(WisBusiness) FRI News Summary — 16 Jan. 2009

From WisBusiness.com …

— During an appearance on CNBC this morning, Gov. Jim Doyle hailed a fed stimulus plan from House Dems.

Doyle, appearing with the Republican governors of Vermont and North Dakota, said the House plan helps states preserve education funding. “We really have to make sure we maintain good schools,” Doyle said. “I think the plan from the House of Representatives really moves in the right direction.”

The inclusion of education-focused funding was important, Doyle said, because “a second-grader can’t say, ‘I’m going to come back and do second grade when the economy improves.'”

Doyle had to talk on the phone because the cold prevented a good satellite hook-up with CNBC, the network said. Noting that it was 20 below in Madison this morning, the governor said: “Our economy has really felt like that.”

He said just about “every other day” brings news from major employers about cuts, expansion delays or layoffs. “It’s a very hard time,” he said.

The House released a draft of the proposal Thursday.

Read a summary: http://appropriations.house.gov/pdf/PressSummary01-15-09.pdf

— The president and CEO of Chicago’s Federal Reserve Bank on Thursday painted a gloomy economic picture for the next 18 months, saying Wisconsin, the Midwest and the nation will have “a lot to weather” especially on the manufacturing front.

Charles Evans told a business audience that the forecasts and economic statistics were “sobering,” comparing the current recession to the deep one of the early 1980s. Evans said the country is in for a “protracted period of poor economic performance” and said the Fed is using all its tools to mitigate the effects of a downturn.

While deflation is a concern with some now, the huge amount of liquidity poured into the financial system may someday pose the opposite problem — hyperinflation. “It’s what Milton Friedman taught, and I believe,” he said of the economists monetary theories.

“There’s a tremendous balancing act,” he added, noting the Fed’s balance sheet has tripled from roughly $800 billion to $2.5 trillion. But he said he didn’t “currently see much risk of an outright deflationary episode.”

The fourth annual Wisconsin Economic Forecast Luncheon was presented by the Wisconsin Bankers Association and the Wisconsin Realtors Association, with support from several sponsors, including WisBusiness.com . The program drew a record crowd of more than 500, said organizers, owing robust attendance to two top speakers and the recession.

See more on the luncheon: http://www.wisbusiness.com/index.iml?Article=145907

— Gov. Jim Doyle preceded Evans and touted the opportunities of a coming stimulus package that he said could help thaw an economic winter and usher in spring.

This economy is frozen, Doyle told the luncheon. The challenge is to ensure the state is in a good position to recover when it heats back up, he said.

“We know spring is coming. And we know the thaw will be there,” Doyle said. “Our job is to try to see that we can bring spring here a little quicker than it otherwise might come.”

Listen to Doyle’s address: http://wispolitics.com/1006/090115DoyleWBA.mp3

— In a new survey, state bankers say low interest rates will spur a modest uptick in new and refinanced residential mortgages during the first six months of 2009. But overall, a majority of bankers rate the Wisconsin economy as just “fair” and 90 percent believe conditions are still weakening.

Those results are from the latest edition of the twice-yearly economic conditions survey the Wisconsin Bankers Association conducts of its members.

Respondents see demand for other benchmark lending categories — including commercial loans and real estate development loan — dropping between January and June 2009. And 54 percent of survey respondents say commercial loan demand will drop. Reflecting weakness in the housing sector, 66 percent of bank CEOs say real estate development loan demand will also drop.

About half of bank CEOs report that their institution has tightened lending standards due to regulatory pressure or to preserve capital.

The other half say they haven’t changed lending standards, but also say that fewer businesses qualify for loans as a result of the economic downturn.

— Lt. Gov. Barbara Lawton announced that for this spring semester, the Business, Environment and Social Responsibility (BESR) Program at the University of Wisconsin-Madison School of Business will offer “Sustainability Meets Entrepreneurship,” a Friday forum series designed to provide UW students and members of the community access to experts on clean technology and alternative energy.

See details: http://wispolitics.com/index.iml?Article=145921

— In the newest edition of his Fashion Forward column, Mitch Bram answers this question: “A lot of things are on sale now … if somebody were to buy a business wardrobe from scratch and had $1,500 to spend, how would you suggest that they do it?”  

Read his answers: http://www.wisbusiness.com/index.iml?Content=211

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