Four decades of teaching at the Graduate School of Banking at Louisiana State University has been a highlight of my career. After a year off as a result of the pandemic, the senior class was eager to convene in a face-to-face environment. Dr. Tom Payne, Dean of the College of Business at Tennessee Tech University, and I teach the Interpreting Economic Change course. Each year we utilize anonymous clicker technology to record responses from the students to increase engagement with our classes. The following are some of the results from the bankers’ point of view.
What is the biggest domestic risk to the U.S. economy?
Thirty five percent of the bankers indicated that government actions, ranging from government stimulus to a wide range of agendas, was the biggest risk to the U.S economy. Inflation was a close second with 32 percent of those surveyed. The main topic of conversation in the hallways and at social events was whether inflation was temporary or here to stay. Surprisingly, real estate and stock market bubbles were not high on the radar screen for this group of bankers with less than 10 percent of the respondents. The bankers were from 15 states and represented regions where housing prices were rising faster than a summer thunderhead. This high-energy group were quite concerned about supply chain disruptions and potential black swan events including anything from COVID-19 variants to grid and cyber-attacks. One only has to observe the recent attacks on the pipeline and meat processing to wonder what is going to be next.
What are the global threats to the U.S. economy?
China’s growth, combined with little action and concern regarding trade policy from political leaders, was identified as a global economic threat. Again, black swan events in the supply chain, along with bottlenecks, imports, and distribution were listed by 20 percent of the respondents. An underlying current in the surveys that raises concern is the global debt buildup not only in the United States, but in major developed countries around the world.
Where will the Dow Jones Industrial Average be one year from now?
Nearly 40 percent of the respondents saw a major correction with the Dow Jones Industrial Average (DJIA) being between 25,000 and 29,000 points. Some of the students even mentioned it would be below 25,000 points while 25 percent expected the status quo. Sixteen percent were bullish, indicating the DJIA would be between 35,000 and 40,000 points. Only 8 percent were super positive, indicating the DJIA would be above 40,000 points.
What is your biggest challenge?
You guessed it, the biggest challenge for the bankers was attracting and retaining productive talent. This was followed by changes in the work culture caused by the pandemic to include balancing distance workers, hybrid work models, and in-office employees. Competition in the future was listed, particularly with the possibility of cryptocurrencies and a government based digital currency.
A real positive of the school was that the participants had great attitudes and a willingness to learn. They were able to think through both sides of an issue while their perspective was challenged without getting too emotional and going off the rail. It seems like the world needs more of that!
Source: Dr. David Kohl, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.