Business analyst, author and economic researcher Mike Moebs described Wednesday as an "economic perfect storm" that brought rough seas for real estate, financial institutions and the job market – conditions not likely to improve for another 18 months.
Speaking at the Small Business Seminar hosted by Florida Commerce Credit Union at its headquarters in Summit East, Moebs said local financial institutions will play a bigger role in the recovery than their national rivals.
"The reason for this is community banks and credit unions represent 97 percent of the 16,305 depositories in the U.S. They have over half of the branches and one-third of the $8.3 trillion in deposits," he said. Beyond that, 60 percent of the 27 million small businesses in the country bank with community-based institutions.
"Financial institutions are key to getting the economy going because they represent the link between those who provide money and those who need it," he said.
With the decline in real estate, however, at least half the nation's financial institutions have lost essential capital or equity, plus reserves and retained earnings. "Once capital is restored for banks and credit unions in the economy, the economy will start to change," he said. "The change means lending will begin and jobs will be created."
It will be the end of 2010 or early 2011 before that happens, he cautioned, "with one big exception" – 2010 is an important election for the party that prevails and will have a great impact on the economy.
April Salter, principal in the public relations and marketing firm SalterMitchell Inc., said Moebs' remarks showed that Tallahassee has been somewhat insulated from the economic slump, but that recovery will be slow.
"We are in sobering economic times and we know that it's going to take time," she said.