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But all agree that we haven’t yet seen the worsr of the current recession. “We aren’t at the bottoj yet,” says Bill Parmele e of , hit hard by the flailing housing “But maybe we can see it from Parmelee recently joined the CFOsof , and for a roundtable on financial issues at an event held by the Charlottse chapter of Financial Executives Gary Zauf of food-service giant Compass was the most trenchantr critic of the $787 billion which is intended to lift the economy. “This is not the way to solvs the problem,” he says flatly. Zauf dismissesd talk of “the worst economy since the Great Depression.
” He says the recession has yet to reac h the depths ofthe 1970s, and he preferw the solutions proposed by President “We came out of that with lower taxes, less he says. “Everything we see (here) are the opposit e of what I think are the ways to fixour Duke’s David Hauser sees hope in some of the energy projects outlined in the legislation. The stimulus package includee morethan $44 billion for energy, including rebuildiny and improving the power-transmission grid.
Thos are important and useful projects, he Duke sees opportunities in thestimulus plan’s effort to encourage greater use of wind powedr — a business the company is ramping up in its nonregulated merchant power business. And Parmelee is encouraged by provision that offer tax creditsfor first-timr home buyers. But he worries whether the packag e isbig enough. “Residential housing, that’s what led into this and fixing housing firsis what’s going to lead us he says. “I thin k the $8,000 credit is OK. It’s not enough.” He said original $15,000 credit proposalo would havebeen better.
He also thinksa it would be better if the moneh was availableat closing, rather than when buyers file their as in the new legislation. And Rick Pucket of Lance is concerned about new provisions of the Trouble d Asset Relief Program that will set compensation for executivez in thebanking industry. “I don’t think that stopx with the banks, with the TARP recipients,” he “I think it goes beyond that.” Compensation decisions, he should be left to corporate boards. In some the CFOs’ views of the stimulusd package reflect how much their companies have been affectee bythe recession.
Zauf, for instance, says Compass had seen almos no impact until about twomonths ago. And even many lines of business — such as governmentf food service — remain strong. Hause r says the Carolinas appear to be weatherinf the recession better than theMidwest — Duke’s othetr service area. But businesses all across its footprinft areseeing problems. All four CFOs have seen impact from the weakened credit Zauf is particularly concerned banks are treating customers with good crediyt the same way they treart those with a poor record of repaying their Parmelee says banks acrosxs the board are seeking to amen credit agreements to reduce their And nonbank lending alternatives are also getting more Duke has been able toraise $3.
4 billio n in the capital markets over the last 12 montha because of its strong balance sheet. But Hause says the company found itself briefly frozen out of the credit market latelast year. Basicallyh none of the CFOs expect to see much improvement in the economin 2009. Parmelee estimates the natiomn has worked through no more than halfits home-foreclosurde issues. He foresees unemployment risingto 10% or 12%.
And the CFOs warn that auto-loan and credit-card defaults could bring a new wave offinancial
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