Brooklyn's Progress Express
Volume 1, Issue 2

Brooklyn's Progress Express talked with Maria Fiorini Ramirez (right) this week about the economic meltdown and the crisis facing Wall Street. The Brooklyn’s Progress economist, who heads up Maria Fiorini Ramirez, Inc., an independent global economic and financial consulting firm, had some advice for businesses worried about the future.

What is your opinion about the House voting down the Wall Street bailout package?
I think it will go forward, they realized that not doing anything is not a good solution either. They tweaked it to make it more palatable for both sides. I don’t think they would bring the bill to the floor without knowing it will pass, learned from the embarrassment on Monday.

Where should I invest my money? Where is it safe?
To have a higher cushion of cash than normal is a good thing, as it has proven all along. That’s still the case, and their may be significant opportunities for the markets yet. But we’re not settled at the bottom yet. It’s better to sit it out.

What is the impact on Brooklyn?
As far as New York being financial capital, the demise of these large firms that have processing and operations in the broader area regionally, certainly there will be impact on Brooklyn. It will be more severe in Manhattan.

We know that people work and live in different places and are spread out over the broader tri-state area. Local communities will have less revenue. This impacts real estate, it impacts tax payments and it impacts overall receipts. The ability to cut spending as fast as receipts shrink is hard because they usually shrink more than spending is cut.

What lesson should we learn from this event?
We always learn lessons, unfortunately we don’t remember them. This happens every 7-10 years. We went through it with the dot com bust, in the early 90s with real estate and the savings & loan crisis in the 80s. We always go through this, and problems usually generate with bad credit and explode into other things.

What can small businesses do?
It’s hard to find a gap filler with the shortage of credit. They should manage their expenses, and try not to be too dependent on credit. Credit is going to be very expensive. We need to do a little bit of belt tightening.

If they had plans to, should businesses continue to expand? What safeguards should they put in place?
I think as long as they have the money and access that’s already been lined up, go for it, because in the long term it is a good investment. But tighten the belt.

Do you have any words of advice for Brooklyn businesses community as a whole?
We’ve gone through these things before, and we’re coming through this also. We’ve been well into it for about two years – we’re on the way out.