Corporate Club at Landerhaven kicked off its 20th year with its annual look at the economy and the fiscal picture for the coming year. The 20th year comes with a new look, a new set and a new format. The program will now be broadcast throughout the month on local Time Warner Cable television and hosted by local favorite Michael Settonni, President & CEO, Broadcast Media Ideas.
The other thing that has changed drastically at this year's event was the tone. It's the subject on everyone's mind - the economy. When will it turn around? What should we do in the meantime? Will it get worse before it gets better? How low can we go?
Although some people milling around before the luncheon had strong opinions about the Big 3 bailout, the Recession, causes, effects and predictions no one really wanted to go on record with their thoughts.
28 tables were reserved for National City now part of PNC. Josh Melda and Diana Nestrovic of National City Bank now part of PNC had nothing but good things to say about their new owner. "PNC is the strongest bank in the country… the banks represent similar cultures so changes will not be significant"
Regional President of National City Bank now part of PNC
The program began with a short speech by Paul Clark, Regional President of National City Bank now part of PNC in which he recounted the history that NCB and Corporate Club had together and his excitement for their future. Clark also sought to assuage the fears of the Cleveland community re the potential loss of NCB's community involvement.
Listen to Paul Clark's statement (1:25) about the first decision that PNC made after the purchase of National City Bank.
Michael Settonni and Harlan Diamond
Michael Settonni then introduced Harlan Diamond and conducted a brief interview with him. Diamond recounted the many important meetings and decisions that took place at Landerhaven, including the deal to proceed with the Gateway Project and the hiring of Danny Ferry as GM of the Cavaliers.
See more and listen to Harlan Diamond's comments.
Michael Settonni then brought up the man that everyone was waiting to hear, Richard DeKaser, Senior VP & Chief Economist, National City Bank. Heads perked up and the room turned silent as the 500 or so people strained to be sure they didn't miss a word.
First came the bad news. DeKaser fully expects more of the same through at least the first quarter of 2009. He likened the economy to a person. "When a person is weak they are more prone to illness."
He finds no one to blame for missing the signs that this was coming in such a strong way - he himself didn't see it coming. He says no one fully understood how undervalued mortgages and loans were and believes the pendulum has fully swung to the other side, making what used to be a simple loan application become a major undertaking with a better than average chance of being denied.
Now the problem as he sees it is cyclical, and therefore hard to correct. More foreclosures equal more supply. More supply equals lower prices. Lower prices equals more foreclosures. This is a pattern all across the country, not just Cleveland.
President-elect Obama's plan "changes each week" according to DeKaser, with the amount of the plan increasing with each change. But most importantly DeKaser believes that his plan seems appropriate in its hugeness. The plan will involve three basic steps.
The first is tax cuts. The second is direct grants to 'shovel ready projects" or the ones ready to go as soon as the financing is in place. The third involves an increase in government spending on the infrastructure of the country with big ticket things such as roads and bridges.
Diana Nestrobic and Josh Melda
of National City Bank now part of PNC
DeKaser also explains the problem with the initial tax stimulus check. Simply put only thirty to forty cents on the dollar was actually spent. In order for the plan to work, the money has to be spent. He says this is why the money is targeted to the most needy, even those who may not have paid taxes. The most needy, according to DeKaser will spend virtually the entire check which is, after all, the goal of the program.
In reference to Mitt Romney's recent statement that he would not have bailed out the car companies but instead would have allowed them to fail, file bankruptcy and eventually re-build DeKaser says there is some error in the thinking, based on the fact that $20.00 out of every $70.00 the Big 3 spend goes to retirees and their pensions and programs. This, he says is not something that can be fixed in bankruptcy.
Richard DeKaser, Senior VP & Chief Economist, National City Bank and Michael Settonni, President & CEO, Broadcast Media Ideas
He recommends instead an effective, efficient and strong Car Czar, who would effectively act as a bankruptcy judge, making sure the businesses are run properly and monies are spent in a prudent and fiscally responsible way.
Dan Polasky of Radix Wire Company and
Joe Skoda of Skoda Minotti
DeKaser says retail sales fell 27% last month (December) compared to last year. Although credit card companies are not taking credit cards away from consumers they are being much more selective in choosing recipients.
More good news - if you have the money there are "a ton of opportunities right now." Housing opportunities for those who can afford it are the greatest they have been in thirty years. Car loans are hard to get, but if you can buy a car, you can get a great deal.
Michael Settonni ended the session with a challenge to the people: "We have to roll up our sleeves for Northeast Ohio."
Chris Ronayne, President of University Circle Inc.
Don't miss the next Corporate Club at Landerhaven, Thursday, February 12, 2009. Michael Settonni will moderate a discussion on Rockin The Business Community with Rock and Roll Hall of Fame executives Joel Peresman and Terry Stewart.
Robert Sorin of Royal American Group
and Paul Springer of SpringCo
Neil Waxman of Capital Advisors, LTD.
Vince Panichi of Ciuni Panichi and Craig Miller of Duffy and Duffy
The consistent quality of the Corporate Club Series at Landerhaven has earned it the coveted Great Lakes Geek Seal of Approval.
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