"I'm going to depress you," said George Feiger, CEO of Zions First National Bank's wealth-management arm, Contango Capital Advisors, to a crowded Sun Valley Lodge dining room on May 21. "It's going to be 2017 or so before it (the recession) is all over."
He said "tremendous" borrowing has marked the past 20 years worldwide. From 1970 to 2008 in the United States, federal spending increased 242 percent even though the median household income increased only 29 percent.
"This debt binge is so large that it can't be undone overnight," he said, adding that the recovery wouldn't be fast but slowed by an "enormous drag."
But, he said, people could still invest—with caution and a plan. This isn't the first time Feiger's been called on for advice. He's been a frequent commentator on the financial climate for the Wall Street Journal, Bloomberg News and Fox Business News. He holds a Ph.D. in economics from Harvard University and was an associate finance professor at Stanford University.
He said that, relatively speaking, America is doing well when compared to Europe and Japan.
"We live in the nicest house in a bad neighborhood," he said.
All of these areas have fallen a long way, but America's plunge has been the smallest, as illustrated in measurable gross domestic product. And America's recovery is slow but faster than Europe and Japan.
"You may be living in a rundown shack, but at least you're not living in the mobile home next door," Feiger said, calling on his previous metaphor.
He said those in the "good neighborhood" are Brazil, India and China.
As for those interested in investing, Feiger said stocks are at a "fair value."
"It's not bad out there, but there are no bonanzas," he said, emphasizing that just because a company and its stock are growing doesn't automatically mean the stock is going to bring a big profit.
The stock must be cheap compared to the value of the company. And, he said, most stocks aren't cheap right now, but at average value, meaning the return is also going to be average.
"It really is a Chicken McNugget out there," Feiger said. "You have to open it up to see if that's really white meat inside."
He said those with an eye on investing must "protect the near term, invest in the long term."
Near-term investments are plagued with volatility because of "explosions of crisis" that unexpectedly pop up. Because of this volatility, he said everyone must make sure cash is available at all times and not rely on their investments to provide spending cash. The money might not be there at the moment, but will come from long-term growth.
Feiger's speech was part of Zions Bank's Community Speaker series. The bank operates 26 branches in Idaho and 103 in Utah.
Trevon Milliard: tmilliard@mtexpress.com
