Results tagged “financialcrisis”

The NY Times has an interesting article wondering about Henry Paulson's many calls to his former company, Goldman Sachs, while he was Treasury Secretary and overseeing bailouts. Sure, Paulson had sold his shares and obtained ethics waivers, but the Times reports, "During the week of the A.I.G. bailout alone, Mr. Paulson and Mr. Blankfein spoke two dozen times, the calendars show, far more frequently than Mr. Paulson did with other Wall Street executives. On Sept. 17, the day Mr. Paulson secured his waivers, he and Mr. Blankfein spoke five times. Two of the calls occurred before Mr. Paulson’s [ethics] waivers were granted." Lawyer and former executive director of the NY State Commission on Government integrity Peter Bienstock said, "If it can happen on a phone call and can happen without public scrutiny, it destroys the standard because then anything can happen in that fashion and any waiver can happen." Paulson's apparently busy writing a memoir, so he didn't comment.

Remember when the financial crisis waterboarded the American economy to within an inch of its life, and then taxpayers threw all their money at Wall Street to stop the drowning? That's all behind us now, and those of you reading this in the basement of your parents' tent under the bridge can take comfort in knowing that everything's coming up Goldman. Though CEO Lloyd Blankfein recently urged employees not too buy anything flashy in the wake of record profits, everything else at Goldman is back to normal and no lessons have been learned, just like the end of a Seinfeld episode."Our risk appetite continues to grow year on year, quarter on quarter, as our balance sheet and liquidity continue to grow," crows Goldman president Gary Cohn to the Times. What could go wrong?

The latest happy tidings from that fountain of good news named Albany warn that ballooning pension costs may drain local government coffers in the next six years. As reported in today's NY Times, an analysis from the state comptroller's office forecasts that state pension costs will triple to $8 billion by 2015, and the only solution is—you guessed it—there isn't one! Upset by that prospect, NY State Association of Counties Director Stephen J. Acquario tells the Times: "It’s alarming, eye-popping and unthinkable...Where is this money going to come from?" In keeping with local custom, no one in Albany can agree on an answer. Governor Paterson wants to limit pensions for new workers, while Comptroller Thomas DiNapoli thinks instead that counties should borrow money from the state to cover the costs. Others believe a tax increase will have to be in the offing, but of course, the legislature is a bit indisposed at the moment. A strong economic recovery could help matters, but what's the bottom line here? Cut benefits or bottom out, says Zvi Bodie at the Boston University School of Management: "Going forward, we’re going to have to promise less."

In yet another look at how the financial downturn is changing job prospects, the NY Times reports that suddenly MBA candidates are thinking outside of the Wall Street finance firm box when it comes to post-grad careers. One Wharton student was considering rabbinical school while an NYU Stern student started a show company, "For me, the Wall Street crisis was a blessing in disguise." Harvard Business school said its job postings were down 30%, with a 40% drop from financial firms, plus " 78% of Harvard’s second-year M.B.A. students had job offers, down from 90 percent at this time last year." Another Wharton student is now looking at a job at the State Department, "A lot of my peers, we’re exploring things that we used to not even think of as an option. A finance major who was minoring in music was suddenly looking into opening a jazz club. All of a sudden, I saw that a lot of Wharton people were interesting."

Let's hope Governor Paterson isn't as whimsical with our state budget as he is with his own. Less than twenty-four hours after being presented with the idea to take a pay cut while at a town hall meeting in Niagara Falls, the governor announced that he will in fact give up ten percent of his salary. While in Buffalo today, he said, “I will symbolically make the gesture for the state. I will take that sacrifice.” But while the governor might be desperate to get in the good graces of state voters, don't expect to him to do it at the expense of his staff members, who recently drew attention to him for the raises he gave them amidst the budget crisis. As for them, Paterson said, “I don’t want anyone else to do anything but do their jobs and make sure that we get rid of this budget deficit."

With the grim state of the city budget a hot topic these days, questions are being raised about how long we can continue to sustain the heavy financial burden that comes from the city's pension system for municipal retirees. Last year the city paid out a total of 9% of its budget ($5.6 billion total) for its pensions and analysts project that percentage is only expected to rise. Former NYPD officer and current State Senator Martin Golden told the Post, "Everything's got to be explored...The bottom line is everything's on the table."

Yesterday was the release of the annual report of cost-cutting suggestions filed by the Independent Budget Office, the nonpartisan, publicly agency, whose report shows both the pros and cons of certain suggested measures. While many of the ideas are bureaucratic pipe dreams, this could be the year that the city takes the IBO up on some of its offerings with the city in a budget crunch resembling nothing from recent years.

This week's New York Magazine has a sprawling piece on the state of small businesses in the five boroughs, and how they're surviving during the financial crisis. While things look pretty glum (even beer sales are down!), the sex toy kingpins at Babeland have seen a rise in sales. Not only that, but their luxury products are flying off the shelves. Are singles and couples alike saving money by staying in and spicing things up? Babeland tells us: "December was our best month in a 15 year history. It’s holding strong, too, as we go into Valentine’s day. What’s interesting, I think, is what isn’t selling. Novelty items have had a drop. These are things like the Ducky vibrator, penis cupcake molds, products that function more as gag gifts than real sex aids. Customers are making purchases that are more of an investment—luxury vibes are made of high quality materials, rechargeable, and customizable, high functioning toys that tend have multiple ways they can be used."

The Times' Metropolitan Diary offers two financial crisis-related anecdotes today. First, there's one about a stockbroker on a subway car ("He seemed sort of agitated and couldn’t seem to stand in one place") who arouses NYC-style sympathy from a fellow passenger. And then there's this short and sweet missive from Carol Weston: "Dear Diary: Overheard on Broadway and 90th, in a conversation between two boys: 'I’m really worried about my bar mitzvah money because it was all put in stock.'" Related: A month ago, a Metropolitan Diary reader sent in their experience with the "You Broke My Glasses Scam."

With Citgroup in serious trouble of being taken over as stock prices continue to plummet, will Citi Field, the Mets' new stadium set to open next year, still have its name by Opening Day? Citigroup's deal with the Mets calls for the financial company to pay the team $20 million annually for the name. The Hoston Astros were still playing in Enron Field when the company went bankrupt and was mired in an enormous scandal. But with other financial giants lining up as potential Citigroup suitors, could Queens become home to Goldman Sachs Stadium? It seemed that New Yorkers' ability to pretend it was called "City Field" softened the blow of the town's first major corporate handle for a hometown team's digs. Maybe now we'll just have to pride in not being San Diego, a city saddled with the Jenny Craig Pavilion.

If losing your job in finance is driving you to drink, what more practical way to go about it than getting a job as a bartender? Enrollment is up at bartending schools in the area--as much as 53% for the month of October at New York Bartending School. The Daily News says that dozens of those enrolling are from now-defunct financial institutions. And one of the teachers from the NYBS sounds like he's encouraging even more to give it a try by noting how organized the ex-traders are. "If you watch how someone sets up before making a drink, you can see how their mind works," he told the paper. But not everyone's sold that education is the best way to become a barkeep. A VP from the NY Restaurant Association told the Boston Globe, "Establishments may be more likely to hire an experienced bartender who is out of work because a restaurant closed than someone fresh out of training."

Today's Times looks at how rapidly Mayor Bloomberg has moved from the controversial and dragged out term limits issue headfirst into proposing potentially unpopular solutions that would deal with the city's dire financial picture. The mayor's moves to take away the property tax rebate, cut city jobs, close low-income dental clinics and suggest new taxes not only make for strange actions from someone in an election year, but also are creating a strained relationship with City Council members who are up for re-election as well. Councilman Vincent Gentile told the paper, “People are just holding on by their fingertips. (They have) a tin ear when it comes to the concerns of everyday New Yorkers.” But Deputy Mayor Edward Skyler defended the moves, “It’s hard to argue that a mayor who is proposing fewer police officers and the elimination of a property tax rebate is making decisions based on politics, rather than the best interest of the city.”

Feeling blue because the recent downturn in the economy has left you with a pink slip from your latest employer? What could be a better way to lift your spirits than heading to New Jersey and cheering on a struggling NBA franchise? The New Jersey Nets are offering to help you do just that with a new program that will give away 300 free tickets for each of five upcoming games to fans who email the team their resume and contact information. The team will then pass along resumes to sponsors and possibly even do some hiring of their own from the pool of job-seeking fans. Nets CEO Brett Yormark says that "it is a chance to relieve stress (and)...a means of escape that people need now more than ever."

JP Morgan Chase announced yesterday that it will take a break from leaving Americans in the cold and hold off on foreclosures for the next ninety days. A JP Morgan executive told the press, "We felt it is our responsibility to provide additional help to homeowners during these challenging times. We will work with families who want to save their homes but are struggling to make their payments." In the interim, the company will attempt to find ways to make payments easier on the $110 billion of problem mortgages. Meanwhile in Washington yesterday, Barney Frank complained that banks thus far are using their portion of the $700 million government bailout for "bonuses, dividends and acquisitions."

Stock markets around the world fell today, hours after the U.S.'s Dow Jones Industrial Average slid 668 points to end yesterday under 8,600. The NY Times says the "Global Markets Dive in a Relentless Selloff"--and a German equity strategist explained, "We are fighting really dire fundamentals. It will require restoring trust and confidence before a sustained rebound will be possible.” USA Today also emphasizes the lack of confidence is what is driving the crisis.

Tonight, the Senate passed the $700 billion bailout package, with 75 votes for and 24 votes against (the bill needed 60 votes to pass; Ted Kennedy, who has been battling cancer, was absent). The NY Times reports the passage left "backers optimistic that the easy approval, coupled with an array of popular additions, would lead to House acceptance by Friday and end the legislative uncertainty that has rocked the markets."

Congressional leaders and the White House agree on a bailout plan that will aid troubled financial firms, but now it must be passed by Congress. The Wall Street Journal reports the bill, which would "effectively nationalize an array of mortgages and securities backed by them -- instruments whose deteriorating value has clogged the nation's financial system," was finished late yesterday, and Speaker of the House Nancy Pelosi says it's "frozen"--as in no more changes.