PhillyDeals: Blue-chip panel tells how to solve economic crisis
Smart people at the biggest firms on Wall Street have put together a thick report on what they call "the most severe" financial crisis since the 1940s.
Smart people at the biggest firms on Wall Street have put together a thick report on what they call "the most severe" financial crisis since the 1940s.
This is a blue-chip crowd - the President's Working Group on Financial Markets. Their cover letter, to Treasury Secretary Henry M. Paulson Jr., is signed by E. Gerald Corrigan, former head of the Federal Reserve Bank of New York and currently a managing director at powerful Goldman Sachs Group Inc., the investment bank least scathed by the current crisis.
It's not written in common Anglo-Saxon, but we're here to help:
"In a highly competitive marketplace, it is very difficult for one or a few institutions to hold the line on best practices or to stand on the sidelines in the face of booming markets."
Translation: We can't control ourselves. We get so excited when investment values rise! We know better, but if somebody doesn't stop us, we're going to sell people a lot of risky stuff that's likely to blow up. And if we don't, someone else will.
"Financial institutions must be subject to a higher degree of official oversight than is necessary for virtually all other forms of commercial enterprise. However, official supervision is not a substitute for effective management of financial institutions."
Translation: We need government regulation, even though we're smarter than the government.
"What's needed [is] a form of private initiative that will complement official oversight by insisting on industry practices that will help mitigate systemic risk."
Translation: We also need to police ourselves, or this slump is going to last a long time.
How's that supposed to work? A code of honor, with drastic penalties? New powers for a private, but compulsory, world financial council?
The report that goes with the letter analyzes how credit-risk models got out of whack in the last few years, and it recommends some "extremely ambitious" steps, including "enhanced disclosures" of "high-risk complex financial instruments," and ways to unfreeze the market for credit-default swaps and other securities that have collapsed, before the end of this year.
Ambitious, but less expensive than letting the markets drift, the bankers concluded.
You can read their report at http://www.crmpolicygroup.org
Chopper One
Virginia pilot
Scott Kasprowicz
and copilot
Steve Sheik
are taking an off-the-shelf
AgustaWestland Grand
helicopter, built at the firm's northeast Philadelphia factory, around the world in what is hoped to be a 14-day flight, setting a record for helicopter circumnavigation of the globe.
Viewers can track their trip at http://www.grandadventure08.com/
Borough in balance
Conshohocken is among the most prosperous of the Philadelphia area's old industrial boroughs, with office towers crowding the Schuylkill waterfront and well-lighted bars and restaurants lining lower Fayette Street, downhill from brick neighborhoods that spread from ethnic churches.
"We're very fortunate we've had people come to Conshohocken to invest and develop," said Gary DeMedio, owner of a real estate agency and president of Greater Conshohocken Economic Development Corp.
"At the same time, because of the success of Conshohocken, our change from a blue-collar to a white-collar community, we've lost some things. Towns can be a victim of their own success. It's time we add something for the residents."
DeMedio says he misses the Acme that moved out to Plymouth Township, and the mom-and-pop grocers that gave way to convenience stores. So he's backing a proposal by developer Julian Miraglia to build a supermarket, 23 upstairs apartments "for senior citizens," and parking on the old Bell Telephone site, 402 Fayette St., which the borough had considered turning into a new town hall.
The borough has been approached by two other local developers, who want to put offices on the site, said Borough Manager Fran Marabella. "And we may still move the borough offices in there. There's been no decision," he added.
The Borough Council plans to review the three proposals at its public property meeting Wednesday.