Pattye Benson

Community Matters

Month – August 2011

Should T/E School District Offer the PSAT to 9th Graders? Radnor School District to Fund Student’s PSAT Tests

August 11, 2011
17 Comments

I read the following update on the Radnor School District in the Main Line Suburban:

Assistant superintendent Kim Maguire outlined a plan to the Curriculum Committee that would have all Radnor ninth-, tenth- and eleventh-graders take the PSAT in October with school-district funding and with across-the-board scores allowing teachers to “check for trends [as well as] individual student trajectories.” The hope, Maguire said, “is that students will be more motivated.”

Asked if she meant more than for PSSAs, Maguire answered, “Yes.” Superintendent Linda Grobman said the school district would be able to “use the [test-score] information to help plan the instructional program.”

The Preliminary SAT/National Merit Scholarship Qualifying Test (PSAT) is a standardized test administered by the College Board and National Merit Scholarship Corporation. Other than practice for the Scholastic Aptitude Test (SAT), a high score on the PSAT is the only way to qualify for a National Merit Scholarship. The PSAT is great practice for the SAT as the results provide a sense of strengths and weaknesses.

The PSAT is offered for Conestoga High School students in their Sophomore and Junior years as preparation for the SAT exam. Radnor High School likewise offers the PSAT to their students in the tenth and eleventh grades. According to the article, the Radnor School District is suggesting that the District will offer the PSAT to the ninth graders in addition to the tenth and eleventh-graders.

Last month when there was discussion on Community Matters of Newsweek’s ‘best of high school’ lists, some commentors suggesting that T/E didn’t need to ‘keep up with the Joneses’ — that everyone knows that Conestoga High School is a great high school and the fact that it didn’t appear on Newsweek’s list was of little consequence. The jury may still be out on the importance (or impact) of Newsweek’s high school rankings, but the PSAT is another issue.

The PSAT is viewed as great practice for the taking of the SAT — and we now read that Radnor School District is discussing adding another practice PSAT year. Can we assume that if a student takes the practice exam three times before taking the SAT, that the student’s SAT scores will go up?

If a student takes the PSAT in both the ninth and tenth grades, is the student better prepared for taking the PSAT in the eleventh grade?

Why is the PSAT exam in the eleventh grade important . . . ? Answer — qualifying for the National Merit Scholarship awards is based on the scores on the PSAT taken as a Junior. Instead of only one practice exam, the Radnor School District students will have the opportunity to practice the PSAT twice before their Junior year. I would suggest that the number of Merit Scholars in Radnor School District will probably increase as a result.

The number of National Merit scholars is a widely quoted indicator of a given high school’s quality. To back up the high standard of T/E school district education, should the Curriculum Committee consider adding the option of PSAT testing for ninth graders? Should T/E fund PSAT testing for its students? Or, does T/E ignore what other neighboring districts are doing? Is there a risk that by increasing the number of practice PSAT exams, that teachers would teach to that exam rather than offering students a more traditional curriculum?

The Impact of the US Debt Crisis on Technology . . . Software Developer John Petersen Provides Interesting Analysis

August 6, 2011
15 Comments

After the fact, it’s easy to say that you saw the downgrading of the US credit rating coming . . . but how many of us could have predicted it a month ago?

Prior to S&P lowering the nation’s AAA rating and prior to last week’s bitter political debates over the debt-ceiling, John Petersen wrote an article, “The Impact of United States debt crisis on technology” for a computer technology website.

When I first read the article with its triple-A credit rating downgrade prediction, my immediate response to John was, “. . . I understand the risk (and significance) if the US Treasuries were to drop in the AAA credit rating BUT – what do you think the likelihood of that happening is? That kind of financial catastrophe would create a complete collapse in the financial markets.” Wow — what a difference a few weeks makes . . . look where we are now! Naively, I wasn’t willing to believe that our government would jeopardize our country’s financial future. John’s article provides an interesting analysis in regards to the impact that the financial crisis will have on technology — I hadn’t looked at it that way.

I guess the next big question is after the credit rating downgrade that added an exclamation to last week’s turbulent week, is what impact will we see on Wall Street when the markets open Monday? Anyone willing to make a crystal ball forecast?

The impact of United States debt crisis on technology
July 16, 2011
By John Petersen
In addition to working as a software developer for 20 years and authoring several computer technology books, John has a MBA and JD.

If you work in the financial industry, you may already have a sense of what the impact is. If you happen to work for a firm that manages portfolios, such as an asset management company, if you don’t know what the impact is, you ought to. And if you fall into the former category of not knowing, by the end of this post, you will… I speak from experience here as I used to be a senior technologist for a UK based asset management company.

In case you have been living under a rock, you have heard that the United States Government is wrangling through numerous budgetary issues. The most notable of these issues is whether to raise the debt ceiling. The US is always refinancing its debt. US Treasury securities are issued all of the time. Treasuries are one of the chief ways portfolio managers hedge against risk. PM’s will usually purchase US Treasuries of the same duration as the security being purchased. It has always been ASSUMED that treasuries have a AAA credit rating. In other words, there is code out there that hard codes this assumption. Often, the process that hydrates a database simply associates the best credit rating with US securities. Ask anybody in the business and they will tell you that it’s just a fact – US Treasuries have the best credit rating you can have – AAA. Its not even questioned. It’s an assumption like magnetic north, Isaac Newton’s 3 laws of motion, the speed of light, etc.

What happens in our business when a fundamental assumption no longer holds true? Anybody here remember Y2K? In the Y2K issue, 2 digit years would be ambiguous. Imagine this calculation: 9/1/20-9/1/23! If all your system did was support 8 digit dates, this is what you were left with. Of course we know this is really 9/1/2020 – 9/1/1923. Imagine if Social Security #’s were no longer 9 digits? Imagine the havoc that would inflict on our systems???!!! This is the kind of calamity I’m talking about.

Now . . . imagine calculating the average credit rating for a portfolio knowing that a similar type assumption as Y2K exists with the current US Debt situation.

All of the code that ASSUMES that US Treasuries have a AAA credit rating and that code will have to be changed. It will be a big job.

By the way, if you cannot calculate an average credit rating for a portfolio, you cannot manage the portfolio. Portfolios normally have compliance guidelines. For example, you may not be able to purchase instruments that are not deemed to be “socially responsible” That can mean anything – but often, it will include securities for tobacco and liquor companies. Another guideline is that average credit rating has to be maintained. Remember when I said earlier when bonds are purchased, US Treasuries are often also part of the purchase as both a hedge and as a way of making sure the portfolio’s overall average credit rating is at a sufficient level? There are many of other areas such as pre-trade compliance, attribution, quantitative analysis, etc that are also effected. Regardless, I’m sure by now, you get the idea. The center of all of that is the software.

If US Treasuries fall below AAA, what securities can a portfolio manager buy? A AAA rating for US Treasuries has always been magnetic north. It’s always been there. Imagine if there was no magnetic north? A compass would be useless! Get the analogy??? If a portfolio cannot be managed within stated guidelines, the fines and penalties for the portfolio manager will begin to rack up quickly. And at the center of all that is the software.

If the US Treasuries don’t have a AAA rating, the way Fixed Income (bonds) are managed will be completely upended – and front and center in that storm will be the software and systems that drive the business. Of course it won’t matter because the entire system will collapse. What software can/cannot do will be the least of our problems, the software’s inability to manage the crisis notwithstanding.

The reasons why Treasuries Securities have such low rates is because of its AAA rating. Imagine if that is lost? Rates on the Treasury Bonds will increase to compensate for the extra risk. Remember the portfolio compliance issue and average credit rating? Portfolio managers will have to begin to sell out of Treasury Bonds. That will drive the price down. What instrument will take its place? I have no idea at this time. Maybe it will be another government’s security. Imagine if Canadian Bonds were the hedge? One thing is for sure, software is at the center of all of this. Worse yet, if the US Treasuries were to go to BBB: less than investment grade, there will be portfolios that won’t be able to buy into US Treasuries because there may be guidelines that forbid buying junk bonds. Often, a portfolio will have bonds that subsequent to acquisition are downgraded to junk status. In those cases, the bonds have to be sold. Sometimes, there are other portfolios that can pick up the slack – but only if other investment guidelines are met.

The biggest database in the world, in reality, is MS Excel… Think of all the tasks that are managed with Excel? Think of those hardcoded cells, macros, etc??? Think of all that gap-filling code that simply stuffs the credit rating to AAA. You need to do this because if you don’t, the rating will be null and you will have a null propagation problem. Think of a portfolio management tool like Charles River, or any other investment system and how they manage and how it gets its data?

Now, the crisis is not so abstract because if this all happens, it will affect us all because the portfolios I’m talking about might be yours, they may be a fund that is held by your 401K, your pension, etc. Think of the folks that live on credit cards – and they max them out. The US is no different in that it won’t be able to rollover/re-finance its debt. And worse, asset management companies will have an administrative problem because the software will likely not be able to cope with the new reality.

As for the Y2K crisis . . . that will be a walk in the park compared to what we are facing here.

There is an ancient Chinese curse: may you live in interesting times. These are VERY interesting times. It will be interesting to see how firms and more specifically, their technology teams deal with the crisis and the aftermath. Maybe in between Words with Friends and Angry Birds, they will think about and confront the problem with a solution.

First Time in our Nation’s History — S&P Downgrades our AAA Credit Rating!

August 5, 2011
11 Comments

As if yesterday’s stock market drop of 500+ points attributing to the worse week on Wall Street since 2008 was not enough bad news — there’s more bad news . . . Reuters news service is reporting that the United States has lost its AAA credit rating from S&P. For the first time in our nation’s history, S&P has downgraded the US credit rating to AA+.

In a statement from S&P, “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” S&P goes on to say that there may be another credit downgrade in 15-18 months.

Is this the outcome the Washington politicians were looking for in their childish debit-ceiling gridlock last week? How can our elected officials possibly think that the bitter political battles were worth this price to the American people! I don’t know how they look themselves in the mirror!

I’m sad for all of us and thoroughly disgusted by many of our nation’s leaders.

TESD Responds Officially to Absence of Conestoga HS on Newsweek’s Best High School List

August 4, 2011
Comments

The latest edition of the T/E News dated August 4 contains the following article explaining the absence of Conestoga High School on Newsweek’s best of the best high school list. Contained in the article is a link to the annual publication, Conestoga Profile, which provide up-to-date statistical information on the high school students.

The school calendar is included in the T/E News and I noted that grades 1-12 will start August 31 which is the week before Labor Day. I thought that school didn’t usually start until the week after Labor Day — just curious, when did that date change? Did the District change the calendar to accomodate possible snow days?

Newsweek Magazine’s List of Best High Schools

For the T/E community members who follow Newsweek magazine’s annual America’s Best High Schools story, you are aware that Conestoga High School (CHS) has been included in the list for the past several years, yet was absent from the list this year. Since the criteria Newsweek uses to determine rankings did not significantly change, we inquired about our status. We learned that Newsweek changed the way in which they collect data about high schools. Newsweek responded that they sent an email earlier in the year to all secondary schools requesting information. According to Newsweek, the email was sent to a CHS counselor. The counselor, however, reported that the email was not received. We subsequently sent our data to Newsweek, and were informed by the Newsweek staff that CHS would have ranked competitively based upon our students’ performance and Newsweek’s calculations.

The T/E School District publishes an annual publication called the Conestoga Profile that spotlights the outstanding achievements of CHS students. The Conestoga Profile provides an overview of the school’s strong educational program and statistical information about our students’ academic performance.

Tredyffrin Township Needs an Economic ‘Call for Action’ From its Elected Officials

August 2, 2011
5 Comments

Nearly 6 months ago on February 2, 2011, I wrote a post called, ‘Another Store Closing in Tredyffrin . . . A Suggestion for a Business Task Force’. The post detailed another store closing its doors; at the time, it was Tuesday Morning. This post was written immediately following the supervisor interviews for the appointment of an interim supervisor (to fill vacated Warren Kampf’s seat). One of the reasons I wrote the post was that I was struck by the fact that in the interview process, all the supervisor candidates listed economic development as one of the most important issues facing the township. Here is an excerpt from the February 3, 2011 post on Community Matters:

In light of the many empty storefronts in the township, the supervisors listed attracting new businesses at the top of the challenge list. I agree that encouraging new business growth is essential but equally important, is how can we support the businesses that we have?

I wonder if a township business task force would help . . . a volunteer group of local retired executives, small business owners, and corporate representatives. The group would meet monthly with a mission to spearhead ways to improve existing relationships and provide assistance and a resource for township businesses. This important support group for the business community could provide regular updates and suggestions to the Board of Supervisors. Just an idea . . .

Subsequent to this post, I had further discussions with several of the township supervisors on the creation of a task force to help our small businesses and to encourage new corporate business development in the township. At the April 4, 2011 Board of Supervisors meeting, supervisor Phil Donahue made a motion for an ‘Economic Development Committee’, which would include himself and supervisors Michelle Kichline and Mike Heaberg. The motion was seconded by supervisor Paul Olson and passed unanimously. Here are the relevant township minutes from the supervisors meeting which detailed the committee:

Mr. Donahue made a motion to form an Economic Development Committee, to pull together information, gather facts, and begin a dialog putting our best foot forward and creating the right environment for Tredyffrin. Mr. Olson seconded the motion.

Ms. Kichline said she, Mr. Donahue and Mr. Heaberg would recruit members of the business community and surrounding regions to serve on the committee, which would advise the entire Board on the role and scope for where we want to go with large and small businesses. Mr. Heaberg said we are looking for creative strategic thinkers in the community.

Resident Carlotta Johnston-Pugh said she didn’t see a lot of diversity in the community and thought this would bring more companies to the Township as well as residents. Mr. Donahue said the first step will be having an opportunity to discuss ideas like that with residents. At the end of discussion, motion passed.

It has been 4 months since the supervisors passed the motion to create the Economic Development Committee. I attend all the supervisors meetings and in checking meeting minutes, I could find no further reference to this committee. Understanding that there may be ‘behind the scenes’ movement on the Economic Development Committee my supervisors, I would still ask what is the status of the committee? Besides supervisors Donohue, Kichline and Heaberg, who are the members of the committee? How often do they meet and what is their mission?

In my early discussions with supervisors, I had suggested that the committee needed to include a balance of small business owners, corporate representatives and interested members of the community. As a small business owner and former member of the Paoli Business & Professional Association Board of Directors, like many other residents, I have a stake in the development and encouragement of our business community. As is the case in many parts of this country, we have seen little improvement in our economic climate and our community needs a grassroots effort to help our businesses succeed and to encourage new growth and development.

I was prompted to write today’s post by an article in the Philadelphia Business Journal, www.bizjournals.com . Newtown Borough in Bucks County is looking at various ways to help their struggling businesses and will hold a roundtable discussion to brainstorm ideas. Council members in Newtown are optimistic that the roundtable will open up communication between the residents, business owners and elected officials. I was optimistic that Tredyffrin’s Economic Development Committee would provide a similar type of forum for our community that would include residents, corporate representatives and small business owners in the discussion.

It is so disheartening to hear of more and more businesses failing – leaving empty office buildings and storefronts in the wake. In addition to an update on the Economic Development Committee, I would also like a status report on the Paoli Transportation Center. A few weeks ago, I wrote of the train station and was given the impression from our State Rep Warren Kampf, Willistown, and Tredyffrin township supervisors that the transportation center remains a priority. If the project is a priority, I believe that the community should expect an update.

Economic development in Tredyffrin Township needs to be more than political campaign promises . . . the decline of our business community is a serious issue and we need help to stabilize and save our community. Should we hold our elected officials accountable? Or, . . . do you think that the severity of the economic situation is beyond the scope of township supervisors? Can local officials make a difference with our local economic climate? My answer to the last question — is that they need to try.

With last week’s unexpected closing of Jake’s Frozen Custard in Paoli after only 10 months, I was again reminded of the fragileness of our economic environment. Our elected officials – local and state – need to help save our existing small businesses and encourage development and growth of new business in the township. These are not passing problems that somehow time will magically erase. Previously, I volunteered to serve on the Economic Development Committee and I am confident I could get many more to help – we just need direction.

The next Board of Supervisors meeting is on Monday, August 15. I am sending a copy of this post to our township supervisors and State Representative requesting that the community receive an update on the Paoli Transportation Center project and on the township’s Economic Development Committee. I am asking for an economic ‘call for action’ from our elected officials.

Community Matters © 2025 Frontier Theme