Hoboken QotD – Wall Street Jobs

4/28/2008:

One reader had a great idea for my “vacation week.”

The Hoboken411 “Question of the Day” (QotD)

Each day around lunch time, a simple question for all of you to answer. So let’s quickly get started with today’s question:

Wall Street Jobs

hoboken-wall-street-job-loss-qotd.jpgYahoo! News reported that Wall Street may lose 36,000 jobs.

How will this affect you, and what impact would it have in Hoboken?

Wall Street may lose 36,000 jobs
Wall Street, the lifeblood of New York City’s economy, could lose over 36,000 jobs because the financial credit crisis has rocked markets and stunned the U.S. economy, estimated James Brown, a labor market analyst with New York state’s labor department.

“History suggests it’s going to be something of that magnitude,” Brown told Reuters, noting Wall Street employment peaked at 200,300 in December 2000, nine months before the September 11, 2001 air attacks.

Losing one in five jobs on Wall Street could have dire consequences for the city’s economy.

Brown’s estimate was almost double the 20,000 job loss over the next two years that the city’s Independent Budget Office forecast in March.

At the end of last month, there were 182,300 people working at banks and brokerages, down more than 5,000 jobs since September. The smaller scope of the layoffs seen so far, however, likely reflects the lag between the end of severance payments and when job hunters file for unemployment benefits, Brown explained.

Unlike much of the nation, layoffs and falling profits on Wall Street pose a bigger risk to New York City’s economy than the housing-led downturn that threatens the nation, according to economists and Mayor Michael Bloomberg.

READ MORE AFTER THE JUMP…

(Wall St., Continued…)

Bankers, brokers and traders earned an average salary and bonus of $340,312 a year in 2006, Brown said.

Wall Street’s total compensation amounts to almost 35 percent of all salaries and wages earned in the city, according to city officials. The taxes that Wall Street’s denizens and their employers pay mean the city’s finances mirror this sector’s roller-coaster cycles.

BUILDING MAY COME TO A STANDSTILL

Real estate and the construction industry, however, remain a vital part of the city’s economy. As the credit crisis roils the lending market, economists are studying how the unwillingness or inability of banks to lend to developers could choke what has been until now an extraordinary construction boom in New York City.

“If you have a period in which employment is declining, they stop building office space, they stop building almost everything,” Brown said. “When we had multi-year slowdowns, in the early 1970s, the late 1980s and early 1990s, you saw dramatic slowdowns in construction.”

On Wednesday, the independent mayor warned that the city will not escape a national recession, but explained that the impact could differ:

“It may well hurt us later but greater when it comes to tax revenues because we’re very dependent on Wall Street.”

The city’s real estate market differs from much of the country because many New Yorkers live in their apartments instead of using them as a second residence and there is less speculative building, Bloomberg told reporters.

“I would think housing prices would come down slower and not as much as elsewhere,” he said. Though foreclosures are “tragic,” there are fewer here than in other areas, he added.

New York City still has too few apartments and this scarcity has kept rents strong though in some parts of the city they have slipped from near-record levels.

Though Manhattan apartments tend to be the most expensive of the five boroughs and fewer were sold in the first quarter, the median price shot up 13.2 percent to a record $945,276, according to the Prudential Douglas Elliman Manhattan Market Overview report.

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170 Comments on "Hoboken QotD – Wall Street Jobs"


matt_72
Member
8 years 4 months ago

hobodave – the more you explain yourself, the more we all realize that you have little or no knowledge in accounting, finance or economics. I could almost swear that you are Progressivejohn’s clone.

Hobo91
Member
8 years 4 months ago

FAP – I totally agree that there many things the FED could have done in the later part of Greenspan’s tenure. It seems perverse that prior to the great housing bubble, the FEDS primary concern was a Japan like deflationary spiral – and housing prices only went up. Today’s headlines only concern inflation and a declining housing market.

Greenspan got lucky and rode an extraordinary wave of expansion. Let him do his speeches and pitch his book. I’m not going to cry over spilled milk.

There’s no telling right now where housing and the econmy will be in a year, but right now my glass is half full. Let’s wait and see.

Bck to the topic of this thread. My bank has seen a couple of big shots get the axe over the CDO debacle. They have been replaced with imports from head office and my bank is continuing to hire.

I’m making numbers up, but if WS headlines say they losing 36,000 jobs – I would put the real number at 20,000.

A lot of people will be hired elsewhere as “cleaners” in other shops. Many people were near the end of their stay and are riding out to pasture ( good for them ).

I have a feeling it will suck for the 2008 graduating class. I came out in 1988 – the psot ’87 crash and it was not fun.

hobodave
Member
hobodave
8 years 4 months ago
🙄 – Why does the idea of a “free market” seem like a religious commandment, handed down to us poor mortals by the gods, when talked about by some posters here? Stand – You’re right in that I don’t have a detailed “insider” knowledge of the securities industry – but I can sure see the results of “how our housing market operates.” [quote comment=”80646″]hobodave your knowlegde of how the securities industry and thus, our housing markt operates is extremely sophomoric… [/quote] On the other hand, my lifelong interest has been more general, in studying how the economic and cultural values of a society impact on its population’s well being. If you get too buried in details, often the expression “you can’t see the forest for the trees,” in quite accurate. Looking at the question of government intervention in the economy, liberals are accused of seeing it as a panacea for all social ills, but those on the conservative side often throw out a phase like “just keep hands off and let the free market resolve it,” as if there is some mystical power at work here, which will take care of any problems that have developed. Well, certain economic approaches may function in some regions, even over a considerable period of time, but as far as I can see, no single policy works forever, and in all circumstances. Hell, why don’t we put fire fighting under that “whatever the market will bear” approach?: Can’t afford to keep up your individual… Read more »
FAP
Member
FAP
8 years 4 months ago

Hobo91 the Fed has taken extraordinary steps to stop the wheels from coming off. One issue is if these steps likely would have been necessary, or at any rate could have been less drastic, if the Fed had done it’s job during the tail end of the Greenspan years.

Where was the Fed talking the market down as the bubble built? Could the Fed, as part of thrift oversight, create disincentives for banks to offer inappropriate mortgages to borrowers?

Was Greenspan taking the punch bowl away or was he pouring more gin in?

Hobo91
Member
8 years 4 months ago

Brady – I’m looking at it from the other side of the fence.

Japan has been in a deflationary spiral for over 25 years as they are still trying get out of the binge 80’s. They’re still in the sh!tter even with a decent maufacturing base and positve trade balance.

I believe that you are correct that the FED was willing to sacrifice a little inflation by lowering the rates so aggresively. The crisis mandated this as the economy could have faced a more serious downturn.

The inflation ills, weak dollar, and the commodity headlines are all that one sees in the press these days. I think it’s BS. The FED has acted proactively to avoid a total meltdown. They seem to setting themselves up for a pause in rates.

Inflation and commodity bugs have been bailing on their positions very aggressively the past 24 hours.

We’ll have to wait and see how it all plays out.

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