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Focuses on the financial problems faced by New York City. Reasons for the financial crises in the city; Overview of efforts by the government to provide funds for the city; Assessment of the scenario in case of a default by the city; Information on the steps planned by financial regulatory agencies in case of a default by the city; Discussion of the consequences of the financial crisis; View that private investors need only regain sufficient confidence that the city has mastered its own finances; Effect of general inflation on fuel, utility bills, building materials and paper; Creation of the Municipal Assistance Corporation (MAC), a special corporation created by the state legislature to avoid a default; Description of the role and functions of the MAC; Report that the banks had a temporary liquidity problem, which would be able to receive extraordinary loans from the federal government; Valuation of securities would be delayed to allow for the market for such securities to stabilize.

If Richard Grasso was the obvious villain in last month's upheaval at the New York Stock Exchange (NYSE), Securities and Exchange Commission (SEC) Chair William Donaldson was the unsung hero. After all, Grasso's obscene compensation package might never have come to light if Donaldson had not requested in March that the heads of the country's stock exchanges review their management structures.Early this year, almost immediately after taking the reins from Harvey Pitt--whom the press had roundly vilified for taking a soft approach on Enron and WorldCom--Donaldson began quietly but forcefully reforming the agency and going after a whole range of hitherto-ignored industries. When Bush announced in December that Donaldson would be taking over the SEC, the country's papers and industry observers were almost uniformly skeptical. With Congress's support secure, Donaldson has proceeded to focus on issues that Pitt had largely ignored: corporate governance, stock exchanges, executive compensation, and hedge funds. And, while many saw April's $1.4 billion settlement between the SEC and ten investment banks as insufficient (Senator Charles Grassley called it "half a loaf"), Donaldson made it clear that the deal was only the beginning of reform in the investment community and that more enforcement actions would be forthcoming if the banks didn't imbibe his reform message.

The author comments on the antipathy of the New York Times newspaper towards the New York Yankees baseball team. After New York Yankees third baseman Aaron Boone hit one of the most memorable home runs in the storied history of the franchise, the editors of the New York Post made an embarrassing mistake. The Post's printers accidentally received an editorial written for publication in the event of a Yankee loss to the Boston Red Sox in this year's American League Championship Series. The New York Times, a perennial target of the conservative Post, highlighted the error under the smug headline "Memo to the post's editorial page: it isn't over till it's over." That was a brazen move on the part of the Times. The Times had deliberately published an editorial ten days earlier rooting against the home team in favor of its most hated rival. I understand that the Times is a national newspaper and has aggressively cultivated a readership outside of the tri-state area, where Yankee hatred is practically a religion. But, if the Times' newfound enthusiasm for the Red Sox was simply a craven pander, expect it to backfire. I suspect the paper's antipathy to the Yankees is due to the Yanks being rich and powerful. The Times, with its tradition of skepticism toward money and power, is naturally repulsed.