Why should you care about the failure of Bank United, even if you don't have an account there?

Because, an interesting story published today on The Big Money says, the acquisition of the largest bank based in Florida by a group of private equity investors could just be the beginning. Of a round of other, smaller banks changing hands across the state.

Again.

I remember another such round. I forget who came up with this line originally, but it was so true: Florida became the shopping mall for big banks from elsewhere.

It was 1997 when Barnett, then Florida’s biggest bank, was swallowed up by NationsBank, which was swallowed up by Bank of America three years later.

Here's the article:

http://www.cnbc.com/id/30965006/

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By Harriet Johnson Brackey
Staff Writer

Consumer confidence nationwide shot up in April, for the second consecutive month. But Floridians are still pessimistic about their personal finances, even though their outlook on the economy is improving.

Nationwide, the Conference Board said Tuesday that its consumer confidence index soared to 54.9. The Associated Press reports that is far above the 42.3 figure that economists were expecting.

It is also the best reading in eight months and close to year-ago levels.

Florida’s consumer confidence dropped one point in May to 71, the University of Florida said Tuesday.

For both the short and the long-term, the Florida consumer confidence survey indicated consumers are becoming more optimistic about the prospects for the U.S. economy over the next year and the next five years.

But, their feeling about their own financial situation is still weak.

“Floridians are saying they don’t have the money now to buy, but they expect to within a year,” Chris McCarty, director of UF's Survey Research Center at the Bureau of Economic and Business Research, said in a statement.

The part of the survey that relates to personal finances fell four points in May to a reading of 40, which is just above its all-time low of 39 in December 2008.

The overall Florida consumer confidence index reached its lowest point on record in June 2008 at 59.

“While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us,” economist Lynn Franco at The Conference Board said.

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This economic downturn is different.

It’s much longer than the average, which was 10 months for all the previous recessions since World War II.

It may turn out to be deeper, too, in terms of just how much the economy will contract.

But what will be its result? Will there be lasting changes in the economy that we’ll say began at this point?

I put that question to Stuart G. Hoffman, chief economist at PNC Financial Services Group.

His predictions:

-When this recession is over, we will save more. He pointed out that up until the mid-1980s, people regularly put away five cents of every dollar earned. But then something happened. Our houses went up in value so rapidly in recent years that many people relied on that as a source of funds for future spending. Now that we’re going through the worst downturn in generations, Hoffman predicts we’ll begin again to put money away and refrain from spending it all.

-We’ll have four years of very active government involvement in the economy. And we’ll end up with the deficit to prove it.

-Globally, the U.S. will become more intertwined with the world and particularly China. As other countries have to buy our debt.

He expects the recession to begin to end as this year closes. Recovery will come in 2010 and 2011. But it’ll feel more like convalescence than a bouncing out of the sick bed.

Florida will lag the U.S. and the global recovery, in his view.

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Summer jobs for teens are going to be so, so hard to find.

The outplacement firm Challenger, Gray & Christmas this week said that it might be the worst summer for job gains since the 1950s.

Last summer was bad, too.

And you see it. There are plenty of earnest teens who can't find something. And who won't be spending much as a result. Teen retailers know this.

Some suggestions for increasing your teen's odds of finding a job:

-Think beyond the mall. There are jobs outside the confines of what teens would buy in distributing, warehousing and other behind-the-scenes players.

-Don't go where all your friends already went and got turned down. This seems to make sense. But not necessarily to teenagers.

-Don't let it be. Don't wait for the phone to ring. Give the potential employer a few days to evaluate your application, and then check back. Do this in person, not by email.

-If all else fails, Challenger suggest finding some rewarding volunteer work for the summer. At least your teenager will get some community service hours which are needed for Florida Brtght Futures scholarships to college.

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Floridians’ consumer confidence in April hit the highest point in more than a year.
The index jumped 6 percentage points to 71, the University of Florida announced this morning.

What it reflects: A huge 15 percentage-point jump in an underlying index that measures perceptions of whether this a good time to buy a big-ticket item, such as a car, a boat or even a house.

A rise in consumer confidence might be a sign that consumer spending will soon rise as well.
“We haven’t had any big, bad events lately and there are some positive things, like the stock market rally,” said Chris McCarty, director of survey research at UF's Bureau of Economic and Business Research.

And he notes that housing prices are stabilizing at a low level, which he says has contributed to consumers’ improved spirits.

According to the Florida Association of Realtors, the median home sales price statewide in March was almost $10,000 higher than in January. In 2008, prices were falling month to month for almost the entire year.

McCarty noted that the lowest rating ever for Floridians' consumer confidence was last June at 59. "Perhaps we really have seen the bottom," he said in a statement.

The last time the index topped 70 was in February 2008, when it reached 73.

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If I were job hunting, where would I go? Not to real estate related firms, of course. They're not hiring and as an industry, they're losing money.

So who is hiring?

That's probably the companies making money.

Sageworks, a financial analysis firm that specialize in private company data, gave me this list of five industries with high profit growth rates in the last year. They're healthy and they might be a good target for your job search.

1. Accounting and tax service firms
2. Specialized freight trucking companies (Such as, refrigerated trucks or flatbed trailers) .
3. Other Health practitioners (Not MDs, but chiropractors, physical therapists, etc)
4. Dentists offices
5. Beer, wine and liquor wholesalers.

Each saw profits grow more than 17 percent in the last 12 months. Sales grew between 5 and 11 percent.

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Are there really signs that the economy is hitting bottom?

So tell me, what are they?

What would make you feel like the pressure on your personal finances has lifted? Being able to eat dinner out every week? Buying a new car?

I'm interested in learning what are your personal economic indicators.

Whether you watch home sales or cereal sales or luxury goods or boat reposessions. Tell me what tells you the direction of the economy.

And which way the signs are pointing now.

Do your see any hint that we are at the bottom?

> Discuss this entry

In case you missed it, here's my most recent story:

http://www.sun-sentinel.com/business/sfl-economy-recovery-c040309sbapr03,0,2656153.story

Signs of economic recovery in South Florida? No turnaround, but there are glimmers of hope
Economic climate: Some trends to watch

By Harriet Johnson Brackey | South Florida Sun-Sentinel

On Wall Street, the stock market has gone up 12 days out of the last 20. Consumer confidence is up a tick, in Florida and across the nation. Even the housing and auto industries are showing unexpected signs of life.

In the steady downbeat of news about the economy in recession, a few signs of hope have surfaced in recent weeks.

A turnaround? No one expects that from the economy this year. But at least some indicators suggest the economy could be close to hitting bottom, economists say.

It won't be a soft landing. New unemployment figures due out today are expected to show the national jobless figure rising to 8.4 percent, from 8.1 percent. Florida's rate is higher, at 9.4 percent. And despite the recent gains on Wall Street, including Thursday's 216-point rally of the Dow Jones Industrial Average, stocks have only slightly recovered from the dramatic slide that began in October, 2007.

"We may be shedding jobs for a little while," says Chris McCarty, who runs the Florida consumer confidence surveys. "But on the bright side, it does look like the stock market is developing a floor here."

Here are some reasons economic forecasters are beginning to sound more optimistic:

Housing sales rise
The Florida Association of Realtors reported that median home prices statewide rose in February to $141,900, the first monthly uptick in six months. In February, the number of existing single-family homes sold in Broward and Palm Beach jumped by 39 percent and 33 percent, respectively, over the year before.

The spike in sales is fueled by lower South Florida housing prices, which, on average, are about 45 percent below the peak in 2005. "A couple of months ago, nobody wanted to buy, at any price virtually," said economist Brad Hunter of MetroStudy.

Interest rates have dropped and first-time home buyers and bargain-hunters are becoming active.

Michael Arno, 33, thinks it's time to buy.

"I'm getting ready to start a family, and renting doesn't work any more," he said. "There are a lot of great buys out there."

Arno, who performs cardiac sonograms at JFK Medical Center, hopes to snap up a home in West Boynton for $75,000 less than he would have paid last year.

Stocks moving up
Typically, the stock market rises before a recession ends. Stocks had a great run in March – climbing 21 percent over a two-week period.

Rick DuPuis, president of Royal Capital Management in Boca Raton, which has $65 million under management, said "things are starting to look a little wee bit up." But he notes that normally stocks will bounce around the bottom before truly turning around.

Even after the recent surge, the Dow Jones Industrial Average, at 7,978.08 – its closing Thursday – remains well below its peak.

Consumers
The three-point rise in Florida's index of consumer confidence in March was a surprise, considering Florida is in a "deep recession," according to Economist Antonio Villamil, dean of the School of Business at St. Thomas University in Miami Gardens.

McCarty didn't take the boost in the confidence index as a sign of things to come. But he did note that the spirits of Florida's many retirees tend to fluctuate along with the stock market that they watch closely. "When it goes up, they feel good."

McCarty expects the confidence level to continue to go up and down, by a few points either way, until the economic and political news shows a clear trend toward the positive.

Carmakers hopeful
A slight rise in auto sales for March cheered beleaguered automakers, which are still selling about 60 percent fewer cars than the average for recent years.

"It's one month in a row, and it's of interest and there may be a small sign of hope," Chrysler President Jim Press said on a conference call. "But if you look at the trends out there, there's a lot of concern."

The number of autos and light trucks sold in March nationwide was 857,773, compared with 688,909 in February. If that rate were to hold for a year, automakers would be selling 9.86 million units.

That pace cheers Richard Baker, president of the South Florida Automobile Dealers Association, who pointed out that General Motors and Chrysler say their compaines could be "viable" at a pace of 9.5 million autos a year.

The Florida Department of Revenue said taxable sales at auto dealers in January were about 13 percent higher than in December.

Richard Baker, president of the South Florida Automobile Dealers Association, is optimistic for the long term. He said automakers are selling about 4 million fewer cars than people are sending to the junkyard on an annual basis, and so he sees demand building.

"People are going to have to come back into the marketplace," he said. "Eventually, you have to buy a car again."

Auto industry officials are also pinning hopes on a new program to back GM and Chrysler vehicle warranties and new tax breaks for cars purchased this year.

Florida's Economy
Florida has been in a recession for two years, in the estimation of UF Economist David Denslow, who said this all began in March 2007. Now, Denslow said, he's "becoming a little more optimistic."

He still sees unemployment growing, perhaps reaching as high as 10 percent nationwide and even higher in Florida. But he's expecting the turnaround to begin next year.

Villamil says some of the signs economists look for — orders for durable goods and consumer spending — are "starting to level off a bit. The steepness of the decline is less." "There are glimmers of light," he said. "But they are at the end of a very dark tunnel."

Information from Bloomberg was used in this report.

Harriet Johnson Brackey can be reached at hjbrackey@sunsentinel.com or 954-356-4614.

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Consumer confidence rose in Florida three points to 65 in March, a University of Florida survey says. But don't let that little uptick fool you. "Until
there is a clear message that things are changing for the better, we
expect consumer confidence to continue to move up and down as
conflicting economic news trickles in," said Chris McCarty, director of UF's Survey
Research Center at the Bureau of Economic and Business Research.

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A note from my colleague Doreen Hemlock....hjb

As the federal government moves to take a bigger stake in Citigroup and other banks, there's growing talk of a larger government role in the U.S. auto industry too.

Mike Jackson, chief executive at AutoNation, the country's largest auto retailer, says one option gaining popularity is a " government-sponsored bankruptcy" for financially troubled GM.

A traditional Chapter 11 bankruptcy would be "catastrophic," Jackson says, because there's not enough credit available from banks to allow GM to reorganize and emerge leaner. The carmaker and many suppliers would go bust, costing millions of U.S. jobs. U.S. taxpayers would never recoup their loans to GM, he says.

A better option, Jackson believes, is for government to lend more to GM -- with conditions, including big concessions from its unions and bondholders. Loans would be the fastest and cheapest way for taxpayers to get repaid, he says.

But with the public wary of further loans, a managed bankruptcy might be next best. The government would finance GM's restructuring and oversee negotiations. Unions and bondholders likely would end up conceding more, and the process would take longer and cost more, but taxpayers would get their money back, Jackson says.

The growing prospect of a government-sponsored bankruptcy might even avert one, serving as leverage in GM's ongoing negotiations and prodding concessions faster, says Jackson. He expects "very intense" talks and "gnashing of teeth" in the coming weeks, as auto sales languish.

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Floridians’ consumer confidence fell in February, as hopes dimmed that the nation would find a quick fix for the troubled economy. Nationwide, consumer confidence is now at an all-time low.

The University of Florida says its index of Florida’s consumer confidence fell three points to 63. Survey Research Center Director Chris McCarty of the Bureau of Economic and Business Research said the indicator fell because “the novelty of
a new administration met with the sustained reality of a faltering
economy."

February's Consumer Attitude Survey index was four points above the all-time low of 59.

The index has five components and each one declined. They are: Expectations for the nation’s economy over the next five years, expectations about personal finances one year from now, current perceptions of personal finances and consumers’ view on whether now is a good time to buy big-ticket consumer goods.

Consumer confidence is considered a key economic indicator. But consumer attitudes won’t turn up until consumers see a clear signal that things are
improving, McCarty said.

"There is no doubt that we will be
working through this recession through this year and into 2010," he predicted.

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Bad news for South Florida exporters and hoteliers seeking international arrivals: The International Monetary Fund now predicts the world economy will come to almost to a halt this year, posting its slowest growth since World War II.

The IMF said Wednesday it projects the world economy to grow just 0.5 percent this year, instead of the 2.2 percent rate it forecast in November. The reason: the deepening financial crisis in the UNited States and beyond.

"A sustained economic recovery will not be possible until the financial sector's functionality is restored and credit makers are unclogged," the Washington-based group said, urging "new policy initiatives."
By country and region, the IMF said the economy in the United States will shrink by 1.6 percent this year, more the 0.7 percent drop forecast in November.

It figures Japan will shrink 2.6 percent, Europe contract 1.8 percent and Canada dip 1.2 percent, portending problems for South Florida to attract foreign guests.

The Latin American and Caribbean region, the top market for South Flrida exporters, should grow by only 1.1 percent, instead of the 2.5 percent rate projected in November, the IMF said.

For the updated forecast, check www.imf.org/external/pubs/ft/weo/2009/update

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Inflation has packed its bags and left the beach.

n the sharpest turnaround ever recorded, consumer prices in South Florida last year barely went up.

Often in recent years, Inflation in the Miami-Fort Lauderdale metropoolitan area was so high it beat out the rate in any other metro area.

But in 2008, the local consumer price iIndex was running at a 0.5 annual rate in December, the Bureau of of Labor Statistics announced Friday. That was a huge decline since October, when local prices were rising at a 4 percent annual rate.

Early in the year, it was as high as 5.8 percent.

"The insanity regarding inflation was largely driven by energy prices," said Economist Sean Snaith of the University of Central Florida. "That's been put on hold at least temporarily by the collapse of oil prices."

He says the CPI will probably be a negative number for the next few months.

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Unemployment, the economists say, is a lagging indicator.

The economy turns down, unemployment rises. The economy turns up, unemployment stays high for a while.

What this means is you should look for more increases in unemployment this year.

It’ll be as bad as last year, according to a prediction announced Monday at The Conference Board.

Last year, the nation lost 2.5 million jobs.

Trends tracked by the research organization point to a loss of 2 million more jobs in 2009.

The Conference Board looks at job openings, part-time hiring, factory production and sales, among other things, to figure out which way employment is going.

It's not going up. Jobs are still being lost.

I thought unemployment would rise this year, but geez, that's a very high number.

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Yesterday’s Beige Book, a report on regional economies from the Federal Reserve, had this view from the Atlanta Fed of one of Florida’s most important industries:

“

Tourism related activity was mixed with reports noting lower hotel occupancy in some parts of the District. Tourism contacts also reported concerns regarding reduced Labor Day weekend travel, and most anticipate some weakening in business travel during the fall.”

Actually, the tourism story may be a good one in 2008.

Here’s why: According to Visit Florida, the state had a 1.2 percent gain in tourists visiting the state in the April-May June quarter compared with the year before. That followed a 4.1 percent gain in tourist visits between January and March compared to 2007.

As the year began, Miami ranked number one in the country for hotel occupancy and it had the second highest average daily room rate, according to The Miami Herald.

But back to the summer that wasn’t so hot. Both summer and the fourth quarter were soft last year, too.

Let’s assume Florida’s tourism industry in the second half of 2008 sees no growth from last year. We’d have the exact same number of visitors in the final six months..

If that happened, Florida would have an annual total of 85.7 million visitors
.
That’s the highest number in a decade,

It’s 46 percent higher than the number of people who visited Florida in 1999.

Why would the number of visitors stay the same as last year? You might assume it would decline, due to the weak economy and high gas prices. But tourism here is not dependent only on our economy.

Foreign visits so far have been on the rise, both from Canada and from other countries. The weak dollar was a boon to Canadians and visitors from the United Kingdom earlier this year. And the bustling Latin American economies, boosted by oil and commodity profits, are enriching those citizens.

The large point is that the economy isn’t a song with only downbeats. Tourism, for much of this year, has played its own tune. And it’s been upbeat.

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In Florida, there’s been very little progress in reducing the number of people without health insurance over the last three years. That’s distressing, especially if you look forward. Poverty is increasing among Hispanics. Unemployment is rising. And huge medical bills are one of the main reasons people file for bankruptcy.

Here are some numbers the SunSentinel’s data base researchers John Maines and Dana Williams pulled out of the Census Bureau’s most recent report.

In Florida,

In 2007, the number of people without health insurance was 3,648,000 or 20.2 percent of the state’s population.

In 2006, the number 3,828,000 or 21.2 percent.

In 2005, the number was 3,616,000 or 20.2 percent.

In 2004, the number was 3,382,000 or 19.4 percent.

In 2003, the number was 3,071,000 or 18.2 percent.

In 2002, the number was 2,843,000 or 17.3 percent.

In 2001, the number was 2,856,000 or 17.5 percent.

In 2000, the number was 2,620,000 or 17.3 percent.

Florida’s rank among states, by percent not covered:

2007 3
2006 4
2005 3
2004 3
2003 10
2002 9
2001 7
2000 8

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The Census Bureau report on poverty, incomes and insurance had a surprise: There were more than 1 million fewer uninsured people last year than the year before.

The story behind that is distressing: More than a million new people were added to Medicaid, a health insurance program for the poor that taxpayers pay for.

A real decline?

No. But here’s what declined: The Commonwealth Fund, a private foundation, reported that health insurance coverage through employers shrank. Employer-based health insurance last year covered 59.3 percent of the population, down from 59.7 percent.

The staff of the Joint Economic Committee of Congress figures the ranks of the uninsured have increased by 7.2 million since 2000.

The lack of insurance can easily be a precursor to poverty.

And poverty, when you look closely at it, is a dire thing. The Census says 37.3 million people were living in poverty in 2007. Of those, 13.3 million were children.

The poverty level for a four-person family in 2007 was $21,203.

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Did you hear that 15,000 reporters are going to be in Denver to cover the Democratic National Convention?

To cover a story for which we all already know the ending.

In a time when the news media is under such financial constraints.

If you gave me 15,000 reporters, I could get to the bottom of the sub prime mortgage crisis, the housing bust, the credit crunch, the auction-rate securities meltdown, the shadowy world of derivatives ----- every place where light needs to shine in the financial world.

It's not the election, it's the economy that needs some real reporting today.

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The Consumer Price Index shot up at an annual rate of 5.6 percent in July --- and the newswires are buzzing about how that’s the highest rate in 17 years.

But it is what is inside the index that’s really high.

On an annual basis, year over year, today’s report from the Bureau of Labor Statistics says cereal and bakery products have increased in price by 12 percent. Fruits and vegetables, up 10 percent. A category called fats and oils, up almost 16 percent.

Gas, the kind you use in your home, and electricity, are up almost 15 percent.

Thank goodness Floridians don’t need to heat our homes with fuel oil, which is up 61 percent.

And the big kahuna, gasoline, up almost 38 percent since last year.

The upside? Not sure what it is, but if it makes you feel better, let’s consider what gasoline-like price surges would mean in the rest of our daily lives.

If haircuts had gone up as much as gas, a $20 haircut last year would be a $27.60 haircut this year.
A $50 pair of shoes would be a $69 pair of shoes.

A $75 dinner at a restaurant would be a $103.50 dinner.

At least we don’t have those kind of price spikes across the board, yet.

Or, do we? Where have you seen inflation hit hard? Which prices?

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A lot of you don’t give a fig about whether we’re in a recession or not. You’ve told me, in response to my Saturday story in which another economist said Florida is in one.

You may not realize it, but I really don’t care either.

I don’t care what we call it. We all have a very personal experience with this economic downturn. It’s real. It’s troubling. It’s going to last for a while. And the only question is how we’ll be when we get to the other side of it.

Because these things end. Average recession length is 10 months. Last two have been only eight months. And we’ve already been in this downturn for a while.

One thing I remember from one recession in the past was that stock markets usually turn up six to nine months before the recession ends. It’s worked that way in the past. I hope it works that way this time.

So I’m looking for that.

We’ll still have gloomy economic stories and headlines. I’ll probably write my share of grim news. But it’s a cycle. And it will end.

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Do you get the feeling that Obama and McCain have not filled a gas tank in the last six months?
That even when they have a day off, out of the public eye, they somehow don't really realize what it sounds like on a Saturday when you can hear grumbling in row after row of drivers at the pump?
That they and their policy-making minions don't really believe that this crisis is changing the economy?
That they have no idea how inescapable the cost of energy is, to all industries, to all consumers?

A day or a week without gas taxes -- McCain's idea -- won't do it. What's Obama's idea? I haven't heard.

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Let’s call it the Do Nothing and You’re Good strategy. It’s one way to make it through this economy, I think.

If you didn’t buy a house at the peak price and you don’t have to sell it now at the bottom, you’re good.

If you didn’t borrow when credit was easy and have to repay now that it’s hard to get, you’re good.

If you don’t need to cash in your stocks and you can pick up some at bargain prices today, you’re good.

Remember, it’s not a loss until you sell it. Do nothing and you may find, down the road, that it's not a loss at all.

Sitting still is smart, in this economy, for some major financial choices. It’s more than sufficient.

DNAYG are the initials for this strategy. Pronounced, DE-Nag.

Stop nagging yourself with worry. People are so concerned. But the economy’s not ending. It’s turning down. It calls for endurance.

Are you good? What’s your best idea for making it through?

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They could be wrong, but the National Association of Business Economists' May Outlook, released today, says this is one short recession or downturn that we're in.

They also predict that we'll go through the downturn without actually recording a decline in the nation's Gross Domestic Product. Pretty neat trick. Typically, a recession is defined as six straight months of decline in GDP.

The group says the downturn should be ending either in the second or third quarter of this year. That's September at the latest.

Why? Because the credit crisis is ending. Because the Fed's actions to shore up the financial system are doing just that.

The troubling part of the monthly survey, as I see it: One out of five of these economists don't expect we're going to get a break from serious inflation this year or next.

What do you think?

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Wall Street is so happy that inflation has moderated.

Wait, it moderated?

The inflation you and I are feeling at the gas pump and the grocery store is not moderate. Yet stocks are surging right now because the overall consumer price index went up only 0.2 percent in April. That's less than 0.3 percent rise in March. The Dow's up more than 120 points at lunchtime.

The real cost of living is soaring, no matter what the CPI says. And we're all trying to adjust.

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Did anybody else notice that just as the nation’s focus shifted to the economy, everyone debated whether we were in a recession or not in a recession? To me, it was the wrong question.

While we all talked about that one, watching for any little sign that would settle the argument, we seemed to not notice something: That a much bigger threat to our daily financial lives was growing and growing and no one seemed to be doing much about it.

And bang, here it is:

Inflation is huge, important and we didn’t seem to notice its arrival. It’s walloping us, every day, in the huge prices for the things we need, food and gasoline. It is the bigger problem, but it is not the one those in power seem to be working on.

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