Results tagged “recession”

After the U.S. Department of Labor announced that October's unemployment rate was 10.2%, one thing that was left unsaid was the number of people who have been unemployed so long they've given up looking for work, not to mention the people who are working part-time but would rather be in full-time jobs. According to the NY Times, "In all, more than one out of every six workers — 17.5 percent — were unemployed or underemployed in October. The previous recorded high was 17.1 percent, in December 1982."

The U.S. Department of Labor released the latest unemployment numbers, which have now finally hit the double digits and broken the "10% psychological barrier"—October's unemployment rate is 10.2%, the highest since April 1983, with employers cutting a "deeper-than-expected 190,000 jobs."

Yesterday, the Senate passed a bill extending unemployment benefits 98-0. The House is expected to approve the bill and the President Obama is also expected to sign it. NY State, which has already extended unemployment benefits to 79 weeks for the longterm unemployed, would get another 20 weeks because its unemployment rate is higher than 8.5% (it was 8.9% in September; the NYC rate is 10.3%). The NY State Labor Dept.'s Twitter has been keeping followers apprised of the bill's progress.

If you've been looking for the silver lining in the recession, here it is: Thanks to plummeting industrial real estate values, the Brooklyn Brewery will be able to stay in Brooklyn. Just last summer, the Williamsburg-based lager-makers feared they couldn't afford to stay in their increasingly costly neighborhood when their lease expired, but dwindling property values and receding interest from non-manufacturing interests allowed the Brewery to sign a 15-year lease.

The three major stock indices each fell over 2.5% today, erasing gains the Dow made over the month and leaving the S&P 500 and Nasdaq to fall 2% and 3.6% respectively for the month. The NY Times reports, "The drops were led by stocks in banks and financial firms, which investors abandoned in light of a Commerce Department report that showed consumers were still in distress. Consumer spending in September dropped by the largest amount in nine months, the report said, a dreary data point that met Wall Street expectations but reinforced the slow, halting recovery of the United States economy."

NYU professor Nouriel Roubini, who predicted the housing bubble would collapse and the ensuing financial crisis, believes the recession is over, according to Bloomberg News. But "The economic recovery in advanced nations will still be 'anemic,' Roubini...said via satellite to a conference in Cape Town, South Africa. The economist said he’s “more optimistic” on the outlook for growth in emerging markets." He also "said this month that stock markets have 'gone up too much, too soon, too fast.'"

With college loan debt, three months till graduation, and less than encouraging job prospects, NYU journalism school student Ryan McLendon decided to sign up for food stamps. According to CityRoom, McLendon waited more than seven hours over two days to see a food stamps counselor in Williamsburg, along with young families and other struggling New Yorkers. Since 2002 the number of NYC residents on food stamps has grown by more than 74%. In the end, when McLendon finally met with a food stamps counselor, the computers were down.

As he suggested—and as everyone expected—Governor Paterson's deficit reduction plan was indeed grim: He proposed cutting a total of $5 billion from the budget over two years, $3 billion for this fiscal year and $2 billion from next. Paterson pleaded for the State Legislature to work with him, "During a time of uncommon difficulty, we need to work together for the common good and enact a consensus plan that helps us avoid the severe consequences faced by other states that failed to swiftly address their budget problems. This will mean hard and painful choices, but that is exactly the type of leadership New Yorkers deserve from their public officials."

Bank of America, which had posted a $3.2 billion profit last quarter, announced a $2.2 billion loss—$1 billion due to consumer defaults (CNN Money: "more and more Americans found themselves out of work and unable to keep up with their loan obligations") and paying the government and another $1.2 billion due to shareholder dividends. Departing CEO Ken Lewis said, "Obviously, credit costs remain high, and that is our major financial challenge going forward."

The NYC economy added 130,000 jobs during the Bloomberg administration— but most of them are in low-paid, un-fun professions like "retail, food service, and home health care." Good luck paying off your student loans on $20K per year!

Arthur Cashin, director of floor operations for UBS Financial Services, is basically part of financial history, if only because of his Dow 10,000 baseball cap. Cashin got the hat on March 29, 1999, when it first broke the 10K barrier.

Thanks to news like JP Morgan Chase's big 3rd quarter earnings, the Dow Jones has been up over 100 points and is thisclose to hitting the 10,000 point mark—right now it's at 9,980.79. CNBC points out, "The Dow was last at the 10,000 level on Oct. 3, 2008. It is up more than 52 percent since early March, when the Dow hit a low of 6,547."

As the NY Times noted, the artists are also bringing empty storefronts to life — something that's been happening in other boroughs as well. They explain these particular spaces were "donated or leased by building owners unable to rent or develop them." Starving artists are making out well during this recession with prime real estate! The benefit for developers? "The artist gets a gallery or studio, and the landlord gets a vibrant attraction that may deter crime and draw the next wave of paying tenants."

More than 500 NYC eateries have bitten the dust this year (farewell, Chanterelle; bye-bye Cafe Des Artistes), but, at the NY Food and Wine Festival, experts insist the Le Bernardins of the city can compete during the recession—as long as they keep "stuffy" to a minimum. Now that one-upping each other's Bordeaux lists is so 2007, Travel & Lesiure food writer Anya von Bremzen called for an end to "table bureaucracy" while chef Andrew Carmellini predicted a "move to casual, comfort food without the trappings of a fancy restaurant."

Today, as some economists said the recession was over (unemployment will still hit 10% though!), the Dow Jones crossed the 9,900 mark. According to CNBC, stocks were "fueled by earnings optimism, but then pulled back as investors took some profits." Another fun fact: "This came after the Dow logged its highest close in over a year on Friday, which, coincidentally, was also the two-year anniversary of its record close above 14,000." Jeez, 14,000—that seems so long ago.

This year's annual Halloween Parade will see more tricks than treats, as the NY Post reports that sponsors have been spooked by the recession and are holding back on their usual monetary support.

According to a survey of low-income New Yorkers, Crain's reports that "two-thirds have less than $1,000 in savings to fall back on should even tougher times hit, while one-third have no savings at all."

With national unemployment at 9.8%—and NYC unemployment at 10.3%—many have been wondering if (and hoping that) unemployment benefits will be extended. Now it's reported that the Senate has reached a deal to continue benefits for another 13 weeks.

A survey done by eFinancialCareers.com of 1,074 Wall Street workers said that 83% of people expected some sort of bonus, 36% expected a bigger bonus, and 11% expected that bonus to have increased by half from last year. This of course comes after a year of credit collapse and soaring unemployment, which many say was fanned by ridiculous pay packages.

Former Federal Reserve Chairman Alan Greenspan gave his predictions on the economy and unemployment: He thinks the economy will grow 3% in the third quarter (which is more than he previously thought)—and that unemployment will break through 10% and be there for a while.

With all the talk that the recession has taken its biggest bite out of those in the top income brackets, it hasn't stopped the income gap in Manhattan being the greatest of any county in the country according to new census data. Other head-scratching numbers among the wealthy recorded in last year's census, the number of New Yorkers making over $200K rose by 19,000 and the median income among the top five percent jumped up to $857,000. The income disparities for the state also remain the largest in the nation.

Oh Brooklyn, you frugal little borough you. The Daily News reports that you are now one of the five most penny-pinching communities in America; one Crown Heights resident explaining, "People in Brooklyn know how to survive. We're resilient."

Bloomberg News says that Americans are hoarding $3.5 trillion in cash, "giving money managers increasing confidence that the stock market rally under President Barack Obama will continue through the end of the year." One investor said, "There’s an enormous stockpile of liquidity on the sidelines. The reinvestment of cash could help fuel the market." And there's even smack-talking about some cautious investors, with one sniffing, "Many of the fund managers I talk to that have missed this rally or underplayed this rally are sitting with way too much cash."

Earlier this year, the NY Times asked its union to take 5% pay cuts, to help stanch its financial bleeding (a $74 million 1Q loss). Now the Post reports though the Times had "a surprise profit in the second quarter" (thanks to cost-cutting), it will "launch another round of employee buyouts to further trim costs." Management met with the NY Newspaper Guild, which also suggested "a four-day work week, being more flexible with comp time and reducing paper use in the building."

Federal Reserve Chairmand Ben Bernanke said that the recession is probably over but had a caveat: "From a technical perspective, the recession is very likely over at this point. It's still going to feel like a very weak economy for some time because many people will still find that their job security and their employment status is not what they wish it was." He added in his remarks to the Brookings Institute, "Unfortunately, unemployment will be slow to come down. It will come down but it may take some time. Obviously, that's a very serious concern." Unemployment was 9.7% last month; it's expected to hit 10% by the end of the year.

Broadway is suffering, people! This summer attendance was down 9.3%, compared with the same period a year ago. Even with more expensive tickets, box office grosses were down 2.9%, to just under $290.9 million. So producer Ken Davenport isn't just being a drama queen when he tells Crain's, "We have far fewer butts in seats, and that concerns me. This summer wasn't good, and we're on target for a drop at the end of this season." Davenport produced four shows on Broadway last season but this fall he's only doing one—David Mamet's Oleanna, a two-hander starring Bill Pullman and Julia Stiles. Other producers are hoping celebs like Daniel Craig, Jude Law, and, ugh, Catherine Zeta-Jones can bring the butts back.

This morning, President Barack Obama warned about Wall Street going back to its dangerous ways, "There are some in the financial industry who are misreading this moment. Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them. They do so not just at their own peril, but at our nation's." Though he did say, "We can be confident that the storms of the past two years are beginning to break," Obama added, "Normalcy cannot lead to complacency... I want everybody here to hear my words. We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses. Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall." Here's the full text.

President Barack Obama will be speaking at Federal Hall in lower Manhattan to discuss financial reform today (it is the eve of the one year anniversary of Lehman Brothers' bankruptcy filing), so expect traffic diversions on the roads while some subway station entrances and exits may be temporarily closed and bus routes may be diverted. As for his pitch, Obama wants Congress to pass financial regulatory reform; the Washington Post reports, "He will urge members of the financial community 'to take responsibility, not only to support reforming the regulatory system but also to avoid a return to the practices on Wall Street that led us to the financial crisis,' an administration official said Sunday."

With the year anniversary of Lehman Brothers' collapse—and the subsequent global economic meltdown—approaching (September 15, 2008 is when Lehman filed for bankruptcy), there are plenty of stories from ex-employees. The Post says "a number of former Lehman employees in its fixed-income, emerging markets and other banking areas will be heading to various watering holes and clubs near Lehman's former Midtown headquarters on Sept. 15, for events that promise to be equal parts networking, reminiscing and working to erase that terrible chapter of their careers"—so consider that a warning! A former mortgage securities broker now admits to the NY Times, "I have blood on my hands," but thinks others are more responsible for the downfall ("regulators, senior executives, rival firms and traders who believed that their elaborate computer algorithms insulated them from risk"). And the Daily News notes that Famous Famiglia pizzeria, right near Lehman's headquarters, had to lay off five of 27 employees.

Attorney General Andrew Cuomo is continuing to investigate Bank of America's acquisition of Merrill Lynch—and he's not very happy with BoA's uncooperative, client-lawyer confidentiality stance! His office sent a letter (PDF) saying that they found four instances where the company failed to disclose "material non-public information to shareholders" (such as Merrill's $9 billion 4th quarter losses, $3.6 billion accelerated bonus payments), "The facts of the cascading losses and bonus payments -- and the facts of Bank of America's senior executives' knowledge of these events -- are straightforward. However ... the decision-making process by which Bank of America and its executives decided not to disclose these material facts to Bank of America's shareholders has been hidden from our investigation by Bank of America's repeated invocation of the attorney-client privilege." Additionally, there are questions surrounding the dismissal of BoA's general counsel: "[Timothy] Mayopoulos was let go the day the bank informed its board that Merrill was bleeding money at an unexpected pace," just days after he discussed the "mounting losses at Merrill Lynch, which were not disclosed to shareholders before the deal closed" with BoA's CFO. Yeah, that's not fishy at all!