MONROE - Monroe banks and businesses are, for the most part, sitting in a shelter of economic stability at a time when some parts of the nation are reeling in mortgage crisis and bank failures.
"The state is in a healthy environment" relative to some parts of the country, according to Fred Giese, president of the Anchor Bank branch in Monroe.
Whereas some states are seeing a "boom and bust," Wisconsin has not had the boom and, therefore, is not seeing a bust, he said. Furthermore, Anchor Bank's Madison headquarters office is not experiencing the recent turmoil in business loans.
Standards for home mortgage loans have not been as strict under government-sponsored enterprises (GSE), like Fannie Mae and Freddie Mac, which were regulated under U. S. Housing and Urban Development (HUD) until the Housing and Economic Recovery Act of 2008 (HERA) became law on July 30, 2008. The responsibility for regulation and affordable housing goals was then transferred to the Federal Housing Finance Agency (FHFA).
And some banks in the country were making "125s," a term used for lending 125 percent of appraised value on a home.
Part of the local banking stability comes from conservative banking practices and from customers not over-borrowing or purchasing enormous homes.
"We've always been very careful," Giese said about the Monroe branch office making home mortgage loans. "But if a person has stable employment and the capacity of pay and a down payment, yes, you can still get a loan."
But the bank is being more careful about "crossing our t's and dotting our i's," as mortgage companies are looking closer at bank portfolios, he said.
Some area banks have a five-star rating from Bauer Financial Inc., an independent bank rating and research firm in Coral Gables, Fla. The firm has been analyzing and reporting on the performance of U.S. banks and credit unions since 1983.
Gratiot State Bank in Gratiot is the most recent recipient of Bauer Financial's highest five-star Superior rating for financial strength and stability. The five-star rating is based on the overall financial picture of the bank.
"Residents in and around Gratiot can ... sleep soundly in the knowledge that they are banking with one of the strongest banks in the county," Karen L. Dorway, President of Bauer Financial, said in a recent news release.
Other area banks with five-stars listed at the firm's Web site include Bank of Brodhead, Bank of Brooklyn (Union Bank and Trust) and the First National Bank of Darlington. Bank of Juda, Bank of New Glarus and Woodford State Bank in Woodford have four-star ratings, and Bank of Monticello has 3.5.
BUSINESS OWNERS CAUTIOUS
Sherrill Kelly, president of Monroe's downtown Business Improvement District and owner of Uptown Girl clothing store, said she isn't worried about the bank that holds the mortgage on her building.
But how any proposed government bailout for the country's financial woes is going to effect business, most Monroe business owners don't know yet.
"I don't think anyone can know," Kelly said about the effect of a legislated bailout. "But if it puts a burden on the taxpayers, it's bound to affect the customers."
From a consumer's point of view, the cost of gas, food, clothing and utilities are up.
In the first nine months of 2008, Swiss Colony has seen sales close to expected. But as people see their investments and 401(K) going down, John Baumann, president of Swiss Colony, believes people will be reminded of the economy and get a little shaky themselves.
"It'll be interesting to see in the next couple of weeks if there's a slackening on the sales demand," Baumann said Tuesday. "They may decide to put off making some purchases or postpone them until the holidays."
However, "people cherish the holidays," and sales begin to increase in November and "really rocket up after Thanksgiving Day," he said.
"But locally, the unemployment rate is below a year ago," Baumann said, which means people will have less worry about saving money.
For now, Baumann said Swiss Colony is going to "stick with the current game plan" and keep watch over inventory.
"Business is good, but changed," Val Burington of Burington Shoes said. She is watching changes in her inventory.
"I'm not sure of how (the proposed bailout) is going to affect us, but as for the economy, we see a change in what we're selling," she said.
Burington said customers are selecting higher-end shoe brands with better quality that signify better endurance against wear.
"Things like sandals, they decide they can do without, and they are doing without," she said.
Future restocking orders for the store will include all shoe sizes, but with a possible reduction in the variety of colors.
"We're going to be conscious of what we buy; inventory will be tighter, but we have no problem of ordering things," she said.
TIGHTENING CREDIT FOR FARMERS
For farmers, the biggest consequence of no bailout would probably be a tightening of credit, said Mark Mayer, Green County ag extension agent. A farmer looking for a million dollars or more to expand may have a harder time getting credit.
However, most farmers use "revolving loans that are not resold to second markets," Mayer said.
In general, economic fluctuations hit the coast states harder.
"I don't know if the Midwest (people) aren't risk takers, but the highs and lows are not there," he said. "And agriculture represents a good portion of our economic climate."
There is a resurgence in the state dairy industry compared to the outlook 10 years ago. Mayer said milk prices have dropped in the last three to four months.
However, the cost of feed corn has also dropped about $2 a bushel, which Mayer attributes to less hedge fund speculation.
According to Mayer, farm economists say the economy is not like it was in the 1980s, when land values dropped as much as 60 percent in some areas.
"Farmers are not buying farm land on credit as much," Mayer said.
If commodities prices stay up and with more people in the world to feed, farmers have made good investments in land.
"Good farmland is something you can't make anymore," Mayer said.
"The state is in a healthy environment" relative to some parts of the country, according to Fred Giese, president of the Anchor Bank branch in Monroe.
Whereas some states are seeing a "boom and bust," Wisconsin has not had the boom and, therefore, is not seeing a bust, he said. Furthermore, Anchor Bank's Madison headquarters office is not experiencing the recent turmoil in business loans.
Standards for home mortgage loans have not been as strict under government-sponsored enterprises (GSE), like Fannie Mae and Freddie Mac, which were regulated under U. S. Housing and Urban Development (HUD) until the Housing and Economic Recovery Act of 2008 (HERA) became law on July 30, 2008. The responsibility for regulation and affordable housing goals was then transferred to the Federal Housing Finance Agency (FHFA).
And some banks in the country were making "125s," a term used for lending 125 percent of appraised value on a home.
Part of the local banking stability comes from conservative banking practices and from customers not over-borrowing or purchasing enormous homes.
"We've always been very careful," Giese said about the Monroe branch office making home mortgage loans. "But if a person has stable employment and the capacity of pay and a down payment, yes, you can still get a loan."
But the bank is being more careful about "crossing our t's and dotting our i's," as mortgage companies are looking closer at bank portfolios, he said.
Some area banks have a five-star rating from Bauer Financial Inc., an independent bank rating and research firm in Coral Gables, Fla. The firm has been analyzing and reporting on the performance of U.S. banks and credit unions since 1983.
Gratiot State Bank in Gratiot is the most recent recipient of Bauer Financial's highest five-star Superior rating for financial strength and stability. The five-star rating is based on the overall financial picture of the bank.
"Residents in and around Gratiot can ... sleep soundly in the knowledge that they are banking with one of the strongest banks in the county," Karen L. Dorway, President of Bauer Financial, said in a recent news release.
Other area banks with five-stars listed at the firm's Web site include Bank of Brodhead, Bank of Brooklyn (Union Bank and Trust) and the First National Bank of Darlington. Bank of Juda, Bank of New Glarus and Woodford State Bank in Woodford have four-star ratings, and Bank of Monticello has 3.5.
BUSINESS OWNERS CAUTIOUS
Sherrill Kelly, president of Monroe's downtown Business Improvement District and owner of Uptown Girl clothing store, said she isn't worried about the bank that holds the mortgage on her building.
But how any proposed government bailout for the country's financial woes is going to effect business, most Monroe business owners don't know yet.
"I don't think anyone can know," Kelly said about the effect of a legislated bailout. "But if it puts a burden on the taxpayers, it's bound to affect the customers."
From a consumer's point of view, the cost of gas, food, clothing and utilities are up.
In the first nine months of 2008, Swiss Colony has seen sales close to expected. But as people see their investments and 401(K) going down, John Baumann, president of Swiss Colony, believes people will be reminded of the economy and get a little shaky themselves.
"It'll be interesting to see in the next couple of weeks if there's a slackening on the sales demand," Baumann said Tuesday. "They may decide to put off making some purchases or postpone them until the holidays."
However, "people cherish the holidays," and sales begin to increase in November and "really rocket up after Thanksgiving Day," he said.
"But locally, the unemployment rate is below a year ago," Baumann said, which means people will have less worry about saving money.
For now, Baumann said Swiss Colony is going to "stick with the current game plan" and keep watch over inventory.
"Business is good, but changed," Val Burington of Burington Shoes said. She is watching changes in her inventory.
"I'm not sure of how (the proposed bailout) is going to affect us, but as for the economy, we see a change in what we're selling," she said.
Burington said customers are selecting higher-end shoe brands with better quality that signify better endurance against wear.
"Things like sandals, they decide they can do without, and they are doing without," she said.
Future restocking orders for the store will include all shoe sizes, but with a possible reduction in the variety of colors.
"We're going to be conscious of what we buy; inventory will be tighter, but we have no problem of ordering things," she said.
TIGHTENING CREDIT FOR FARMERS
For farmers, the biggest consequence of no bailout would probably be a tightening of credit, said Mark Mayer, Green County ag extension agent. A farmer looking for a million dollars or more to expand may have a harder time getting credit.
However, most farmers use "revolving loans that are not resold to second markets," Mayer said.
In general, economic fluctuations hit the coast states harder.
"I don't know if the Midwest (people) aren't risk takers, but the highs and lows are not there," he said. "And agriculture represents a good portion of our economic climate."
There is a resurgence in the state dairy industry compared to the outlook 10 years ago. Mayer said milk prices have dropped in the last three to four months.
However, the cost of feed corn has also dropped about $2 a bushel, which Mayer attributes to less hedge fund speculation.
According to Mayer, farm economists say the economy is not like it was in the 1980s, when land values dropped as much as 60 percent in some areas.
"Farmers are not buying farm land on credit as much," Mayer said.
If commodities prices stay up and with more people in the world to feed, farmers have made good investments in land.
"Good farmland is something you can't make anymore," Mayer said.