Oracle of NY: July 2009

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July 2009

July 31, 2009

Metropolitan Unemployment (cont.)

From the Bureau of Labor Statistics:

Unemployment rates were higher in June than a year earlier in all 372 metropolitan areas, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Eighteen areas recorded jobless rates of at least 15.0 percent, while 9 areas registered rates below 5.0 percent. The national unemployment rate in June was 9.7 percent, not seasonally adjusted, up from 5.7 percent a year earlier. Among the 369 metropolitan areas for which nonfarm payroll data were available, 352 areas reported over-the-year declines in employment, 16 reported increases, and 1 had no change.

In June, 144 metropolitan areas reported jobless rates of at least 10.0 percent, up from 6 areas a year earlier, while 62 areas posted rates below 7.0 percent, down from 312 areas in June 2008. El Centro, Calif., recorded the highest unemployment rate, 27.5 percent, followed by Yuma, Ariz., 23.1 percent. Among the 18 areas with jobless rates of at least 15.0 percent, 8 were located in California and 5 were in Michigan. Bismarck, N.D., registered the lowest jobless rate in June, 3.8 percent, followed by Manhattan, Kan., and Rapid City, S.D., 4.6 percent each. Overall, 152 areas posted unemployment rates above the U.S. figure of 9.7 percent, 216 areas reported rates below it, and 4 areas had the same rate.

For the sixth 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 June 2008: Kokomo (+11.8 percentage points) and Elkhart-Goshen (+10.0 points). The Michigan areas of Monroe (+8.6 percentage points), Muskegon-Norton Shores (+8.2 points), and Detroit-Warren-Livonia (+8.1 points) had the next largest over-the-year rate increases. Hickory-Lenoir-Morganton, N.C., also had a rate increase of 8.1 percentage points, and Bend, Ore., and Janesville, Wis., had increases of 8.0 points each. An additional 22 areas registered unemployment rate increases of 6.0 percentage points or more, and another 56 areas had rate increases of 5.0 to 5.9 points.

Posted at 10:17 AM in Current Affairs | Permalink | Comments (0) | TrackBack (0)

July 26, 2009

World Business Forum

I plan to attend the World Business Forum, October 6-7 at Radio City Music Hall, New York City.

The World Business Forum is the largest business event in the United States, where top business, political and academic figures meet to debate the most pressing issues of the day.

Each year over 5,000 attendees from around the globe gather at Radio City Music Hall® in New York City for two days to debate and discuss global issues, advance their businesses and experience an incredible lineup of global leaders, brilliant minds, business icons and legendary CEOs.

www.wbfny.com

Please let me know if you would like to meet at or around the event.

Posted at 10:54 PM in Current Affairs | Permalink | Comments (6) | TrackBack (0)

July 25, 2009

Regulatory Restructuring

Federal Reserve Chairman Ben Bernanke comments before the House of Representatives concerning regulatory restructuring:

The role of the Federal Reserve in a reoriented financial regulatory system derives, in our view, directly from its position as the nation's central bank.

Financial stability is integral to the achievement of maximum employment and price stability, the dual mandate that Congress has conferred on the Federal Reserve as its objectives in the conduct of monetary policy.

Indeed, there are some important synergies between systemic risk regulation and monetary policy, as insights garnered from each of those functions informs the performance of the other.

Close familiarity with private credit relationships, particularly among the largest financial institutions and through critical payment and settlement systems, makes monetary policy makers better able to anticipate how their actions will affect the economy.

Conversely, the substantial economic analysis that accompanies monetary policy decisions can reveal potential vulnerabilities of financial institutions.

Posted at 10:05 PM in Current Affairs | Permalink | Comments (0) | TrackBack (0)

July 20, 2009

Valuation Services and Consulting

Steps for producing a valuation for a bank loan to a private company:

Gather and review financial and legal documentation.
Note key loan parameters such as: interest rate, maturity date, type of loan (bullet or amortizing), first or second lien, financial covenants, up-front and other fees, pre-payment penalty.
Note key financial performance parameters: EBITDA, income, margins, cash flow, balance sheet (historic, current and projected).
Analyze key financial ratios: leverage, interest coverage, loan to value.
Perform DCF analysis.
Compare company to similar publicly traded companies.
Compare loan to publicly traded similar debt instruments.
If the company is distressed, determine the value of its assets.
If the company is in bankruptcy, determine the probability and timing of recoveries.

For competitively priced hedge fund portfolio valuations, business development corporation and private equity valuation services and consulting, please contact:

Joshua Persky
tel: 917 650 8700
email: joshua.persky@sloan.mit.edu

Posted at 04:48 PM in Business & Valuations | Permalink | Comments (0) | TrackBack (0)

July 18, 2009

Smart Networking with Pat Drew

I attended the Friday Career Coffee seminar at the New York Society of Security Analysts (NYSSA).

Career coach Pat Drew pointed out that 70% of jobs are found via networking, and cold contacts (acquaintances and distant contacts) are more typically fruitful than warm contacts (family, friends and close contacts).

The session was made lively by audience participation in networking exercises. I met a dozen people with various interests and backgrounds - and left the session with a pile of business cards and new contacts.

Paloma Bowland, my career coach was also in attendance, and we will be speaking at the NYSSA Friday Career Coffee seminar on October 16th.

Posted at 09:18 PM in Current Affairs | Permalink | Comments (0) | TrackBack (0)

July 14, 2009

President Obama on the American Graduation Initiative

In Warren, Michigan:

Now, since this recession began 20 months ago, 6.5 million Americans have lost their jobs, and I don't have to tell you Michigan in particular has been hard-hit. Now, I -- the statistics are daunting. The whole country now, the unemployment rate is approaching 10 percent. Here in Michigan, it's about five points higher. And new jobs of course are going to be coming out and we're going to see continuing job loss even as the economy is beginning to stabilize.

Now, that's not just abstractions. Those just aren't numbers on a page. Those are extraordinary hardships, tough times, for families and individuals who've worked hard all their lives and have done the right things all their lives. If you haven't lost a job, chances are you know somebody who has: a family member, a neighbor, a friend, a coworker. And you know that as difficult as the financial struggle can be, the sense of loss is about more than just a paycheck, because most of us define ourselves by the work we do. That's part of what it means to be an American. We take pride in work -- that sense that you're contributing, supporting your family, meeting your responsibilities. People need work not just for income, but because it makes you part of that fabric of a community that's so important. And so when you lose your job, and when entire communities are losing thousands of jobs, that's a heavy burden, that's a heavy weight.

Now, my administration has a job to do, as well, and that job is to get this economy back on its feet. That's my job. And it's a job I gladly accept. I love these folks who helped get us in this mess and then suddenly say, well, this is Obama's economy. That's fine. Give it to me. My job is to solve problems, not to stand on the sidelines and harp and gripe.

Posted at 08:39 PM in Current Affairs | Permalink | Comments (0) | TrackBack (0)

July 12, 2009

Rain to Water - Rain2o.com

I have always considered water our most valuable commodity.

On average, each person uses 100 gallons of water per day for drinking, food, washing, flushing and watering lawns and gardens. A typical 4-person household uses 146,000 gallons per year. Homeowners spend up to a few thousand dollars a year in municipal water fees.

How much rain falls on a typical roof?

50,000 gallons annually!

That’s the answer when big and small homes are averaged together and different levels of rain fall are taken into account. A modest ½” of rain yields 700 gallons of rain water on a typical roof - and all of that pours through downspouts.

Rain barrels are an excellent way to collect and store rain water for use between rains, for example, to water gardens using soaker hoses. The cost to set up a few rain barrels is modest and easily recouped through savings from reduced water bills.

For more information, please refer to www.Rain2o.com

Posted at 05:16 PM in Community | Permalink | Comments (0) | TrackBack (0)

July 11, 2009

World Economic Outlook Update from the IMF

From the Press Conference on the International Monetary Fund’s World Economic Outlook and Global Financial Stability Report, comments by Olivier Blanchard, Economic Counselor and Director of Research:

To give you the basic numbers of the update, our forecast for world output is for a decline of 1.4 percent in 2009 and for an increase of 2.5 percent for the world as a whole in 2010. Now, 2.5 percent, the number that we have for 2010, presents a positive revision of about .6 percent relative to what we had forecast last April, and that's clearly good news. But 2.5 percent is also substantially less than the rate of growth that would keep unemployment constant so that our forecast implies further increases in unemployment probably all the way to the end of 2010.

So, the forces pulling the economy down originate in the financial crisis and the collapse of confidence that took place at the end of 2008, decreases in demand that led to decreases in production to decreases in unemployment, to further decreases in demand and so on and so on. And these dynamic effects were so strong that in most countries the decrease in output in the first quarter of 2009 was nearly as large as the decrease in output in the last quarter in 2008. The good news is that these forces are abating. The financial sector is stabilizing. As José Viñals described, liquidity has returned, risk appetite has increased, capital flows across countries have partly recovered. Banks, however, are still not in great shape and continue to retrench and tighten lending standards.

In short, and returning to the global economy, the worst is behind us and the recovery is coming. The recovery is fragile, however....

Posted at 08:32 PM in Current Affairs | Permalink | Comments (0) | TrackBack (0)

July 09, 2009

Unemployment by the Numbers (cont.)

From the U.S. Department of Labor:

In the week ending July 4, the advance figure for seasonally adjusted initial claims was 565,000, a decrease of 52,000 from the previous week's revised figure of 617,000. The 4-week moving average was 606,000, a decrease of 10,000 from the previous week's revised average of 616,000.

The advance number for seasonally adjusted insured unemployment during the week ending June 27 was 6,883,000, an increase of 159,000 from the preceding week's revised level of 6,724,000. The 4-week moving average was 6,769,000, an increase of 12,000 from the preceding week's revised average of 6,757,000.

Posted at 11:15 PM in Current Affairs | Permalink | Comments (0) | TrackBack (0)

July 08, 2009

Fair Value Measurements: Compliance Strategies and Lessons Learned

I just returned from the New York Society of Security Analysts (NYSSA) seminar on FASB 157 - Fair Value Measurements. Karl D'Cunha, Senior Managing Director, Houlihan Smith and Harvey Poniacheck, PhD, Director of Valuations Services at RSM McGladrey, Inc. made presentations.

The focus of the presentations was on the three levels in the valuation hierarchy as defined by the Financial Accounting Standards Board in FASB 157 - and a lively discussion ensued.

It was a refreshing and informative session for the security analysts and valuations professionals in attendance.

Kudos to Karl, Harvey and NYSSA!

Posted at 01:00 PM in Current Affairs | Permalink | Comments (0) | TrackBack (0)

July 05, 2009

The Severity of the Economic Problem

U.S. Secretary of Labor Hilda L. Solis issued the following statement on the June 2009 Employment Situation report:

Today's news is a reminder of the severity of the economic problem that this administration inherited and continues to illustrate the pressing needs of American working families.

The president and I are keenly aware of the challenges Americans are facing and their struggle is the single, most important focus of this administration. We will not be satisfied until we are seeing robust monthly job growth delivering income gains to American families across the economic spectrum.

When this administration took office, the economy was shedding jobs at a rate of 700,000 per month. This past June our economy lost 467,000 jobs, bringing the total number of jobs lost since this recession began to 6.5 million. The overall unemployment rate increased to 9.5 percent.

As the administration's policies take hold, there are signs that the economy is gaining strength. Consumer confidence is rising, and the housing and financial markets are stabilizing.

Through our urgent efforts we are helping millions of Americans who have lost their jobs to regain their footing in the workplace and to lay the foundation for a new and robust economy.

The department has released more than $57 million in National Emergency Grants to help communities cope with mass layoff events and other emergencies.

We additionally have released $1.7 billion in incentive payments to states that update their unemployment insurance eligibility requirements so that more workers — including recent entrants to the workforce and part-time workers — can access benefits. So far 25 states and the District of Columbia have qualified for these payments.

We are moving swiftly to protect workers who have lost their jobs and to provide new training opportunities so that workers can upgrade their skills and prepare for new employment in growing and emerging sectors like green jobs and health care.

The Department of Labor recently awarded 98 grants, totaling more than $25 million, through our Homeless Veterans Reintegration Program. This program provides approximately 15,000 veterans with job training to help them succeed in civilian careers.

It is also of vital importance that we help our next generation succeed in the workforce. We have distributed $50 million for Youth Build programs to expand services to at-risk youth, and our Summer Youth Employment program will help employ more than 200,000 youth this summer. These efforts come in addition to the $2.5 billion in Recovery Act funds recently announced by the Vice President to help states support their education budgets.

The Recovery Act is providing much needed relief to the economy. At this very moment, 1,900 highway projects are already under way as $19 billion in transportation construction funds have been put to work. An additional $4 billion in loans and grants are creating jobs by bringing broadband service to un-served and underserved communities across America.

We are living through a time of extraordinary challenges, but Americans have long demonstrated an ability to face adversity with the dignity and strength necessary to achieve change. As I meet with workers all across this country, I am even more confident that we can meet these challenges with the same resilient attitude and commitment to innovation that has characterized our nation throughout its history.