Early Briefing: Anxiousness And Anger On Main St.
The president and the presidential hopefuls plan to huddle today to press the case for a $700 billion bailout for Wall Street that they say is necessary to also save Main Street. We hear from those on the front lines in today's paper:
D.C. real estate agent David Crossland can tick off a list of clients who have gotten cold feet as the turmoil in the financial markets has worsened.
There's the District lawyer who decided to sit it out because "he's strapping in for a recession," Crossland said.
There's the young couple who were itching to buy on Capitol Hill but decided against it. "They're convinced times will get worse."
He said, "It's kind of a bummer."
No kidding. On Wednesday, the National Association of Realtors released a new round of glum numbers about home sales. The Mortgage Bankers Association said home loan applications have dropped. And interest rates have moved back over the symbolic 6 percent level.
Patricia Cook, a stay-at-home mother who was hoping to buy her first place in a few months, has her doubts, too.
"We're going to delay because there's too much uncertainty," said Cook, who is watching the drama unfold on Capitol Hill. "I'm watching the hearings. I'm watching the stock market. These are things I never used to do. . . . I'm anxious."
* Metro columnist Marc Fisher talked to a different set of business people. On Columbia Pike in Arlington County, a small strip shopping center at South Randolph Street is the picture of stability, he writes: five small, family-owned businesses and a church-run thrift shop. There are a vacuum cleaner store, a dry cleaner, a Bolivian restaurant, a hair stylist and a bakery, most owned by immigrants.
Most of the owners say business is soft of late, but nobody's defaulting on loans, no one's behind on rent, no one is laying off workers. They work within their means, something they don't see happening on Wall Street.
"We shouldn't be punished for their errors," says Reena Bawa, an immigrant from India who started out as a stylist at Beauty Fair 25 years ago and bought the shop nine years later. "Everything that's happening now is about power. They were just thinking of themselves, and as a result, the middle class, the people who are straight and smooth, are suffering."
In her business, there are no too-good-to-be-true interest rates, no great bursts of profit. "If we go up 50 cents in price, we lose customers," she says. "If I want to remodel, I might get a loan, but I know where I'm getting the money to pay it, and I don't do it if I can't."
So yes, the shop could use a facelift, and yes, the customer base is getting older, but Beauty Fair has delivered Bawa and her family their American dream. In Burke, where she lives, too many houses have "Foreclosure" signs out front, but hers is not among them -- and will not be.
Next door to the beauty salon, Derek Smith unlocks Vacuums Unlimited for another day of business and waits. Some days now, hours go by without a body coming through the door. "If I don't sell, I don't eat," says Smith, the manager. "I have to talk people into buying a vacuum for $200, when last year, I'd be talking to them about a $400 or $500 vacuum."
Smith, who grew up in the District and lives in Fort Washington, sees Wall Street executives who were sucking in $50 million a year and asks: "After a certain point, what do you need all that money for? You can't spend it all. If I was making $50 million, I'd be creating jobs for people. Instead, the banks were practically giving away loans. You give someone a loan they can't afford, you're not creating something they can leave behind for their kids, you're just putting them in debt, debt, debt, that they can't possibly pay."
Across the pike, Luxury Auto Sales of Arlington sold 51 cars last month but only 17 so far this month, says salesman Miguel Santos. "Okay, the Dow Jones is down every day, people don't have health insurance, everybody's paying double for food, so much for gas," says Santos, who came to this country from the Dominican Republic 15 years ago. "And everyone is so worried -- 'Oh, my house, how will I pay for my house?' But let me tell you, I say, 'Thank you, America,' because if you work hard and pay your bills, you're going to go somewhere."
Santos says he hasn't taken a vacation in 15 years, and today his daughter is in college.
These businesses survive because the owners know that greed will sink them, that their bottom line is only as strong as their relationships with their customers and that whatever their wares, what they really sell is trust.
Those rules don't change with the size of a business. The difference is that on Columbia Pike, merchants and their customers share a place and know each other. They're in it for themselves, sure, but also for everyone else.
* In other news, Army officials are likely to announce Monday that they will relocate 6,400 jobs originally slated for Fort Belvoir to Alexandria, and not to a transit-accessible location in Springfield preferred by state, Fairfax County and congressional officials, according to several people with knowledge of the Army's thinking.
Assistant Army Secretary Keith E. Eastin said in an interview Wednesday that Army Secretary Pete Geren will make a decision by Monday. It is part of a plan by the Army and Congress to move 20,000 defense workers, most of them from office buildings in Arlington, to Fort Belvoir.
*MacroGenics, a privately held Rockville biotech, plans to announce today that it has raised $25 million in financing.
The money will be enough to fund the company's operations through 2010, said MacroGenics chief executive Scott Koenig.
It will primarily support MacroGenics' new cancer stem-cell program, which was acquired through its purchase of South San Francisco, Calif.-based Raven Biotechnologies in July. The funding will also advance the company's autoimmune, cancer and infectious disease product pipeline.
* Three more members of Fannie Mae's board of directors have left after the government seized control of the mortgage company earlier this month, including Karen N. Horn, a top executive with a New York investment firm; H. Patrick Swygert, former president of Howard University; and Bridget A. Macaskill, founder of a financial services firm. Six people have now left the Fannie board, leaving it with eight members, led by the government-appointed chairman, Philip A. Laskawy.
* Moody's Investors Service said it has downgraded Six Flags' junk-grade corporate-family and probability-of-default ratings, citing the possibility that the theme park operator will fail to meet its obligations.
* A New York company announced Wednesday that it was abandoning plans to build an upscale private boarding school on the former Bethesda estate of National Geographic editor Gilbert Grosvenor, abruptly ending a project that had sparked intense neighborhood resistance.
The firm, Nations Academy, said in a statement that "current real estate market and financial conditions" forced it to cancel its plans for the property, which was to have been the flagship for a string of internationally oriented prep schools in major cities around the world.
September 25, 2008; 8:50 AM ET
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