog post I asked our Preferred Partners to tell us what they see coming over the horizon, from their perspective, that credit union executives need to be focused on and/or prepared for as we head into 2013. Looking back a year, I see some common themes—revenue issues, economic uncertainty, regulatory uncertainty, and political uncertainty. From that perspective, not much has changed as we look forward to 2013. Here is what a few of them said:

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All Eyes on Europe in 2012

Guest post written by Evan Shelan, CEO, eZforex.com

In 2012, Europe may become one of the best geo-political barometers to determine future economic growth in the United States. Europe’s woes may negatively impact the credit union’s business model as Europe’s sovereign debt escalates.

As The ECB continues to focus on the short-term issues of Europe, such as monetary policy, the real issue at large is each country’s fiscal responsibilities. Watch for the European Central Bank (ECB) to continue drawing the line with Quantitative Easing (QE). The ECB is willing to support banks by injecting short-term liquidity, but unwilling to support governments and their excess borrowing.

Without the ECB solving Europe’s sovereign debt issue, world markets may become negatively impacted in 2012. It is advisable for credit unions to begin devising contingency plans in the event any one of the below economic irregularities occur: Read more

Nine Credit Union Industry Experts Tell Us What To Watch For In 2012

I like to say that one of a visionary leader’s most important functions is seeing over the horizon and recognizing opportunities and threats before anyone else does, and then shaping the strategy and tactics of the organization accordingly.

So for our year-end blog post I asked our Preferred Partners to tell us what they see coming over the horizon, from their perspective, that credit union executives need to be focused on and/or prepared for as we head into 2012.  Here is what a few of them said — Read more

Just When You Thought It Was Safe To Go Back In The Water – Will The Downgrade Have A Lasting Effect?

I tend to be an optimist, and thought (hoped) that once the debt ceiling deal was finalized, the nation would refocus and we could get back to the business of economic recovery.

It is usually the Federal Reserve that is accused of taking the punch bowl away just when the party gets rolling, but this year Standard & Poor’s stepped in to be the “bad cop” by downgrading their U.S. Government long-term AAA debt rating to AA+ for the first time since granting it in 1917.  This last week has brought back painful memories of 2008, with all-too-familiar volatility in the equity markets and plunges in the value of retail investor portfolios and 401(k)s.

But what will the long-term effect be?

Dave Goerz, SVP and Chief Investment Officer for HighMark Capital (the Adviser which manages our National Investment Fund for Credit Unions) has posted an excellent commentary that puts the recent debt rating downgrade into historical context and outlines some of the steps that can be taken to address the deficit and political concerns that prompted the downgrade. Read more