Manhattan Awash in Office Space; Residential Gridlock in California

Midtown Manhattan and the entire state of California both have problems. Let's first take a look at Manhattan Is Awash in Sublet Office Space.

Few office towers have been left untouched by the flood of sublet space that has recently inundated the New York office market. In Midtown Manhattan — where many of the world’s largest financial companies are headquartered — three out of every four office towers now have sublet space available.

In Midtown Manhattan, for example, 13 percent of prime, modern, well-located offices — which brokers often refer to as Class A space — was available in April, up from 6.5 percent a year earlier, according to Colliers ABR, a commercial real estate services company. And sublets now account for some 40 percent of the space available in Midtown, compared with 30 percent of the much smaller total that was available a year ago, the company said.

Robert Sammons, the managing director in charge of research at Colliers ABR, said that sublet space in trophy office towers along Madison Avenue and Park Avenue has been leasing for as little as one-third of what that space might have commanded in early 2008, at the height of the roaring market.

“A year and a half ago, this space might have leased for $150 per square foot,” Mr. Sammons said, while he has heard of recent sublets in high-end buildings in this office corridor with annual rents of as little as $40 to $50 a r square foot. “This is the most remarkable turnaround in pricing that I’ve ever seen in such a short period of time.”

In April, two financial companies began offering sublet space at 399 Park Avenue, between 53rd and 54th Streets: Citigroup listed the building’s entire third floor, and Legg Mason listed the entire fourth floor. Each floor covers more than 97,000 square feet.

This month, JPMorgan Chase listed a large sublet at 277 Park Avenue, between 47th and 48th Streets. It amounts to more than 400,000 square feet, covering the 13th to the 17th floors, and the 19th to the 25th floors of this 51-story office tower. This is the largest block of space currently being offered for sublet in Midtown Manhattan.

Gridlock in California



California Stats

• There has been no increase in organic house sales in California in 18 months.
• Foreclosure-related resale market at the point of maximum demand.
• Total sales vs. foreclosure supply is heavily imbalanced.

"Over 50% of all sales are foreclosure related and that is snuffing out demand from other sectors."

Even though there is massive housing oversupply in California, the homebuilder industry lobbied for tax credits to build new homes.

California Tax Credits For New Home Purchases

Inquiring minds are investigating the California Tax Credit for New Home Purchase program.

This tax credit is available for qualified buyers who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.

California allocated $100,000,000 for this tax credit. Buyers must apply for credit allocation from us. We will review applications and allocate credit on a first-come, first-served basis. Once $100,000,000 has been allocated, the tax credit will no longer be available. We began issuing certificates of credit allocation on May 1, 2009. Please check this page for updates on the allocated and remaining credits available. (Updated 05/15/09)



California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less. Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased.

California has wasted $65 million of a planned $100 million wastage.

It is beyond reckless to waste money like this in the midst of a fiscal crisis. If you want to know why California is broke and looking to increase taxes, such idiocy is always at the heart of the matter.

Moreover, note that the California credit is on top of the Federal First-Time Home Buyer Tax Credit.

A tax credit of up to $8,000 is available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

There is a massive oversupply of housing and the Federal government and states are attempting to stimulate home building!

The most amazing thing to me in all this is the number of people who blame regulation for the current crisis. The creation of Fannie Mae, Freddie Mac, idiotic programs like these, and the existence of the Fed itself are what regulation brings.

Yet complete fools and many people I otherwise consider brilliant are screaming for more regulation.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

UPDATE: Latest on the PW Flex/Minis

UPDATE: For those specifically looking to discuss the Flex and Mini -- especially Canon interference issues and workarounds -- the best place I have found is on the PW Flickr Group.
__________


For those of you interested the new PW Mini TT1 and Flex TT5 units, some updates on the Canon range issues -- and new features -- inside.
__________


Signal vs. Noise

First things first, there have been reports of interference shortening the working range with the new PWs and some Canon model flashes. It was surprising to me, as I did not experience any first-hand range issues in my testing of the units I had earlier this year. But I shoot Nikon, of course.

The range reports that were coming in were certainly enough to get PW's attention. And when they looked into them they found that the Canon flashes themselves were putting out some RF interference that shortened the range of the FlexTT5 and MiniTT1 units -- and significantly, in some cases.

Upon further investigation, it turns out that not only were some of the Canon units noisy (RF-wise) but there was also a wide range of variability when it came to the magnitude of the RF noise. Some individual units were moderately noisy, and others were more like front-row-at-a-Metallica-concert noisy. (FWIW, PW did not see the problem during development because while they bought a dozen or so Canon flashes for testing, those were relatively new flashes with similar serial numbers.)

"We should have just bought the the flashes off of eBay," joked PW's Jim Clark, noting that the noise range was all over the map depending not only on the flash model, but how long ago it was manufactured.

This radio frequency interference does serve to shorten the range of wireless TTL synching. But since the problems are coming from the flashes themselves, it is now the flashes that get the fix. Rob Galbraith has a very detailed post on his homebrew fix(es) for noisy flashes.



PW themselves have just annouced an "AC7 Shield" which should greatly extend your range if you happen to have a noisy flash. It also doubles as a flash umbrella adapter which gets the flash almost exactly onto the axis of the umbrella shaft. They are sending them out for free to Canon users who are experiencing problems with interference from Canon flashes. Nikon flashes (actually, all other brands of flashes) do not leak RF as do the Canons and thus are not affected.

(NOTE: The photo below actually shows the next-to-last version of the AC7 shield. Minor changes were made to the final version, renderings of which are available on the AC7 announcement.)



Long story short, if your Canon flash is spitting out RF noise, shielding it should bring dramatic improvements in wireless TTL range. PW tests are showing new ranges of several times the distance of unshielded flashes, all other things being equal. Rob put it through its paces, and wrote a very detailed review, here.

For the Nikon shooters, RF noise issues are reportedly nonexistent with the Nikon speedlights. And all seem to get along well with the upcoming Nikon PW models, which are due out soon and available for preorder.


It's a Platform, Not a Remote

If you are using the new Minis and/or Flexes, you definitely want to make sure to use your utility program and upgrade your firmware pretty regularly. They aren't just fixing bugs -- they are improving the feature set and providing new capabilities. (You can always get the latest firmware info at PocketWizard.)

You have to remember that these things are basically black-box Trojan Horses that allow PW to hack (in a good way) into all sorts of features and abilities of the various flash platforms.

Example: One of the more interesting new features is a little timing hack that shortens the length of the pulses that fire in FP mode.

This reduces the amount of energy used by the flash in FP mode, thus giving Flex/Mini users shorter recycle times and longer battery life. FP photogs who are used to waiting for the recharge at high shutter speeds (thus, more wasted flash energy) just got a little bit of their life back.

This is not small potatoes, either. Efficiency gains are reportedly as high as 70%, and this also translates to higher output in FP mode on the various pulsed shutter speed settings. Anyone who has ever pushed FP flash to its limits (not hard to do) will behappy to hear that some camera/flash combos are cranking out up to two more stops of light in that neighborhood. (More details here.)

Also, due to the wide range of max sync speeds and shutter delays of various models, some flashes are better suited to shift from HyperSync into FP sync at different shutter speeds. And PW has given control of that crossover point to the user. You can now choose at what point the remotes will toggle between HyperSync (increased max sync speed) and FP (hi-speed pulsed) sync. If you are hanging out in the grey area on your model, you might choose a different point to make the jump than staying with the previous 1/640th default.

It important to note that anything I write here may well be out of date and eclipsed by the next firmware update. We will not be hitting every update but may set up some kind of an archive table for info or something like that. Especially with respect to the different microsecond delay settings for various camera and flash models for the HyperSync settings.

Shortly after the Nikon-specific PWs are out, I'll put out a call for numbers and we'll set up a comprehensive table/matrix of settings. For instance, someone with a D3 and Profotos will have a totally different ideal sync offset than someone with a 5DII and a set of AlienBees.

This is important information, because it buys you the very best sync speed possible with your camera/flash combo. And higher sync speeds effectively mean greater effective flash range. We'll give the readers a little time to experiment, then crowdsource the info.


Of Mice and Men

Last but not least, remember "Newton," the mouse who invaded Jim Clark's house last winter? He was thusly named because he yielded to the laws of Newtonian physics in the process of being spectacularly captured.

Well, Newton is once again free, looking for another house to invade for next winter.

Freeing him wasn't easy - Newton knew a good gig when he saw it. But he was finally coaxed out of his comfy "jail" and headed immediately for the trees. Yep, he went for the high ground, running right up the side of a tree fast enough to impress Jim, who just might have to engineer Mousetrap v2.0 next winter.

Consumer Confidence Soars; How Much Is Unwarranted Hope?

Sentiment that the bottom is in is rapidly picking up steam. Please consider Consumer Confidence Jumps by Most in Six Years.

Confidence among U.S. consumers jumped in May by the most in six years, fueling speculation the economy will recover later this year. The Conference Board’s sentiment index surged to 54.9, higher than forecast, according to figures from the New York- based research group today.

“Pent-up demand is increasing each passing day as reflected in these confidence numbers,” said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts. “But there is a funny dynamic going on as people are waiting. The turn will come when there is a sense that we have passed the bottom,” which Behravesh said may happen as early as August.

My Comment: When the economy is losing 500,000 jobs a month and housing is saturated, outside of bargain hunting, demand is shrinking. Indeed, some consumers are looking for bargains on autos, and rental properties, but that demand will subtract form demand in 2010. This is all part of the healing process, but without jobs (and I still see no recovery in jobs), this round of premature bargain hunting will eventually give way.

The 28-point jump in confidence over April and May is the biggest two-month rally since records began in 1967. The measure reached its lowest point ever in February, with a reading of 25.3.

We’re certainly moving in the right direction,” said James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. “We expect to have positive economic growth in the third quarter. The job declines will fade.”

My Comment: Actually we are not moving in the right direction. We are moving in the wrong direction at a decreasing rate.

The confidence report showed optimism over the next six months led the jump. The Conference Board’s expectations measure rose to 72.3, the highest level since December 2007. The gauge of present conditions increased to 28.9 from 25.5.

“As far as consumers are concerned, the worst is now behind us,” Lynn Franco, director of the Conference Board’s consumer research center, said in a statement.

Macy’s, the second-biggest U.S. department store, and Chrysler are trying to revive sales. Chrysler, trying to restructure under bankruptcy, is offering incentives of as much as $6,000.

Some Consumers Excited About Bargains

For consumers with cash, with a job, and no fears of losing a job, saving $6,000 on a new car is quite a chunk of change. But what percentage of the population needs a new car, wants a new car, can afford a new car, has a job, and no fears of losing that job? And pray tell what will happen to demand in 2010 if dealers have to pay $6000 in incentives to clear lots now?

Consumer confidence, or consumer hope?

I am not the only one asking questions. MarketWatch is asking Consumer confidence, or consumer hope?

They call it "consumer confidence," but the numbers released Tuesday by the Conference Board might better be pegged as "consumer hope." There's a big difference, namely that confidence translates into spending, while hope is just a good feeling.

Consumers clearly believe the worst is behind this economy and the market, when it's not clear at all to the experts that the U.S. can avoid another leg down -- or worse -- en route to a broad-based recovery.

Consider that there was a big increase in the percentage of consumers expecting the economy to generate new jobs, despite no evidence that the current economy can actually achieve that.

Consumers ignore possible problems when they are feeling good, but the true measure of consumer confidence ultimately is reflected in consumer spending. Any positive move in confidence now won't be reflected in those numbers until late summer.

In a MarketWatch interview, Joseph Battipaglia, market strategist at Stifel, Nicolas, said: "The data is mixed as to whether or not consumers are actually going to open their pocketbooks and start spending again."

The problem with the index reflecting more hope than reality is that the numbers could whipsaw based on bad news, and headline risk right now is big. Jobs, inflation, gas prices, the future of the auto industry, the foothold gained by federal policies and much more will have to be aligned right for confidence gains to continue, and to hold long enough that the now-optimistic consumer actually opens his wallet.

Consumer Conference Board Confidence



The above chart from Bloomberg with thanks to Chris Puplava at Financial Sense.

The expectations index has never in history dropped this far although the present situation index has on two prior occasions. Moreover, the gage of present indicators is still in the gutter at 28.9. I sense that reality will set in when the present situation index fails to rebound along with the hope of growing expectations.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Downsizing of America - Thoughts on a Vanishing Lifestyle

In response to Lifestyle Liquidation - Estates of the Fabulously Rich, an article about an aborted move by the Peacock family to sell a 10,000-square-foot home complete with an exotic game room featuring a hyena and the heads of an elephant and wildebeest, along with 6 sports cars and other items, I received this email from "MB".

Dear Mish,

I’m a longtime reader and always enjoy your take on things. Your article on the failed auction of the mansion in Florida points out a change I think we are facing: huge, overly ostentatious homes are dinosaurs. I am a builder, not working for the past two years because I don’t like to work and lose money, but I was recently tempted by a “bargain” property here in the Portland area.

The bargain property is a ten thousand square feet home on 1.4 acre lot in the most prestigious gated community around. It is appraised at $3.5 million, has a $2.7 million mortgage, is bank owned by a mortgage company in bankruptcy, and the price has kept dropping until it is now at $900,000.

The home has been empty for two years with no heat or water, the beautiful yard is now out of control, the wood windows are all dry rotted from neglect, and as much as I would love to take on a project like that (I truly do love the challenges of building) I can’t see ending up with a 10,000 square foot home with a tax bill of $41,000 and huge utility bills. Who will ever want to live in a home like this again? I considered offering $600,000, but decided to walk away, not wanting to own it at any price.

The times they are a changing.

"MB"

Those who think the bottom in housing is in, especially luxury housing, need to think again. As pointed out in "Lifestyle Liquidation", attitudes are changing, and those attitudes are not changing back. Peak Credit and Peak Earnings are in. Those expecting otherwise need to consider the Effect of Household Deleveraging on Housing, Consumption and the Stock Market.

Peacock aborted the auction of the cars because he owes more on them than the offers. He aborted the sale of the mansion although he would have walked away with over $2 million. Will the next offer be as good?

Cash strapped boomers will be traveling less, eating out less, and buying fewer toys in retirement than they expected. When they go to downsize, who can afford to buy such mansions. Of those who can afford to do so, who will want to?

Is Housing an Investment or a Consumable?

Note what happens to homes that are not maintained: dry rot sets in. In Florida, mold and termites take over. Those who think of housing as an investment are now finding out the reality, housing is more of a consumption item than an investment.

As a consumable, housing prices ought to be reflected in the CPI but officially they are not. Unofficially, I have done so as the following chart shows.

Case-Shiller-CPI (CS-CPI) vs. CPI-U



click on chart for sharper image.

See CS-CPI Negative 5.0% Third Straight Month for more details.

Greenspan ignored the effects of asset bubble like housing, by failing to take into consideration housing in the CPI. Real interest rates were -5% in mid-2004 and stayed that low for quite some time, spawning the biggest credit boom the world has seen. Now in spite of a Fed Fund's rate that is zero, real interest rates are +5%.

Think the Fed knows how to manage an economy? Think again.

Greenspan had the winds of productivity, credit expansion, and consumer attitudes at his back. Bernanke has the winds of credit contraction, consumer attitudes, and demographics blowing stiffly in his face.

Those betting on Bernake's ability to reflate should take another look at Bernanke's Deflation Preventing Scorecard. He's a perfect 13 of 13 failure and changing consumer attitudes towards debt and banks attitudes towards lending are why.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

"Drone Wars" Coming as Japan Prepares to Rejoin Global Arms Industry

US manufactures of military equipment will soon be facing additional competition as Japan's big guns prepare to rejoin global arms industry.

The huge engineering and technological might of Japan may be poised for a new lease of life as the country prepares to ditch a self-imposed ban on arms exports that was introduced in the mid-1970s.

The controversial decision, which is likely to encounter bitter opposition from the country's mainly pacifist middle classes, could deliver significant economic benefits to Japan and lead to a realignment in the global defence industry.

A ruling party MP said that the greatest significance would be the conversion of Japan's robotics industry from civilian to military use as the world's defence spending is directed to remote-control hardware, such as drone aircraft.

Lifting or toning-down the 33-year old embargo would unleash some of the world's most advanced heavy engineering companies into the international weapons market, one of the few areas of manufacturing where Japan's immense technical resources have, for purely political reasons, not produced a dominant global player.

The expected move, which government insiders said may be announced by Taro Aso, the Prime Minister, before the summer, is likely to begin by relaxing the ban to allow Japanese companies to work on joint projects with American and European defence manufacturers, whose products could then be sold internationally.

Joint production and the scope to profit from a share of international sales could draw more Japanese companies into the defence industry and, the Government hopes, bring procurement costs down. Yet as the ban loosens further, government defence insiders say that Japan could be propelled into the top ranks of arms manufacturers.

Mr Aso's Government, meanwhile, is struggling to reverse an unprecedented shrinkage of the economy while the strong yen has made Japanese goods even less price-competitive against South Korean and Chinese products. Defence analysts have long maintained that Japanese industry, once freed from its ban, could quickly rival British, American and European players. Japan's prowess in miniaturised motors, robotics and control systems would be especially competitive.

Drone Operators Ask For 'Open Systems'

National Defense Magazine is reporting Drone Operators Ask Industry For ‘Open’ Systems.

The ground-based equipment that is used to fly unmanned combat aircraft is not adequate to handle the demanding missions of current conflicts, operators say.

Of most concern is the design and configuration of the control stations where pilots fly surveillance drones over combat zones thousands of miles away. Operators have said that the workstation displays do not provide sufficient views of their surroundings, and that the aircraft-control system does not allow them to fly more than one aircraft at a time.

Companies are reacting to these complaints with redesigned control stations that place operators in a cockpit-like environment. The new systems also are attempting to improve interoperability by conforming to open standards that facilitate communications with different types of aircraft. While progress is being made, there are still some hurdles.

In an effort to encourage less “stove-piping,” Congress has mandated that all unmanned aircraft weighing more than 45 pounds must transition to a tactical common datalink that will enable them to interoperate with various ground technologies.

AAI Corp., which manufacturers the Shadow and Hunter unmanned systems, modified its ground control station software to comply with a NATO standard agreement for interoperability between drones that is known as STANAG 4586.

The common user interface is analogous to Windows in the computer industry, he says. The aircraft specific software is similar to a printer driver that communicates with a certain type of printer. If the printer runs out of ink, its driver puts a message indicator on the screen. The same holds true for an unmanned system communicating through the ground control station via a vehicle-specific module.

The station recently completed several takeoff and landing tests of the Sky Warrior, the Army’s newest drone that is based on the General Atomics Aeronautical Systems Inc. Predator. That accomplishment demonstrates that the ground station can control an aircraft made by another manufacturer, Bachman says.

Raytheon Corp. also has modified its ground control stations. The company’s “common ground control system” was built with commercial computers and visual systems laid out in a cockpit-like configuration. Three wide-screen displays give pilots and sensor operators a 120-degree view of the battlefield. The company recently made an unsolicited bid to the Air Force.

General Atomics and Raytheon officials say that their ground control technologies also are STANAG 4586-compliant and can operate multiple aircraft.

The Air Force is rushing to train analysts to pore over UAV feeds and create so-called “actionable intelligence” that commanders can use to locate fleeting targets.
Some military organizations increasingly are relying on automated “sensor fusion” software to create intelligence products.

Not only are there more unmanned systems in the air but they also are being outfitted with larger sensors, which means that operators are “inundated by pixels,” says John Bradburn, senior business development director at Sarnoff Corp. Mission commanders have limited personnel at ground stations to analyze data, which is increasing the demand for automated tools, he says. Sarnoff developed a three-dimensional visualization technology called TerraSight that takes full-motion video from drones and combines it with blue-force tracking data and other metadata to create a digital map of the battlefield where commanders can easily pinpoint the location of targets.

Star Wars: The Clone Wars Trailer 3 - TV Series




AAI Corporation, General Atomics, and Raytheon are soon going to have competition for their drones.

Yoda: "Begun these clone wars have."

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Jobless Graduates Face Dismal Jobs Market

With unemployment rates soaring towards 9% and poised to hit 11% by the end of the year, college graduates are facing the toughest job market in years.

ABC News is asking Got Work?

Casey Savage graduated from Trinity College in Hartford with a 3.8 grade-point average and honors. What he doesn't have is a job.

"I've talked to 24 different firms so far. Hedge funds, investment banks, private equity shops," Savage said. "And I just feel that there's limited opportunities at this point."


According to a survey from National Association of Colleges and Employers, the class of 2009 is leaving campus with fewer jobs in hand than their 2008 counterparts. The group's 2009 Student Survey found that just 19.7 percent of 2009 graduates who applied for a job actually have one.

In comparison, 51 percent of those graduating in 2007 and 26 percent of those graduating in 2008 who had applied for a job had one in hand by the time of graduation.

Kahn studied the impact of the recession in the 1980s and found that seniors who graduated then were still feeling the impact 20 years later. Today's seniors are "going to be earning much less than their counterparts who graduated in better times and they'll be in lower level occupations," she said.

"If I were a 22-year-old today I would be willing to take an unpaid internship," said Lanna Hagge, director of Career Services at Trinity College. "I would be willing to do almost anything just to get the experience and exposure."

College Graduates Tackle Dismal Job Market

CBS News is reporting College Graduates Tackle Dismal Job Market

(CBS) The nation's unemployment rate is soaring, inching closer to 10 percent with each passing month. And that spells trouble for graduating college seniors, about to compete in the toughest job market in decades, reports CBS News correspondent Priya David.

"The previous 5 years it was a seller's market for these kids," said Ed Koc of the National Association of Colleges and Employers. "They could pretty much demand what they wanted in terms of a job and what they got from an employer. That's no longer going to be the case."

One place recent graduates can look for work is the U.S. government. The government has postings for more than 40,000 open slots right now and expects to increase hiring employees straight from college.

College senior Peter Donald expects to find a job in federal law enforcement soon. But fellow senior Bill Frame is still looking for work. He spent months trying for a job on Wall Street without success, and has now widened his search to other industries.

College Graduate Unemployment Understated

The unemployment rate and underemployment rate of college graduates is understated according to the New York Time article The Job Market for College Graduates.

Last month, the number of college graduates who were working fell by 282,000, while only 2,000 more college graduates were classified as unemployed. Why this gap? Laid off college workers, who are unaccustomed to unemployment, may feel a stigma if they report themselves as actively looking for work, so they are uncounted among the unemployed.

The job situation is likely to weaken considerably for less-educated workers as the downturn persists, however, because employers are likely to raise skill requirements. Employers tend to be more selective in downturns. A study by Paul Devereux, for example, found “the education levels of new hires within occupations are higher when the unemployment rate is high and this effect is more pronounced in lower-paying occupations.” If this is right, then more college graduates should be working at Starbucks in the months ahead.

Because jobless college-educated workers appear unlikely to be classified as unemployed and because it is likely that well-educated workers will be taking jobs for which they are overqualified, the depths of this recession should not be measured only by the official unemployment rate. The fraction of the population that is employed is probably a better indicator of the strength of the job market, even though it does not reflect the underutilization of skills by workers who do find jobs.

Looking For Jobs In All The Wrong Places

Casey Savage in the ABC article and Bill Frame in the CBS article are looking for jobs in bubble fields that have popped. The reality is Wall Street is still laying off and the job market in high finance is going to be extremely weak for years to come.

Please consider Wall Street seen replacing few of jobs cut by 2013.

Wall Street securities firms will emerge from the current recession in a down-sized mode, with few of the jobs cut replaced by 2013, even as the industry returns to profitability next year, a New York City fiscal monitor said in a gloomy report released on Wednesday.

The city faces a decline in tax revenues of $2.5 billion in the current fiscal year, and a further $2.2 billion decline in the 2010 fiscal year, due to the Wall Street job cuts, a drooping real estate market and lower business taxes, the city's Independent Budget Office said in the report.

The projected decline for the current fiscal year ending on June 30 represents a 6.6 percent decline in tax revenues, according to the watchdog's report.

"This back-to-back decline -- which follows a year, 2008, of essentially no tax revenue growth -- would mark the first time in at least three decades that the city experienced consecutive years of falling tax revenues," the Independent Budget Office said in the report.

Employment in New York City peaked at 3.8 million in the third quarter of 2008, the report said. The latest forecast for job losses in the city is slightly higher than the loss of 228,500 jobs in the 2001 to 2003 recession -- but smaller than the 377,500 reduction in jobs from 1989 to 1992.

By the third quarter of this year, New York City employers likely will have made three-quarters of the job cuts for the current recession, the report said. The financial sector as a whole is seen axing a total of 56,800 people through the first quarter of 2012. More than half of the jobs lost will be by securities workers, with the sector's workforce falling by 17.2 percent, the report said.

Graduates hoping to become Wall Street wunderkinds or commercial real estate tycoons better be thinking about Plan B. Other than those with specialties in bankruptcy, the Plan A jobs simply are not there. Moreover, those who waste too much time pursuing jobs that are not available are likely to end up in Plan C, working at Starbucks.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Geithner Dismisses GOP Socialism Charge as 'Ridiculous'

Geithner is dismissing GOP Socialism Charge as 'Ridiculous'. I dismiss Geithner's rebuttal on the basis Geithner is a liar. Tune in if you can stand listening:



The Washington Post picks up the story in Geithner Dismisses GOP Socialism Charge as 'Ridiculous'.

"There's still a bit of concern about whether, if you participated in these programs, you'll face in the future some change in the rules of the game, and that's causing a bit of -- a bit of concern," Geithner told The Post's Lois Romano for her continuing "Voices of Power" interview series. Private investors have expressed interest in the program, the government will work to limit their concern and he anticipates they will be "a good deal for the American taxpayer."

"That's the important thing to recognize," he said, "because you -- you have in this basic structure, investors putting skin into the game, taking risk, making judgments about what the price should be for these securities, and the taxpayer gets to participate in the upside in those judgments. So we think they're a good deal for the taxpayer."

Geithner is a Liar

The idea that investors have a skin in the game when the Fed picked the "investors" in the PPIP is a complete farce and taxpayers face 93% of the losses is absurd.

Ironically Geithner's Plan Can Succeed as long as one is fully aware that succeed means the plan is to ....

Dump $500 billion of toxic assets on to unsuspecting taxpayers via a public-private partnership in which 93% of the losses are born by the taxpayer.

Please see the above link for more details as to what constitutes "success".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List