Credit unions have been hearing dire warnings about impending rising interest rates from all manner of huffing and puffing pundits for the last few years. But what has happened? Nothing. Rates haven’t risen as expected. And the sky didn’t fall either. So should we dismiss these warnings as a bunch of people simply crying wolf? The NCUA doesn’t think so. In fact, the NCUA is so concerned about the potential affect of rising rates on credit unions that they released an Economic Update video on October 1, 2014 featuring their chief economist, John Worth. In the video, Mr. Worth re-emphasized the NCUA’s focus on the risks to CUs presented by the inevitable rising interest rates and the importance for CU’s to fully understand and prepare for it.In the NCUA’s video, Mr. Worth said that in the second quarter of 2014, credit unions in general performed well – partly as a result of the improving U.S. economy. But, he reminded us that this improving economic environment poses a downside in the form of possible changes in interest rates. His clear implication is that as the economy improves, credit unions should expect rising interest rates and prepare for it. Mr. Worth then highlights some recent economic developments that may act to boost interest rates, including signals from the Federal Reserve. For example, at the end of one of its recent Federal Open Market Committee meetings, the Fed confirmed that it would continue to wind down its quantitative easing program (e.g., continue tapering its purchases of Treasuries and Mortgage Backed securities) and that the program would end before 2015 if the economy remains on track. Sure enough, the Fed did, in fact, end its securities purchasing program in late October just after this NCUA video was released. Mr. Worth acknowledged that long term interest rates are affected by many factors and the end of its quantitative easing program does not alone mean that interest rates will jump. But, the Fed believes that if the economy continues to improve as the Fed expects, short term interest rates will probably rise. The Fed also believes that the unemployment rate will be at 5.5% by the end of 2015, which most economists define as “full employment” (although this headline measure does not typically consider underemployment and the participation rate, both of which have been unusually and chronically high following the economic crisis). Fed policy makers, according to Mr. Worth are telling us that if the economy proceeds as expected and when we reach or approach full employment, expect to see short term rates increase in 2015. But, the Fed has continually reminded us that all this is “data driven.” In other words, if the economy improves faster than expected, rates will likely rise faster and higher and vice versa. Regardless, Mr. Worth says that based on the improving economy and the Fed’s statements, it appears that short term rates will be rising.So what does all this mean for credit unions in the view of NCUA? Mr. Worth says it means rising interest costs in 2015 and into 2016 but uncertainty as to how fast those costs will rise. If the increase in short term rates is greater that that for loan rates, the yield curve would flatten and CUs would suffer a cut in net interest margins. Non-interest income has already recently moved lower and if that continues, Mr. Worth warns that the added decline in net interest margins could cause many CUs to realize declining net income or even losses. This prompts Mr. Worth to express the main point of the video in the following quote near the end of his talk:Here at NCUA, our chief concern is that credit unions are aware and prepare for this possibility. Credit unions should have a firm idea of how their income statements and balance sheets are affected by a rapid rise in short-term rates and they should have a plan for dealing with the potential consequences.The moral of this story? Persistent warnings of imminent rises in interest rates have been echoing in our ears for a few years now, but so far rates have not risen. But don’t let this desensitize you to the issue. Understanding and preparing your credit union’s loan and investment portfolios for rising interest rates is imperative because interest rates have no where to go but up. And when they do, you want to ensure your sheep don’t get shorn.Heber Fuger Wendin, established in 1934, is a fee-only, independent SEC-registered investment advisory firm (not a broker) to credit unions and other depository institutions. Mr. Barnes leads the Heber team in helping to manage $4.8 billion for nearly 100 community depository institution clients, including credit unions. Mr. Barnes can be reached at [email protected] or www.HeberInvestments.com or www.linkedin.com/in/davidgbarnes 5SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr,David Barnes Mr. Barnes, a licensed attorney and registered investment advisor representative (Series 65), leads the Heber Fuger Wendin team in service to their institutional and individual clients. He became a Heber … Web: www.heberinvestments.com Details
Sir Alex Ferguson says football would become a “shambles” if more technology was introduced into the game. Press Association Goal-line technology has helped referees since it was brought in at the start of last season. The former Manchester United manager, who clashed with referees on many occasions during his time at Old Trafford, believes any additional technology would be detrimental to the flow of the game though and would also undermine the officials in charge. “Technology will advance the game, I suppose, but you can’t have too many things because then it takes a lot of power away from the referees at which case it becomes a bit of a shambles because the game is stop-start, stop-start and you cannot have that,” Ferguson told New York radio station SiriusXM FC. “Goal-line technology is fine. Let’s just leave it there. “I don’t think you can introduce it for things they are talking about like free-kicks, or yellow and red cards. “I think it becomes really difficult.”
The USC women’s basketball team hopes to bounce back from a pair of tough losses against top-10 conference opponents as it takes on the Arizona State Sun Devils on Friday at 7 p.m. and the University of Arizona Wildcats on Sunday at 2 p.m.High hopes · Sophomore guard Ariya Crook and the Women of Troy are looking to snap a two-game losing streak as the team returns home. – Chris Pham | Daily TrojanThe Women of Troy (7-10, 4-2 in the Pac-12) competed until the end against both No. 7 Cal and No. 6 Stanford, losing 71-63 to the Golden Bears in overtime and 75-66 to the Cardinal. The Golden Bears came back from a six-point deficit to force the game into overtime, then held USC without a field goal in the extra period. Junior forward Cassie Harberts scored 15 points for USC, while junior forward Kate Oliver added 10 points and 10 rebounds. Cal’s forward Gennifer Brandon finished with 23 points (15 in the second half) and 26 rebounds, while guard Layshia Clarendon added 27 points (six in overtime).USC overcame a 33-20 deficit at halftime to cut Stanford’s advantage to as low as six points, but was unable to take the lead, despite scoring 46 points in the second half. Harberts finished with 21 points, her 18th straight game with double-digit scoring this season, while sophomore guard Ariya Crook added 18 and sophomore forward Alexyz Vaioletama scored 10 points. Stanford’s Chiney Ogwumike finished with 29 points and 16 rebounds, while Joslyn Tinkle scored 15 points.“I think we’re at a really good place and time right now during conference,” Harberts said. “We went up there 4-0, so I thought that was a really good start. We had a chance to take two of the top-10 teams down, and I think even though we came up short in both games, it showed true character in who we are right now. We don’t give up.”Arizona State (10-8, 2-4 Pac-12) and Arizona (11-6, 3-3 Pac-12) are both coming off a pair of games against No. 20 Colorado (15-2, 4-2 Pac-12) and Utah (10-7, 1-5 Pac-12).Colorado beat both Arizona State and Arizona, winning 57-43 and 79-36, respectively. The Utes, meanwhile, defeated the Sun Devils 66-46 (their first Pac-12 win of the season) and lost to Arizona, 62-58.The Sun Devils are led by forwards Janae Fulcher and Joy Burke. Fulcher leads the team in scoring with 11.5 points per game to go along with 5.1 rebounds. Burke is averaging 7.6 points and 5.9 rebounds per game.Senior guard Davellyn White leads the Wildcats with 16.4 points and 5.8 rebounds per game, while junior guard Kama Griffitts is averaging 11.5 points and 5.1 rebounds per game.“I think we’re more focused right now on the short-term goals,” associate head coach Daron Park said. “We’ve taken the mentality right now that the next game on our schedule is the most important game of the season. That’s the way we’re preparing. That’s what our approach is for, so right now, Arizona State on Friday night is the most important game of the season.”USC swept both Arizona and Arizona State last season, winning 60-48 and 59-53 in two matchups against the Sun Devils, while defeating the Wildcats by scores of 72-67 and 78-62.
Black Stars vice captain Kwadwo Asamoah will start in Kwesi Appiah’s team against Cameroon in their Group F clash on Saturday evening, Citi Sports’ Fentuo Tahiru reports from Egypt.The Inter Milan midfielder will start as part of a midfield 3 along with Thomas Partey and Mubarak Wakaso.Asamoah’s exclusion from the team’s 2-2 draw against Benin in the Stars’ opening game had many people questioning the decision.Appiah has now decided to throw in Asamoah to bring creativity into the midfield.Baba Rahman is also expected to start ahead of Lumor Agbenyenu at left back with captain Andre Ayew expected to reprise his role playing off his brother Jordan at the tip of Ghana’s attack.Jonathan Mensah will start in central defense alongside Kassim Nuhu. Mensah came off the bench after John Boye got sent off against Benin.The rest of the team picks itself and Appiah is not expected to make any further changes barring any last minute injuries.Ghana must avoid defeat against Cameroon to stand a chance of making the round of 16.
Stoke City forwards Victor Moses and Osaze Odemwingie were the notable big name exclusions from the Super Eagles 23-man squad for the 2015 Africa Cup of Nations qualifiers against Congo and South Africa in September.The Eagles, who are the reigning African champions, begin their title defence against the Red Devils of Congo in Calabar on September 6, before flying to Cape Town to take on the Bafana Bafana four days later.Fifteen players from the 2014 World Cup squad made the cut for the AFCON qualifiers. The exclusion of Moses, who just sealed a season-long loan deal at Stoke, may have arisen from an indifferent performance at the 2014 World Cup in Brazil, where he was also involved in a spat with officials.Also left out from the list released by the Nigeria Football Federation on Tuesday are the duo of Reuben Gabriel, Ejike Uzoenyi, Michael Uchebo and Babatunde Michael, who were all part of the squad in Brazil.Hull City forward Sone Aluko however made a return to the squad alongside Schalke 04 man, Chinedu Obasi. Former England youth international Aluko has made just one appearance for the Eagles – against Ireland in 2009 – despite being handed several invitations in the past.Obasi’s last game for Nigeria was in a 0-0 friendly draw against Botswana in November 2011, in what was Stephen Keshi’s first game in charge of the national team. There were also call-ups for homeboys Warri Wolves in-form striker Gbolahan Salami and Enugu Rangers’ Christian Osaguona.The quartet of Elderson Echiejile (Monaco) Joel Obi (Inter Milan), Nosa Igiebor (Macabi Tel Aviv) and Nnamdi Oduamadi (Crotone), who were all last minute exclusions from the trip to Brazil, are back in the team.With Joseph Yobo’s retirement from international football, the qualifiers will see goalkeeper Vincent Enyeama taking over as captain of the national side.