FEDERAL RESERVE NOT READY TO RAISE INTEREST RATES YET

Contributed By Joel Sullivan, buenavistainv.com

The Federal Reserve pledged to maintain their position of keeping interest rates low for an “extended period”. This statement was issued following the Federal Reserve’s second of eight policy meetings for this year. However, this meeting was unique because the Fed Chairman, Ben Bernanke, held a news conference immediately after. This was the first time a Fed Chairman answered questions from the press right after a policy making meeting. An indication of his effort to better communicate policy decisions to the public.

In its published statement, the Fed offered a mostly upbeat assessment on the economy. It said the economic recovery is proceeding at a “moderate pace” and hiring is improving gradually.

The focus of the meeting was to discuss whether to raise interest rates or not, and whether to adjust the current monetary easing program, better known as QE 2. The program has been given this nickname because it is the second round of quantitative easing by the Fed. The quantitative easing programs were designed to stimulate economic growth. Between December 2008 and March 2010, the Fed bought $1.7 trillion in US Treasuries. Bernanke has said that this first round of stimulus was necessary to end the “economic free fall” of the recession of 2008. In November 2010 the Fed began the $600 million QE2 program. Its current portfolio consists of $2 trillion of securities, when counting Treasury bonds and mortgage debt. The Federal Reserve has been buying 85% of all government debt sold since November 2010. This buying spree is scheduled to end in June. Once this stops, interest rates could begin to rise. Currently the US economy is projected to grow at a 3% rate this year. However, the question is whether growth can continue if interest rates rise.

The QE2 program in particular has come under criticism by some economists, who are worried it will contribute to higher inflation. Chairman Bernanke has defended this criticism saying that the jump in oil and food prices should cause only a temporary increase in inflation. Excluding those prices, which tend to fluctuate a lot, inflation is still low he has argued. The difficulty for the Fed is to find the right balance of stimulating the economy through lower interest rates without causing a large increase in inflation.

Because of these policies, the current fed funds rate is .25%. This is the rate at which banks lend to each other. This rate is important because many other interest rates in this country are based on the level of the fed funds rate. The rate has never been below 1% before 2008.

QE2 was all about chasing away the threat of deflation, or falling consumer prices, and it sent investors into stocks enlarging people’s net worth through the stock market. It kept the dollar low giving US exports a lift by making them more affordable to foreign markets. Since QE2 was announced, the S&P 500 has gained 28%. Commodities are up and even subprime debt has come back in price.

There is little doubt that Fed policies have been good for the stock market and probably the economy in general. The challenge will be to see if the Fed can wean the country off extremely low interest rates without interrupting the current recovery. Because, it is quite likely that rates will start rising later this year or early next year.

Buena Vista Investment Management LLC
241 Third St. So., Wisconsin Rapids,WI, 54494
715-422-0700

Lassa to Hold Budget Listening Sessions

Will Visit Marshfield, Wisconsin Rapids, Adams

Madison —   State Senator Julie Lassa (D-Stevens Point) will hold a series of listening sessions to receive constituent comments on the proposed two year state budget on Tuesday, May 3.

Sen. Lassa will meet with constituents at the following locations and times:

• Marshfield Public Library, 211 East 2nd Street, Marshfield, 9 a.m. to 11 a.m.
• McMillan Library, 490 East Grand Avenue, Wisconsin Rapids, 1 p.m. to 3 p.m.
• Adams Community Center, 569 North Cedar Street, Adams, 4 p.m. to 6 p.m.

“I look forward to hearing feedback from district residents regarding Governor Walker’s two-year budget proposal and their ideas on how we can tackle the state’s fiscal challenges,” Lassa said.

Lassa also announced that State Representative Scott Krug (R-Wisconsin Rapids) will be joining her at the budget listening sessions in Wisconsin Rapids and Adams.

Ronald J. Arling named Controller and Chief Accounting Officer

NewPage Names Ronald J. Arling Controller and Chief Accounting Officer

Miamisburg, Ohio/PRNewswire/ — NewPage Corporation today announced the appointment of Ronald J. Arling to the position of controller and chief accounting officer, effective April 25, 2011.

Mr. Arling will report to the senior vice president and chief financial officer. Mr. Arling has managed key areas of the finance function including general accounting, internal audit, credit and collections and financial analysis. He joined NewPage in November 2006 as internal audit director, in April 2009 advanced to assistant controller and in November 2010 was promoted to controller. Prior to joining NewPage, Mr. Arling held finance positions of increasing responsibility with large companies in diverse industries including CareSource Management Group, Co. Inc., Reynolds & Reynolds, NCR Corporation and Deloitte & Touche LLP.

Mr. Arling will be responsible for managing the corporate accounting and reporting process and ensuring that all financial statements and filings are accurate, complete and timely.  In addition, he will make certain that corporate-wide accounting policies and appropriate controls are in place in accordance with generally accepted accounting principles and work with operations and other finance functions to improve accounting and reporting capabilities.

Lassa Jobs Training Bill Gets Hearing

Bipartisan-sponsored bill expands custom training program for businesses

Rep. Keith Ripp (R-Lodi), left, and Sen. Julie Lassa (D-Stevens Point) testify before the Senate Committee on Agriculture, Forestry and Higher Education on Se

Madison — A bill that would expand a program that provides customized employee work skill training programs to promote business expansion, introduced by State Senator Julie Lassa (D-Stevens Point), got a public hearing in a State Senate committee today.

Senate Bill 40 expands support for Advanced Manufacturing Training Grants, a program that enables the Wisconsin Technical College System to work with businesses to provide training in in-demand manufacturing skills and help manufacturers compete globally. Sen. Lassa testified before the Senate Committee on Agriculture, Forestry and Higher Education along with Assembly lead sponsor Rep. Keith Ripp (R-Lodi).

“I think the most exciting thing about the Advanced Manufacturing Training Grants program is that the link between workforce development and economic development is clear and direct,” Lassa said. “We can look at example after successful example of how this program is expanding the capacity of our companies to compete, helping to attract new companies and giving our working men and women the employment skills they need.”

She pointed to the example of a partnership between Ocean Spray and Mid State Technical College that helped the company expand its cranberry production facilities in Wisconsin Rapids. “Typically, it takes about four months to develop a new production line for cranberry processing. Mid State training helped cut that time down to eight days for Ocean Spray,” Lassa said. She said the company’s expansion had enabled it to increase full-time employment at the plant from 50 to 168.

First implemented in 2009, the Advanced Manufacturing Training Grants program is extremely popular, and the original $1 million in grants were used rapidly by 103 companies to train 4,135 workers. In response to that demand, Sen. Lassa’s CORE Jobs Act expanded the program to $2 million. SB 40 further expands support by $400,000 annually.

“In a time when resources are as scarce as they have ever been, we need to be sure that we invest the funds we do have in programs that work. The Advanced Manufacturing Training Grant program is a prime example of a program that is working,” Lassa said.

The proposal is one of five job creation bills Lassa introduced in March. If approved by the committee, it would go to Joint Finance Committee before heading to a vote before the full Senate.

Congressman Duffy meets with local workforce development partners

Rep. Duffy met with local displaced workers preparing for new manufacturing jobs and learned about a successful public-philanthropic partnership focused on workforce development. Pictured, from left: Larry Jackson, Rep. Duffy, Tim Haferman, and Sylvia Rodriguez.

Wisconsin Rapids, WI – Wisconsin 7th District Congressman Sean Duffy recently met with local displaced workers preparing for new manufacturing jobs and learned about a successful public-philanthropic partnership focused on workforce development.

In mid-April, Duffy visited south Wood County to meet with Workforce Central partners and see firsthand the successful infrastructure being built on a dual-customer approach: meeting employers’ workforce needs and training area job seekers to gain the skills needed to work in today’s economy.

As part of his visit, Duffy met three displaced workers currently enrolled in the Food Manufacturing Science Certificate program at Mid-State Technical College (MSTC) in Wisconsin Rapids. This program trains candidates with the specific skills needed by local food manufacturers. It was developed with input from area business leaders in partnership with MSTC.

Congressman Duffy praised the Workforce Central program as a model that’s working.

“I’m proud of this public-private collaboration that is providing these students with the quality training and education they need to re-integrate themselves into the workforce,” Duffy said. “This fast-track program will help get them back on their feet and will provide local employers with capable, hard-working employees. I applaud the Community Foundation on leading this strategic effort.”

“This program provided a chance to renew my skills,” said Sylvia Rodriguez, who will complete her certification in July. “It’s exciting to see the different things available now, even though I worked in manufacturing all my life. I really enjoy the classes we’re taking and appreciate the opportunity to give another 10-15 years to the workforce.”

The Workforce Central program, a project of Community Foundation of Greater South Wood County, uses philanthropy to unite 16 local investors, employers, government, education and service providers focused on strengthening the local economy by providing peer-to-peer business solutions, industry-driven job training and career support for workers.

Currently, there are more than 500 people in the region on the dislocated worker waiting list for retraining, according to Rene Daniels, executive director of the North Central Wisconsin Workforce Development Board. “That’s why it’s so important that the private sector tell us what kind of jobs they need people for, but also help us design that training.”

From day one, the Workforce Central program has focused on long-term sustainability, explained Jennifer Riggenbach, the program’s director. “It’s about seeing where the economy is going and determining where can we build local infrastructure. This unique strategy is possible because of the investments of 16 local investors, dedicated business leaders, industry expert facilitation, and our partners: Mid-State Technical College, North Central Wisconsin Workforce Development Board, Labor Employment and Training Center, and Wood County Human Services.”

Rep. Duffy, right, learned about the Workforce Central program during his recent visit to Wisconsin Rapids. He met with local displaced workers, who are preparing for new manufacturing jobs in the food processing industry, including Larry Jackson, left.

In addition, several local business leaders participate in the Advanced Manufacturing CEO Peer Council. This group meets monthly to explore and share best practices for an improved, skilled workforce. The CEO Peer Council is led by John Bergin, a local industry expert with nearly 40 years’ manufacturing experience. While in Wisconsin Rapids, Duffy met with these groups to get their feedback on the benefits of collaborative public-philanthropic partnerships such as these.

Corenso President Tom Janke emphasized the value he’s seen in the Peer Council. “It’s been very gratifying to have a group of like-minded peers to bounce off ideas, questions and issues. It’s imperative that we continue developing the skills in our existing and emerging workforce and give them the tools that they need to help us continue competing.”

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Submitted by: Carol Davis, Communications Officer, Community Foundation of Greater South Wood County.

Reform deal at UWSP, lawsuit imminent

Submitted by Jeffrey Decker
2004-2005 UWSP Speaker of the Senate

Major concessions by administrators give students a victory in the struggle to restore rule of law to UWSP.  The single Finance Committee last week cut the budget of one of the “rogue subcommittees” that had claimed independence from student government, and a new implementation plan restores student government’s dominance over all its rogue committees.

These concessions will be made official in a signing ceremony and follow a series of missteps by administrators and bold action by students.

UWSP Chancellor Patterson has apologized for intimidating a Student Government advisor in a March 13 meeting where he obstructed the right of the students to organize as they see fit.  You can hear the advisor take offense at 8:25 in this recording: http://sharedgov.podomatic.com/.  Please read the open letter students sent around campus demanding an apology.

Only one SUFAC has ever existed at UWSP.  By dividing and absorbing student power they have managed to double segregated fees over the last five years.

Another aspect of the reform is found in new definitions of “allocable” and “non-allocable” in the new SUFAC bylaws. Administrators had defined almost all fees as “non-allocable,” meaning students have only meaningful input and not direct control, but at UWSP “meaningful input” has meant showing only completed budgets to student leaders and insisting on complete approval.    https://www.uwsp.edu/stuorg/sga/documents/referendum/sufac%20bylaws.doc

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Jeffrey Decker’s credentials include a record as a successful journalist and vice-president of the Oshkosh Neighborhood Watch.

WILL RISING OIL PRICES DERAIL OUR IMPROVING ECONOMY?

Contributed by Joel Sullivan, buenavistainv.com

It was only 12 short months ago and gas was $2.84 a gallon on average. Today it is $3.82, a 34% increase.  We all know the painful feeling of filling up our vehicles, but what is the actual impact of higher oil prices to our economy? And how long will these high prices last?  The first question is somewhat easier to address then the second. However, history can give us some perspective on both these issues.

The first thing to understand is that the US spends about 8% of GDP (Gross Domestic Product) on energy. Of that 8%, about 3.5% is spent on oil related products, according to the Energy Information Administration (EIA). This has dropped over the last 30 years due to changes in the economy and to increases in energy efficiency.  In order to better understand the impact on oil prices on our economy, the EIA studied oil prices from the period of 1997 to 2001. From 1999 to 2000 oil went from $11 per barrel to $29 per barrel, almost tripling in price. Based on their study, they estimated the higher cost of energy created about a .7% drag on the economy. When looking at the US economy as a whole, a 3 fold increase in prices resulted in a less than 1% reduction in growth.

Doug Ramsey, an experienced money manager with the Leuthold Group in Minneapolis, provides another perspective. He disagrees with the assertion from some economists that “every $10 increase in the oil price reduces GDP growth by X”. He believes that when the economy is in an acceleration phase, such as now, then higher oil prices have little impact on GDP growth. He states that the impact of oil prices depends on whether the economy is expanding or contracting.  When the economy is struggling, then rising oil prices can have a much bigger impact on growth. So there are different points of view out there, however the consensus appears to be that higher oil prices shouldn’t have a significant impact on the growing US economy.

How long prices stay high is another important factor.  There is no shortage of forecasters offering their opinion on this subject.  Last month JP Morgan raised its forecast by $6 to $99 as an average price for 2011. The average price last year was $71. On the other hand, Goldman Sachs actually lowered their forecast by $15 a barrel. While forecasting actual price targets is tricky at best, we have seen that historically prices don’t stay at these elevated levels for very long. The thing to keep in mind with oil is the price is quite volatile. History has also shown us wide price swings in oil.  A recent example occurred in 2008 -09. Oil went from $145 per barrel in July, 2008 to $40 in April,09 and then back up to $70 in August, 09. Yesterday the price of a barrel of oil was $111. So the likelihood of oil going to $120 or $130 in 2011 and staying there is rather small. Conventional wisdom is that “the remedy for higher prices is higher prices”. The thinking is that when prices reach elevated levels, households and businesses alter their consumptive behavior and begin to consume less. As demand falls, supplies increase and shortly thereafter prices fall.

As a consumer, be patient and you’re likely to see gas prices get back closer to $3 than $4.  And as an investor, oil prices should have minimal impact on the near term growth of the US economy, which should allow the US stock market to continue to climb higher.

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Buena Vista Investment Management LLC, 241 Third St. So., Wisconsin Rapids, WI 54494
715-421-0700

Earth Day: A letter from Senator Herb Kohl

This Friday, April 22, is Earth Day. Last year, we celebrated the 40th Anniversary of the first Earth Day and honored our own Senator Gaylord Nelson, the key force behind that first celebration in 1970.

On this day of reflection, it’s hard not to think about environmental tragedies of the last year – especially the ongoing nuclear accident in Japan and the oil spill in the Gulf, which occurred one year ago this week. These serve an important reminder: regardless of the kind of energy we use, we must always take care to protect public health and our environment.

It also reiterates the need to increase our use of energy that will never run out. Wisconsin has many great natural resources, but deposits of oil, natural gas and coal are not among them. While there is no doubt that we need these energy sources to fuel our economy, a dollar spent on oil drilling or coal mining undoubtedly benefits other states and other countries. But a dollar spent on renewable energy can support new jobs for Wisconsin.

We don’t have oil, but we do have forest resources that can be turned into biomass for our power plants, and one day into fuel for our cars and trucks. We don’t have coal, but we do have farmers across the state that are using “cow power” — anaerobic digesters that turn farm waste into electricity. We don’t have natural gas, but we have groundbreaking companies creating advanced batteries, solar light pipes and wind turbines. These new energy technologies aren’t just good for reducing power bills and pollution, but also for growing our state’s economy.

While we don’t always agree on how to tackle environmental issues, we all support clean air and water, we all want our children to be healthy, and we all yearn for our economy to grow and get people back to work. Forty-one years after the first Earth Day, we celebrate the progress we’ve made, rededicate ourselves to the work ahead, and applaud the men and women of Wisconsin who are inventing and implementing homegrown solutions to better our planet.

Lassa Visits SPASH Credit Union Branch

Will learn about Central City’s award-winning youth financial education program

WHAT: State Senator Julie Lassa will visit Central City Credit Union’s Stevens Point Area High School branch to help commemorate National Credit Union Youth Week.  Sen. Lassa will learn about Central City’s award-winning youth financial education program, and meet with students to discuss the importance of financial education.

Central City operates three youth-run branches in local public schools, and partners with teachers to bring a variety of financial lessons into the classroom.

• WHEN: Wednesday, April 20, 11 a.m.
• WHERE: CCCU Branch at 1201 Northpoint Drive, Stevens Point
• WHO: State Senator Julie Lassa (D-Stevens Point), Peter Bildsten, Secretary, Wisconsin Department of Financial Institutions, Richard Voigt, CCCU Chairman, Pat Wesenberg, CCCU President & CEO, SPASH students

I-90/94 backups expected Easter weekend

I-90/94 backups expected Easter weekend, Tomah to Camp Douglas

Significant traffic backups are expected Easter weekend near the I-90/94 work zone between Tomah and Camp Douglas, according to the Wisconsin Department of Transportation Southwest Region.

Traffic is reduced to one lane in each direction due to construction. Delays will occur in each direction Friday (April 22), Sunday (April 24) and Monday (April 25). Alternate routes are strongly recommended on those days. Portable message boards will be activated to assist motorists as backups occur.

All lanes in the 6.5 mile work zone will be open Memorial Day weekend.

Motorists can use the state’s 511 Traveler Information System at http://www.511wi.gov or by dialing 511 on their phone for the most current information on lane closures, incidents, and road conditions.