Showing posts tagged “financial crisis”
Matt Saldaña ·
18 May 2009, 10:41 PM ·
Comment
At tonight’s regular City Council meeting, Durham City Manager Tom Bonfield proposed a $344 million budget for Fiscal Year 2009-10–a decrease of roughly $11 million, or 3.1 percent, from last year’s budget. You can view his Power Point presentation, and accompanying letter, at the City’s new budget Web site.
The most controversial aspect of Bonfield’s plan is the elimination of 113 jobs, including 35 current employees (the rest are unfilled positions). That represents a 4.7 percent cut to the City’s workforce of 2,400, at a total savings of roughly $6.6 million.
In addition to job cuts, Bonfield proposed freezing most pay raises, and reducing benefits such as 401(k) matches and healthcare coverage for all employees.
“Clearly the biggest impact of the proposed budget will be on our employees,” Bonfield said. “Unfortunately, because we are such a personnel-intensive organization, it is impossible to reach a balanced budget proposal without affecting employees.”
As Bonfield read off the proposed layoff numbers, several dozen protesters representing Durham City employees–at least 35–filed silently out of their seats, holding up neon-colored signs that read, “Use the rainy day fund.” Continue reading »
Durham, economy budget, Durham, financial crisis, Tom Bonfield
Matt Saldaña ·
19 Dec 2008, 3:44 PM ·
1 Comment
The News & Observer ran a one-source news story in today’s business section that reported on a meeting between “executives and journalists” at the paper and Mark Vitner, a Wachovia economist. The piece essentially consisted of Vitner’s prediction that the recession would last until mid-2009 (really?), and his admission that banks “fishtailed a little bit” due, in the reporter’s words, to “troubles that caused credit markets to stop functioning in the first place.”
The Progressive Pulse, the blog of NC Policy Watch, notes that the N&O story failed to mention that Wachovia played a significant role in those “troubles,” focusing instead of the ensuing credit crunch. As The New York Times reported in a story that ran pre-bailout, Wachovia was a key player in the housing bubble that went bust:
Wachovia has a $120 billion portfolio of mortgages loaded with adjustable interest-rate loans that allow borrowers to skip part of their monthly payments, much of which it inherited from its ill-timed acquisition of Golden West, the big California lender, at the end of the housing boom in 2006.
The Progressive Pulse is none too pleased that this bit did not make the N&O story, noting that it would be to Wachovia’s advantage to leave the phrase “subprime loans” out of the picture:
Continue reading »
North Carolina, economy, media financial crisis, Wachovia
Fiona Morgan ·
17 Dec 2008, 11:30 PM ·
Comment
Duke University President Richard Brodhead sent an email to students, faculty and staff Wednesday evening letting them know some unsettling news about how the financial crisis has affected the university: Its endowment is worth 19 percent less than it was on July 1.
It could be worse. Just ask Yeshiva University.
Below is a copy of Brodhead’s email.
Continue reading »
Durham Duke University, financial crisis
Matt Saldaña ·
12 Dec 2008, 10:33 AM ·
Comment
Less than two months after it agreed to acquire Merrill Lynch & Co., Bank of America announced yesterday that it plans to cut between 30,000 and 35,000 jobs over the next three years. The Merrill Lynch merger, approved just one week ago by shareholders of both companies, is expected to close by the start of next year.
The Charlotte Observer quotes UNC-Charlotte economist John Connaughton weighing in on the relative impact of job losses at Wachovia and BofA:
“Bank of America has never had an overly large presence in Charlotte, given the size of the bank,” Connaughton said. About 5 percent of the combined company’s work force is based in Charlotte.
By contrast, the struggles of Wachovia — Charlotte’s other big bank, which is being sold to San Francisco’s Wells Fargo — will have a far greater impact locally, Connaughton said. That’s because Charlotte will lose a corporate headquarters, not just jobs, with Wachovia, and because Wachovia employs more people in Charlotte than Bank of America.
Bank of America said in a statement that the cuts would eliminate overlapping jobs related to the purchase of Merrill Lynch. The cuts are also related to “the current recessionary environment,” the bank said.
North Carolina, national Bank of America, financial crisis, Wachovia
Fiona Morgan ·
10 Dec 2008, 3:09 PM ·
Comment
Wall Street Journal reports (and WRAL’s LocalTechWire follows) that the Canadian company may seek a bailout from its home government. The 2,000 Nortel employees in the Triangle would probably appreciate that.
economy financial crisis, Nortel, technology
Matt Saldaña ·
9 Dec 2008, 2:20 PM ·
Comment
3:32 p.m. Borosage says that the Campaign for America’s Future’s proposal is “just the beginning” of a “broad restructuring of the economy.” He says that the “thrust” of the proposal is “parallel” to Obama’s economic recovery plan: retro-fitting public buildings, building and repairing schools, holding governors accountible for spending infrastructure money, and undertaking a green public works program larger than any other infrastructure-building program since Eisenhower initiatiated the interstate highway system.
Continue reading »
national financial crisis
Matt Saldaña ·
5 Dec 2008, 12:23 PM ·
Comment
According to a report released today by the Bureau of Labor Statistics, 533,000 Americans lost their jobs in November, catapulting the unemployment rate to 6.7 percent–the highest in 15 years, according to the Wall Street Journal. The latest statistics mark a significant uptick in job losses, from 320,000 pink slips in October. And they signal no end in sight from a recession that began a year ago. From the bureau’s report:
Since the start of the recession in December 2007, as recently announced by the National Bureau of Economic Research, the number of unemployed persons increased by 2.7 million, and the unemployment rate rose by 1.7 percentage points.
The New York Times notes that the November decline was the largest one-month loss since 1974. Service workers were hit hardest:
70 percent of the job loss was in the service sector, particularly in retailing, temporary work and hotel and restaurant employment. Indeed, the only sectors adding jobs in November were health care and education.
Looking for a silver lining? There is none. After 12 straight months, the economic downturn is on its way to becoming the longest recession since the Great Depression. (The Times notes that the previous record was 16 months, set during the mid-70s and early-80s.)
UPDATE: We found the silver lining. H/t NPR.
Wake County, national financial crisis
Fiona Morgan ·
4 Dec 2008, 1:24 PM ·
Comment
The rarely discussed problem with the newspaper industry is that many newspapers are still profitable, just not profitable enough — their owners and investors aren’t willing to accept a decline in profit margins as a tradeoff for long-term viability.
For evidence of this, consider Gannett, the uber-chain that owns USA Today. Its stock price falling as the economic downturn gets worse, Gannett plans to lay off about 3,000 employees. Thing is, the company’s still making profits that would be considered healthy in most other industries.
Former Gannett editor Jim Hopkins, who’s been blogging the carnage at his independent Gannett Blog, got hold of 2007 financial documents that list the sales and profit margins of each individual Gannett paper, information the company doesn’t like to reveal. While the numbers are a year old, they do tell us something about the financial bassakwardness of the media industry. One paper more than 42 percent profit.
The Asheville Citizen-Times, Gannett’s only North Carolina paper, made $20.6 million in ad sales and had a 23.49 percent profit margin in the first three quarters of 2007, according to Hopkins’ information. The Citizen-Times recently announced it will lay off 60 people.
Meanwhile, financial ratings firm Fitch Ratings warns newspaper companies are likely to default on their debt and go out of business next year, which will leave “several cities” with no daily newspaper. The McClatchy Company, which owns The N&O, is one of two companies whose debt Fitch rated as “junk,” according to Editor & Publisher.
media financial crisis, layoffs, McClatchy, newspapers
Fiona Morgan ·
3 Dec 2008, 12:24 PM ·
Comment
Only 379 of the North Carolinians who died last year owed any estate tax — which means the tax affected half of one percent of all Tar Heel estates. But nationally, that tax on estates of $1 million or more is expected to generate more than $23 billion.
That’s why N.C. Justice Center’s Budget & Tax Center Director Elaine Mejia says this is no time to cut it.
“The estate tax is the most progressive part of the federal tax code,” she said in a release today (PDF). “At a time when the wealth gap between rich and poor is at its greatest level since 1929, slashing the tax would hurt working families even more.”
Mejia cites a national report (PDF) by Citizens for Tax Justice that calls on the Obama administration to do more to preserve the tax Bush plans to phase out by 2010.
Mejia says raising the threshold above $1 million would reduce the number of middle class families affected by the tax. But she says, “eliminating the tax is simply ludicrous.”
Uncategorized financial crisis, tax
Fiona Morgan ·
21 Nov 2008, 1:08 PM ·
Comment
Unemployment is 7 percent in North Carolina, half a percent above the national average, according to October figures released today.
The state could face a budget shortfall of more than $3 billion next year (PDF).
State schools are being asked to cut their budgets by $58 million.
UNC’s endowment has lost 13 percent of its value, meaning less money available for financial aid.
More kids are going to bed hungry, with less money available for food stamps.
What do we do now?
North Carolina financial crisis
