Answers few regarding the economy

Photo by The Carolina Scoop's Adam Diaz
Jeffrey Kane, vice president of the Federal Reserve Bank
of Richmond's Charlotte office, gave the keynote address during
the Chamber's final 2008 networking luncheon in Denver.

ANSWERS FEW REGARDING THE ECONOMY

By Jon Mayhew

DENVER -- People packed the Verdict Ridge Country Club on Wednesday expecting serious answers
to the current worsening economic situation. Jeffrey Kane, vice president of the Federal Reserve Bank of Richmond's
Charlotte office, was the guest at the final Chamber networking luncheon, was the special guest speaker for the event.

By the time the luncheon ended at 1 p.m., many of the more than 100 people in attendance had little answers to
how long and how deep the recession would run.

Instead, Kane used the occasion to give opinion intermittently laced with humor. And while he took questions from
the audience at the end of the presentation, answers were almost non-existent.

At the beginning of his presentation, Kane himself asked the burning question on everyone's minds: what is the
Fed doing to ease the credit crunch?

The answer?

"It's not a sub-prime problem or a mortgage problem," said Kane. "The problem exceeds
sub-prime mortgages by a great extent."

Kane said the key to the tough economic times is the banking and finance lenders. Kane pointed to the wide
swath interest rates are currently covering in the market.

Photo by The Carolina Scoop's Adam Diaz
More than 100 people turned out for the Chamber's
final networking luncheon of 2008 at the Verdict Ridge Country
Club in Denver on Wednesday.

Kane said the traditional banking system many Americans are used to is going by the way-side.

"The traditional way of showing mortagages on a balance sheet are today not very profitable," said Kane.

Kane did tell the crowd the recession is expected to go through 2009, saying "we're going to be in pain
for some time." The cost of the recession -- according to Kane -- is around $3 trillion.

Kane said the number of financial institutions will also be whittled-down during the next 18
months due to mergers and acquisitions.

"There will be anywhere between 5,000 and 7,000 financial institutions nationwide
left intact in their current form," said Kane.

Lincolnton businessman Stephen Starnes attended, expecting to get information on how much
pain Americans will be in during the recession. Starnes said he was disappointed at the answer to his question on
what the Fed will "throw at Americans next."

"All they have to do is keep printing money," said Starnes after the event.

Another question asked of Kane was the governance and stewardship of the Fed and its leaders.

Kane said it's all about choices.

"Some people say to let the market go on and choose pain points," said Kane. "We can't focus on any kind of
punishment when we're in the middle of a recession. When we get to the governance point, we can punish."