Where is NYC Losing Jobs?
A: The Crains New York job-loss meter is now at 73,181 since the peak in August 2008 and last updated September 14th, 2009. The last NYC Comptroller Comments report had 2009 & 2010 estimated NYC job losses at 110K & 87K respectively. The job loss forecast by the Mayor is significantly higher at 172K and 129K respectively for 2009-2010. Anyway you cut it, its clear that NYC continues to be in a rising unemployment environment however my hope is that this fed engineered reflation environment helps to constrain future planned job cuts. If anything, maybe we can escape this severe crisis by seeing less jobs lost than originally announced by major firms. Time will tell if there are major consequences to these extreme policy actions. So where are jobs being cut the most?
First, here is the job-loss estimates state in "The Comptroller's Comments on the Adopted Budget for Fiscal Year 2010 and the Financial Plan for FYs 2010-2013" report issued two months ago:
The Crain's Job-Loss Meter sits at 73,181 and is calculated as follows:
CrainsNewYork.com's Job-Loss Meter has been updated to show the number of jobs lost in New York City since the peak of August 2008. Our base figure draws on Eastern Consolidated's seasonally adjusted analysis of New York Department of Labor monthly statistics.So, outside the financial sector where is NYC losing its jobs? Here are the Top 10...
We also update regularly to include layoffs in the city that have been announced to the Department of Labor to satisfy the Workers Adjustment and Retraining Notification Act. According to WARN, all private employers who have 50 or more employees must file notice with the state at least 90 days before they intend to lay off 25 or more employees.
1. MTA NYC Transit - 1,194
2. Caritas Healthcare (Mary Immaculate Hospital) - 1,045
3. MACY's - 1,012
4. Amalgamated Life - 466
5. American Transit - 400
6. Milford Plaza - 354
7. Cipriani Fifth Avenue / Rainbow Room - 261
8. Transit Facility Management Corp. - 248
9. Thacher Proffitt & Wood LLP - 243
10. Finley Fine Jewelry - 226
In the financial sector, I see an additional 4,937 jobs lost reported in this survey since peak employment hit in AUG of 2008. I know in June of last year there was an estimate of 22,000 jobs lost on wall street here in NYC, via Crains:
In the past year, 22,000 New Yorkers who work on Wall Street have lost their jobs, according to a Crain’s estimate. The city's Independent Budget Office forecasts that 33,300 Wall Street jobs—17% of the city's best-paid workforce—will disappear by next year.I am hoping it is not that high and I don't have an exact number on it today. Does anybody else know of an outside source for where wall street job losses are today? With a fed reflation strategy in full force and a dramatic improvement in credit, hopefully the dire expectations for total job losses made last year will prove to be too pessimistic. What would be interesting to know is whether or not securities firms adjusted their planned layoffs from previous announcements!
Announced cutbacks at securities firms: total worldwide followed by estimated number in New York City:
CITIGROUP 15,900; 3,000
BEAR STEARNS 9,200; 7,000
UBS 7,000; 1,000
LEHMAN BROTHERS 6,400; 2,000
MERRILL LYNCH 5,200; 2,000
MORGAN STANLEY 4,400; 2,000
J.P. MORGAN CHASE 4,100; 1,500
BANK OF AMERICA 3,700; 1,000
GOLDMAN SACHS 1,500; 500
WACHOVIA 1,400; 1,000
CREDIT SUISSE 1,300; 750
DEUTSCHE BANK 500; 250
As good as the equity market is performing and the things that is telling us about the near term, mainstreet will continue to FEEL pressured as consumers continue to save and repair balance sheets. Let us not forget that the foundation of many balance sheets was in real estate and homeowners did take a 20-30% haircut, depending on price point, on their largest held asset that was likely further hurt by equity taken out during the credit boom. Lower asset prices + higher principal owed can be a crimp on any lifestyle that one got used to in the old days.
Stocks are a proxy for everything and right now credit has improved dramatically; something you can't deny. What I mean is, even CMBS AAAs, series 1, can't rally much more because the bids are close to par right now - around 93/94. Series 5 CMBS AAAs are around the low 80s. CMBS AAs are tougher to call but they are not a whole lot of the notional outstanding. AAAs are about 80% of the notional outstanding or so and tell you the clearest bigger picture of the perceived health of commercial real estate.
In short, worries about commercial real estate being the next shoe to drop is just not hitting the bids on derived AAA securities. Instead, bids for CMBS AAA have rallied dramatically along with the improvement in credit as a result of extreme fed policies and liquidity measures. If there is a problem ahead of us, we will see it here first and right now it just ain't there! I'll do a separate piece on this later.
Posted by In Debt We Trust
Wed Sep 16th, 2009 11:37 AM
Noah,
2 things.
1) Don't forget law firms. The report hides the real situation b/c many firms have been extending or rolling back their starting dates well into 2010 (for associates). Some of them pay their associates to sit around and do nothing until January. Others pay for their hires to go work at non-profits at substantially reduced salaries (and likewise reduced prospects of advancement once they DO actually enter the firm). I was at a NYC Bar function last week and there was a lot of worried talk.
2) Can you expand on what you mean by CMBS AAA can't rally much higher? Why choose AAA as the standard?
The greatest rises have been in high yield (junk). The uber bears have priced in default rates of 40%. But the real figure is likely to be a lot less - maybe 20%-25% at most, which means HY still has room to grow. This doesn't mean to jump in now as growth is limited in the sector.
Posted by Noah
Wed Sep 16th, 2009 12:50 PM
CMBS AAA represents about 80% of the notional outstanding so its the biggest picture of the perceived health of the CRE marketplace. As credit improved big time, so did bids for CMBS AAA, series 1 which is around 93/94...series 5 closer to low 80s and that is what you see on markit.com data
Posted by Noah
Wed Sep 16th, 2009 05:35 PM
keep in mind the series of the CMBS on markit...every 6 months a new series is issued. Series 1 is probably loans from 2006, the older stuff. I believe they have a definition page somewhere
Posted by In Debt We Trust
Wed Sep 16th, 2009 05:41 PM
Thanks for the insight.
Does this mean CMBX AAA Series 5 will approach the 90's too?
I see that HY is nearing par value too.
http://debtsofanation.blogspot.com/2009/09/
debts-of-spenders-high-yield-makes-new.html
I wish I could go back in time and load up on junky stocks like LVS and MGM! Or better yet, short the ultrashort etfs.
Where do we go from here? Some colleagues believe the dollar is close to bottoming out. That would coincide nicely w/a topping out in the credit markets.
Posted by Noah
Wed Sep 16th, 2009 05:45 PM
no idea...too focused on urbandigs 2.0 and my clients..been soooooo wrong a while back on sustainability of this rally that a few months ago I started to think we will hit S&P 1150...now it looks possible.
Maybe Jim Rogers was right...stocks can fly to record highs but the dollars will be worthless
Posted by In Debt We Trust
Wed Sep 16th, 2009 05:59 PM
1 more question - many of the CDX indices like HVOL and EM are trading above 100 again. Does this mean they are trading at a substantial premium?
Posted by Noah
Wed Sep 16th, 2009 06:20 PM
that i am not sure about..will ask someone. i would think they are trading where they should given moves in credit markets. i think all these moves are building in big premiums, honestly. But its the fed policies driving it and you cant fight it. when fed policies change, I think we will see interesting things happen.
Posted by anonymous
Wed Sep 16th, 2009 07:57 PM
Source for Wall Street job data. Lagged a couple of months
http://www.sifma.org/research/statistics/other/employment-NY-quarterly.pdf
Posted by Noah
Wed Sep 16th, 2009 08:31 PM
thanks anon...
"From the monthly peak of 191,800 in August 2007 to end-June 2009, New York City has lost
27,300 (14.2 percent) securities industry jobs."
more in line with the year ago crains estimate based on company announcements. so we are higher..i hate to say it but this is a good thing, it has to happen, it is happening, things seem to be stabilizing, and Im sure we can much better absorb any future shockwave that may come in the medium term
Posted by fin
Thu Sep 17th, 2009 02:42 PM
Hi, this is a late comment, but wanted to offer an anecdote on wall street jobs.
I work in finance (fixed income buy-side) and watched tons of sell-side people lost their jobs last year. Interestingly, all of them I know already have new job in the same field, mostly at smaller/regional firms. I'm sure the salary levels are much lower than before, and don't know how secure those jobs are, but it is quite something that most people landed somewhere within a few quarters (most Lehman fixed income people just moved to Barclays, too). And lots of hedge funds are doing fairly well this year.