Report: State Will Shed 40,000 Jobs, $3b in Tax Revenue
Started by stevejhx
almost 18 years ago
Posts: 12656
Member since: Feb 2008
Discussion about
ALBANY — A new projection shows Wall Street's meltdown could cost New York up to 40,000 private sector jobs and $3 billion in tax revenues over the next two years, two state officials said today. The revised numbers in the snapshot of worst case estimates was done yesterday at the highest levels of government. They are worse than Governor Paterson's estimate just Tuesday that the state would lose... [more]
ALBANY — A new projection shows Wall Street's meltdown could cost New York up to 40,000 private sector jobs and $3 billion in tax revenues over the next two years, two state officials said today.
The revised numbers in the snapshot of worst case estimates was done yesterday at the highest levels of government. They are worse than Governor Paterson's estimate just Tuesday that the state would lose about $1 billion in revenue because of plummeting stock values and the need for federal bailouts of the financial sector.
Wall Street is a major economic force in New York state, generating one-fifth of the state's revenues each year.
The officials, including one senior administration official, spoke to The Associated Press on the condition of anonymity because they weren't authorized to comment on the fiscal analysis.
Both the revenue and job hits would be substantial. The total state budget including federal funds is about $120 billion. New York has about 7.25 million private-sector jobs, after losing 6,500 jobs, or 0.1 of 1%, in July. Employment had already declined in five of the first seven months of the year.
Today, the Assembly Speaker, Sheldon Silver of Manhattan, said a diminished Wall Street poses "monumental" economic challenges for the state, leading to lower wages and lower employment growth. He said that in late August, the state's foundering financial sector had already shed more than 30,000 over the previous 10 months, citing an analysis by the Financial Times.
The new analysis includes the stock market drop, lost revenue from transactions and projected lost income tax revenue from Wall Street jobs.
State officials used the model of fiscal damage to New York after the September 11, 2001, terrorist attacks. Then, Governor Pataki said it was the state's worst financial hit since the Great Depression 70 years earlier.
There are still threats to the future of Wall Street fixtures. Three of its five major investment banks — Bear Stearns, Lehman Brothers, and Merrill Lynch — have either gone out of business or been driven into the arms of other banks. The two remaining — Goldman Sachs Group Inc. and Morgan Stanley — were under siege.
The state officials caution that they are still trying to estimate how many jobs might remain in Manhattan.
"We're in some serious times," Mr. Paterson said Tuesday. "It's going to get worse before it gets better."
A State Division of Budget spokesman, Jeffrey Gordon, wouldn't confirm the numbers. He said officials will look to business tax and payroll tax figures expected in coming weeks to help estimate the damage.
For example, he said more than 27,000 employees have already lost or are at risk of losing their jobs because of decisions by major financial institutions to close or merge. But whether those jobs will be transferred or kept in some form may not be known for weeks.
http://www.nysun.com/new-york/report-state-will-shed-40000-jobs-3b-in-tax/86149/[less]
Response by manhattanfox
almost 18 years ago
Posts: 1275
Member since: Sep 2007
Steve, what do you think about Bloomberg's comments re:next financial crisis from pull out of foreigners not willing to buy US Debt?
I agree with this thread -- it is going to get MUCH uglier before it gets better. I still think BRIC investing is going to be better in the long run -- choking a bit when the market gets halted for two consecutive days... i.e., Russia.
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Response by stevejhx
almost 18 years ago
Posts: 12656
Member since: Feb 2008
"it is going to get MUCH uglier before it gets better."
The fact that we didn't have a rally on Wall Street today is indicative of where we're headed. Some upward movement after the Brits ban short selling - but the Republicans will never do that, their hedge-fund buddies with carried interest won't let them.
"I still think BRIC investing is going to be better in the long run -- choking a bit when the market gets halted for two consecutive days... i.e., Russia."
It is, but the rapid movements burned me big time - first time I've ever been caught like that, doesn't feel good. In the short- to medium-term, BRIC is going nowhere but down. Once China's A shares start rising, that will be the signal: they were the first to fall (by 64%) and the government is taking direct action to prop the markets up.
"Bloomberg's comments re:next financial crisis from pull out of foreigners not willing to buy US Debt?"
I don't know the specific comment, but I posted an article from today's Times elsewhere. It will cause interest rates to rise.
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Response by flmd
almost 18 years ago
Posts: 223
Member since: Feb 2008
oh good lord...just because Stevejhx was the most persistent of many real estate bears on this board does not mean you should seek him out for all manners of investment advice.
I can't wait for the century of China to be firmly debunked...the market is already down 65% and is likely to go down further. Please explain to me why people so firmly believe that a bunch of central planners no anything about economics...
It was only in 1998 that Russia defaulted on all their debt people and now they closed the markets so as to stop a massive crash...please people wake up...can't you see that the BRIC economies are another masterful wall street sales job...not unlike hedge funds and collaterized loan obligations...we will never learn
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Response by stevejhx
almost 18 years ago
Posts: 12656
Member since: Feb 2008
flmd: "the market is already down 65% and is likely to go down further."
Actually, if you read the news the government lowered interest rates, lowered reserve requirements, eliminated the stamp tax, and is injecting cash into banks so that they can buy into the stock market. China's decline is at an end.
"Please explain to me why people so firmly believe that a bunch of central planners no anything about economics..."
Actually, if you read the news, China does not use central planning.
"can't you see that the BRIC economies are another masterful wall street sales job"
10% per annum growth rates, controlled inflation, abundant raw materials, and populations large enough to support a domestic market does not equal a "sales job." It equals fundamentals.
I was burned because I didn't follow my own investment strategy, looking instead at those countries' fundamentals rather than what was actually happening in their markets. Never again.
China was the first market to start falling - in October. They will be the first to start rising. I got rid of most of my China exposure in March, kept a small piece, will add to it once the market is on a clear upward trend, which should be by November, once all these pieces they put together start working.
Brazil reached an all-time high in May, has fallen 40% since then. It has another 10%-15% to go down from the peak - 10,000 points, to 35,000 - and then will start rising again. Right now I'm double-short Latin America because there will be more bad news out of the financial sector in the 3rd quarter. It's been choppy today, it's up somewhat, but still hasn't recovered half of yesterday's loss. There is nothing wrong with its economy, and the next interest rate move is down.
If you think outsourcing to India has stopped, think again: where do you imagine all the Wall Street research jobs are going to go, after the IT moves?
And Russia - some political problems, but vast natural resources. Natural resources are down 50% from their peak in June. They will be back.
What won't ever be back is the Wall Street that we've come to know and love. That's gone forever.
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Response by flmd
almost 18 years ago
Posts: 223
Member since: Feb 2008
the BRIC's countries ability to sustain rapid growth and avoid problems has become "common wisdom" and everyone is buying into it as an article of faith.
The type of evidence you used is similar to the same stuff used by the manhattan real estate bulls. All I need to do is change the details. I don't care that BRIC Countries are growing by 10% per annum, manhattan real estate was growing by 20% per annum.
I never said that China still uses central planning...I said they are central planners and I refuse to believe that a bunch of central planners can wonderfully manage a COMPLICATED economy , that is growing unprecedentaly fast and can transform in a generation from a rural society to a capital intensive industrial wonder using half of the some of the world's resources. I don't buy it.
I am glad you mention China's recent governmental interferences because history and economic logic suggest that their current level of investment will be way too high encouraging huge amounts of waste and of course inflation.
They like a fair number of the other BRIC's depend heavily on exports and we are in the throes of a global slowdown in economic growth and trade .
China and the rest also have to deal with rising energy costs and they are incredibly energy inefficient
Steve you should know better...your arguments smell suspiciously similar to arguments of real estate bulls
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Response by stevejhx
almost 18 years ago
Posts: 12656
Member since: Feb 2008
"The type of evidence you used is similar to the same stuff used by the manhattan real estate bulls."
Absolutely not. The evidence I use is based on the internal dynamics of their economies - what the real-estate bulls were saying is that prices could continue to grow forever despite their relationships to income. It's easy to double $1, it's hard to double $1 million. That's the difference between emerging and developed markets.
BTW I just switched again because of possible new government intervention in the market.
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Response by nyc10022
almost 18 years ago
Posts: 9868
Member since: Aug 2008
The Chinese financial numbers were as fradulent as those on the "birth certificates" of the gymnasts. They are infamous for trying to make themselves sound bigger than they are. Their goal isn't properity, but perceived prosperity and therefore power.
This is just the Chinese deck of cards starting to fall...
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Response by nyc10022
almost 18 years ago
Posts: 9868
Member since: Aug 2008
> BTW I just switched again because of possible new government intervention in the market.
You're doing exactly what loses folks money.
When everyone thinks its bad, buy. When everyone thinks its good again, sell...
If you wait for the good news to buy, you've already lost.
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Response by stevejhx
almost 18 years ago
Posts: 12656
Member since: Feb 2008
"You're doing exactly what loses folks money."
You're partially right. Here's why:
"When everyone thinks its bad, buy. When everyone thinks its good again, sell... If you wait for the good news to buy, you've already lost."
If you can guess exactly what people are doing and what they will be doing, good luck. I don't usually react to what other people do - I react to what I see as fundamentals. Sometimes - as with BRIC - I was wrong to do so: the fundamentals are strong but the markets tanked.
BUT - a major intervention by the government, not yet announced but rumored, is certainly a reason to switch strategies and stay in cash.
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Response by stevejhx
almost 18 years ago
Posts: 12656
Member since: Feb 2008
Furthering on that, I believe we're at an inflection point in the markets - either they'll continue to tank, or they will start to rise. The ONLY thing that can change that is action by the government. That's why today's news was a deal-breaker for me. I don't want to be invested in anything, except a small China position, until I know what the government plans to do.
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Response by mbz
almost 18 years ago
Posts: 238
Member since: Feb 2008
The government will do everything in their power to reflate this thing one more time. Won't impact highly levered assets (e.g. homes) but will be constructive for the stock market. That's my guess. Oil is the wildcard. If oil reacts strongly to reflationary tactics then the Fed/Govt may be handcuffed.
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Response by nyc10022
almost 18 years ago
Posts: 9868
Member since: Aug 2008
"either they'll continue to tank, or they will start to rise. "
"either they'll continue to tank, or they will start to rise. "
"Thanks Steve. That is information we all needed."
You don't seem to get what I mean. This may indicate a bottom, if the market reacts favorably to the government's involvement. If the market doesn't like the government's plan, it will continue to slump, and slump significantly.
We're not talking about an interest rate cut here - we're talking about a long-term structural solution to the problems we're facing. That's why it's no better an idea to invest now than it is around earnings season. There's no way a chart can tell you the likely direction in an environment like this.
Steve, what do you think about Bloomberg's comments re:next financial crisis from pull out of foreigners not willing to buy US Debt?
I agree with this thread -- it is going to get MUCH uglier before it gets better. I still think BRIC investing is going to be better in the long run -- choking a bit when the market gets halted for two consecutive days... i.e., Russia.
"it is going to get MUCH uglier before it gets better."
The fact that we didn't have a rally on Wall Street today is indicative of where we're headed. Some upward movement after the Brits ban short selling - but the Republicans will never do that, their hedge-fund buddies with carried interest won't let them.
"I still think BRIC investing is going to be better in the long run -- choking a bit when the market gets halted for two consecutive days... i.e., Russia."
It is, but the rapid movements burned me big time - first time I've ever been caught like that, doesn't feel good. In the short- to medium-term, BRIC is going nowhere but down. Once China's A shares start rising, that will be the signal: they were the first to fall (by 64%) and the government is taking direct action to prop the markets up.
"Bloomberg's comments re:next financial crisis from pull out of foreigners not willing to buy US Debt?"
I don't know the specific comment, but I posted an article from today's Times elsewhere. It will cause interest rates to rise.
oh good lord...just because Stevejhx was the most persistent of many real estate bears on this board does not mean you should seek him out for all manners of investment advice.
I can't wait for the century of China to be firmly debunked...the market is already down 65% and is likely to go down further. Please explain to me why people so firmly believe that a bunch of central planners no anything about economics...
It was only in 1998 that Russia defaulted on all their debt people and now they closed the markets so as to stop a massive crash...please people wake up...can't you see that the BRIC economies are another masterful wall street sales job...not unlike hedge funds and collaterized loan obligations...we will never learn
flmd: "the market is already down 65% and is likely to go down further."
Actually, if you read the news the government lowered interest rates, lowered reserve requirements, eliminated the stamp tax, and is injecting cash into banks so that they can buy into the stock market. China's decline is at an end.
"Please explain to me why people so firmly believe that a bunch of central planners no anything about economics..."
Actually, if you read the news, China does not use central planning.
"can't you see that the BRIC economies are another masterful wall street sales job"
10% per annum growth rates, controlled inflation, abundant raw materials, and populations large enough to support a domestic market does not equal a "sales job." It equals fundamentals.
I was burned because I didn't follow my own investment strategy, looking instead at those countries' fundamentals rather than what was actually happening in their markets. Never again.
China was the first market to start falling - in October. They will be the first to start rising. I got rid of most of my China exposure in March, kept a small piece, will add to it once the market is on a clear upward trend, which should be by November, once all these pieces they put together start working.
Brazil reached an all-time high in May, has fallen 40% since then. It has another 10%-15% to go down from the peak - 10,000 points, to 35,000 - and then will start rising again. Right now I'm double-short Latin America because there will be more bad news out of the financial sector in the 3rd quarter. It's been choppy today, it's up somewhat, but still hasn't recovered half of yesterday's loss. There is nothing wrong with its economy, and the next interest rate move is down.
If you think outsourcing to India has stopped, think again: where do you imagine all the Wall Street research jobs are going to go, after the IT moves?
And Russia - some political problems, but vast natural resources. Natural resources are down 50% from their peak in June. They will be back.
What won't ever be back is the Wall Street that we've come to know and love. That's gone forever.
the BRIC's countries ability to sustain rapid growth and avoid problems has become "common wisdom" and everyone is buying into it as an article of faith.
The type of evidence you used is similar to the same stuff used by the manhattan real estate bulls. All I need to do is change the details. I don't care that BRIC Countries are growing by 10% per annum, manhattan real estate was growing by 20% per annum.
I never said that China still uses central planning...I said they are central planners and I refuse to believe that a bunch of central planners can wonderfully manage a COMPLICATED economy , that is growing unprecedentaly fast and can transform in a generation from a rural society to a capital intensive industrial wonder using half of the some of the world's resources. I don't buy it.
I am glad you mention China's recent governmental interferences because history and economic logic suggest that their current level of investment will be way too high encouraging huge amounts of waste and of course inflation.
They like a fair number of the other BRIC's depend heavily on exports and we are in the throes of a global slowdown in economic growth and trade .
China and the rest also have to deal with rising energy costs and they are incredibly energy inefficient
Steve you should know better...your arguments smell suspiciously similar to arguments of real estate bulls
"The type of evidence you used is similar to the same stuff used by the manhattan real estate bulls."
Absolutely not. The evidence I use is based on the internal dynamics of their economies - what the real-estate bulls were saying is that prices could continue to grow forever despite their relationships to income. It's easy to double $1, it's hard to double $1 million. That's the difference between emerging and developed markets.
BTW I just switched again because of possible new government intervention in the market.
The Chinese financial numbers were as fradulent as those on the "birth certificates" of the gymnasts. They are infamous for trying to make themselves sound bigger than they are. Their goal isn't properity, but perceived prosperity and therefore power.
This is just the Chinese deck of cards starting to fall...
> BTW I just switched again because of possible new government intervention in the market.
You're doing exactly what loses folks money.
When everyone thinks its bad, buy. When everyone thinks its good again, sell...
If you wait for the good news to buy, you've already lost.
"You're doing exactly what loses folks money."
You're partially right. Here's why:
"When everyone thinks its bad, buy. When everyone thinks its good again, sell... If you wait for the good news to buy, you've already lost."
If you can guess exactly what people are doing and what they will be doing, good luck. I don't usually react to what other people do - I react to what I see as fundamentals. Sometimes - as with BRIC - I was wrong to do so: the fundamentals are strong but the markets tanked.
BUT - a major intervention by the government, not yet announced but rumored, is certainly a reason to switch strategies and stay in cash.
Furthering on that, I believe we're at an inflection point in the markets - either they'll continue to tank, or they will start to rise. The ONLY thing that can change that is action by the government. That's why today's news was a deal-breaker for me. I don't want to be invested in anything, except a small China position, until I know what the government plans to do.
The government will do everything in their power to reflate this thing one more time. Won't impact highly levered assets (e.g. homes) but will be constructive for the stock market. That's my guess. Oil is the wildcard. If oil reacts strongly to reflationary tactics then the Fed/Govt may be handcuffed.
"either they'll continue to tank, or they will start to rise. "
Thanks Steve. That is information we all needed.
;-)
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"either they'll continue to tank, or they will start to rise. "
"Thanks Steve. That is information we all needed."
You don't seem to get what I mean. This may indicate a bottom, if the market reacts favorably to the government's involvement. If the market doesn't like the government's plan, it will continue to slump, and slump significantly.
We're not talking about an interest rate cut here - we're talking about a long-term structural solution to the problems we're facing. That's why it's no better an idea to invest now than it is around earnings season. There's no way a chart can tell you the likely direction in an environment like this.