Perspectives from the Banking Schools

Recently I lectured for my 27th year at the Southeastern Ag Lenders School at Clemson and at the 61st LSU Graduate School of Banking, where I have been on the faculty for over 20 years. I gained some interesting perspectives by interacting with students and faculty at the two schools.

This year over 30 Mexican bankers were in attendance at LSU. They shared some interesting points.

• The Mexican economy represents approximately a $1 trillion dollar economy compared to the U.S. at $14 trillion.
• Mexico is the eighth largest tourist destination in the world.
• Nearly one million U.S. citizens own homes in Mexico. Many are baby boomers and retirees seeking cheaper areas to live.
• There are 31 states in Mexico. Discussion on the social disorder and violence found that much of the activity is in five states near the U.S. border. The Mexican bankers and citizens are very concerned since it has been detrimental to the economy.

In both schools, faculty and students were very concerned about the direction of the U.S. and global economies. While the yield curve, which plots the interest rates for short term versus long term money, is very steep suggesting economic growth, revised GDP estimates suggest there are headwinds in the global economy. Many of the G-20 nations are experiencing high government debt, lack of consumer confidence, political and military uncertainty, and high unemployment rates. These factors are overshadowing long term economic prospects. Only time will tell!

Side Note:
A number of CEOs at agricultural banks and Farm Credit have announced their intentions for retirement over the next year. A changing of the guard in leadership will modify the ag lending landscape for producers and small businesses seeking credit.