The Federal Reserve is giving money away, driving its benchmark interest rate down near zero.

"They're running themselves out of room," said

Ted Peters

, chairman and chief executive officer of Bryn Mawr Bank Corp. and a new appointee to the board of the Fed's Philadelphia bank. "But the concern right now clearly is the economy spiraling downward."

The economy is stuck in a "liquidity trap," where "no one wants to spend or take risk," writes bank analyst

Richard X. Bove

, at Ladenburg Thalmann Financial Services Inc., in Florida.

What to do? The government can "stimulate inflation," which pressures people to spend before their dollars lose value. Or it can stimulate spending with massive public purchases. "Looks to me that both courses are being pursued. So there is hope."

The Fed is trying to drive down home-loan rates, wrote

John Silvia

, chief economist at Wachovia Corp. He predicted "a long period of easy monetary policy that may generate more problems down the road and yet provide little quick relief for the economy." See additional reactions,


Bankers go home

Bank of America Corp. is preparing to absorb Merrill Lynch & Co. Inc., while Wachovia will vote next week on its sale to Wells Fargo & Co.

In the meantime, both companies are cleaning house, writes the Charlotte Observer, hometown paper for BofA and Wachovia.

Just one of 11 top executives of the merged Wachovia-Wells Fargo company who'll report to chief executive

John Stumpf

will come out of Wachovia, the paper reported. The head of the merged bank's new Eastern district, based in Charlotte, is

Laura Schulte

, a 26-year Wells Fargo veteran.

Bank of America is removing a string of senior executives. The bank said Wilmington credit card chief

Bruce Hammonds

, MBNA Corp. founder

Charles M. Cawley

's right-hand man before BofA bought MBNA three years ago, is among those retiring.

New bank jobs

Sallie Mae, the student-loan giant, gave Delaware a shot in the arm this fall when it settled on suburban Wilmington for the location of its new operations center and 1,100 jobs.

To house those workers, Sallie Mae now has agreed to pay $20.75 million to Nationwide Financial Services for its building at 300 Continental Dr., near Newark, Del., CB Richard Ellis Group Inc. said yesterday. The property includes 160,000 square feet of offices on 22 acres off I-95, between Wilmington and Newark.

A.C. looks to N.Y.

Bets are down in Atlantic City, and three casinos have chosen this winter to roll out double-decker Atlantic City Express Service weekend trains from New York's Penn Station and Newark, N.J., to the resort, starting Feb. 6.

First class tickets on the 21/2-hour trip will start at $75 one-way, $50 round-trip. A.C. wants more overnight visitors, as Pennsylvania and other states lure the day-gambler trade.

Three casinos backing the service - Caesars, Harrah's Resort and Borgata - hope to lure high-end bettors who see the city as a shopping-and-overnight destination, Borgata president

Larry Mullin

said in a statement. They'll send shuttles to meet passengers in A.C.

Haverford's loss

Academic life isn't much of a shelter from this economic slowdown. We've previously reported plunging endowments at Harvard, Penn and Swarthmore. Yesterday, Friends-oriented Haverford College says it's looking for ways to cut costs after its endowment fell to $375 million, from $521 million, since June 30.

Pharma unfriendly

Does Atlantic City and its piney hinterland deserve to be ranked with South Florida, Chicago, Los Angeles, and "the entire state of West Virginia" as one of "America's most unfair jurisdictions"?

That's what the American Tort Reform Association, which represents corporate interests that want to limit lawsuits, claims in its yearly "Judicial Hellhole" report. ATRA says Atlantic County has become "the destination of choice for those suing the pharmaceutical industry."