Well, baseball season is here, America's favorite past time, andthe season is unpredictable as ever. My San Francisco Giants wonthe World Series for the first time in my life a couple years ago,and we missed the playoffs by a few games last year, and we startedthe season this year with the first three games resulting inlosses. Not to be cliché, but past performance cannot predictfuture results.

However, if you're in finance, you have very little to go onthese days. Ben Bernanke has promised us low rates until late 2014,which is the equivalent of betting on the Dodgers to win the wholething this year (yea, right!). Economists are looking very close atBen these days, looking for any clue of what the next pitch isgoing to be, a curve or a fastball, or the dreaded pitchout. TheNCUA has recommended that we shock our balance sheets at 400 and500 basis points because the rates are so low. Four years ago wethought 300 basis points were too much!

The economy has traded loans growth for share growth, and wedidn't even get a say. Members are paying down debt, strategicallydefaulting, just regular defaulting, and not borrowing like theyused to. Our general manager, the NCUA, is trying to recruit theheavy hitter, Mr. MBL. However, the little credit unions havelittle or no expertise in this area. So while raising the MBL capmay help some of us, it's not the all-star the industry needs.

The housing market is still at record lows, each month thatshows a gain is followed by a month with losses. While sellingmortgages to the secondary market is a smart interest ratesensitivity move, we trade high yielding loans for low yieldinginvestments.

The question we have to ask ourselves is, can our company handle10%-15% of our loan portfolio at 4% for 15 years? Credit unionsroutinely do not have a large variable loan portfolio, which hasmade the NCUA nervous recently. While we have lived with thepossibility of raising rates over the past several years, it hasnot materialized.

And Ben has promised us low rates until 2014. So having lowrates would be acceptable these days, however, only for those loanproducts that have a weighted average maturity of less than fouryears. This leaves us with our fastball, our bread and butter, theauto market.

The competition is tough in the auto market with 0% financing,no payment for 90 days, no credit needed, etc., but, I think creditunions can still make loans, make relationships, and driveincome.

There are CEOs that would disagree with offering a 1% new autorate, or a 2% used auto rate, and maybe they are right. If aninvestment at three years yields 0.80%, add 0.20% for the loan lossallowance for each new dollar in this category, this gives you a 1%yield. Now, if you have a 20% success rate at adding GAP insurance,and 10% success rate of MBI, this would yield 1.20%. Not to mentionif 30% of each new member uses your debit card, credit card, andoverdrafts once in a while. Depending on usage, each new loan couldnow yield you 1.50%. Still too low? Make it a 2% new auto loan,which could yield you a 2.50%.

I recently overheard a conversation two CEOs were having. Bothwere talking about how low their rates were for new autos, bothwere over 3% and not having any luck. They decided not to play ballwith the big guys. But sitting on the bench and waiting for thegame to change is not an option that's going to get us the win. Wemust get back to what we do best: low fees and great service.Building member relationships, being top of wallet, increasing ournon-interest income, is what's going to get us to the final inningsand keep us in the game.

The season is just beginning, nothing that happened yesterday,or last year, is going to help us predict what's going to happenthis year. We must keep a watchful eye on rates, the housingmarket, the job market, and our members' behavior.

Although, we have several pitches to throw, we need to rely onwhat we know and do the best, whether that's MBLs, autos, mortgagesor Visas. We must take what we do best, and make it better and moreappealing than what is in the market place today. Adding specialfeatures, reducing the prices, letting the member feel like theyare getting a deal, will bring us the home runs we need.

Good luck this season, and Play Ball!!

MichaelGay is controller at AltaOneFederal Credit Union in Ridgecrest, Calif.