For Lehman, More Cuts and Anxiety

For good measure:

Banks and securities firms have shed more than 101,000 jobs this year, according to Bloomberg News, as the mortgage crisis and struggling economy brought an abrupt end to years of prosperity for the financial industry. Few think the bloodletting will end there.

“We’re not done seeing headcount reductions on Wall Street in this cycle,” said Jeff Harte, a securities industry analyst at Sandler O’Neill.

Steve, How many times does it have to be said, job lose on the "street" has nothing to do with NYC RE. Stop with your propaganda and constant negativity. Just in case you didn't get the message, Manhattan is a unique area and is immune to financial downturns. Stop posting useless information and go back to FI.

I'm sorry, dco. :**(

More people getting fired and losing the means to support their families. Awesome! Thanks stevejhx, none of us have access to the NYT or CNN to see this. What would we do without your insightful posting of links to other articles?

I read this site now and then for a bit of amusement during my busy day. I've never posted on it, but I think I'll contribute something today. I find it incredulous that there are people out there that actually think that the pendulum cannot turn for Manhattan Real Estate. What planet are they on? I wonder if the same commentary was being made all those years ago when Japan had the priciest real estate around and embarked on a downturn that lasted well over a decade. I wonder if a year after the market crash of 87 the pundits were also commenting on the immunity of Manhattan real estate right before it's seven year downturn. The facts are the facts - massive NYC overbuilding, massive lost of the highest compensated jobs, a seeping global economic downturn, massive credit contraction, massive household debt, excited inflation, massive destruction of wealth related to housing price declines, wall street compensation deflation, and maybe even the imminent downgrade of the credit rating of the USA if forced to bail out FRE and FNM amidst a sustained economic downturn. This story sells itself. And yet I read with much amusement... If the trend continues for a declining euro and a virulent dollar - look out below. But realistically, it probably will only be a 15% drop from current levels spread out over another 3 year period. Not amaggeddon, but if you bought a 1 br for 800k, sold it for 680k, netted out transaction costs of lets say 50k (broker, bank fees, etc) - and your net impact is only a loss of $170,000, I guess thats not so bad. Its like those folks that think that a guy who graduated 894th out of 899th and was a legacy admittee to the naval academy, is 72 years old, admits to not being very technologically astute or economically savy with an undisputed reputation for having a volcanic temper is suppose to lead this country out of the mess his party is largely responsible for. McCain like NYC Real Estate is an investment that in 2008 is not a smart money buy.

starfish- When you post an article or speak, the intent is what should be the subject of rebuttal. Intent or motive is usually misinterpreted and more often twisted, to make it appear that the speaker has other intentions. Clearly the intent, was not to laugh at people losing their their jobs. It was to highlight the relation ship between employment, in this case Wall Street, and the affects on Wall Street.

So one of two things happened, either you understood the intent and just decided to twist the fact. Mainly done to show resentment toward the speaker or to further your own agenda. The other reason is much more innocent or naive, in regards to the subject matter.

No of course not. Steve would never post bad news out of his pathological need to be recognized on an anonymous board. These posts emanate from a purely altruistic place.

To be fair, equal derision should be given to the folks who gloated when apartment values went up, and tons of folks were priced out of the market. Lower prices is not a bad thing for everyone...

it is for the owners and for the city and state tax rolls.

But it is for *new* owners... plus, if sales increase because of lower prices, city and state RE tax collections might actually increase. And housing would cost less. Point is, there are 2 sides to it.

nyc10022- "Point is, there are 2 sides to it".

Even I forget that at times. Very well said.

but i thought your mantra was that sales were not increasing. i'm no Univ of Chicago economist, but generally as sales increase so too does price.

totallyanonymous - "'m no Univ of Chicago economist, but generally as sales increase so too does price"

Untrue. In finance you see the largest volume days in a company's history when the stock is about to go bankrupt (WCOM was trading 10,000,000 shares a day right before it went under).

If every apartment holder in NYC felt they were in danger of bankruptcy you would see record listings and record sales but prices would also be at record lows. So I don't think you can say that sales increases guarantee high prices. You might be able to say that high sales indicate an inflection point in the price curve where prices are rising fast (2003-2006) or....

dco, I know people have different reasons for posting links. And I would be fine with it if stevehjx did anything else with his day but post links to articles about people losing their jobs on Wall Street and the economy generally going into the toilet. He does not post those articles to start a robust and new debate on the economics on NYC real estate, he does it because he takes pleasure in bad news and thinks it makes him the smartest person on the board because he has been predicting a bad RE market foreever. He clearly has an axe to grind with investment banks and absolutely loves it when there is bad news to post. Maybe if everyone on the board personally admits to him that fewer high paying jobs in NY can't possibly be good for the economy he will stop. Please ask him on the next break.

starfish- Point taken. I actually need to apologize. The mistake I made, was making an assumption, on Steve's motives. Whether I'm right or wrong, really isn't the point. I actually made the mistake of assumption. Sorry, In the future, if you see a similar post by me, I want you to understand, that my intention is to not to have a laugh at other people's expense. It's clearly to highlight, that the lose of jobs on Wall Street, will have a large affect on NYC RE.

The reason I do this no secret. I'm a bear on NYC RE and have been defending my position. Over the month's, I have heard from all the "bulls", that Manhattan is unique for several reasons. The number one reason is the availability, of high paying job on Wall Street. Now that this once "boasted" reason, is coming back to haunt them, they want to act as if it will have no affect. You can't have it both ways. That's my motive and "perhaps", that's the motive of many others.

I am not laughing, I am not hoping for bad news, I don't take pleasure in the bad news, I don't specifically seek it out so that I can post it on here with the same dumb-witted tag-line... I am "highlighting"...

http://www.fool.com/investing/mutual-funds/2008/08/29/bracing-for-a-double-dip.aspx

OF course, no effect on Manhattan!

http://biz.yahoo.com/ap/080829/economy.html

The foreigners will save us!

http://biz.yahoo.com/ap/080829/economy.html

Buy, buy, buy!

http://biz.yahoo.com/ap/080829/investment_banks_sector_snap.html?.v=1

But don't worry, Manhattan is different!!

http://biz.yahoo.com/ap/080829/investment_banks_sector_snap.html?.v=1

No effect on the economy!

but isn't the argument over?

Manhattan apartments are now selling for less than they did before, some back to pre 2005 prices. Why spend time on the "X is going to cause Y logic", when the Y already happened. The decline is here.

nyc10022- Agreed, however I'll proclaim a "bear" victory when I see Large banners with "Large Reductions" hanging from new construction developments. That will be a clear sign that not even the "NYC RE Marketing Machine" could argue.

If you find that to be a little over the top, it was suppose to be, you get the point.

no, its a fair point.

starfish: "He does not post those articles to start a robust and new debate on the economics on NYC real estate, he does it because he takes pleasure in bad news and thinks it makes him the smartest person on the board because he has been predicting a bad RE market foreever."

Actually I think I'm the one who started all the "robust debate" on NYC real estate - buy vs. rent, effect of Wall Street, foreigners will not save us, etc. It is others who have limited themselves to spewing nonsense, or merely criticizing me for pointing out the obvious: if Wall Street was propping up prices before as was claimed, now what...?

totallyanonymous: "Steve would never post bad news out of his pathological need to be recognized on an anonymous board."

A need to be "recognized" on an "anonymous" board? Spoken by someone whose screen name is totallyanonymous?

stevejhx- "A need to be "recognized" on an "anonymous" board? Spoken by someone whose screen name is totallyanonymous"

That's classic.

I love how when things are going well "investment bankers" are considered ruthless and shrewd geniuses, but when they help create a financial mess that puts our whole economy at risk, then we should feel sorry that they are getting canned.

Please. Go cry me a river.

Steve might go a bit overboard with his bearish commentary and posting, but he does bring links, data and sound arguments to the table. On the other hand, all I see from the RE bulls on this board is a bunch of talk about previous price points - which don't necessarily imply future appreciation. (And if anything represent a simplistic, inflationary view of market price dynamics.)

When people point out that Wall St. is losing jobs and the economy is suffering from inflationary pressures and slowing growth, they aren't "celebrating" the news, but are simply adding a necessary depressant to a NYE RE market that, frankly, has been run up on a combination of speculation in combination with a considerable shift and concentration in world wealth over the past decade (partly to due real estate and commodities). Now the later might be helping to hold the NYC market where it is (15 CPW is a perfect example), but rich people didn't become rich buying the top. Additionally, all of NYC's upside has apparently been priced in and the State's and City's books don't look like they are going to be able to keep NYC as clean as safe as it has been during the last 10 years.

I find it naive that people are asking - just a year or two into the slightest decline - when it is going to be over, but probably weren't so quick to ask the very same question while the NYC market went up. There is a fundamental lack of objectivity and honest analysis in RE markets in general, and this board needs as much grounding real news and discussion as possible to counter what has essentially become a ponzi scheme that has ignored economic fundamentals (especially cash flow) over the past couple of years.

The pendulum has already turned for Manhattan, canny. There was an article the other day in the NY Sun about Manhattan apartments being sold for LESS than their purchase price. That is right, LESS than their purchase price. There was one nasty sale in Tribeca where the seller took a $200,000 loss,and that does not even include the realtor commission and closing costs!

Well said, memito.

Very good debut post, Canny! Well worth reading.