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12 Economic Environment December 2011–January 2012 The RMA Journal Hemera/THinksTock
Through the Cycle Cycle by Rick buczynski How to Identify the Best C&I Lending Opportunities in Challenging Times As of this writing in early September, there is no beacon to light a clear course through stormy economic seas. The financial markets continue to ebb and flow on the unpredictable tides of good and bad economic news. Consumer confidence remains weak and fragile. Households are tightening their belts and working off their heavy debts Keynes’s “paradox of thrift” warns us that starving this financial fever may just leave us all dead from hunger. Still, it is not bad news, just a necessary adjustment to the overleveraged spending spree that was a key factor in the euphoric run-up of household debt, a harbinger of the Great Recession (Figure 1). Business investment and private-sector job creation, both necessary catalysts for a solid, sustainable recovery, seem trapped in a maelstrom of uncertainty despite generally strong profits and a corporate America awash Markets can remain irrational longer than you can remain solvent. Figure 1 $2,600 $2,550 $2,500 $2,450 $2,400 $2,350 $2,300 John Maynard Keynes, British economist (1883-1946) in cash. Profits have been robust, while the national unemployment rate remains stubbornly high (Figure 2). The unemployment numbers (14 million) Total Consumer Credit Outstanding: Stepping Down from (or Falling Off?) the Mountain of Debt Billions, Seasonally Adjusted $2,250 2007-01 2007-07 2008-01 2008-07 2009-01 2009-07 2010-01 2010-07 2011-01 2011-06 Source: Federal Reserve Board The RMA Journal December 2011–January 2012 13
Page 1: C&I Lending in Challenging Times A
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Page 9: For more on this industry, see the

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