Crossing the Street

Westchester County Business Journal, Sep 29, 2008 by Golden, John

These days Debra Borchardt brings along a sense of history on the 90-minute train commute from her home in Cortlandt Manor to her job on Wall Street. It tells her, together with the morning news she absorbs in transit, that what befell her Texas banking ancestors in the Great Depression - their bank's failure amid a wave of like failures - is coming around again in her financial time.

Her job on Wall Street has changed in the last two volatile years. Borchardt, a self-confessed "market geek," left one side of the Street and, taking in stride a substantial loss of income and colleagues' doubts about her sanity, crossed to another career there while the going, like her stock's price, still was good. Looking at it from both sides now, she sees a Wall Street whose situation is "unprecedented."

"It's exciting not in a good way," Borchardt said last week in her company's office at 14 Wall St., directly across the tourist-crowded street from the back door of the New York Stock Exchange. "It's exciting in that every day feels historical, momentous. Nothing like this has happened before."

She was speaking of the federal government's announcement of a planned $700 billion bailout to save Wall Street from a market collapse and the nation from an economic depression of the kind that closed her family's bank in her native Texas. It was the first business day after the bombshell announcement, and Borchardt would publicly discuss with other market experts, explain and comment on the still-sketchy plan for an online video audience of brokers, traders and mainstream investors looking for guidance at thestreet.com.

UNCHARTED TERRITORY

Since last year, Borchardt has been a reporter and commentator at the free financial news site owned by TheStreet. Com Inc., a publicly traded, 12-year-old financial media company with a network of Web sites. Her occasional companion at the studio desk and the company's co-founder, financial analyst and former hedge fund manager James J. Cramer, is the online site's reigning well-paid star and, arguably, Wall Street's most voluble and best-known televised talking head.

"You've got the Treasury Secretary (Henry Paulson) running the country now," Borchardt said as if astonished. "Oh my God. President Bush isn't running the country. President Paulson is running the country. We say the people with the money have the power. He has the power."

Borchardt saw danger ahead with the government bailout.- "I think everybody agreed something needed to be done," she said. "They had to do something. If they didn't, we were going to face a collapse of the markets. But the plan we have now is ill-defined and it's already showing signs of potential for abuse" by companies and foreign banks lobbying to have the government pick up their bad securities and owners of "toxic" assets pricing those same assets for government purchase, an arrangement Borchardt called "very incestuous."

"I think that's what troubles persons in the market," she said.

"It's going to cost more than Paulson is saying it's going to cost. The taxpayer is going to bear the hit.

"This is uncharted territory," she said. "We try to compare it to the savings and loan crisis" of the late '80s and early '90s, which required a direct federal government bailout of about $125 billion and whose impact in Texas Borchardt well recalls. "But it's clearly become 20 times worse than that one was. We're comparing it with that because we don't have anything else to compare it to.

"It's a great time to be in business journalism because of' the stuff happening right now," said the 47-year-old Borchardt, who left her former Wall Street .job to pursue a master's degree at New York University School of Journalism and prepare for her second Street career. "I just know it because I did it," she said of the financial market and its news. "I lived it and breathed it."

JUGGLING ACT

Trained as an actor, Borchardt was on a shoot in Houston more than 20 years ago when an acquaintance recommended the brokerage business to her. "I fell into it because it worked well with my acting desires," she said, leaving her time for auditions. She went to work at Merrill Lynch, obtaining her securities license while there. "Mother Merrill was the great training ground for the brokerage business," she said.

"I don't think they should merge with Bank of America," she said of her former employer. Rather, Merrill Lynch should become a bank holding company just as Goldman Sachs and Morgan Stanley will be transformed on a remade Wall Street. "The week they made that deal, it made sense,' she said. But in the "fluid situation" where stock prices rise and fall and rise again, "I wouldn't be surprised if they backed away from it," she said of the Bank of America deal.

Borchardt for 15 years worked at The Bear Stearns Companies Inc., where she rose to a vice president's rank in the foreign exchange and clearing departments and on the European fixed-income desk. Ten years ago, she and her husband, residential architect Chris Borchardt, who owns cbdb Architects in Peekskill, moved to Westchester County when Borchardt took a job with Bear Stearns in New York.