New York may lose as many as 225,000 jobs and $6.5 billion in securities industry-related tax revenue over the two-year period ending in October 2009, state Comptroller Thomas P. DiNapoli said.Is This A Problem Or A Blessing?
In a report published today, he predicted financial- industry job losses may total 38,000 by October, with 10,000 more jobs lost in banking, insurance and real estate. Those losses could spread throughout the private sector, taking out as many as 225,000 positions statewide, he said.
“Wall Street is the engine that drives the economies of New York state and New York City, but the global credit crunch has slowed that engine down,” DiNapoli said in a news release. “This year is on pace to be one of the worst years ever on Wall Street.”
Wall Street’s importance to the economy is so great that for each financial sector job lost, two positions will vanish in other industries in New York City and 1.3 jobs will disappear elsewhere in the state, DiNapoli’s report stated.
Most of those jobs are financial engineering jobs that should never have existed in the first place. The IPO mania, merger mania, covenant lite deals, toggle bonds that paid back debt with more debt, SIVs, and the lend to securitize models, all with 40 times leverage are dead and not coming back. Enormous profits were made by executives selling such trash to pension plans and unsuspecting customers.
Now taxpayers who never participated in the party have to pay for the cleanup of the mess. So forgive me for not crying about the loss of those jobs. It is best if those jobs never come back.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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