The full release is below.

Sausalito – June 30, 2010 – TrimTabs Investment Research estimates that the U.S. economy shed 152,000 jobs in June.  While the headline figure is negative, the job losses were due primarily to the layoffs of 243,000 temporary employees at the Census Bureau.

“The big news is that private sector added just 91,000 jobs in June, much less than the 150,000 needed to keep up population growth,” said Charles Biderman, CEO of TrimTabs.  “Investors are starting to realize that the economy is going to grow a lot more slowly than forecast.”

In a research note, TrimTabs pointed out that multiple indicators suggest the economy is slumping.  Real-time tax data shows wages and salaries are declining sequentially, growth in online job postings is slowing, initial unemployment claims are stubbornly high, and the housing market is weakening.

“Surging demand for homes and durable goods generally fueled strong economic recoveries in the past,” Biderman noted.  “But now that the government has stopped doling out cash to people to buy houses, cars, and appliances, where’s the unfulfilled demand to boost the economy?”

Adding to the woes of the job market and the housing market, state and local governments face enormous budget deficits.

“Without huge tax increases or massive federal aid, 1 million to 2 million public sector employees could lose their jobs by the end of 2011,” said Biderman.

TrimTabs expects consumption to weaken over the near term because Congress failed to extend emergency unemployment benefits.

“We estimate that 2 million people will lose their unemployment benefits over the next two weeks,” said Biderman.  “These benefits average $300 per week, so that means about $32 billion fewer dollars annually will be available for consumption.”

By SARAH WALLACE

The comprehensive financial reform agreed upon by the House and Senate on Friday, along with all the new regulations of the past year, could signal the end of community banking. The new reforms will give more power to the Federal Reserve to regulate how my bank and others like it do business.

What does all this mean for our customers? Less credit will be available, costs will increase, and we will be less able to make loans to regular people who were creditworthy in the past. This is the perfect storm for the small retail banking customer. We will start to see more small community bank failures and mergers because of voluminous regulation.

I have served as the president and now the chair of the board of directors of First Federal Savings and Loan Association in Newark, Ohio, since 1980. First Federal is a $200 million, federal mutual thrift. We were created to provide people a safe place to deposit their money, and loan that money back into the community in order to meet housing needs. Additionally, we utilize a significant portion of our profits to give (yes, I said give—not lend) to worthy community organizations and projects. 

Our business model is narrow. We have 55 employees. We are mortgage lenders and providers of retail deposit services. We have always been a major housing lender for low and moderate income workers in our community. Our borrowers work in government, agriculture, manufacturing, education and the medical profession, like any small community in the United States. For 76 years, this business model has served us, and most importantly, the people in our community very well.

Here is the problem as I see it. First Federal lends to creditworthy folks who for decades have been well-served by bankers who understand their market and can think creatively to structure credit appropriately. It is what community bankers do. Going forward, we will no longer be able to evaluate loan applications based solely on the creditworthiness of the borrower. We will be making regulation compliance decisions instead of credit decisions. This is not in the best interest of the consumer.

I have said to our employees many times, “We are in the business of helping people!” Sometimes, bad things happen to good people, people we see in the grocery store and at Little League baseball games. We used to believe that if someone hit a bump in the road of life and came to us for financing, we could often figure out a way to help them. I fear this kind of community-oriented banking will end. There will be creditworthy borrowers who will no longer be able to get loans.

Recently, a couple came to us wanting to refinance their home. They were paying a relatively high interest rate (by today’s standards) to a competing institution. They had reasonably good equity in their residence and owned a couple of rental properties, also with good equity. One borrower worked in the construction field and had experienced a reduction in income over the past couple of years, causing some recent slow payments on their credit report. After verifying the income and assets of the borrowers, an idea not new to us, we decided to deny the loan.

An argument could have been made to grant the loan because of the good equity position and due to the fact that we would have been lowering their monthly payment. However, fear of regulatory criticism through the federal examination process and potential money penalties associated with noncompliance here the overriding factors, causing the loan to be denied.

I had another customer stop in my office the other morning to ask how I thought the new bill would affect bank fees on checking accounts. My short answer was they will become more expensive, due in large part to the change in interchange fee regulation. It is estimated that banks on average will experience a 75% reduction in interchange fee income. In small banks like ours, interchange income offsets the expense associated with providing the service of electronic banking. Institutions will be faced with one of two choices: Either increase fees on checking accounts and continue to offer electronic banking, or stop providing the service altogether.

We all know the employees needed to provide banking services to deposit and loan customers: the manager, the teller, the back-office folks who balance the books, the loan officers and the customer-service representatives. In order to comply with the volumes of new regulation—and small banks are required to comply with the same consumer regulations that apply to the Wall Street banks—we will need to have a proportionately higher number of employees working day after day to interpret and implement all the new federal rules. This in itself, because of the sheer volume, has the potential to destroy community banking. Large banks have entire departments devoted to regulation compliance on a full-time basis; we have one employee, like most institutions our size.

The safety and soundness of our nation’s small financial institutions is dependent on our being able to be profitable and add to our capital base. Small community financial institutions care about the people in their communities. Unfortunately, the new financial regulatory reform bill will greatly inhibit our ability to help them.

Mrs. Wallace is chair of the board of directors of First Federal Savings and Loan Association in Newark, Ohio.

Rachel Dollar and Fraudline

The respective Republican winners, Meg Whitman and Carly Fiorina – both highly successful former high-tech executives – represent the future and the possible. Jerry Brown, who was governor three decades ago, and Sen. Barbara Boxer, a fixture in Congress for nearly as long, represent the past, way past.  

California voters thought they had broken with a past of reckless spending and an unresponsive Legislature by electing Arnold Schwarzenegger governor. But the terminator changed somewhere along the line and, anyway, was no match for the public employee unions and gerrymandered, spendthrift Legislature.

Even with open primaries approved by voters Tuesday, Ms. Whitman may not be able to tame Sacramento either with its huge budget deficits and out-of-control bureaucracies.

But by taking a startup called eBay and growing it into one of the world’s most successful and well-known corporations, she has demonstrated high levels of managerial competence and imagination. She at least has a chance. And, clearly, one of the things missing most at all levels of government is business knowledge.

Then there is the alternative universe known as Washington, D.C. There, deficits are quickly climbing toward 100 percent of annual GDP, the kind of tipping point that, as it did in Europe, can spark a financial crisis.

There in that alternative universe, taxes and regulation are being raised almost daily on capital and investments. And they are doing so at precisely the time when business needs that capital to hire. Instead, millions of Americans are unemployed with no substantial turnaround in sight.

One can argue that government spending was necessary to soften the financial crisis. But it cannot continue much longer, if at all. Incredibly, at this moment, Congress is considering tens of billions in new spending that will add to the deficit.

  Someone who has run a business, like Ms. Fiorina at HP, knows you can’t spend more than you bring in forever.

Yes, government is not a business. Government tackles problems the private markets won’t. But neither is government’s size and reach limitless, certainly not to a point beyond the taxpayers’ ability to pay for it. Many people sense that point has been breached.

The future has to be different.

                                                         •••

Brad Bollinger is Business Journal editor in chief and associate publisher. He can be reached at 707-521-4251 or bbollinger@busjrnl.com.

Following is the latest employment release from TrimTabs:

SAUSALITO – TrimTabs Investment Research estimates that the U.S. economy added 475,000 jobs in May, the third consecutive monthly increase.

“Investors shouldn’t let a huge headline employment print fool them,” said Charles Biderman, CEO of TrimTabs.  “Temporary hiring by the Census Bureau was responsible for most of the job growth in May, while private sector job growth apparently slowed.”

TrimTabs’ employment estimates are based on analysis of daily income tax deposits to the U.S. Treasury from all salaried U.S. employees.  TrimTabs estimates that the Census Bureau hired between 350,000 and 400,000 temporary workers in May, while the private sector added between 75,000 and 125,000 jobs.

“Census hires, the late Memorial Day, and recent tax changes threw a wrench into our employment model,” cautioned Biderman.  “Estimating employment growth for this May was problematic.”

In a research note, TrimTabs explained that the economy appears to be decelerating as the Census Bureau stops hiring, government stimulus diminishes, and inventory restocking ends.  Tax data indicates wages and salaries are no longer rising sequentially, growth in online job postings is slowing, and initial unemployment claims are stubbornly high.

“We are cautiously bearish on U.S. equities,” said Biderman.  “We do not see how the sovereign debt crisis can be resolved without sovereign defaults or massive money printing, either of which will boost volatility and lower asset prices.  An escalation of the crisis could quickly snuff out the economic recovery.”

It was just one more example of the remarkable higher educational assets that exist in the North Bay, including, of course, Sonoma State University, University of San Francisco, Santa Rosa Junior College, College of Marin and Napa Valley College, among others.

Too bad we’re not using them.

That is an exaggeration, of course, but there also is some truth to it.

Students come from all over California, the nation and abroad to attend these North Bay institutions of higher learning. But not enough local students are doing the same.

In Sonoma County, for instance, only 26 percent of seniors do the minimum coursework to apply to CSU or UC, compared with 35 percent statewide, according to data from the state Department of Education.

On June 10, the North Bay Leadership Council will release a report that focuses on the benefits of “College-Prep for All.” The report, prepared by researchers at Dominican for the NBLC, proposes a solution to the college preparation dilemma: to ensure all high school students have access to the “A-through-G” courses required for admission to a California state college or university.

The idea, which has taken root in Los Angeles high schools, is not embraced by all educators. Some believe it will cause even more students to fail or drop out of high school because the will be overwhelmed by the coursework. In addition, they say, college is not for everyone.

But completing the “A-through-G” doesn’t mean every student must want to or can go to college. Of course some will want to enter technical training, which is fine. But think how much better prepared they will be for whatever choice they make.

Education ultimately is about giving young people the tools to meet life’s challenges. It is about setting expectations. And it is about giving yourself options, which is especially critical as continuing globalization requires higher skill levels and the ability to adapt to change.

One has to ask the hard question: How many kids end up in easier, lower-level classes because either they or someone somewhere assumed they weren’t college material? Or maybe they weren’t aware of the classes?

If every high school student had to at least attempt the more advanced courses required for college, at least we would know they had the chance.

And it’s a good bet many, many more will meet the challenge.

                                                       •••

Brad Bollinger is Business Journal editor in chief and associate publisher. He can be reached at 707-521-4251 or bbollinger@busjrnl.com.

Good evening and welcome to our 2010 Commercial Real Estate networking event under the theme, “Where’s the Money?”

Going back in our records, I found the Business Journal has been holding a version of this event since 1990, only skipping a year here or there. We think, and we hope you agree, it’s important to get together once a year if for no other reason than to stop and reacquaint ourselves with many of the people like you who help make the North Bay such a great place.

Looking back on the last year in the economy, I was reminded of the story of a man that leaves this earth and when he gets to heaven, he is directed to purgatory to repent for his sins. He is given three choices, a place of awful fire, a place of grinding sand storms and, third, a place where people were standing in water up to their knees drinking coffee. The man chose the obvious, the third option. He was there for a while enjoying his coffee when a voice could be heard, ‘OK. Coffee break is over. Back on your heads.’

Still, being a glass-half-full kind of person, I am optimistic. Indeed, events seem to have conspired to create what could be the ideal climate for the North Bay to move ahead in a very positive way.

After all, we have a strong, educated work force; homes are more affordable today than at any time in the last decade; we have strong universities and community colleges; we have cutting edge companies; and we have the office and industrial facilities large enough to house the next Medtronic.

Importantly, though they are still in the development stages from Sonoma State University, chambers and other business organizations across the North Bay, we are going to see for the first time in my memory sophisticated and sustainable efforts to support business and economic vitality in our region.

And so, help is on the way and the Business Journal will be there to do its part. It is our mission to provide information that helps businesses navigate whatever is before them, and we are committed to continuing that role.

We have for you tonight a panel of banking and commercial real estate industry leaders to address the future. And who better to moderate this panel than Joan Woodard, president and CEO of Simons & Woodard, a firm that has played an enormous role in the architecture, commercial real estate and economic development of this region.

She will be joined by Brian Reed, executive vice president and chief credit officer for First Community Bank; Sherrill Stockton, senior vice president and SBA manager for Exchange Bank, and Kurt Scheidt, principal with Kearny Capital Partners of San Francisco.

We are very excited this evening to honor our winners. You, the winners, are from a wide variety of industries, organizations of all sizes and from many walks of life across the North Bay. The youngest among you is 24. Can anyone here guess the oldest?  That was a test. Importantly, you represent a new generation of leadership and vision for the North Bay.

Before we get on with the program, I wanted to make some very brief remarks to let you know how important you are and how important recognitions like tonight are to our future.

Last Friday I had the opportunity to visit Roseland University Prep charter high school in Roseland in Santa Rosa and met a very inspiring young man. His name is Fernando and, though very recently it looked like life may have turned out quite differently for him, he is headed in the fall to the University of the Pacific to study civil engineering.

After congratulating him, my first thought was how do we make sure Fernando comes back to this community after he finishes his education to work in his chosen field, because if we do not have the jobs and are not attractive to him, we will lose him.

I ask all of you here, will that happen for Fernando and will that happen to young professionals like yourselves?

Or will the people and leadership that are already here slam the door shut, content to keep what they perceive as theirs? Will local, county and state leaders continue to make it more and more difficult to start a business or expand a business here? Will they continue to saddle you with more taxes and debt and regulation?

I worry a lot about this question because you are our future. I can work until I am 75, but it will make little lasting difference to the prosperity of this region for the next 20, 30, 40 or 50 years and beyond. You are the key to our future, and we all need to make sure there is room for you to continue to grow and prosper and not have to leave the area to live your dreams.

Speaking recently at the memorial service for Hugh Codding, the late builder’s contemporary, Henry Trione, noted that, yes, he was among what is referred to as the greatest generation. But he said he was also part of the luckiest generation, to be here at a time of great progress, investment and prosperity.

Here’s wishing that yours, too, will be the luckiest.

Congratulations.

Unfortunately, the reality is something different.

Now, don’t get the idea that we’re somehow opposed to green jobs and doubt their increasing importance to the economy and living standards going forward. In fact, any job added today is a good thing.

But they are not the panacea many make them out to be. As one builder remarked recently after hearing two county supervisors tout green jobs, “I’ve got 50 workers ready to be there tomorrow. So where are they?”

As Joilet, Ill., has discovered like cities across the U.S., green jobs are harder to come by than many thought.

In Joilet, the former “City of Steel,” one politician declared it would become the “Green Jobs Capital of the World.”

According to the Wall Street Journal, the local junior college invested $190,000 in new wind-turbine equipment to teach students. But there are still few jobs available for those who get trained.

Many say it will take more government incentives to get green job creation jumpstarted.

And no doubt that at some point, new industries will crop up to absorb newly trained green talent for industries like solar that was talked about for years before it became mainstream.

But the pace of green jobs creation is a cautionary tale for political leaders not to put all of their marbles on one tiny — and heavily subsidized — sliver of a diverse and dynamic economy.

In order to even begin to make up for 8 million jobs lost in the U.S., job creation needs to be dispersed over the broad economy from finance to manufacturing to retail and many, many other sectors.

The sooner that is understood, the sooner progress can be made on returning the U.S. economy to  a era of sustainable growth.

 So, why, then, did the nation’s arbiter of recessions, the National Bureau of Economic Research’s Business Cycle Dating Committee, refuse to go along with that thinking?

 On Monday, the committee of prominent economic seers took the unusual step of refusing to assign an end date to the recession that began in December 2007, saying it lacked decisive data.

 ”Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature,” the statement said.

 Anticipating an announcement Monday, pundits had been speculating that the committee would declare the great recession over. Instead they got this statement: “Many indicators are quite preliminary at this time and will be revised in coming months,” the statement said. “The committee acts only on the basis of actual indicators and does not rely on forecasts in making its determination of the dates of peaks and troughs in economic activity.”

 What could be clouding the committee’s thinking? Could it be the persistent high unemployment of nearly 10 percent? Could it be that while the federal government is pouring trillions into the economy, most private enterprises, particularly small companies, remain deeply cautious about the future? Could it be the committee members are concerned about a false prosperity built on government debt and a soaring stock market? Could it be they know what toxic assets remain out of public view on the balance sheets of the nation’s financial institutions? Could it be they find it hard to declare a recession over when tens of thousands of Americans are still losing their homes?

Could be.