Napa County's July unemployment rate at 8.8% was unchanged from the rate in June, while the state of California's rate rose half a point to 12.1%, and the nation was at 9.4%. Napa's rate was among the lowest in the state.
While this is still a high number, it shows the strength of our local area relevant to other counties. My discussions with hotelier's and restauranteurs also exhibit a leveling off, if not a slight rise in sales.
We have a ways to go in feeling the turn around of what the pundants call the end of the recession - but should be grateful for where we live and work.
Please continue to buy local and support our local businesses.
Monday, August 24, 2009
Wednesday, August 19, 2009
Health Care
We have all been hearing about the Health Care Debate - throughout our country, as well as in Washington, DC. Healthcare is a critical and very large component of our economy - affecting each of us everyday in many ways.
This month Charter Oak Bank was notified that our monthly employee insurance premiums will go up 20%, on top of a similar rise last year. This will affect not only the bank, but each employee, as the bank covers 80% of each employee's premium and 50% of dependents. An employee with a family will have an additional burden of about $140.00 for their portion alone.
We also have a few employees with "pre-existing" conditions. Fortunately, these employees are covered while they work for Charter Oak Bank. But if they leave, retire or for whatever reason go elsewhere - unless employed in another group - most likely will not be able to obtain health coverage again. This just plain is not fair.
You may be aware of the Children's Health Initiative. Fortunately, we have a great program here in the Napa Valley. but we still have numerous children who do not have health insurance. Many employers do not cover dependents - and thus many uninsured children.
I'm just outlining a couple points above. Primarily I'm asking for you and everyone to get involved as we revamp out national and statewide health insurance systems. No matter which side of the isle you sit on - be part of the solution. Call Mike Thompson - give him your thoughts. Don't stop with Mike - call or write others involved in this process. I don't have a handle on all the solutions - but I think we can certainly agree that the system is broken and in need of major repair.
This month Charter Oak Bank was notified that our monthly employee insurance premiums will go up 20%, on top of a similar rise last year. This will affect not only the bank, but each employee, as the bank covers 80% of each employee's premium and 50% of dependents. An employee with a family will have an additional burden of about $140.00 for their portion alone.
We also have a few employees with "pre-existing" conditions. Fortunately, these employees are covered while they work for Charter Oak Bank. But if they leave, retire or for whatever reason go elsewhere - unless employed in another group - most likely will not be able to obtain health coverage again. This just plain is not fair.
You may be aware of the Children's Health Initiative. Fortunately, we have a great program here in the Napa Valley. but we still have numerous children who do not have health insurance. Many employers do not cover dependents - and thus many uninsured children.
I'm just outlining a couple points above. Primarily I'm asking for you and everyone to get involved as we revamp out national and statewide health insurance systems. No matter which side of the isle you sit on - be part of the solution. Call Mike Thompson - give him your thoughts. Don't stop with Mike - call or write others involved in this process. I don't have a handle on all the solutions - but I think we can certainly agree that the system is broken and in need of major repair.
Tuesday, August 11, 2009
Credit Availability & the Economy
The following is an email that I received yesterday and my response. I thought it would be good to post here.
Subject: Lending
Brian
I would be interested in your view of when banks and credit card companies are likely to start lending again in force. I hear the lack of available loans and restrictions on credit as a big reason consumers have stopped shopping (in addition to layoffs and reduced value of investments) and it has certainly affected the value of my real estate portfolio. I hear estimates of 6 months to a year from some economists, but wondered what you thought?
My response:
This is much longer answer – than I can give here – and would be happy to chat on the phone. In brief – the economy is going through a dramatic change. This is not just in credit availability, but also in overall spending habits. The new term is “Frugality is hip”, with greater discretion is spending.
Credit card availability (your clients’ source of credit) is definitely tightening – which I don’t see relaxing, if ever. The credit card companies were too loose in those standards and will now take significant losses in their credit card portfolios. Overall credit to businesses, housing, etc – is available – but again with tighter underwriting. For example, 80% real estate loans are available – but with validated source of income and current appraisals (unlike the sub-prime world). With the significant drop in real estate values – the most recent source of availability e.g. equity loans – is just not there. I can give you more details – but not a rosy picture when is comes to credit availability, because of tight underwriting standards.
The good news is that we have reached the bottom of the recession - I would say this month (which was the consensus projection of over a year ago) – and which will be announced/validated in October with the release of GDP and other numbers. As you’ve read, unemployment will continue to rise through year end – with California among the nationwide leaders. So the projection is that increased spending will occur in about spring of 2010. This is not an issue of credit availability, but more of consumer confidence and availability of money. Spending habits have changed. People are dropping down in their purchase habits. What I mean is that they are dropping down in level of restaurant, dropping down in price points on wine purchases, and taking a more conservative approach to discretionary purchases.
Another positive factor – as evidenced through this recession is the effects of “Staycation” on the Napa Valley. Staycation is where vacations and other trips are cancelled, and people stay local - spending their dollars here. That trip from San Francisco for a New York vacation is replaced by a weekend in the Napa Valley. Hotels and restaurants report that the drop in occupancy has leveled off, and they are now even seeing some (thought limited) increase in business.
This gives a quick snapshot, for which I can give greater detail on the phone or in person.
Best to you,
Brian
Subject: Lending
Brian
I would be interested in your view of when banks and credit card companies are likely to start lending again in force. I hear the lack of available loans and restrictions on credit as a big reason consumers have stopped shopping (in addition to layoffs and reduced value of investments) and it has certainly affected the value of my real estate portfolio. I hear estimates of 6 months to a year from some economists, but wondered what you thought?
My response:
This is much longer answer – than I can give here – and would be happy to chat on the phone. In brief – the economy is going through a dramatic change. This is not just in credit availability, but also in overall spending habits. The new term is “Frugality is hip”, with greater discretion is spending.
Credit card availability (your clients’ source of credit) is definitely tightening – which I don’t see relaxing, if ever. The credit card companies were too loose in those standards and will now take significant losses in their credit card portfolios. Overall credit to businesses, housing, etc – is available – but again with tighter underwriting. For example, 80% real estate loans are available – but with validated source of income and current appraisals (unlike the sub-prime world). With the significant drop in real estate values – the most recent source of availability e.g. equity loans – is just not there. I can give you more details – but not a rosy picture when is comes to credit availability, because of tight underwriting standards.
The good news is that we have reached the bottom of the recession - I would say this month (which was the consensus projection of over a year ago) – and which will be announced/validated in October with the release of GDP and other numbers. As you’ve read, unemployment will continue to rise through year end – with California among the nationwide leaders. So the projection is that increased spending will occur in about spring of 2010. This is not an issue of credit availability, but more of consumer confidence and availability of money. Spending habits have changed. People are dropping down in their purchase habits. What I mean is that they are dropping down in level of restaurant, dropping down in price points on wine purchases, and taking a more conservative approach to discretionary purchases.
Another positive factor – as evidenced through this recession is the effects of “Staycation” on the Napa Valley. Staycation is where vacations and other trips are cancelled, and people stay local - spending their dollars here. That trip from San Francisco for a New York vacation is replaced by a weekend in the Napa Valley. Hotels and restaurants report that the drop in occupancy has leveled off, and they are now even seeing some (thought limited) increase in business.
This gives a quick snapshot, for which I can give greater detail on the phone or in person.
Best to you,
Brian
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