PhillyDeals: Will cash infusion work? It's a coin toss

A day after the

Federal Reserve Board of Governors

voted to pump another $1-trillion-plus into the economy, U.S. stocks and the dollar fell, and oil and gold rose. Not exactly a vote of confidence in the USA's radical attempt to save jobs by risking massive inflation.

"Nothing like this has ever been attempted before. The risk of failure is therefore quite high," warns veteran bank analyst Richard X. Bove, lately of Rochdale Securities in Connecticut.

"The Federal Reserve is taking a calculated risk," he told clients in a note. "What the central bank sees as likely is a reduction in interest rates, increased lending, higher sales activity, inventory building, and renewed capital expenditures."

If it works, Bove said, "prosperity will return. Equity values will soar. Financial companies will be primary beneficiaries."

If not? Dollars "would become valueless, eliminating [their] usefulness in averting problems in the United States economy," he predicted.

Bove concluded, "This is almost a heads-or-tails move, with the result being 50 percent in each direction."

"With one hand the government is issuing debt, and with the other it's repurchasing it using paper that it is printing," Lawrence Creatura, of Pittsburgh-based Federated Investors, Inc., told Bloomberg news. "This is a shell game that's not going to be overlooked by global investors."

While Pennsylvania's

Gov. Rendell

and New Jersey's

Gov. Corzine

juggle tax increases and spending cuts, neither has gone so far as their fellow Democrat in Delaware.

Gov. Jack Markell called yesterday for "temporary 8 percent across-the-board pay cuts in the salaries of all state employees," while also boosting income, corporate, store-purchase, utility, tobacco, and alcohol taxes, as well as taxes on legal sports betting at the state's casinos.

Facing a fight from state workers, Markell's counting on support from his Democratic

allies, who run both houses in Dover.

Shareholders of

Republic First Bancorp Inc.

and

Pennsylvania Commerce Bancorp Inc.

voted yesterday to combine and form

Metro Bancorp

, run by Commerce's

Gary Nalbandian.

The merged bank is "following the industry-changing model originated by Vernon W. Hill II," Commerce Bancorp said in its announcement.

Hill cofounded PA Commerce as a franchise of his former Commerce Bancorp. He was forced out of Commerce two years ago by federal regulators, who stopped approving new branches while investigating Hill's use of his wife Shirley's company to decorate Commerce branches. The bank was later sold to TD Bank N.A., of Toronto. The feds settled their beef with Hill without sanctions. Hill called it an "exoneration."

"We expect the combined companies will resume branching and deposit growth like the old Commerce Bank did in New Jersey and Pennsylvania," despite the slow economy, wrote Janney Montgomery Scott L.L.C. analysts Stephen Moss and Rick Weiss in a recent report.

They expect investors may be slow to embrace Metro, since growth costs money and loan losses are still rising. We expect Shirley Hill will have a role in arranging new Metro Bancorp branches, too.

DCANet

, of Wilmington and Philadelphia, started offering Internet service in 1994. "We were one of the original ISPs. Now we're competing with

Comcast Business

and

Verizon FiOS

head-to-head," said

Keith Duncan

, DCANet president and owner.

Why is DCANet still in business? Loyal clients like DuPont Co. in Wilmington, Mannington Mills in New Jersey, and WHYY in Philadelphia. "Our claim to fame is local service," Duncan said. "When you call me, you get someone quickly. And we monitor your system proactively. We see something, we'll call you. 24/7."

To stay relevant, DCANet is offering high-speed Internet service to customers who still use old-fashioned copper phone cable. In a deal with Ethernet provider XO Communications, of Herndon, Va., Duncan says he's offering the service to businesses that need reliable local mail servers, starting at $745 a month for five megs/second.

Duncan says the same service on modern fiber cable might cost twice that price. In a slow economy, his service gets customers with copper cables "into the game."