Oracle of NY

Metropolitan Unemployment

From the Bureau of Labor Statistics:

Unemployment rates were higher in May than a year earlier in all 372 metropolitan areas, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Fifteen areas recorded jobless rates of at least 15.0 percent, while 21 areas registered rates below 5.0 percent. The national unemployment rate in May was 9.1 percent, not seasonally adjusted, up from 5.2 percent a year earlier. Among the 310 metropolitan areas for which nonfarm payroll employment were available, 295 areas recorded over-the-year declines in employment
and 15 reported increases.

In May, 112 metropolitan areas reported jobless rates of at least 10.0 percent, up from 6 areas a year earlier, while 97 areas posted rates below 7.0 percent, down from 333 areas in May 2008. El Centro, Calif., recorded the highest unemployment rate, 26.8 percent, followed by Yuma, Ariz., at 23.3 percent. Among the 15 areas with jobless rates of at least 15.0 percent, 7 were located in California, 3 were in Michigan, and 2 were in Indiana. Bismarck, N.D., registered the lowest jobless rate in May, 3.5 percent, followed by Iowa City, Iowa, 3.7 percent, and Ames, Iowa, 3.8 percent. Overall, 148 areas posted unemployment rates above the U.S. figure of 9.1 percent, 215 areas reported rates below it, and 9 areas had the same rate.

For the fifth consecutive month, all 372 metropolitan areas had over-the-year unemployment rate increases. Two areas in Indiana that experienced layoffs in transportation equipment manufacturing recorded the largest jobless rate increases from May 2008: Kokomo (+11.7 percentage points) and Elkhart-Goshen (+11.4 points). The areas with the next largest over-the-year rate increases were Bend, Ore. (+8.8 percentage points), and Hickory-Lenoir-Morganton, N.C. (+8.5 points). An additional 31 areas registered unemployment rate increases of 6.0 percentage points or more, and another 44 areas had rate increases of 5.0 to 5.9 points.

Transparency in Financial Markets

From Rober H. Herz, Chairman FASB, at the National Press Club:

Transparency is not just a buzz word or a cliché. It is a fundamental and absolutely essential attribute of sound financial markets. Relevant, trustworthy, and timely information is the oxygen of financial markets. Depriving markets of such information—or polluting the information—can have very adverse consequences.
 
And so additional systemic actions by others are also needed to improve disclosures and transparency at other levels—particularly those relating to the complexities and risks inherent in financial products, and to the information systems around the markets for structured securities and derivatives. Transparency to the American public around taxpayer funded investments and financial support of major U.S. companies is also essential.

President Obama Calls the Energy Bill a Jobs Bill

From President Obama's Weekly Address:

The energy bill that passed the House will finally create a set of incentives that will spark a clean energy transformation in our economy. It will spur the development of low carbon sources of energy – everything from wind, solar, and geothermal power to safer nuclear energy and cleaner coal. It will spur new energy savings, like the efficient windows and other materials that reduce heating costs in the winter and cooling costs in the summer. And most importantly, it will make possible the creation of millions of new jobs.

Make no mistake: this is a jobs bill. We’re already seeing why this is true in the clean energy investments we’re making through the Recovery Act. In California, 3000 people will be employed to build a new solar plant that will create 1000 permanent jobs. In Michigan, investment in wind turbines and wind technology is expected to create over 2,600 jobs. In Florida, three new solar projects are expected to employ 1400 people.

The list goes on and on, but the point is this: this legislation will finally make clean energy the profitable kind of energy. That will lead to the creation of new businesses and entire new industries. And that will lead to American jobs that pay well and cannot be outsourced. I have often talked about the need to build a new foundation for economic growth so that we do not return to the endless cycle of bubble and bust that led us to this recession. Clean energy and the jobs it creates will be absolutely critical to this new foundation.

The Value of Michael Jackson's Beatles Catalogue

In 1985, Michael Jackson bought the rights to the Beatles record catalog along with the rights to other artists' songs for $47.5 million. In 1995, he sold half the rights to Sony for $90 million. How much is the Beatles record catalog and associated rights worth today?

A music library, like any other asset, is worth the value of projected future cash flows generated by the asset. If the Beatles catalog generates $70 million a year in profits and is expected to do so for the foreseeable future, then we might value the asset at the present value of $70 million per year for the next twenty years.

However, some assets, such as sports teams, have trophy value. A sports franchise may actually lose money year after year, but increase in value due to the fact that there are a limited number of teams, and they are attractive to wealthy investors for the prestige, fame and the fun of owning them. Also, if a sports team is a top performer in its league or can improve its performance, it can actually make money for its owners.

The late Michael Jackson's share of the Beatles catalog is not only a cash generator, but it is also a trophy asset. I would say it is worth more than its present value of expected cash flows. How much more?

That is a question for the market to answer.

How much is Michael Jackson's own record catalog worth? Priceless. 

He was a year older and than I - and I will never forget listening to I Want You Back and ABC when they first aired over AM radio and I started to dance out of sheer joy.

Automated Anti-Hacking Vulnerability Assessment Report

I am in touch with an interesting startup company whose mission is to "create a disruptive approach in the global online vulnerability assessment and compliance markets, by our cutting-edge automated security testing for web applications and network systems."

They claim to challenge their competition by having significantly more automated security checks.

They are looking to work with hosting providers, information security resellers, integrators and government agencies.

They are looking for customers, business partners and funding.

If interested, please contact me at joshua.persky@sloan.mit.edu.

Iranian Freedom

Along with many millions of people around the world, my thoughts, heart and prayers are with the freedom fighters in Iran. May they walk in the path of Gandhi and King yet know without pause, doubt or fear that they have the right to defend themselves and preempt those who would dare to use force unjustly against them.

We shall overcome
We shall overcome
We shall overcome some day

Oh, deep in my heart
I do believe
We shall overcome some day

We'll walk hand in hand
We'll walk hand in hand
We'll walk hand in hand some day

We shall all be free
We shall all be free
We shall all be free some day

We are not afraid
We are not afraid
We are not afraid some day

We are not alone
We are not alone
We are not alone some day

The whole wide world around
The whole wide world around
The whole wide world around some day

We shall overcome
We shall overcome
We shall overcome some day

Oh, deep in my heart
I do believe
We shall overcome some day

This is a bit out of left field, but since I love to play with words and numbers, I'll share some word addition with you.

If a=1, b=2, c=3, d=4 ... z=26

then I+R+A+N+I+A+N = I+S+L+A+M+I+C = F+R+E+E+D+O+M = F+A+M+I+L+Y = M+A+N+K+I+N+D

7 Stages of Job Loss Grief (cont.)

Stage 7 – Acceptance

I did not arrive at my final stage of grief—acceptance—until I had left Manhattan and moved in with my sister’s family in Larchmont.

I know I had reached the acceptance stage of my financial grief at that time, when I was living in my sister’s basement and sleeping on her couch, because that is when I finally registered for unemployment insurance—a full nine months after I had lost my job.

For nine months, my wife had begged me over and over to register for unemployment insurance, and I had repeatedly told her, “I don’t have time.”

Talk about denial!

A few weeks after I registered for unemployment, I started receiving checks, and the money almost exactly covered my expenses. I then requested from the New York State Department of Labor that they pay me from the time I was initially unemployed, credit for a period during which no valid claim was filed, but my request was denied.

Apparently, I learned the hard way. You can only get unemployment insurance from the time you register.

What had I been thinking? I should have registered the day after I had received my last pay check. I could have used the money to support my children or reduce my credit card debt, yet I couldn’t bring myself to do it.

When I told the authorities that I had been proud, stubborn and stupid, they were not convinced. I don’t think it would have made any difference if I had told them that I had been in shock and denial. I should have told myself on January 1st, a day after my last paycheck, “Get over it and register for unemployment insurance!”

Reaching the stage of acceptance was also the turning point in my efforts to find a job. That is when I let professional career coach and business strategist Paloma Bowland into my life, started a serious self-evaluation, revised my resume, unified my social networking and marketing efforts, strengthened my brand and started feeling better about myself. That is when my search turned around and leads started solidifying in a manner in which they had not done so before. I soon found a job in my field.

In retrospect, I can clearly see how I passed through the seven stages of grief—shock, denial, anger, bargaining, depression, testing and acceptance—and I can clearly see how my personal job-loss grief unambiguously expressed itself in my relationship with money as I was searching for a job.

However, all during my job search, the only notion of which I was fully conscious was that I needed to find a job—and on that I never gave up.

7 Stages of Job Loss Grief (cont.)

Stage 6 – Testing

The next stage of grief is testing. A grieving person looks for a way out of his or her depression and starts testing ideas or activities that might help.

For me, the testing stage evoked my moment of creative inspiration. I got the idea to go out to Park Avenue, put on a sign board and hand out resumes. In fact, my entire summer was a testing stage for financial grief.

Consequent to my viral publicity, I was introduced to many interesting people and opportunities—and because I was naturally curious and did not know what would work out, I considered them all.

I corresponded and spoke with dozens of people who persistently tried to convince me to join their multilevel marketing programs, met with an accomplished engineer and businessman in the Hudson Valley who wanted me to sell lychee wine store-to-store, spent a week with the Ahab-like founder of a start-up company who was developing an automated stock trading system, met with several boutique investment banks with the idea of starting up and managing a hedge fund portfolio valuations group, met with a Cleaning Diva to see if we could join forces, met with an insurance representative who wanted me to sell supplemental work insurance, met with an ambitious real-estate entrepreneur on Wall Street who wanted to me to help purchase undervalued toxic assets from failing financial institutions and flew to Dallas to meet with a trio of entrepreneurs who were trying to develop an energy drink for the Latino market, promote a hyperbaric chamber for chronic wound care and find investors for a municipal bond hedge fund.

I tried anything and everything—and nothing worked—other than becoming more and more famous for being the "Face of the American Economy," "Sign of the Times" and the "Sandwich Board Guy."

Inspirational Speaking

The 1010 WINS Personal Finance Breakfast at the NY Hilton was a wonderful and successful event. Thank you Judy DeAngelis, Sara Burningham, Amy Oliver and the entire 1010 WINS crew!

It was also exciting and a pleasure to meet and speak with the other panelists: Jean Chatzky, Richard Lipstein, Kathy Boyle and Mellissa Bushell - whose cupcakes are a real treat.

The event resulted in Paloma Bowland - my career coach and business strategist who was in the audience - and I being invited to speak at a different event in the fall.

The event received excellent coverage by Laurie Petersen at Minyanville.com

http://www.minyanville.com/articles/C-bac-economy-EBAY-wfc-finance/index/a/23135/from/home

 

7 Stages of Job Loss Grief (cont.)

Stage 5 – Depression

By the end of May, Cindy and I knew we had come to the end of our rope. That’s when she told me we were going to put our belongings in storage, and she was going to take the kids to Omaha—and that’s when I entered the next stage of grief, depression.

Leave our apartment and put our stuff in storage? Oh, my God, what had we come to? Cindy was going to take the kids to Omaha, but what was I going to do?

I had no money. My credit cards were maxed out. I planned to host my older children for the summer, and I needed to keep looking for a job.

My father and step-mother had enough room to host us in Rhinebeck, but I knew they were not as energetic as they used to be and were not up to the challenge of hosting us for more than a few days. Furthermore, Rhinebeck was at least a two-hour trip from the city. How would I get to meetings and interviews in the city?

What I did not know at the time was that my parent’s health was becoming so fragile, they could no longer maintain their house or feel confident they could handle an emergency. They were planning to rent or sell their house and move into an independent living facility.

I spoke with my father and asked him what to do.

My father had always been a great provider, and I had asked him for help before, but I had never felt so defeated and desperate. I had never before felt as though I was imposing. I asked him if he would either take me in or give me enough money to survive for the summer. I knew I was putting him on the line, but he spoke with my brother—and they each sent me a check.

I had never felt so helpless before. I felt as though I was not only ruining my own life, but I was bringing everyone around me down into a bottomless pit.

I had destroyed my wife’s dreams and my children’s opportunity. I was asking my family for money when they were all facing their own financial challenges.

Where and when was it going to end? How was I going to get back on my feet?

7 Stages of Job Loss Grief (cont.)

Stage 4 – Bargaining

It was soon after the Bear Stearns collapse that I started reaching out in new directions. I realized that my focus on valuations and related positions at investment banks, private equity and hedge funds might be too narrow.

I started to look for business development positions. Before I had transitioned to commercial and investment banking, my experience had been in international  business development for a satellite network communication company.

It was my way of entering the next stage of financial grief, bargaining. That’s when you try an alternative route to avoid disaster or temper the effects of a disaster that has already happened.

It was then that I started reaching out to acquaintances I barely knew. My wife and I started asking the parents of our children’s nursery school and kindergarten classmates if they knew of any job openings.

Amazingly, one of our acquaintances responded positively. He was a Director of Business Development for one of the largest computer manufacturers and business services providers in the world and said he might be able to squeeze me in. He just needed to convince a few colleagues and get budget approval.

The possibility of a job with one of the biggest and best companies in the world kept my hopes up, but the process moved forward slowly.

I had a telephone interview at the end of April which seemed to go well, but toward the end of May my acquaintance said he was still waiting for approval to hire me.

7 Stages of Job Loss Grief (cont.)

Stage 3 – Anger

Perhaps, it took the Bear Stearns collapse to move me to the next stage of job loss grief, anger. It was the slap in the face that took me out of shock and denial.

When Bear Stearns collapsed, I started realizing that things were not the same as they had been before. Just as I should have been re-entering the job market, the job market was falling apart.

I watched news reports of people walking out of Bear Stearns with their cartons of belongings—and they were in shock. I had acquaintances at Bear Stearns with whom I was trying to network, trying to get my foot in the door—and with a bang, the door was slammed shut on them too.

Suddenly there were thousands of highly-qualified bankers looking for jobs, and the competition was fierce.

I started wondering how long it would take me to find a job. Three months had passed since I had left a prestigious investment bank, and another firm which had called me every few months while I had worked there no longer seemed interested.

I’m not one to get angry easily, but I was certainly starting to feel the pain.

Unemployment by the Numbers (cont.)

From the U.S. Department of Labor:

In the week ending June 6, the advance figure for seasonally adjusted initial claims was 601,000, a decrease of 24,000 from the previous week's revised figure of 625,000. The 4-week moving average was 621,750, a decrease of 10,500 from the previous week's revised average of 632,250. 

The advance number for seasonally adjusted insured unemployment during the week ending May 30 was 6,816,000, an increase of 59,000 from the preceding week's revised level of 6,757,000. The 4-week moving average was 6,750,500, an increase of 57,250 from the preceding week's revised average of 6,693,250.  

Reuters and a Pink Slip Party

I went to my first Pink Slip Party down on Varick Street at the City Winery. It was an excellent networking event and I met many interesting people searching for work, looking to hire and marketing their wares, such as One Wire Finance www.onewire.com a web site for "precise connections between finance professionals and firms."

I did not wear my sign board, but moments before I left to the event, this article came out in Reuters: http://blogs.reuters.com/trading-places/2009/06/10/a-time-for-change-part-ii/

When I returned home, I received an email from a colleague pointing out an article that had been published about A. J. Liebling in the New York Times this past weekend, including:

During the Depression he paid a sandwich-board man $2 a day to walk along Park Row with a sign reading “Hire Joe Liebling” in hopes of catching the eye of the city editor of his dream employer, The World.

7 Stages of Job Loss Grief (cont.)

Stage 2 – Denial

The next stage of my job-loss grief was denial—and boy was I in denial—financial denial.

For several months, my wife and I did not change a single habit.

I paid the rent and paid child support—as I had always done before. Cindy and I kept going out on our romantic night-on-the-town Saturday night dates. Our cleaning lady showed up once or twice a week. The kids continued with their after-school classes. We even flew to Montreal in the middle of a blizzard for a long weekend to celebrate my brother-in-law’s Super Bowl Sunday wedding—and I trekked through knee-deep snow in a tux.

Life was good!

What were we thinking? How could I have been so confident that I would find a job?