Archive for September, 2006
Wells Fargo Survey - Women Business Owners
Wells Fargo & Company is a diversified financial services company with $500 billion in assets, providing banking, insurance, investments, mortgage and consumer finance to more than 23 million customers from more than 6,200 stores and the internet across North America and elsewhere internationally.
Wells Fargo Bank, N.A. is the highest credit-rated bank in the U.S., receiving an “Aaa” by Moody’s Investors Service – its top credit rating – and “AA+” by Standard & Poor’s Ratings Services. Providing financial products and services to more than one million businesses with annual sales up to $20 million in all 50 states, Puerto Rico and Canada, Wells Fargo is the #1 lender to small businesses in the United States in total dollar volume according to the most recent CRA data (2004). The second largest national SBA lender in dollars, Wells Fargo is an SBA Preferred Lender in 30 states and the District of Columbia, and originated 4,165 loans for $579 million in 2005.
Its diverse business services programs provide outreach and education to women, African American, Latino, and Asian business owners about financial services. Since 1995, Wells Fargo has loaned more than $32 billion to women and diverse business owners.
Women business owners, now surpassing 10 million nationwide, are happy being small business owners and are optimistic about the future of their businesses, according to a special Wells Fargo/Gallup Small Business Index report on women business owners.
Ninety-five percent of those surveyed feel they are successful and eighty-six percent say, if given the opportunity again, they would still become a small business owner. Women business owners are very confident in their companies’ overall future growth prospects, highlighting three key business areas: revenues, cash flow and compensation.
Sixty-three percent say their cash flow from last year was somewhat good or very good (20 percent), while seventy-two percent expect their company’s cash flow in the next year to be somewhat good or very good (23 percent).
Three in five (60 percent) respondents expect their companies’ revenues to increase in the next year while only one in ten (10 percent) expects to see a decrease. “These results are very encouraging and indicate that women business owners are successful, happy, and extremely confident in what they are doing,” said Rebecca Macieira-Kaufmann, executive vice president and head of Wells Fargo small business segment.
“Women business owners exemplify the American entrepreneurial spirit. Their continued optimism points to both the future of women in business and the overall small business segment.” Women business owners also indicated that they are financially more successful as small business owners than they would have been working for another company in the same field.
Three–quarters (76 percent) of survey respondents say they are financially more secure, with forty-three percent stating they earn more per hour as a small business owner. The sentiment is equally strong for current and future expectations.
Seventy-one percent say their companies current financial situation is very good (26 percent) or somewhat good (45 percent) compared to eighty percent say they expect their financial situation to be very good (34 percent) or somewhat good (46 percent) in the next year. “Women business owners should feel optimistic about their futures,” said Laine Caspi, founder of Parents of Invention based in Los Angeles, California.
“I have been a business owner since 2002 and the market growth I have seen in just those four years has been tremendous. I think if this survey is conducted in another two years, the numbers will be even higher.”
Since the third quarter of 2003, the Wells Fargo/Gallup Small Business Index has surveyed small business owners each quarterly basis on their perception of current conditions and future expectations relating to financial situation, revenues, cash flow, capital spending, number of jobs and credit availability. These results are based on a survey of approximately 4,800 women business owners from across the country. Surveys were conducted from September 2004 to May 2006.
The companies surveyed are at least fifty percent or more women-owned. The margin of sampling error is + 4 percentage points.
For more than 60 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people’s attitudes, opinions and behavior.
While best known for the Gallup Poll, founded in 1935, Gallup’s current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.
Rates heading down
There is a lot of discussion on the US housing market and what impact the decreasing Real Estate sector in the US will have on the overall economy and consumer spending in the US. The forecast for Real GDP growth is only 1.0% for the US in Q2 2007 versus an actual 2.9% growth rate for Q2 in 2006.
This may seem dismal, but fortunately for the US economy, labour income is back on the rise and should offset some of the fallout from loss of home equity purchasing power. Since wage growth is typically the way Americans financed consumption in the past, consumption being driven the old fashioned way will assist the US economy in coming months.
Also, the Fed Funds rate is at its highest level in 5 years, so there’s plenty of room to lower rates to help boost the economy.
There’s a prediction of a 50 bp decrease in the Fed Funds rate over the next 9 months.
The Canadian housing sector, in general, has not experienced the same run up in prices, so the threat is far less here. The issue here is the Canadian Dollar, perhaps even hitting 92 cents this year, causing the Ontario economy to falter below 2% growth rate. The Bank of Canada will not want to see a higher CDN Dollar. The prediction is for three 25 bp reductions in prime over the next 9 months or so.
This will help keep the energy driven CDN Dollar from further damaging the Canadian economy.
Bond Yields are also predicted to fall by over 50 bps in the next 9 months. The markets will likely not worry about another hike in rates and potentially see some rate reductions.
Got a mortgage question? Give us a call or visit http://www.blogger.com/www.truenorthmortgage.ca .
Sincerely,
True North Mortgage
Hard Landing For Housing Already Here
Some figures from this article:
The Hard Landing For Housing is Already Here
- 32.6% of new mortgages and home equity loans in 2005 were interest only, up from 0.6% in 2000
- 43% of first-time home buyers in 2005 put no money down.
- 15.2% of 2005 home buyers owe at least 10% more than their home is worth.
- 10% of all home owners have no equity in their homes
- $2.7 trillion in loans will adjust to higher rates in 2006 and 2007.
- 70% of borrowers who took out pay-option ARMS in the past year have loan balances larger than their initial loan.
- Homeowners face higher payments as mortgages are reset. Generally, monthly payments rise between $200 and $500 depending on the size of the mortgage.
- According to Reality Trac, August foreclosures were up 23% over July and 53% over a year ago.
- The number of homes for sale is at record highs, and inventories are 59% higher than a year earlier.
- New home sales are down 22% and existing home sales down 11%.
- The NASB housing market index has recorded an all-time decline.
- The housing affordability index is at a 15-year low.
- The house price-to-income (rents) ratio is off the charts. According to HSBC, in 18 states accounting for over 40% of national home values, the price-to-income ratio is 3.6 standard deviations above the mean.
- The OFHEO index of house prices deflated by the consumption price deflator has soared to a record high of 350 from 250 in 2001. From 1976 to 1996 it never was above 220.
- According to the NAR the year-to year prices of existing homes are now flat. A short time ago they were rising at a yearly rate of 16%.
- Nationally, home prices have not declined on a year-to-year basis since 1933. Recently, however, prices have been dropping in the North East, West and Mid-West.
- Sales incentives are now estimated at 3% to 7% of selling prices.