Tuesday Morning Report: 10,000 securities jobs to leave NY? Tappan Zee Bridge project gets boost from Cuomo; PEF contract talks continue

Good Tuesday Morning! Today the FDIC will vote on an initial version of the infamous Volcker Rule, so keep an eye on Wall Street as that vote looms. Speaking of Wall Street, did you know that the city of New York has already racked up $2 million in overtime pay as a direct result of the Occupy Wall Street protests?…

BEFORE we dive into the news, I would like to talk about my alma mater, Boston College, and a little-known competition that takes place on campus every year. It has nothing to do with our hockey team – winners of two national titles in the last four years, I might add – or our football team, which currently stinks; rather, it is a venture capital competition run by a professor in the Information Systems department. Each year, this competition awards a $5,000 grant to the team of students that generates the best and most inventive business plan, leaving them to do what they will with their new company and earnings.

One such start-up to come out of the Boston College Venture Capital competition was called WePay. Founded in 2008 by Bill Clerico and Rich Aberman as a more specialized payment service than PayPal, WePay has raised over $10 million in seed funding to date. All it took was a great idea, a few very smart students and some start-up cash to help them attract the attention of the likes of Highland Capital Partners, Y Combinator, and SVAngel.

If a private university in Chestnut Hill with 9,000 undergraduates can have its own venture capital competition, why doesn’t Westchester County? There is a wealth of talent and capital in Westchester, so why can’t we harness that in the form of a venture competition or business incubator? America’s strength has alway been beating the other guy to the punch. Since 2008, we have lost that risk-taking, fighter’s mentality.

Believe it or not, this is something that an independent panel of businesspeople – including GE chief executive Jeffery Immelt – is advocating for. From the Wall Street Journal article on the Web this morning:

“…Among its ideas to spur start-up activity, the council recommends Congress eliminate taxes on income from investments of $25 million or less in a privately held firm as long as the investment is held for at least five years. It also calls for cuts to corporate income taxes for the first three years of a company’s existence to encourage it to expand…”

Ideas like this one are needed on a national scale, but why not on a local scale as well? Here in Westchester, we have the resources, we have the higher education institutions, we have the capital, and we have the collective intellect – so what are we waiting for?


Wall Street to lose 10,000 jobs? A new report by NY state Comptroller Thomas DiNapoli said that New York City’s securities industry could lose nearly 10,000 jobs by the end of 2012, and that bonuses are likely to be considerably smaller this year.  

Gov. wants federal approval of TZ Bridge expedited. Yesterday, Gov. Andrew Cuomo announced that he has asked the federal government to expedite the review and approval process to allow work to begin on the Tappan Zee Bridge project, which represents a multi-billion dollar investment that will create tens of thousands of jobs.

PEF contract negotiations “ongoing.” Contract talks between the Public Employees Federation and NY State are ongoing after union members rejected the contract that was negotiated by union leadership. Just over a week remains before the nearly 3,500 pink slips sent out to PEF employees as a result of the contract rejection become official and permanent.

Lunch Break: Thursday 9/29 (Union layoffs; ObamaCare; and more)

Here is your lunch-time version of our daily morning report (because sometimes, everyone just has one of those crazy mornings). Without further delay…

Driving the day, Part 1: Gov. Andrew Cuomo has been on a hot streak lately – much unlike the Red Sox (more on that later in this post). So it was inevitable that he was eventually going to get a setback. Well, that setback came on Tuesday evening, just after his announcement that five major tech companies would be investing $4.4 billion in local R&D and manufacturing facilities. On Tuesday, the Public Employees Federation, which is the state’s second-largest public employee union with 56,000 members, rejected its proposed 5-year contract with the state that would have guaranteed members protection from layoffs in exchange for three years of no raises plus paying a higher percentage of healthcare costs. Whether or not you agree with the union’s vote, 3,500 pink slips went out yesterday. This is exactly when we CANNOT afford to cut jobs – particularly at the government level when so many are already being lost.

Driving the day, Part 2: On Wednesday, the Justice Department asked that the Supreme Court –  SCOTUS for short (don’t you love acronyms) – rules on “ObamaCare” ASAP. In other words, look for a ruling in early 2012, which, as all of the networks have hammered home, comes smack in the middle of the campaign. Health care affects jobs, and with small businesses hurting, the consensus is that ObamaCare will add to the pain. Jobs in turn affect the economy, and well, folks, 99.9 percent of the time that is exactly what an election hinges on. So yes, this is a “big f****** deal” (quoting our friend Joe Biden) for the president.

They Said It: “We’ve had close to 10% unemployment now for a number of years, and of the people who are unemployed, about 45% have been unemployed for six months or more. This is unheard of,” said Fed Chairman Ben Bernanke in Cleveland yesterday, calling the unemployment levels a “national crisis.”

By the Numbers: 1.3%, as in the level of GDP growth in the second quarter of this year, up from a previous estimate of one percent growth.


> Federal mortgage-aid program to shut its doors with $500 million unspent…(New York Times)

>Web searches cut unemployment duration by 25%…(Wall Street Journal)

>Bloomberg consumer confidence index at second-lowest record ever…(Bloomberg)

>SEQRA, environmental laws hurt New York businesses, developers…(Westchester County Business Journal)

Sports Blink: Last night, the Boston Red Sox completed the biggest regular-season collapse in MLB history for team in playoff contention. The Sox led the AL Wild Card race by 9 games on Sept. 3, but from there they went 7-20 in the month of September. They now have several months to work on their golf games and their excuses between now and spring training.

Opening Bell: Wednesday 9/27 ($4.4 billion investment; Health care premiums up; Union rejects deal)

Driving the day: Yesterday, Gov. Andrew Cuomo was joined by former President Bill Clinton to announce a $4.4 billion joint investment by five major tech companies, including IBM, Intel, GLOBALFOUNDRIES, TSMC, and Samsung to pursue nanotechnology in New York state. Also included: the state will be investing $400 million in the SUNY system to promote nanotechnology research and development there. All told, we are looking at the creation of at least 2,500 high-paying, high-tech positions and 2,000 construction jobs; and at the retention of another 2,500 existing jobs in Albany, Canandaigua, and East Fishkill. Notably, nearly 1,000 of those tech-related positions will be created in Westchester’s backyard at IBM’s East Fishkill and Yorktown Heights facilities (IBM alone is responsible for $3.6 billion of the total promised investment dollars).

Stock Outlook: U.S. futures are up, but with most European indexes either flat or down slightly and with durable goods orders slowing, look for Wall Street to back off its two-day hot streak.

By the Numbers: 12, as in the number of days the current protest against Wall Street’s financial companies has been ongoing, with roughly 100 arrests made.

They Said It: “Clearly, in the developed world – Europe, U.S., and Japan – the economy is slower, but there is reasonable activity there and the emerging world is still quite strong,” General Electric Co. CEO Jeffrey Immelt told reporters, saying that he doesn’t see a double-dip recession occurring.


> Cuomo, New York state dealt a blow as state’s second-biggest union rejects contract, making imminent layoffs likely (New York Times).

> The New York Times reports health care premiums are way up – and worker contributions to health care costs are on the rise as well (New York Times).

Sports Blink: In baseball, both wild card spots are in a dead heat, with the Red Sox tied with the Rays and the Cardinals tied with the Braves (both the Sox and the Braves blew big leads over the past couple weeks). If either race remains tied after tonight’s games – number 162 of the season – the teams will face off in a one-game playoff.