By Joseph Palumbo III
You live in Queens and you hear the names Bear Stearns, Merrill Lynch and Lehman Brothers and you say to yourself, “This doesn't affect me. I don't work on Wall Street or in finance and I'm not an investor.”
Unfortunately, current Wall Street troubles are future overshadowing ailments that will hit closer to home than we would like. Hundreds of regional and community banks are going to fall and go under in the next year or two. While struggling Wall Street makes headlines, what happens in our communities is the key to the nation's financial well-being.
This year alone 11 banks have gone under, with a few dozen on the chopping block and soon to follow by year's end. Between now and 2010, about 3 percent of our nation's 8,500 federally insured lenders will not survive and fold. That is the highest shrinkage the country has seen in about two decades.
Local, regional and community banks will not go under. They will face turbulent waters, but they will be stringent about banking practices. This will make it harder for us to get an equity loan or re-finance our homes.
It is going to be harder for small Queens business owners and would-be owners to get loans or lines of credit to help start or grow their businesses. Situations we once shrugged off will fall under a microscope and federal regulators will have a no-nonsense attitude.
So How's Business regarding Wall Street's financial fallout and its effect on Queens? I do not see the economy picking up again for at least another two years or more. Start improving your credit now and sit with your financial planner and take a look at where your money is and what it is doing. Diversify into safer areas until this hurricane passes.
Reach Joe Palumbo at 516-248-0256 or info@camelotlimo.com.
