Tatum/Roulston Report

The pundits just can’t get enough economic data to make their point. Wall Street economists can’t help but compare the current recovery to the past. It just seems they can’t be talking to the same companies, bankers and consumers we see in our travels around the country and the Tatum Survey is hearing every month. As we have said recessions are economic while depressions are emotional. The credit meltdown has had a lasting emotional impact unlike anything we have seen in the last 50 years. Savings, retirements and a good degree of confidence was lost and not soon to be replaced. Political and credit signals are creating ongoing uncertainty and this month in the Tatum Survey, we see that maybe unemployment is slowing but overall employment is not growing. Uncertainty is reflected in sloppy backlogs, capital expenditures and to some extent credit availability.

There is a leaderless funk that is concerning in its breadth. Business has reached a bottom and rebounded to a plateau where business after business we talk to compares to the levels they saw 3-5 years ago with little sign of visibility. There are businesses in isolated segments that are growing and some even thriving with catalysts in technology and health care spending to go along with government stimulus. We are not naysayers, but reality is that consumers are weighing the issues of credit and debt much differently than the last 20 years. Common sense tells us as we look at the state of commercial and consumer mortgages that banks are not likely soon to change their flexibility and generosity. Politicians are entering their “season”, so rhetoric is bound to rise. Our view is the market has pockets of opportunity for good managers. In general valuations reflect sluggish growth. Selectivity, accountability, transparency and diversification are our focus in 2010.

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