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A year after the meltdown...
Federal Reserve Board Chairman Benjamin Bernanke may think the recession is over, but the average Floridian has a hard time seeing signs of the end.
With high unemployment, low consumer confidence and weak consumer spending, Floridians stand on uncertain ground, one year after the collapse of Lehman Bros.
Bernanke said Tuesday the worst recession since the 1930s is probably over. But he conceded that the economic pain won’t go away quickly.
“It’s still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was,” he said.
The recession nationwide began in December 2007, although Florida analysts say it began here earlier that year, probably in March.
Although nationwide unemployment stands at a 26-year high of 9.7 percent, Florida's rate is higher, at 10.7 percent statewide in July. It's even more in Palm Beach County at 11.3 percent. Broward's rate is 9.5 percent.
One year ago, when Lehman Bros. collapsed Sept. 15, 2008 in the largest corporate bankruptcy in U.S. history, Wall Street was teetering. It had already survived the demise of Bear Stearns in March, 2008, as the firm folded after the collapse of two hedge funds tied to subprime mortgages.
Lehman Bros. had more than $1 billion directly invested in commercial real estate loans in South Florida.
But the ramifications of its failure went far beyond its own interests and helped to freeze up the credit markets. That set off a scramble for borrowers, big and small, that hasn’t ended.
Today, one year after the nation’s financial system almost collapsed, 7 out of 10 Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown, according to an Associated Press-GfK poll.
President Barack Obama Monday called on financial industry leaders to accept new regulatory reforms. Among his proposals is for the creation of a Consumer Financial Products Commission, which would have authority over mortgage and loan disclosures and possibly other services and products.
When it comes to complex financial services products, Floridians don’t have enough understanding, said Gary L. Horowitz, who is both a certified public accountant and certified financial planner in Deerfield Beach.
“Most people wing things,” he said. “They go through life and if works, good, and if it doesn’t, in the past, they made up for that (loss) here in Florida just by owning real estate.” He said property owners bailed themselves out with home equity loans as property values rose, “But you don’t have that anymore,” he said.
Florida Bankers Association President Alex Sanchez vehemently opposes more regulation for banks, which he points out, are already regulated by four federal agencies and state banking regulators. “The problem we banks have is we are the only ones regulated for consumer issues, not the non-banking shadow-banking (firms) on Wall Street.”
Information from The Associated Press was used in this report.
Spotlight on Lehman and South Florida:
Lehman Bros. had investments worth $900 million in 13 commercial real estate projects in Broward County.
Its loans financed the Trump condominium tower in Hollywood and the Hollywood Bread Building.
In Palm Beach County, Lehman had $489 million invested in 15 commercial projects.
The state of Florida had $140 million invested in Lehman Bros.securities.
Lehman also reportedly financed millions of square feet of office space in Miami, Tampa Bay and Orlando.
Harriet Johnson Brackey, the personal finance writer for the Sun-Sentinel, has been an award-winning business...
Comments
Simply put, Obama is in the White House. That means confidence is very low. Obama WANTS the economy to fail so he can turn over America to his globalist, corporate handlers.
Posted by: Kim Cameo | September 15, 2009 6:49 PM
Throw a couple Trillion dollars at anything and it should recede for awhile.
Posted by: Winston Zeddmore | September 16, 2009 12:08 AM
look the only thing that needs to be regulated which is the root of this mess is the federal reserve.as matter of fact it really needs to go away....they are the ones responsible for people having what they cant afford.and when ron paul asked for an audit the house turned it down..which indicates that there is massive corruption exists.why would they oppose an audit.every bussiness is subject to one...are they above the law..obama is the federal reserves do boy
Posted by: lou | September 16, 2009 1:30 PM
Why don't we just give the government all our pay and they can give us the tiny bit we need
Posted by: Becky | September 17, 2009 3:57 PM
Financial Conservation - A Small Step, Not A Great Leap
There has been for some time a disconnect between the real economy and the financial markets which they are suppose to reflect, causing a lot of damage to a lot of people.
Here and around the world, societies have spent enormous time and resource, from the grassroots level on up, creating awareness of the necessity to preserve -- not waste or destroy -- our natural resources. It is a small step, not a great leap, to apply the same basic principles of conservation to our limited financial resources that are equally necessary to sustain and keep us in step with the unalterable stages of life.
Posted by: Michael E. Douroux | September 21, 2009 12:18 PM