Ronald Reagan once said “Every new day begins with possibilities.” As spring enters into the First Western offices, all of us are looking toward the possibilities. With our DTC | Cherry Hills team finding a home in the second quarter, our Northern Colorado office moving into a new location third quarter, the prospect of a California presence at some point in 2008 and plenty of new faces around the offices, the possibilities for First Western are endless.
In A Letter from Scott, Scott Wylie shares his thoughts on the April showers and May flowers that are coming to First Western. In Cocktail Party Chatter, Warren Olsen discusses the three economic issues the United States is currently facing. Karen Post gives us a market update for the first quarter of 2008 in The Devil’s in the Details and Amy Boyd talks about The Conundrum between Growth and Inflation in A Little Education. In the New with First Western section, you’ll read about our 17 new associates we have welcomed to the First Western team including Matthew Roan, President of our Boulder location, Carol Streets, President of our Cherry Creek location and Shane Phillips, our new Vice President of Mortgage Lending.
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A Letter from Scott
by Scott Wylie
Last quarter we looked at the success of First Western’s risk-managed approach to our client portfolios and our own business results, and showed that there are opportunities to do well even with the market turmoil today. As an update, the turmoil continues – spilling beyond sub-prime mortgages to big earnings misses at big, well-run companies like GE, ongoing write-downs at big brokers like Merrill Lynch and big banks like Citigroup. Many hedge funds and alternative investments that touted outsize returns have shown now how they had those returns for a while – outsize risks now causing big “surprise” losses.
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Cocktail Party Chatter
by Warren Olsen
I have been accused of writing too much about baseball (Go Rockies!) and golf (no grand slam for Tiger this year), so I thought I’d talk about sailing and investing this time around. It should be fun (at least for me), to see how much I can stretch, contort, and generally torture this analogy. So here goes:
Most of the time in investing, the wind is clearly behind you and you sail along feeling pretty good. Capital markets, like the wind, push us forward and so long as investors don’t make big investing mistakes, we move forward at a pretty good clip. There are always those investors who are so worried about something going wrong (too much “fear”) that they never fully deploy their assets (in sailing, raise their sails) so that they putter along feeling safe from risks, but never getting to their destination (accomplishing their financial goals). There are also those investors who try to get too much from their financial assets (too much “greed”) and get too close to the wind and end up capsizing. A few even sink. Most investors, however, sail merrily along at various speeds and its hard to tell the good investors (sailors) from the inept ones when the winds are benign.
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The Devil's in the Details
by Karen Post
The credit cycle hit markets full force, causing unprecedented dislocations in the financial system during the quarter. What began over a year ago as contained subprime mortgage problems has continued to spread, revealing much deeper economic and financial issues stemming from an easy money cycle. The high levels of leverage created, mainly at financial institutions and with consumers, are now being unwound, causing asset prices to fall in certain markets and liquidity to dry up in other markets.
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A Little Education
The Conundrum between Growth and Inflation
by Amy Boyd
Although it will take at least six months to confirm, most economists and the Federal Reserve now believe that the U.S. is in a period of economic recession. A recession is conventionally defined as two successive declines in quarterly GDP growth. Fourth quarter 2007 GDP came in at .6% and the initial reading on first quarter 2008 GDP is not due out until the end of April, but most signs point to a slowing, if not negative growth environment. These factors include elevated weekly jobless claims and rising unemployment, three (3) months in a row of negative nonfarm payrolls, large declines in manufacturing and new and existing home sales, lowered consumer confidence readings and negative retail sales numbers, lower profits and earnings guidance for publicly traded companies, and large write-downs and bankruptcy filings in financials and other sectors. Economic data is backward looking, however, and often revised, so a precise beginning to any recessionary period is often difficult to mark and often not apparent until months into such a period. But this is where most experts agree the U.S. economy stands at the present time.
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New with First Western
All of the growth in our different markets has allowed us to fully staff our local offices and increase our support teams too. We welcomed 17 amazing new team members. Please click on the link below to see who has joined the team and what they are going to be doing with us.
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The First Western Trust Bank Newsletter and the information and research contained herein do not represent a recommendation of investment advice to buy or sell stocks or any financial instrument nor is it intended as an endorsement of any security or investment and it does not constitute an offer or solicitation to buy or sell any securities. The articles within the First Western Trust Bank Newsletter represent the author’s own opinions and should not be construed as personalized investment advice.
Investments, insurance, annuities and similar products are not FDIC insured, may lose value, and have no bank guarantee.
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