Notes and Opinions from one of Arizona's Most Trusted Loan Teams

I thought this news item might be interesting. We have long felt that the economic problems in this country are being overstated by the press. We know that anyone who has lost their job (or owns a mortgage company) are in the midst of a personal recession, no matter what the larger picture is.

However, this economy continues to confound the experts. Last week, the experts predicted a job loss of 30,000 jobs or more, only to have jobs GROW by 40,000. With this kind of "expert" making dire predictions all the time, maybe we shouldn't be too frightened. Anyway, here is an opinion recently voiced by someone who should be an expert. Let's hope he is correct. You can see the whole article at reuters.com.

Fed's Lockhart: Econ woes unlikely to be lengthy

By Karen Jacobs

ATLANTA (Reuters) - The United States will not experience a protracted period of economic weakness like Japan did in the 1990s, but the U.S. financial system is hurt by a lack of clear information about banks, Atlanta Federal Reserve Bank President Dennis Lockhart said on Wednesday.

One similarity between the current U.S. financial system and Japan's situation in the 1990s "gives pause," Lockhart said -- the opaque nature of areas of the U.S. banking system.

"Much has been written recently about the so-called 'shadow banking system' of hedge funds and complex securities in the United States that also renders much of our financial system opaque," Lockhart told the Japan-America Society of Georgia in Atlanta.

"Improved transparency must accompany other reforms as an early priority," he added.

As the United States recovers from the bursting of the housing bubble and a credit crunch, it must address "broad systemic inadequacies" and make necessary changes, Lockhart said.

Policy-makers and lawmakers agree oversight of the U.S. financial system needs overhaul to avoid repeating the mistakes that led to the overheating of the housing market and the surge of home loan delinquencies, which slowed the economy and convulsed financial markets. Defaults among complex securities that contained poorly underwritten mortgages played a central role in the financial turmoil.