Fairly positive, hopeful news. Good!

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There are many people still going to work (not doing much, but still going in.)Many have not been officially terminated by Lehman Brothers. Barclay's has been acquiring some of the divisions or "people" as chiefahill stated. Rumor is that some of the Lehman employees should be receiving a notice of termination within the next week or two with a temporary job offer from Barclay's. I'm keeping my fingers crossed for them that the offer becomes a permanent position.

I had a pretty long conversation with a higher up at Barclay's on Friday afternoon. We discussed the market and the chaos that ensued last week. So I asked him point blank what their intentions were with the acquistion of Lehman. Barclay's didn't acquire any of the bad real estate from Lehman, they acquired people as he put it. From my understanding they are going to keep a lot of the Lehman jobs as it increases their presence here, something that they were looking to do for a while and the opportunity presented itself. I'm sure there will be layoffs but maybe not as severe as we all are expecting.

Take it for what you will.

Meltdown Ripples Across Hudson

The New York Times
By ANTOINETTE MARTIN
Published: September 19, 2008

JERSEY CITY


FALLOUT About 1,700 people work ? or worked ? at Lehman offices at 70 Hudson Street in Jersey City. Mayor Jerramiah T. Healy said some might stay if Barclays buys part of Lehman.

LAST Monday, when the financial tornado on Wall Street first hopped across the river to roil the economy here, Mayor Jerramiah T. Healy sounded a bit like someone hit by flying debris ? stunned, and still patting himself down to check for missing parts or grievous wounds.

?It?s scary,? he said. ?And it?s going to be challenging.? Lehman Brothers Holdings Inc. had filed for bankruptcy and Merrill Lynch had agreed to a takeover, and for this city on the Hudson River known as ?Wall Street West,? that could mean, according to the mayor?s quick calculation, a loss of about 2,000 jobs at just two offices located within a couple of blocks of each other.

The mayor instantly predicted that the damage to his city, tied more than any other in New Jersey to Wall Street, by virtue of proximity and PATH train, was not over.

In the next instant, however, he began pointing to why he believed that the city?s real estate markets, both commercial and residential, would survive and even thrive. ?The good news is we still have all our greatest assets ? the biggest collection of very reasonably priced A-1 office space, located right next to the cultural and commercial financial center of the world, abundant and varied options on types of housing; four PATH stops, four ferry stops and light rail.?

Over the last week, even as disorientation seemed to become daily reality in the financial world, various major players in Jersey City real estate, like brokers, developers, and analysts, said that they could find some strong reasons to agree, at least cautiously, with the mayor?s optimism.

?No matter what happens,? said Joe Panepinto Jr., a locally based developer, ?Jersey City is going to be saved by the cost differential.? The economic challenges will make that even more imperative. ?If you?re a big company, and things are hurting, the first thing you do is look at cutting labor costs,? said Mr. Panepinto, who is a principal with his father in Panepinto Properties. That will hurt Jersey City, he said. But the next thing an executive considers to save money is cutting real estate costs, and that, he predicted, ?will lessen the effect of job loss.?

Mr. Panepinto, along with other developers and the financial-services firm Cushman & Wakefield, said that prime office space in Jersey City often costs less than half of what comparable space in Manhattan does. Ken McCarthy, Cushman?s director of research, said that the average cost of first-class office space on Jersey City?s waterfront is $33.13 per square foot , while in Manhattan, it is $84.18 per square foot. For residential real estate, the difference is roughly the same.

Some market experts guessed that the cost differential would narrow in the future, with Manhattan prices coming down more than New Jersey waterfront prices do, while others said that history suggests it always remains around 50 percent ? no matter what calamities and changes occur.

?I really think Jersey City, and Hoboken too, are in a really strong position,? said W. Joshua Levering, a senior vice president of NAI James E. Hanson, a real estate services and property-management company, ?and frankly, I think what is going on right now just enhances Jersey City as an incredible cost-saving alternative.?

Of course, all those people trying to assess the situation professed wariness concerning what else might occur in coming weeks and months. For example, by Thursday, some of them were keeping a close eye on rumblings about possible major bank mergers and noting a little nervously that speculation had begun that Goldman Sachs could soon be the lone independent investment bank remaining in the country.

?Goldman Sachs is huge for us,? said Mayor Healy. ?Really huge. They?ve got about 2,000 people over there,? he said, referring to the Goldman Sachs tower, the tallest building in the state, within blocks of Lehman?s and Merrill Lynch?s Jersey City offices.

As the week neared a close, the overall picture had brightened a bit, he said. Some of the 1,700 Jersey City jobs at Lehman might be saved under a deal with Barclays to buy parts of Lehman?s operations; it appeared more jobs would be saved in the Merrill takeover, and 200 jobs at A.I.G., the insurance giant, were evidently saved by the federal bailout of that company.

The local residential real estate picture was also murky, with some bright spots, at the end of a chaotic few weeks.

The city is in the midst of a huge makeover, as housing development has moved west from the waterfront over the past five years, and many extremely large projects are opening and expanding.

At Trump Plaza Jersey City, a 55-story condominium tower, finishing touches are just now being put on an amenity floor with a lavish spa featuring a rain-forest simulator, a fitness center and an indoor golf room. Questions are percolating about how well the building will sell in light of the loss of some of the highest-paying local jobs, contractions on Wall Street, and the mortgage credit crunch.

So far, said Dean Geibel of Metro Homes, the builder and partner with Trump Enterprises on the project, about 200 of the 440 units have sold ? with only ?a handful? of those who signed contracts unwilling or unable to close.

Mr. Geibel said that sales had slowed in recent months, but that one or two contracts a week were still being signed for condos priced at $600,000 and up. A 17-year-veteran of Wall Street before he became a developer, he said he did not see Jersey City losing its luster as a ?high-quality, high-amenity, lower-cost? alternative to Manhattan ? and, he noted, between a third and a half of buyers at the building so far are ?international,? and using their condos as pieds-?-terre.

The Beacon, another huge residential project, is a conversion of the former Jersey City Medical Center that will eventually have about 1,200 units. Its developer reported that buyer interest had actually reignited in the past two weeks, following the government takeover of mortgage lenders Fannie Mae and Freddie Mac.

?Things had basically fallen off a cliff over the last eight or nine months,? said the developer, George Filopoulos, of Manhattan-based MetroVest. He added that 215 of 300 completed units had sold.

Now, with the stabilization of the two big mortgage companies, MetroVest is ?promoting the heck out of? what Mr. Filopoulos called the deals that can be had at the Beacon, and getting an enthusiastic response.

==============================
Also from the Trenton Times:

Jersey City sits in eye of storm
Lehman, Merrill sales could erase jobs there

Sunday, September 21, 2008
BY IAN T. SHEARN
Newhouse News Service

When the going gets tough, America turns to metaphor.

The financial crisis on Wall Street has been called, everything from a meltdown to an earthquake to widespread toxic pollution.

Some prefer the hurricane metaphor. And, just how bad the collateral damage will be in New Jersey varies among the prognostications of business executives here, dependent on their faith in government, their perspective of time and, of course, what they do for a living.

"Monday, it was a Category 4 or 5," Jersey City Mayor Jeremiah Healey said Friday after the federal government stepped in and promised a massive program to save a financial system paralyzed by bad debt. "Now, it's down to a 1 or a tropical storm."

Both Lehman Brothers and Merrill Lynch have more than 3,000 employees along Jersey City's Gold Coast, mostly of the back-office nature, and Healey was wondering if they were all about to disappear.

"It was scary," he said. "We didn't know if they levees were going to hold."

Now, he's hopeful Barclays Bank, which bought most of Lehman's assets, and Bank of America, which is acquiring Merrill Lynch, will keep many of those jobs in Jersey City -- though, he said, he has received no direct assurance from either bank.

James Hughes, dean of Rutgers University's Bloustein School, thinks it's still "the worst hurricane since the Great Depression," and doesn't share Healey's optimism.

"I'm sure the Bank of America and Barclays have IT sections," he said, which would leave the two Jersey City operations in serious jeopardy. Merrill Lynch's corporate campus in Hopewell Township stands to fare much better, Hughes said, because the wealth-management division housed there is something Bank of America doesn't have.

Governor Jon Corzine, meanwhile, on Friday called for an emergency economic forum to address the ongoing uncertainty in the national economy and its effect on New Jersey.

"That is highly threatening to folks, not only those that work in New Jersey but those that work in New York and live in New Jersey," Corzine said.

The state labor department said last week unemployment in New Jersey spiked to a five-year high of 5.9 percent in August. In all of New Jersey, almost 270,000 people work in the financial sector, according to the Department of Labor statistics.

Jersey City, which attracted a number of major financial companies after Sept. 11, 2001, has been one of the few economic success stories in the Garden State in recent years, and has thus far managed to ride out the downturn relatively unscathed.

One point of agreement Healey and Hughes share is the financial institutions in New York will be forced to reduce operation expenses, which means Jersey City -- and the Meadowlands -- may become more attractive with rents half of what they are in Manhattan.

In other words, whatever hit Jersey City may be about to take, could be offset with new business.

"We will continue to market our city," Healey said.

Frank Gunsberg, an executive vice president for GVA Williams, a real estate services firm, prefers the long view.

"It's still to be played out," he said. "We're in uncharted waters. The good news is this is a correction. You will see a revitalization. We are a resilient society."

The financial industries grew much faster than the overall economy from 1998 to 2006, Hughes said.

"It was essentially a wild economic party with all the new imaginative borrowing and lending schemes," he said. "But wild parties are followed by prolonged economic hangovers. We're just starting the hangover phase."

Jersey City sits in eye of storm
Lehman, Merrill sales could erase jobs there

Sunday, September 21, 2008
BY IAN T. SHEARN
Newhouse News Service

When the going gets tough, America turns to metaphor.

The financial crisis on Wall Street has been called, everything from a meltdown to an earthquake to widespread toxic pollution.

Some prefer the hurricane metaphor. And, just how bad the collateral damage will be in New Jersey varies among the prognostications of business executives here, dependent on their faith in government, their perspective of time and, of course, what they do for a living.

"Monday, it was a Category 4 or 5," Jersey City Mayor Jeremiah Healey said Friday after the federal government stepped in and promised a massive program to save a financial system paralyzed by bad debt. "Now, it's down to a 1 or a tropical storm."

Both Lehman Brothers and Merrill Lynch have more than 3,000 employees along Jersey City's Gold Coast, mostly of the back-office nature, and Healey was wondering if they were all about to disappear.

"It was scary," he said. "We didn't know if they levees were going to hold."

Now, he's hopeful Barclays Bank, which bought most of Lehman's assets, and Bank of America, which is acquiring Merrill Lynch, will keep many of those jobs in Jersey City -- though, he said, he has received no direct assurance from either bank.

James Hughes, dean of Rutgers University's Bloustein School, thinks it's still "the worst hurricane since the Great Depression," and doesn't share Healey's optimism.

"I'm sure the Bank of America and Barclays have IT sections," he said, which would leave the two Jersey City operations in serious jeopardy. Merrill Lynch's corporate campus in Hopewell Township stands to fare much better, Hughes said, because the wealth-management division housed there is something Bank of America doesn't have.

Governor Jon Corzine, meanwhile, on Friday called for an emergency economic forum to address the ongoing uncertainty in the national economy and its effect on New Jersey.

"That is highly threatening to folks, not only those that work in New Jersey but those that work in New York and live in New Jersey," Corzine said.

The state labor department said last week unemployment in New Jersey spiked to a five-year high of 5.9 percent in August. In all of New Jersey, almost 270,000 people work in the financial sector, according to the Department of Labor statistics.

Jersey City, which attracted a number of major financial companies after Sept. 11, 2001, has been one of the few economic success stories in the Garden State in recent years, and has thus far managed to ride out the downturn relatively unscathed.

One point of agreement Healey and Hughes share is the financial institutions in New York will be forced to reduce operation expenses, which means Jersey City -- and the Meadowlands -- may become more attractive with rents half of what they are in Manhattan.

In other words, whatever hit Jersey City may be about to take, could be offset with new business.

"We will continue to market our city," Healey said.

Frank Gunsberg, an executive vice president for GVA Williams, a real estate services firm, prefers the long view.

"It's still to be played out," he said. "We're in uncharted waters. The good news is this is a correction. You will see a revitalization. We are a resilient society."

The financial industries grew much faster than the overall economy from 1998 to 2006, Hughes said.

"It was essentially a wild economic party with all the new imaginative borrowing and lending schemes," he said. "But wild parties are followed by prolonged economic hangovers. We're just starting the hangover phase."

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I was only joking - I like reading your insights

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The press releases seem to say of the Federal Reserve Bank of New York, but I don't think anyone has released a document showing what exactly the terms of the deal are, so I don't think anyone really officially knows.

Is AIG the property of the US taxpayer or the property of the Federal Reserve Bank?

2 very different things,

The Federal Resere is a private bank.

Umm...not many any more ;-p

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I wonder if this Mr. Fuld is related to the Ouija board spirit William Fuld?

If so, it might be funny to get a bunch of Ouija board owners to try asking William Fuld what he thinks about all of this.

September 18, 2008
Op-Ed Columnist
Need a Job? $17,000 an Hour. No Success Required.
By NICHOLAS D. KRISTOF
Are you capable of taking a perfectly good 158-year-old company and turning it into dust? If so, then you may not be earning up to your full potential.

You should be raking it in like Richard Fuld, the longtime chief of Lehman Brothers. He took home nearly half-a-billion dollars in total compensation between 1993 and 2007.

Last year, Mr. Fuld earned about $45 million, according to the calculations of Equilar, an executive pay research company. That amounts to roughly $17,000 an hour to obliterate a firm. If you?re willing to drive a company into the ground for less, apply by calling Lehman Brothers at (212) 526-7000.

Oh, nevermind.

I?m delighted to announce that Mr. Fuld (who continues to lead Lehman since it entered bankruptcy proceedings this week) is the winner of my annual Michael Eisner Award for corporate rapacity and poor corporate governance. The award honors the pioneering achievements in this field of Mr. Eisner, the former Walt Disney chief.

This isn?t a plaque that will simply gather dust in a closet. It?s a shower curtain to commemorate the $6,000 one that the former C.E.O. of Tyco purchased and billed to his shareholders.

So, Mr. Fuld, you?ll be pleased to know that I?ve picked out a lovely green vinyl number for you. Only $14.99! Why, I saved you $5,985!

Perhaps it seems frivolous to be handing out shower curtains to chief executives when we?re caught in a deepening economic crisis. Well, it is.

But one of our broad national problems is rising inequality, and it is exacerbated by corporate executives helping themselves to shareholders? cash. Three decades ago, C.E.O.?s typically earned 30 to 40 times the income of ordinary workers. Last year, C.E.O.?s of large public companies averaged 344 times the average pay of workers.

John McCain seems to think that the problem is that C.E.O.?s are greedy. Well, of course, they are. We?re all greedy. The real failure is one of corporate governance, which provides only the flimsiest oversight to curb the greed of executives like Mr. Fuld.

?Compare the massive destruction of wealth for shareholders to what he gets at the end of the day,? said Lucian Bebchuk, the director of the corporate governance program at Harvard Law School. A central flaw of governance is that boards of directors frequently are ornamental and provide negligible oversight.

As Warren Buffett has said, ?in judging whether corporate America is serious about reforming itself, C.E.O. pay remains the acid test.? It?s a test that corporate America is failing.

These Brobdingnagian paychecks are partly the result of taxpayer subsidies. A study released a few weeks ago by the Institute for Policy Studies in Washington found five major elements in the tax code that encourage overpaying executives. These cost taxpayers more than $20 billion a year.

That?s enough money to deworm every child in the world, cut maternal mortality around the globe by two-thirds and also provide iodized salt to prevent tens of millions of children from suffering mild retardation or worse. Alternatively, it could pay for health care for most uninsured children in America.

Do we truly believe that C.E.O.?s like Mr. Fuld are more deserving of tax dollars than sick children?

Perhaps it?s understandable that C.E.O.?s are paid heroically when they succeed, but why pay prodigious sums when they fail? E. Stanley O?Neal, the former chief of Merrill Lynch, retired last year after driving the firm over a cliff, and he walked away with $161 million.

The problem isn?t precisely paychecks that are huge. Baseball stars, investment bankers and hedge fund managers all earn obscene sums, but honestly ? through arm?s-length transactions. You and I may gasp, but that?s the free market at work.

In contrast, boards pay C.E.O.?s after negotiations that are often more like pillow talk. Relationships are incestuous, and compensation consultants provide only a thin veneer of respectability by finding some ?peer group? of companies so moribund that anybody shines in comparison. The result is what critics call the Lake Wobegon effect, which miraculously leaves all C.E.O.?s above average. Indeed, one study of 1,500 companies found that two-thirds claimed to be outperforming their peer groups.

John Kenneth Galbraith, the great economist, once explained: ?The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself.?

There are widely discussed technical solutions to C.E.O.?s overpaying themselves that we should move toward. We can also learn from Britain and Australia, which offer shareholders more rights than in America, redrawing the balance between shareholders and management and curbing pay in the process.

As for Mr. Fuld, unfortunately, he had no comment for this column. At $17,000 an hour, it probably wasn?t worth his time.

The real lesson here is that this is a truly spectacular time to buy mortgage-backed securities. If I had enough money, I would go find a pool of mortgage-backed securities issued before, say, 2006, and I'd be a vulture and buy as many as I could at 10 cents on the dollar.

A lot of the borrowers will default, but plenty will pay, so plenty of those MBS will do fine.

Of course, these things get divided in tranches and all that, so you'd have to look into that. But, if you get MBS that perform about as well as the underlying mortgage market performs, or better, then that's good enough.

Chances are the very best deals would be in places like the Cleveland or Detroit suburbs.

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You're right. Getting a bit off topic here... I will try to keep it JC focused.

Looks like Lehman's NY employees might catch a break w/ the Barclays bid. We'll see what happens to the JC employees.

Telling Jokes at the End of the World


September 17, 2008
Wall Street Journal Blog
Rob Curran and Geoff Rogow report:

Wall Street equity traders usually thrive on volatility, but the arrival of carnage to their doorstep has distracted and confounded them. The Dow industrials fell 500 points Monday, several companies have blown up this week, and Wednesday hasn?t started any better, with the Dow already down 200 points.

This habitually brusque bunch is even more harried than usual, worrying about their livelihoods and the safety of their funds? accounts in addition to the direction of a crazy market. One prominent form of escape: gallows humor. (Consider it the Milton Berle approach to dealing with problems.)


Asked what floor he was going to in an office complex in Jersey City, N.J., an employee of one major brokerage replied, ?I might as well go up to your floor, and apply for a job. It looks like we?re next.?

A trader of mortgage-backed securities at a hedge fund took a philosophical approach to the crisis. ?They are shutting our desk down by year end,? he said. ?So that?s all she wrote. Now I am drinking on the job.?

Others are frazzled: in response to a request for investment advice in the crisis, one veteran money manager said: ?I won?t answer that. We?re struggling to figure that out ourselves here.?

Oy vey.
Even the diehard speculators in the hedge-fund community are in a state of confusion. The funds have watched two of the prime brokerages that serve them collapse and another get swallowed by a bank in a few months, and some are close to sticking money under a mattress, said Lorenzo Di Mattia, manager of hedge fund Sibilla Global Fund. Some funds are too busy working out where to put their account to even bother with securities or commodities.

?People doubt the brokers, and are busy pulling money out from one place to [put in] the other,? Mr. Di Mattia said. ?There?s fears of [having] no place to put the money. So [there are] no buyers.? Still, he added, ?Those who figured this out have a lot of cash to put at work.?

Many clients have pulled back, and there?s a sense that investors are ?staying in cash,? said Joe Saluzzi, founder of institutional brokerage Themis Trading. Still, traders kept spirits relatively high at his shop.

At Themis, people are waiting for word of ?GMO calls,? Mr. Saluzzi said. ?It?s an expression when a retail broker gets calls from clients, saying ?Get me out.? We?re asking people, ?Are you getting any GMO calls?? It doesn?t have that feel, yet.?

Richard Parker, managing director of institutional trading at the brokerage Stanford Group, summed up the shock waves sent by Lehman Brothers Holdings Inc.?s failure and American International Group Inc.?s fall to its knees.

?Just because I don?t think we have the bad stuff on our books doesn?t mean we aren?t bothered by the whole thing,? Mr. Parker said. ?Our landscape is much smaller.? He said he?s hearing interest in health-care stocks, and even technology stocks, despite a recent hammering.

In times of great uncertainty, the markets themselves become tougher to trade. Strategies that have served investors for months, if not years, had to be thrown out the window this week. The mood is one of exasperation: Stockpile cash if you have it; sell what?s liquid and profitable if you don?t.

Behind the scenes, the run on shares of financial institutions is expected to affect the way they handle trades and extend credit to clients. Already, commodity shop Ospraie Fund has run aground in the volatility of that sector. But Ospraie was far from being the only fund heavily leveraged to the price of oil and other commodities.

If funds are forced to sell assets during times of distress, they?ll take losses, and those losses will soon become evident to their investors.

?I can?t wait to see all the investor letters at the end of the month,? said one trader at a Wall Street bank. ??So, uh, sorry we lost all your money; can you give us some more???

SLyng,

Are you sure you are on the right website? This is jclist you know.

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I have a holiday home, boat, bike and truck all paid for (hypothetically) and my own business. In these hard times I am unable to meet my mortgage payments on my primary home. Can I ask the feds for a loan so I'm not forced to sell -I'm good for it, as I have a lot of assets?

I say let AIG play the game of 'monopoly' and be forced to sell their assets to make-up any short falls in their budgets. I bet the excutives still get their huge-ass bonuses at the end of the year !

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Well perhaps that makes me an idiot.

1st off, they haven't been completely "nationalized" as you seem to claim. Have you read the terms of the "bail out" - if not the cliff notes are in my prior post which you cherry-picked in your response.

Secondly, AIG is not the "property of the US Taxpayer" - they have warrants on 80% of the company. The government has given AIG a bridge loan of $85bn... AIG has over $1 trillion in assets and quite a few profitable business segments that will be sold off to pay back that loan (which happens to be senior to every other piece of AIG debt outstanding.

Which naturally brings us to your last point - You claim that "the pigmen and pension funds...will be spared the pain of their greedy actions". AIG stock was at $70/share a year ago, now it's at $2/share. Any people holding AIG preferred shares of AIG will stop getting dividends and see the value of their holdings fall to pennies on the dollar. I would wager even some bond holders might not come out whole... So who is winning from this transaction? What exactly are the "pigmen" getting?

And i'd be willing to bet that the US Taxpayer will get every penny they put into AIG back (with plenty of interest). It's not a good situation, but if you prefer total collapse of our financial system, i can understand your vehemence(we still may get that but i for one hope we don't).

Shares of Morgan Stanley and Goldman Sachs plunge

AP Wire
By JOE BEL BRUNO ? 54 minutes ago

NEW YORK (AP) ? Shares of Goldman Sachs and Morgan Stanley plunged on Wednesday, a sign that investors fear they can't survive in their present form as the last two major independent investment banks.

Executives of both companies insisted a day earlier, when they were reporting profits for the most recent quarter, that they do have the financial wherewithal to go it alone.

But analysts said the question increasingly is whether continued market turmoil could force them to acquire or be acquired by commercial banks, whose deposit-taking operation would provide a stable source of funding.

Morgan Stanley shares fell as much as 44 percent Wednesday and were off about 25 percent in late afternoon trading. Goldman Sachs shares shed more than 35 points before narrowing their loss to about 14 percent.

Anxious investors also continued to bid up the price of protecting against a default of debt issued by the two investment banks. The spike in credit default swaps has fanned fear gripping Wall Street that the investment banking model is in jeopardy of extinction.

"This may be the most panicky the market has been in since this credit crisis began," said Roy Smith, a professor of finance at New York University's Stern School of Business. "People are running for high ground at any cost. The question is, can they stay solvent longer than the market is irrational."

Smith believes the companies can survive on their own, but remains concerned about the current environment in which they operate. Global banks and brokerages have written down more than $350 billion from wrong-way bets on mortgage investments and other risky securities during the past year.

The upheaval in the U.S. financial system has driven Merrill Lynch & Co. and Bear Stearns Cos. into emergency sales, and Lehman Brothers Holdings Inc. into bankruptcy.

Morgan Stanley had hoped to stem investor panic about its financial health by releasing third-quarter results a day earlier than planned. On Tuesday, the company posted better-than-expected profits, and while Goldman Sachs' profit slumped 70 percent, it did finish the quarter in the black.

Goldman Sachs Chief Financial Officer David Viniar and Morgan Stanley CFO Colm Kelleher both said their firms were able to navigate through the market dislocation, and vowed to remain independent. The CFOs said their firms have enough cash on hand and no need to raise more.

Spokesmen for both investment banks declined to comment Wednesday about the plunge in their shares.

Analysts such as Fox-Pitt Kelton's David Trone have told clients that the sale of Merrill Lynch and collapse of Lehman Brothers might force the remaining investment banks to pursue some kind of transaction to stabilize results.

The steady funding base of deposits held by banks would go a long way in assuage investors concerned about volatility.

There have been numerous reports in the past year that Goldman could buy a retail bank, with Charlotte, N.C.-based Wachovia Corp. mentioned the most. The investment bank has advised Wachovia in the past, and a deal would help the bank keep in step with rival Bank of America Corp. after it agreed to acquire Merrill Lynch.

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Some of them took out home equity lines of credit, so not only did they lose NOTHING, some of them walked away with thousands of dollars for their "troubles."

yeah and Sarah wants to take them off the endangered species list. Whatever.

http://dotearth.blogs.nytimes.com/200 ... ng-may-have-led-it-there/

Mmm Flame, Word word. where's the JC Spoken Word/ Gil Scott Heron "Revolution Will Not Be Televised" boite where I can sip my vodka tonic, don my shades and snap my fingers in agreement and channel my modern day beatnik sensibilities? Perhaps my house.

you know you're in the endtimes
when the sign of the beast
is what's signing the lease
and you be dining on grease
we need minds to increase
thats what rhyming release
pure light pure light

sometimes I almost can't stand it
the havoc of this planet is so graphic when i glance at it
destroyed by the power hungry's crack habit
global corporations hand crafted with black magic
but i guess you have to sleep before you can be awake
and night proceeds the day
so i'm trying to help this fever break
the truth is all that i relate
speaking as a friend to my countrymen the enemy's the state

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PAY NO ATTENTION TO THE MAN BEHIND THE CURTAIN (OR THE SINKING ECONOMY)!!!

LISTEN TO ME NOW: TAX CUTS! GAY MARRIAGE! GUNS! ABORTION! HE'S A MUSLIM! LIPSTICK!

There, you're back on track...

Okay, not trying to be Debbie Downer or anything, but doesn't it seem like a fin de si?cle moment of the United States where we're fed a surfeit of Gossip Girl, Privileged, Laguna Beach, New 90210, The Hills, MTV Sweet Sixteen, the "reality" shows of the rich celebrity families (and other similar programming) juxtaposed with serious economic turmoil that shows no signs of abating, a calamitous war, nation's infrastructure crumbling, unprecedented deficits, global warming/environmental devastation (e.g., the polar bear who swam to Iceland because of lack of ice caps to float on only to be killed). It feels like the Titantic when people were listening to the big band music.

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Only an idiot wouldn't call nationalizing AIG a "bail-out" - Yes AIG is now the property of the US Taxpayers, but the pigmen and pension funds that supported their gross negligence will be spared the pain of their greedy actions.

The average 'MerKan sheeple won't though...

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Couldn't happen to a more deserving bunch of asshats (The LeFraks), RE prices in JC are gonna crop through the floor now (about time)

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While I certainly see your point, however here is the counter-point. The government will be charging AIG Libor+8.5% (right now works out to about 11.5%) on their bridge loan. The loan will be paid off with asset sales, so they're more or less breaking the company apart. Not only that, the shareholders get massively dilluted. The government will have warrants (options) on 80% of the company. So basically any upside will go to taxpayers. Meanwhile, since there is such fear on wall street, the government can issue 3month T-bills at 0.30% interest rate. So really they should do fairly well on the transaction - issue short-term debt at sub 1% yields, and collect interest from AIG at 11.5%.

The Press calls this a "bail-out" but AIG isn't getting a free ride from the Fed. The situation sucks and it boggles the mind how it ever came to this, but it had to be done.

More empty apartments in Newport as foreign Lehman staff are forced to go home if they can't find alternative employment... A lot will skip their rent term agreements and make a run for the airports.

New Jersey's `Wall Street West' Quakes Amid Namesake's Turmoil

By Stacie Servetah and Terrence Dopp

Sept. 17 (Bloomberg) -- Jersey City, where New Jersey bet it could transform warehouse and factory tracts into a ``Wall Street West'' across the Hudson River from Manhattan, was paying off. That is, until its investment bank tenants started collapsing.

Many of the towers that have sprung up in the past decade on Jersey City's waterfront are filled with satellite offices for the largest investment-banking firms. More than 3,000 employees of Lehman Brothers Holdings Inc. and Merrill Lynch & Co. work in New Jersey's second-largest city.

Lehman this week filed for the biggest bankruptcy, while Merrill agreed to a takeover by Bank of America Corp. Those firms joined Bear Stearns Cos. and at least 20 banks and credit unions nationally that couldn't survive this year's credit crunch.

``It's basically a disaster for tri-state real estate,'' said Andy Merin, vice chairman at Cushman & Wakefield in East Rutherford, New Jersey. ``Financial companies drive this region. Clearly of all the markets in New Jersey, Jersey City is the most dependent on New York City and the financial arena.''

Jersey City's Hudson River waterfront has attracted securities firms since the early 1980s, sparking a building boom for office space that now totals 17 million square feet (5.2 million square meters), more than in downtown Atlanta or Pittsburgh, according to the city's economic development agency.

Only four years ago, Jersey City's office vacancy rate was more than 18 percent. It's now about 7 percent, said Seena Stein, principal in real-estate broker Newmark Knight Frank's East Rutherford office.

Lower Taxes, Rent

New Jersey offered tax breaks and lower rent to entice the New York-based companies. While the asking rent along Jersey City's once-industrial waterfront is the highest in the state at $33 a square foot, it's less than half the rate in midtown Manhattan, according to Newmark.

The banks' offices also helped bring higher-income people to the city. Jersey City's median household income jumped 19 percent in 2007 from 2006, while the state average income climbed 4 percent, U.S. Census figures show.

``We are the economic engine that is driving the state,'' Mayor Jerramiah Healy, a Democrat, said in an interview.

Five years ago, the city didn't have one hotel; it has four now, with a 90 percent occupancy rate, and a fifth hotel ribbon- cutting will take place in the next six weeks, the mayor said.

``This is going to be a setback for everybody, including Jersey City,'' Healy said. ``But we still have the location, all the amenities. We will continue to market that.''

`We Are Vulnerable'

GovernorJon Corzine, a first-term Democrat who ran Goldman Sachs Group Inc. from 1994 to 1999, said yesterday he was watching to see if the financial firms cut any New Jersey-based jobs. As much as a third of the state's economy is dependent on Wall Street, he said.

``I'm worried about the state budget and the state economy in the context of the very dramatic restructuring that we're seeing on Wall Street,'' said Corzine, 61. ``We are vulnerable, there is no question about that.''

Merrill has about 1,600 workers in Jersey City. Lehman has 1,500 and American International Group Inc., the New York-based insurer that received an $85 billion U.S. government bailout yesterday to avert collapse, has about 200. The city hasn't been told yet of any plans to close offices or fire workers, said Rosemarie McFadden, deputy mayor for economic development.

``Clearly all of the signals are disconcerting, but it's going to take time to play out,'' McFadden said.

Layoffs, Delayed Expansion

For Jersey City, the likely impact is layoffs and delayed expansion, said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University in New Brunswick, New Jersey. Lost revenue from the banks is a larger issue for the entire state, he said. Merrill, for example, has 6,500 employees at its complex in Hopewell and many state residents commute to work at the firm's Manhattan headquarters.

``We are at risk,'' Hughes said. ``The lives of individual employees that potentially lose their job and the income losses to the state, particularly the bonus payments, play a big part in the state's income tax and revenue.''

Even before this week's news from Lehman and Merrill, Jersey City businesses were feeling the effects of the credit crisis, said Johnny Leung, owner of Komegashi, a Japanese restaurant five blocks away from the cluster of office buildings that includes Goldman, Lehman and Merrill.

$50 Lunch Bills

Groups of Goldman employees who used to spend as much as $500 to $600 at a time in Komegashi have trimmed bills to about $50, ordering the $11 ramen special instead of specialty sushi rolls that cost as much as $20 apiece, Leung said.

Black limousines idling curbside in the financial district, once a common sight in the evening, have become scarce. Leung, 44, said half of his lunchtime crowd consists of finance-sector workers, and deliveries to people working late nights have slowed drastically.

Valerie Vlahakis, 63, owner of Lee Sims Chocolates on Bergen Avenue, a middle-class neighborhood ``up the hill'' from Jersey City's financial district, said her business depends on the health of the city and its residents. The revitalization of the waterfront area has been trickling into other areas, and the demise of the city's financial district could stop that, she said.

``Everyone is holding their breath,'' Vlahakis said.

To contact the reporters on this story: Stacie Servetah in Trenton, New Jersey, at sbabula@bloomberg.com; Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net.

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Downturn strikes at Hudson's heart

Wednesday, September 17, 2008

On Monday, Wall Street tilted.

The Dow Jones industrials dropped 500 points, the worst slide since right after Sept. 11, 2001. It was estimated that around the world shareholders' wealth dropped by about $700 billion.

On the surface, it was all triggered by Lehman Brothers' bankruptcy filing and what was basically a forced sale of Merrill Lynch to Bank of America for $50 billion in stock. The real fear of investors is that it is not over and that the credit crisis will devour other banks and financial institutions. The last banks standing will be able to pick up some bargains, but the impact on the average investor will be painful.

Here is how it could hurt in Jersey City - and other Hudson County municipalities better take heed.

Wall Street is the engine that drives Jersey City. First, developers will not be able to unload those tony housing units because many of the people buying them, and this goes for Hoboken as well, are from the financial world. There will be no big bonuses this year.

The Jersey City Financial District is made up mostly of commercial back offices. If more of those financial firms and banks start to collapse, expect those back offices to fold and for there to be much office space available on this side of the river.

Developers of housing projects who cannot unload condos will probably look to Jersey City to help bail them out. They will line up to rework their tax abatement deals similar to that given by the city to Canco Lofts, the development at the old American Can Company property on Dey Street, which now makes lower in-lieu-of-taxes payments than originally agreed.

As the dominos fall, area shops and small businesses will hurt. There does not seem to be much hope for a bright holiday shopping season if things do not get better quickly.

Is any more proof required to show that there is a serious need to review federal banking and investment deregulation? Remember the deregulation in the Ronald Reagan years that ended many restrictions on savings and loan associations. This led to the biggest financial bailout in history. Today, this country could not find enough taxpayers' money to bail out investment firms and large banks.