Posts Tagged ‘Wall Street’
DorobekInsider: What’s the impact of Wall Street’s woes?
So we all have been watching the financial mess. In fact, it was so curious yesterday that all the cable networks literally had split-screens, with one eye focused on Wall Street and another on Capitol Hill as House members voted down the financial rescue bill.
The big question: What does this mean for the government world. We have been trying to get our arms around it on Federal News Radio’s Daily Debrief with Chris Dorobek and Amy Morris. Yesterday, we had Jeremy Grant, an emerging technologies analyst for the Stanford Group Company’s Washington Research Group [hear the interview here .mp3]… Tom Trabucco, Director of External Relations for the TSP, talking about what it means for feds retirement plans [hear the interview here .mp3] … and the remarkable Stanley Collender, who is known as a one of the leading experts in federal fiscal and monetary policies having worked on the staff of the House and Senate Budget Committees [hear the interview here .mp3].
But what do you think?
What does the impact of the financial mess mean for government?
DorobekInsider: House.gov overwhelmed
AP is reporting that the House of Representative’s Web site was brought to its knees yesterday as people flooded the site seeking information on the vote to reject the Wall Street rescue plan.
“We haven’t seen this much demand since the 9-11 commission report” was posted on the site in 2004, said Jeff Ventura, spokesman for the House Chief Administrative Officer.
“We’re being overwhelmed with Web traffic about the bill.” Ventura said the Web site is working, but many computer users are getting the equivalent of a busy signal when they try to visit the site. Once users are on the site, it works at reduced speed. “You have to keep trying and eventually you get in,” he said. Ventura said the slowdown is expected to last until Tuesday, when demand is expected to decline with the House in recess.
In the meantime, technicians planned to work through the night to fortify the system. “Our computer people aren’t going anywhere,” Ventura said.
DorobekInsider: The Wall Street crisis could impact the government too
We have all been watching the mess on Wall Street — and I think most people in government sit back and think, “Thank goodness I’m a fed and I don’t have to deal with this stuff.”
Unfortunately, in today’s hyper-connected world, what happens on Wall Street has ramifications on Main Street… and around the Beltway. (Ah — the world is flat!)
We seemingly hate to say it, but… it seems we just don’t know.
In my own mind, I keep going back and forth on the potential impact of this to government.
But here is some reading/listening on the subject.
* Michael Lent, the editor and publisher of Government Services Insider, wrote a excellent column for the current issue of Washington Technology headlined, Five ways the financial crisis makes things tougher for contractors. The headline could have just as easily have read, “Five ways the financial crisis makes things tougher on agencies,” to be honest, particularly given that agencies are increasingly dependent on contractors to get their jobs done.
I should note that we had Lent on Federal News Radio’s Daily Debrief with Chris Dorobek and Amy Morris on Thursday. You can hear him for yourself here. [.mp3]
His five ways:
1. Regulation — in general — is now in, with gusto, easing passage of more rules.
2. The bailout will infect the discretionary budget, snuffing growth in some areas.
3. Financing for M&A deals will be constrained as “deleveraging” proceeds on Wall Street.
4. Small businesses will suffer a continuing credit pinch.
5. Boards of directors will be compelled to proactively surveil management.
One of the somewhat scary parts of this situation seems to be that the longer it goes on, the less we seem to know. For example, last weekend, when Treasury Secretary Henry Paulson was on the Sunday news shows talking about the $700 billion package, my immediate thought was that this would have a huge impact on agencies. Why? Because, just as Lent says, the debt would essentially choke the government spending.
But — and we all hate this phrase — we just don’t know. Elsewhere on Federal News Radio, on InDepth with Francis Rose, our mid-day program, Rose spoke to Henry Aaron, a senior fellow at the Brookings Institution and the former Assistant Secretary for Planning and Evaluation, Department of Health, Education, and Welfare. His point: We just don’t know what this will mean. [You can listen to the interview with Aaron here. (.mp3)] It depends how much the government pays for these troubled debts… and how much it can then sell them for.
Meanwhile, CNet’s Dan Farber says that we should get ready for a new wave of consolidation, at least in the information technology world.
While tech spending doesn’t exactly correlate to the credit crunch, IT purchases are expected to slow down over the next three quarters, according to Forrester. Advertising spending in 2009 could be curbed if the economy spirals downward. Of course, no one knows which direction the gyrating stock market and spending patterns will go. If the $700 billion government (taxpayer) handout brings more confidence into the markets, the outlook will be better. But the majority of companies lacking strong financials or sales pipelines will be looking for reasonable exits or ways to conserve cash while the economy sorts itself out.
One other piece that is worth reading. (Hat tip to Federal News Radio’s Francis Rose.) Over the weekend, WP money columnist Robert J. Samuelson provided insights into one of the big questions coming out of all this economic mess: How did we get here in the first place?
His column, headlined The Confidence Game , is worth a few minutes.
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