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Found 15 results

  1. China's Arithmetic When It Comes to the Dollar “It will be helpful if Geithner can show us some arithmetic” -Yu Yongding From the lens of a global risk manager, this morning has to be one of the more fascinating that I have ever woken up to. At the same time as the US Government is setting themselves up to announce one of the largest bankruptcies in US corporate history, we have a squirrel hunting US Treasury Secretary telling the Chinese to “trust us” and America’s currency. That a boy! Providing leadership to the world’s increasingly interconnected economy is by no means an easy task, and maybe that’s why the world is voting against America holding the world’s reserve Currency Conch any longer. Timmy Geithner’s effectiveness with the Chinese translators overseas this morning is borderline laughable. There was a time when the Wizards of Wall Street’s Oz could fly overseas and make a comment like “we are committed to a strong dollar” and it would actually matter. Rather than getting on a plane and shaking hands with The Client (China) himself, President Obama opted to send the same guy that called the holder of $768B in US Debt “manipulators"... Nice! When it comes to financial market sophistication, other countries aren’t as gullible as they used to be. An internet connection and You Tube screen have effectively changed all that. On the heels of Timmy’s “reassuring” comments, the US Dollar is getting spanked again, trading down another -0.73% to lower-lows at $78.63. Rather than fading Geithner from my soapbox, now the world is – it’s sad. I understand that this is all doesn’t matter yet because someone on CNBC is hopped-up about where the US futures ramped into Friday’s close and look here on today’s open. That manic behavior really helps America’s reputation. At the end of the day, the US stock market could go up another 6% to 9% today, and it would still be amongst one of the worst performing stock markets in the world. The Dollar moving into crisis mode matters. First, all of the reflation trades pay themselves out in full. Second, all of the global political capital associated with the almighty Petro-Dollar gets redistributed. And Third, well… rather than analyzing this as the said Great Depression Part Deux… how about another Third Quarter of 2008 in US Equities? Nah, that’s crazy right? Like they say in the Canadian Junior Hockey Leagues, “crazy is as crazy does”! There are loads of unintended consequences associated with a US Dollar crashing – the only other sustainable break we’ve seen in the US Dollar Index below the $80 level since 1971 (when Nixon abandoned the gold standard), was that one that led us to that 2008 Third Quarter… After locking in another +5.3% month for May, the S&P500 is up a whopping +1.8% for the YTD. Unlike most global equity markets that are charging to higher-highs this morning, the S&P500 is still trading below its January 6th high of 934. On the heels of another strong, albeit not herculean PMI manufacturing report last night (it decelerated slightly month over month), China’s stock market charged to higher-highs, closing up another +3.4%. The Shanghai Composite Index is now +49.5% YTD, and we, as our British philosophy competitor likes to say remain “long of it.” From Hong Kong to Russia, stock markets are up +4 to +6% this morning. Why? Because, much like the only other time we saw the US Dollar break down to these levels, everything that China needs reflates. Oil prices and the promises of a potentially empowering Chinese handshake have the Russian Trading System Index (RTSI) up +83% for 2009 to-date. Now that and the price of oil trading up +19% in less than 2-weeks is getting someone paid - and it isn’t the American Consumer! As she trashes her currency, America will continue to lose political capital both domestically and abroad. After all, a -12% three-month swan dive in the US Dollar has hacked over $90 Billion of value from the Chinese position in US Treasuries. Creditors and citizenry hush yourselves! All the while, 17 out of 23 Chinese economists polled are calling holding those Treasuries a “great risk” this morning. I know, I know… an economist or a billion US Dollars ain't what it used to be… At some point, China’s interpretation of the arithmetic is going to really matter.
  2. (Courtesy of The New York Times) Holy crap! The new AT&T going to have 129.23 million customers. It would be like Bell buying out Telus.
  3. China’s Stock Market Passes US as Leading Indicator Published: Wednesday, 4 Aug 2010 | 12:43 PM ET By: John Melloy Executive Producer, Fast Money China may be the second biggest economy in the world behind the US, but it is No. 1 in terms of influence over global stock markets, analysts said. “The Chinese equity market has shown signs of ‘leading’ global equity markets at turning points over the past three years,” wrote Geoffrey Dennis, Citigroup’s emerging markets strategist. “As a result, the 13 percent rally in the Shanghai Composite since early-July has been a major support for improved overall global sentiment over the past month.” It’s only natural China’s stock market would take a leading role following structural changes such as a jump in listings and the allowance of short sales. After all, the economic influence speaks for itself. Among other things, China is the biggest consumer of energy products, accounts for 70 percent of iron ore demand, and in 2009, became the No. 1 auto market, according to analysts’ reports. The Shanghai Composite Index has led the US market back from its 2010 low. It’s no coincidence that the leading US stocks during this comeback have come from the stocks in the industrial and raw material industries such as Caterpillar [CAT 71.56 -0.40 (-0.56%) ] and Freeport-McMoRan [FCX 74.61 0.54 (+0.73%) ]. Ford [F 13.04 0.06 (+0.46%) ] shares are up 30 percent in one month. “China’s rapid growth in auto sales is merely a reflection of the rise of middle class consumption patterns,” wrote Marshall Adkins, Raymond James energy analyst. “Add in increasing Chinese trucking, petrochemical and aviation consumption, and total Chinese oil demand growth in 2011 should be well north of 500,000 barrels per day and could drive over half of the global oil demand growth next year.” It’s no coincidence then that oil topped $80 this week before retreating today. The iShares FTSE/Xinhua China 25 Index [FXI 41.95 -0.08 (-0.19%) ], an ETF traded here on the NYSE, is supposed to be a direct play on the Chinese market, but it has underperformed China’s local market over the past month. The ETF contains only the large Chinese stocks that are listed as ADRs on US exchanges. What this data shows is that you may be better off buying a US index fund, industrial stocks or a broader emerging market ETF if you believe China is going higher. Citigroup sees the Chinese stock market rising five to 15 percent higher by the end of the year as fears of an economic slowdown are priced in. "Based on a 'no double-dip' scenario, solid growth in emerging markets, low interest rates 'for longer' and attractive valuations, we remain bullish on emerging market for the long-term, including Chinese equities," wrote Citi's Dennis. The closing bell of the New York Stock Exchange used to ripple through the rest of the world, dictating trading in Australia, Asia and Europe that followed it. No longer. The US traders’ day may be decided before he or she even wakes up. http://www.cnbc.com/id/38558580
  4. jesseps

    Stock pick(s)

    Here's some of my stock pick(s) ASTI (US) — Solar AGU — Agricultural CUM — Copper CRESY (Argentina) — Agricultural BAA — Mining LMA — Mining PPX — Thermal HDY (US) — Oil VRX — Pharmaceuticals UEC (US) — Uranium TKO — Mining Most are under $10. PPX, is currently trying to be bought up by another company. Hopefully that wont fall through.
  5. Quebec companies getting pummeled By Paul Delean December 12, 2008 Quebec’s economy supposedly is weathering current financial turbulence better than other parts of the country, but you’d never know it from the stock listings. Several publicly traded Quebec-based companies that used to have significant share valuations have plummeted below, or near, the dreaded dollar mark, in some cases becoming penny stocks. The 2008 Dollarama portfolio includes familiar names like AbitibiBowater, Quebecor World, Mega Brands, Garda World, Shermag, Hart Stores and Bikini Village. What happens from here is anybody’s guess. Once stocks start descending to these levels, getting back to past peaks really isn’t the issue anymore. Survival is. Institutional investors are leery. Several actually have a rule against buying shares priced below $5. “What matters are a corporation’s fundamentals, not the stock price. But often, they’re really bad when a company’s stock goes way down in price, and leave you wondering if it’s worth anything at all,” said Benj Gallander, co-author of information newsletter Contra The Heard, who’s been investing in out-of-favour stocks for 15 years with partner Ben Stadelmann. While takeovers are always a possibility, Gallander said companies that really get beaten up usually are not prime targets. “Companies are more likely to buy companies that are going really well, at ridiculous prices, than the ones that are struggling,” he said. What’s making this downturn especially challenging is the tightness of credit, Gallander said. Cash-strapped companies in need of fresh funds are having a harder time with lenders, and investors have cooled to new stock issues. “It used to be a lot easier (for companies) to go to the well and get cash. These days, the competition for funds is so fierce, and not as many people are willing to invest. Investors are more selective. They want to see clean balance sheets, and preferably dividends and distributions, not a lot of debt and a history of losses. Ongoing losses are very dangerous if you don’t have the cash to support it.” Montreal portfolio manager Sebastian van Berkom of van Berkom & Associates, a small-cap specialist, said there are decent stocks in the dollar range, but there are also an awful lot of highly speculative ones. “If someone had the intestinal fortitude to put together the best of these Dollarama stocks into a diversified portfolio of maybe 50-70 names, you’d probably end up doing pretty well. Ten per cent would go bust, 10 per cent would be 10 baggers (grow by tenfold), and the other 80 per cent would do better than the overall market,” he said. But since even the largest and strongest global companies have been battered by this year’s downdraft in equity markets, investors are understandably gravitating to those names, some now at prices unseen in decades. “In this kind of environment, why speculate at the low end when you can buy quality companies at the lowest price they’ve traded at in years? You don’t need to speculate, so why take the risk? That’s why some of the fallen angels have come down so much,” van Berkom said. Some of the deeply discounted companies undoubtedly won’t survive their current woes, Gallander said. The biotech sector, constantly in need of cash tranfusions, is especially vulnerable. “They may have great products in the pipeline,” he said, “but who’ll finance them?” While there is potential upside in some of the names, he considers it a bit early to start bargain-hunting. “I’d be wary of redeploying cash at this point. Even if you pay more (for stocks) in a year, there could be less downside risk if the economy’s in better shape. Personally, I don’t see things coming back for years. There’ll be lots of bargains for a long time.” Here’ are some of the downtrodden, and the challenges they face. AbitibiBowater Inc.: A $35 stock in 2007, AbitibiBowater is now trading around 50 cents. The heavily-indebted newsprint manufacturer recently reported a third-quarter loss of $302 million ($5.23 a share) on flat revenue. Demand is plunging around the world as the newspaper industry contracts in the face of competition from the internet In the U.S. alone, it’s fallen 20 per cent this year. Gallander is one of its unhappy shareholders; his purchase price, prior to the merger with Bowater, was $56.24. “We looked at getting out a few times, didn’t, and got absolutely killed,” he said. “At the current price, there’s huge potential upside, or the possibility in six months that it could be worthless.” Garda World: Investors did not take kindly to the global security firm’s surprise second-quarter loss of $1 million (3 cents a share) and revenue decline of 5.5 per cent. After years of rapid growth by acquisition, Garda – which reports third-quarter results Monday – is talking about selling off part of its business to repay its sizable debt. At about $1.20 a share (down from $26.40 in 2006), “it’s extremely speculative,” van Berkom said. “Rather than offering to buy parts of the business now, competitors may wait to see if it survives and then buy.” Mega Brands: The Montreal-based toy company had a prosperous business until it took over Rose Art Industries of Livingston, N.J., in a $350-million deal in 2005. Since then, it’s taken a huge hit from lawsuits and recalls of the Magnetix toy line it acquired in the Rose Art deal and the stock has plunged from $29.74 a share in 2006 to about 50 cents this week. The company lost $122 million in the third quarter (after writing down $150 million for “goodwill impairment”), just had its credit rating downgraded by Moody’s (which described 2009 prospects as “grim”) and now has to cope with a sharp decline in consumer spending for its peak selling season. Revenue has nonetheless held up relatively well so far, Gallander said, so this one could still be a turnaround candidate. Hart Stores: The smallish department store chain keeps adding to its 89-store Hart and Bargain Giant network in eastern Canada, but same-store sales have been slipping as consumers retrench. Profit in the last quarter was $757,000, down from $1.7 million the previous year. The stock’s dropped even more, closing this week around $1, down from $6.55 in 2006. But Gallander, who bought in at $3.46, still likes the company, which pays a dividend of 10 cents a year. “They’re facing a slowdown, which could hurt the bottom line and the distribution, but so’s everyone else. Few companies can be resilient in this kind of economy.” Groupe Bikini Village: All that remains of the former Boutiques San Francisco and Les Ailes de La Mode empire is 59 swimsuit stores generating quarterly sales of about $13 million and net earnings of less than $1 million. “Our company has come through some challenging times,” president Yves Simard said earlier this year, “and today, we are a stronger company for it.” You wouldn’t know it from the price of the 172 million outstanding shares. Friday, it was 3 cents. The 2008 range has been 10 to 2.5 cents. Boutiques San Francisco was a $32 stock in 2000. Kangaroo Media: It’s had plenty of media coverage for its handheld audio/video devices that allow spectators at NASCAR and Formula One auto races to follow and hear the action more closely, but only one profitable quarter since it went public four years ago. The company generated $2.2 million in sales and rentals in its most recent quarter, but lost $3.4 million (10 cents a share). Loss of Montreal’s Grand Prix race in 2009 won’t help. Shares got as high as $8.19 in 2006 but traded at 5 cents yesterday.. Victhom Human Bionics: Outstanding technology – a prosthetic leg that remarkably replicates human movement – but no significant sales yet spells trouble for the Quebec City company. It had revenue of $531,997 in its most recent quarter, most of it royalty advances, but a net loss of $3.3 million. Investors are losing patience. The stock, which traded at $2 in 2004, has tumbled to 3 cents. Quebecor World: One of the world’s largest commercial printers, it entered creditor protection in Canada and the U.S. last January and seems unlikely to emerge. It lost $63.6 million (35 cents a share) in the most recent quarter on revenue of $1 billion, which pushed the total loss after nine months to $289 million. The stock, as high as $46.09 in 2002, traded yesterday at 4 cents. Unless you buy for a nickel in the hope of getting out at 7 or 8 cents a share, this is probably one to avoid, said Gallander, who prefers to steer clear of companies in creditor protection. Shermag: Asian imports, a contracting U.S. housing market and rapid appreciation of the Canadian dollar pulled the rug out from under the Sherbrooke-based furniture maker, which experienced a 40-per-cent drop in sales in the past year, has lost money for the last 11 quarters and entered creditor protection in May. (It was extended this week to April). A $16 stock in 2003, it was down to 7 cents yesterday. “We looked at Shermag closely before (credit protection), but backed off. They’re good operators, but the way things are now in their business, they just can’t compete,” Gallander said. Railpower Technologies: The manufacturer of hydrid railway locomotives and cranes has a lot of expenses and not many customers, and the economic slowdown won’t help. It lost $7.1 million in the most recent quarter on sales of just $2.9 million. A $6.69 stock in 2005, it traded at 14 cents this week. Mitec Telecom: Revenue has been rising for the designer and manufacturer of components for the wireless telecommunications industry, but it’s still having trouble turning a profit. Through the first half of its current fiscal year, sales grew 63 per cent to $25 million, for a net loss of $1.1 million. The company, which went public in 1996 at $6.50 a share, traded yesterday at 6 cents. Management is doing a commendable job of trying to turn around the company, said Gallander, who has owned the stock for several years. “They seem to be doing the right things, but they’re not out of the woods yet. In normal times, they’d be doing better than now. But the telecom sector, too, will be hit.” [email protected] © Copyright © The Montreal Gazette
  6. End of an Era on Wall Street: Goodbye to All That By TIM ARANGO and JULIE CRESWELL Published: October 4, 2008 JUST before midnight 10 days ago, as a financial whirlwind tore through Wall Street, someone filched a 75-pound bronze bust of Harry Poulakakos from the vestibule of his landmark saloon on Hanover Square in Manhattan. Harry Poulakakos at his restaurant, which has been part of the Wall Street culture now being transformed by the financial crisis. “If Wall Street is not active,” he warned, “nothing is active.” Digging into a bowl of beef stroganoff the day after the bust disappeared — it was eventually returned anonymously — Mr. Poulakakos recalled some of the customers who had passed through his doors since he opened his bar, Harry’s, 36 years ago. Ivan Boesky once had a Christmas party there. Michael Milken worked over at 60 Broad. Tom Wolfe immortalized the joint in “The Bonfire of the Vanities.” Mr. Poulakakos says he even got to know Henry M. Paulson Jr., the former Goldman Sachs chief executive and now the Treasury secretary. Mr. Poulakakos, 70, has also seen his share of ups and downs on the Street, including the 1987 stock market crash, when Harry’s filled up at 4 p.m. and stayed open all night. But the upheaval he’s witnessing now — much of Wall Street evaporating in a swift and brutal reordering — is, he said, the worst in decades. “I hope this is going to be over,” he said. “If Wall Street is not active, nothing is active.” Mr. Poulakakos, rest assured, isn’t planning to disappear. But the cultural tableau and the social swirl that once surrounded Harry’s are certainly fading. “It’s the beginning of the end of the era of infatuation with the free market,” said Steve Fraser, author of “Wall Street: America’s Dream Palace,” and a historian. “It’s the end of the era where Wall Street carries high degrees of power and prestige. And it’s the end of the era of conspicuous displays of wealth. We are entering a new chapter in our history.” To be sure, living large and flaunting it are unlikely to exit the American stage, infused as they are in the country’s mojo. But with Congress having approved a $700 billion banking bailout, historians, economists and pundits are also busily debating the ways in which Wall Street’s demise will filter into the popular culture. It’s an era that traces its roots back more than two decades, when suspendered titans first became fodder for books and movies. It’s an era when eager young traders wearing khakis and toting laptops became dot-com millionaires overnight. And it is an era that roared into hyperdrive during the credit boom of the last decade, when M.B.A.’s and mathematicians raked in millions by trading and betting on ever more exotic securities. Over all, the past quarter-century has redefined the notion of wealth. In 1982, the first year of the Forbes 400 list, it took about $159 million in today’s dollars to make the list; this year, the minimum price of entry was $1.3 billion. As finance jockeyed with technology as economic bellwethers, job hunters, fortune seekers and the news media hopped along for the ride. CNBC became must-see TV on trading floors and in hair salons, while people gobbled up stories about private yachts, pricey jets and lavish parties, each one bigger and grander than the last. Finance made enormous and important strides in these years — new ways to parse risk, more opportunities for businesses and individuals to bankroll dreams — but for the average onlooker the industry seemed to be one endless party. In 1989, tongues wagged when the 50th birthday celebration for the financier Saul Steinberg featured live models posing as Old Masters paintings. That bash was outdone last year, when Stephen A. Schwarzman, head of the private equity firm Blackstone, feted guests at a 60th birthday party boasting an estimated price tag of $5 million, video tributes and the singer Rod Stewart. “The money was big in the ’80s, compared to the ’50s, ’60s and ’70s. Now it’s stunning,” said Oliver Stone, who directed the 1987 film “Wall Street” and is the son of a stockbroker. “I thought the ’80s would have been an end to a cycle. I thought there would be a bust. But that’s not what happened.” Now, with jobs, fortunes and investment banks lost, a cultural linchpin seems to be slipping away. “This feels very similar, historically, to 1929 and the emotions that filled the air in the months and years that followed the crash,” Mr. Fraser said. “There is a sense of extraordinary shock and astonishment, which is followed by a sense of rage, outrage and anger directed at the centers of finance.” A WALL STREET hotshot was in a real-estate quandary, and he wanted Barbara Corcoran to help him sort things out. “This is a finance guy making a ton of money and he was trying to decide whether he should sell the country home in Connecticut, the apartment here in the city or the 8,000-square-foot dream home in Oregon that he just finished,” recalled Ms. Corcoran, who has spent years selling high-end luxury properties to New York’s elite. Daintily pulling the shell off a soft-boiled egg at a busy restaurant, she said she had fielded call after call from anxious Wall Streeters trying to decide between signing contracts on multimillion-dollar properties or renegotiating because of the downturn. (Renegotiate, she advises.) Skip to next paragraph Enlarge This Image Mark Lennihan/Associated Press Limos lined up at the Lehman Brothers headquarters, pre-bankruptcy. Enlarge This Image Carl T. Gossett/The New York Times The New York Stock Exchange on New Year’s Eve, 1971, in the innocent days before the Gordon Gekko’s arrived, before the 1987 crash and before the credit crisis tarnished the second Gilded Age. But this particular financier, whom Ms. Corcoran declined to identify, was interested in unloading property so he could time the absolute tippy-top of the real-estate market, not because his wallet had thinned. “He decided to list the country home in Connecticut,” Ms. Corcoran said, shrugging as she bit into her egg. If there has been one thing that has kept pace with the outsize personas on Wall Street, it’s the gigantic paychecks they’ve hauled in. Since the mid-1980s, top traders, bankers, hedge fund managers and private equity gurus have reeled in millions of dollars in rotten years and tens and hundreds of millions — a handful even making billions — while the good times rolled. For instance, Steven A. Cohen, a high-profile hedge fund manager who leads SAC Capital Advisors, spent more than $14 million in 1998 for his 30-room mansion in Greenwich, Conn. Then he spiffed up the place with a basketball court, an indoor pool, an outdoor skating rink — with its own Zamboni — a movie theater and showpieces from the art collection on which he has spent hundreds of millions in recent years. So it’s unlikely that hedge fund stars like Mr. Cohen are headed for the bread lines. Two weeks ago, as Lehman Brothers filed for bankruptcy, Bank of America rescued Merrill Lynch, and regulators and bankers anxiously tried to figure out how to save the Street from itself, the world’s affluent plunked down more than $200 million in a two-day auction in London, snapping up the latest works by the British artist Damien Hirst. Still, some will inevitably downsize. “The yacht is probably the first thing to go,” said Jonathan Beckett, in a telephone interview from Monte Carlo as he attended the annual Monaco Yacht Show last month. Mr. Beckett, the chief executive of Burgess, a yacht broker, said that for the past eight years there have been few sellers in the market. That is starting to change, said Mr. Beckett, who noted that a handful of yachts had been put up for sale, ranging in price from $10 million to $150 million. Even party time has shortened. “In the last couple of weeks, since the bottom fell out of the market, we’ve seen people become more reticent to sign commitments for some expensive venues,” said Joseph Todd St. Cyr, director of Joseph Todd Events, which plans weddings and bar and bat mitzvahs for clients whom he describes as nonshowy, sophisticated Park Avenue types. “I had one client who was ready to book the Plaza for a wedding, but now he wants to know what are his other options and whether the Plaza will back down on its minimum spending requirement, which runs about $80,000 to $100,000 for a prime Saturday night date,” Mr. St. Cyr said. “Bar and bat mitzvahs in this town had become a little bit of a show. There’s a little bit of outdoing the Joneses and the Cohens,” he added, noting that typical parties, if devoid of appearances by N.F.L. superstars or the Black Eyed Peas, range from $150,000 to $400,000. Even though some clients may not have been hurt in the downturn, they simply don’t want to have an overly ostentatious party in this environment, he said. SHOWY homes are also on the block. Joseph M. Gregory, Lehman’s president and chief operating officer who was replaced in June, a couple of months before the firm filed for bankruptcy, listed his oceanfront, 2.5-acre, eight-bedroom Bridgehampton home for $32.5 million this summer. Mr. Gregory could not be reached for comment. While brokers say they have yet to see an avalanche of high-end sales, they do say that upheaval is present in the minds of buyers. Once a hamlet for the moneyed old guard, Greenwich has found itself in recent years overrun by flashy hedge fund and private equity managers. But with the markets in flux, some high-end homes with price tags as high as $3 million to $8 million that sat unsold for six months or longer are now being offered as rentals, said Barbara Wells, a local Realtor. “I had a rental on the market for $11,500 a month. On Monday, we got an offer for $8,500, which we countered with $9,500. They came back with $8,000,” she said. “I told them they were going the wrong way but they said, because of what was happening in the financial markets, this is our new offer. And guess what? The owner accepted it.” Also shocking, she said, is the fact that some of the new homes offered for rent were houses built on spec. In all likelihood, the real estate market could be frozen for the next 6 to 18 months or so as buyers and sellers struggle to reach agreement on prices, Ms. Corcoran said. “The buyers have jumped to the sidelines and the sellers refuse to budge on their prices, completely in a state of disbelief that anything has changed,” she said. Job losses and lower bonuses are likely to hurt sales of apartments in New York, particularly starter abodes like studios, one bedrooms and basic two bedrooms. “The lowest-priced properties are always hit hardest first and recover last,” said Ms. Corcoran, who estimates that 20 to 25 percent of apartment buyers in the city work on Wall Street. “The rich have more wiggle room.” Skip to next paragraph Enlarge This Image Neal Boenzi/The New York Times, top; Marilynn K. Yee/The New York Times Michael R. Milken, top, in 1978, and Ivan F. Boesky, bottom, in 1987. The two men, both of whom went to prison, became symbols of Wall Street’s excesses. Enlarge This Image Janet Durrans for The New York Times The Greenwich, Conn., mansion of Steven A. Cohen. After buying it in 1998, he added amenities befitting a hedge fund king, like an outdoor skating rink. Despite the malaise, she says she sees some hope. “This feels like 1987,” after the stock market crashed, she declared. “It’s not even close to ’73 or ’74, when people used to feel sorry for you if you told them you lived in New York City.” That said, Ms. Corcoran said that data she once compiled showed that apartment prices in New York had peaked in 1988, one year after the ’87 crash, and taken 11 years to recover. Of course, there’s another much-watched barometer of Wall Street buoyancy: traffic at some of the city’s high-end strip clubs. During the heyday of the Wall Street boom in the 1990s, Lincoln Town Cars, Rolls-Royces and Bentleys were often found idling outside places like Scores. Inside, according to people who were present at the time, groups of brokers routinely dropped $50,000 and even $100,000 in a single night. In the “presidential suite” at Scores, with its own wine steward who delivered $3,200 bottles of Champagne, the tabs grew quickly. While dancers may not receive gifts like the ones once lavished upon them — say, a $10,000 line of credit at Bloomingdale’s or a pair of $125,000 earrings — the clubs still appear to be filled with brokers, bankers and foreign businessmen. On a recent night at Rick’s Cabaret in New York, men in suits and ties were in full force. At around 10 p.m. — early for a strip club — 10 of the club’s 11 private rooms on the second floor were booked. “Men will never grow tired of the high-class strip-club experience,” said Lonnie Hanover, a spokesman for Rick’s Cabaret International in New York. Rick’s, which is publicly traded on the Nasdaq and has 19 clubs across the country, even plans to expand. “When times are tough, there is no better form of escapism than a night at a gentlemen’s club,” he added. IN the early 1980s, Mr. Stone (who gave the world Gordon Gekko and the “Greed is good” mantra in “Wall Street”) spent time in Miami doing research for his movie “Scarface” (with its cocaine-snorting gangster Tony Montana). When he returned to New York he noticed a shift in the city’s culture of high finance, a world he was familiar with from his childhood. While Wall Streeters weren’t packing guns, other similarities startled him. “What shocked me was I met all these guys who at a young age were making millions and they were acting like these guys in Miami,” Mr. Stone recalled. “There’s not much difference between Gordon Gekko and Tony Montana.” “Money was worshiped and continues to be worshiped,” Mr. Stone added. “Maybe that will change now.” Adoration of riches is hardly new, however. In the mid- to late 19th century, the Gilded Age — a term Mark Twain coined in 1873 — offered equally ostentatious displays of wealth and a broadening gulf between rich and poor. “In the Gilded Age, they built great, enormous palazzos in Newport that they lived in for six weeks a year,” said the historian John Steele Gordon, whose book, “An Empire of Wealth,” chronicles that era. “During the last 25 years, it’s certainly been a gilded age in the sense that enormous fortunes have been built up in an unprecedented way.” Part of Wall Street’s allure for the young and ambitious was that anyone — regardless of education or breeding — could hit it big and live like a kingpin. Consider, for instance, Jordan Belfort. In 1987, Mr. Belfort, then a down-on-his-luck former meat-and-seafood distributor, was standing outside an apartment building in Bayside, Queens, when a childhood acquaintance who worked on Wall Street pulled up in a Ferrari. “This was a guy who you never would have expected would be making this kind of money,” Mr. Belfort recalled in a recent telephone interview. “I was broke, broke, broke, down to my last $100.” Mr. Belfort hit the Street in the late 1980s, and he recounted his adventure last year in a book called “The Wolf of Wall Street,” which he published after serving almost two years in prison for securities fraud and stock manipulation. He recently finished a second installment, “Catching the Wolf of Wall Street,” to be released in February. When he first struck it rich, he followed a well-trodden path for Wall Street upstarts. “First thing I did was go out and buy a Jaguar,” he said. “Step One is you get the car. Step Two, you get a great watch. Then great restaurants, and then maybe a place in the Hamptons — a summer share with another broker.” Whatever the Street’s excesses, it did offer individuals and institutions reliable, sophisticated and often efficient ways to trade and invest, helping to spread some of the wealth. Markets were democratized as individuals who had never before bought a stock or bond dabbled in investing, even if that meant simply plunking down money in a mutual fund, or participating in their company 401(k) plans. New technologies and the ability to trade stocks cheaply opened the financial doors to more people. As home prices rose, meanwhile, homeowners were enticed to tap into their new wealth through home equity loans and then used that money to pay for their own version of a lavish lifestyle. DESPITE these gains in the middle class, though, the truly wealthy have pulled away from the pack. Not since the late 1920s, just before the 1929 market crash, has there been such a concentration of income among individuals and families in very upper reaches of the income spectrum, according to researchers at the University of California, Berkeley, and the Paris School of Economics. Some say that anger over the yawning wealth divide found traction in the highly charged and polarizing debate in Congress over the bailout bill. Mr. Fraser, the historian, says that anger is informed by the de-industrialization of the American economy in recent decades. Factory closings and the loss of manufacturing jobs that paid decent, middle-class wages coincided with the heady expansion of the financial sector, where compensation soared. “That means that people in Ohio and Pennsylvania have not been living as high on the hog as those on Wall Street,” Mr. Fraser said. “There’s a real sense of anger at that unfairness.” Even if the current crisis leads to a prolonged slowdown, people may still flock to finance jobs. But they may have to recalibrate their expectations. “There’s no question that people on Wall Street are going to make less money,” said Jonathan A. Knee, a Columbia Business School professor and author of “The Accidental Investment Banker.” Like any cultural force concerned about its legacy, the financial world has a custodian of its past. On Wall Street, it can be found at the Museum of American Financial History, just a block from the New York Stock Exchange. Located in a grand space once occupied by the Bank of New York, it features a long timeline charting major market events. The last event it notes is the popping of the dot-com bubble earlier this decade. Robert E. Wright, a financial historian at New York University who is a curator of the museum, said that there were still many unknowns about how recent events would be recalled. “If the economic system shuts down and we go in for a deep recession, it probably is the end of an era,” he said. Hedging its bets, the museum has already started collecting mementos from the current crisis to post on its wall.
  7. (Courtesy of The Montreal Gazette) I removed most parts of the article that aren't really speaking about the Decarie Square project. Plus he voices his opinion on office towers here in Montreal.
  8. October 13, 2008 By ANDREW ROSS SORKIN Morgan Stanley was racing to salvage a crucial investment from a big Japanese bank on Sunday in an effort to allay growing fears about its future — negotiations so critical to the financial markets that they have drawn in both the Treasury Department and the Japanese government. Morgan Stanley, one of the most storied names on Wall Street, was locked in talks on Sunday to renegotiate its planned $9 billion investment from the Mitsubishi UFJ Financial Group of Japan, according to people involved in the talks. The completion of a deal might help calm markets worldwide, which sank last week because of escalating concerns about the fate of financial institutions like Morgan Stanley. Investors might read the investment as a sign of confidence in the bank’s future. Mitsubishi was pressing for more favorable terms after Morgan Stanley lost nearly half its market value during last week’s stock market plunge. Treasury, however, is not planning to have the United States government take a direct stake in Morgan Stanley as part of a broader effort to stabilize the financial industry and the markets, these people said. Wall Street had buzzed Friday that such a move might be unavoidable. Morgan Stanley is in the midst of the gravest crisis in its 74-year history, even though analysts estimate that the bank has more than $100 billion in capital. Morgan Stanley’s shares price has plunged nearly 82 percent this year, closing at $9.68 on Friday. Last month, Mitsubishi agreed buy about 21 percent of Morgan Stanley. The investment was to be made in the form of $3 billion in common stock, at $25.35 a share, as well as $6 billion in convertible preferred stock with a 10 percent dividend and a conversion price of $31.25 a share. Under the proposed new terms being discussed on Sunday, Mitsubishi would still buy roughly 21 percent of Morgan Stanley, these people said. But all of the investment would be through preferred shares, with a 10 percent annual dividend. Many of those shares would be convertible into common stock, but the Japanese bank was trying to set a conversion price far lower than originally proposed. Morgan Stanley and Mitsubishi have been in constant contact with government officials this weekend, these people said. Mitsubishi and the Japanese government have sought assurances from the Treasury Department that if the United States were to decide to inject money into Morgan Stanley at a later time — a possibility some analysts do not rule out — that such a move would not wipe out preferred shareholders. The Treasurey has indicated that it might use some of the $700 billion bailout package to take direct stakes in banks, but it has not spelled out how it would do so. Investors suffered deep losses when the government effectively nationalized the nation’s largest mortgage finance companies, Fannie Mae and Freddie Mac. It is unclear how far those discussion have gone or whether any such assurances would be forthcoming. Henry M. Paulson Jr., the Treasury Secretary, has pushed both companies to come up with a private-market solution and has indicated that he does not believe that Morgan Stanley needs capital from the United States government. However, he privately hinted to members of both companies that the government would back Morgan Stanley if it came to that, these people said, suggesting that he does not want to repeat the troubles that resulted from allowing Lehman Brothers to go bankrupt. George Soros, the billionaire investor, wrote in a column in The Financial Times that Morgan Stanley needs to be rescued by the U.S. government. “The Treasury should offer to match Mitsubishi’s investment with preferred shares whose conversion price is higher than Mitsubishi’s purchase price,” Mr. Soros wrote. “This will save the Mitsubishi deal and buy time for successfully implementing the recapitalization and mortgage reform programs.” While the negotiations remained fluid, people close to both sides expressed confidence that a deal would be struck. The companies are hoping to announce the terms of the transaction and Mitsubishi’s commitment to complete the deal by Monday morning, before the stock market open in the United States. Over the past week, Mitsubishi and Morgan Stanley have issued statements insisting that they planned to complete the deal on the original terms. Spokespeople for Mitsubishi and Morgan Stanley declined to comment on Sunday. Morgan Stanley converted itself into a bank holding company one week after Lehman Brothers collapsed last month. That business model makes it easier for Morgan Stanley to borrow from the Federal Reserve. The firm has also lowered its gross leverage levels to under 20 times. Mitsubishi has large ambitions for expansion into the United States. It recently purchased the remaining shares of UnionBanCal, a bank in California, for a premium over its share price. Mitsubishi had owned the majority of UnionBanCal since 1996. Edmund L. Andrews and Eric Dash contributed reporting. http://www.nytimes.com/2008/10/13/business/13morgan.html?_r=1&hp&oref=slogin
  9. TD and Royal downgraded to sell Posted: January 16, 2009, 8:47 AM by Jonathan Ratner Both Royal Bank and Toronto-Dominion Bank were downgraded to a “sell” at Dundee Securities on expectations for weaker credit quality, bringing them in line with the firm’s bearish view on the sector as a whole and its recommendations for all of the Big 5 banks. Despite significant deterioration in its U.S. loan portfolio’s credit quality, Royal’s earnings have held up reasonably well on the back of its domestic retail banking programs, analyst John Aiken told clients. However, since Canada is unlikely to escape the “economic carnage” occurring in the U.S., he said it is only a matter of time before domestic credit quality begins to weaken materially, as credit card exposures have already started to show. “Consequently, although Royal will likely fair relatively well and should retain a premium to the group, absolute risk still exists,” Mr. Aiken said, cutting his price target on the stock from $38 per share to $35. It closed at $34.04 on Thursday. His forecast for TD moves from $51 to $44 as a result of expectations for a challenged outlook in the coming quarters as a result of additional deterioration in credit quality. It ended the day at $44.05. While Mr. Aiken said TD’s operations remain strong and its long-term prospects are solid based on its U.S. growth platform, he thinks 2009 will be the second straight year of declining earnings. “TD will not be immune and we believe that there is a risk that current expectations for credit losses have a significantly greater chance of being too low rather than too conservative,” the analyst said. Mr. Aiken did upgrade Laurentian Bank from a “sell” to “neutral,” but lowered his price target from $36 to $33. The stock closed at $31.41 on Thursday. “We believe that Laurentian’s valuation is much more reasonable at these levels,” he said, adding that while the bank does not have any direct exposure to the U.S., it will still feel pain on the domestic front. In general, Mr. Aiken feels the impact of underlying economic weakness and credit woes in the U.S., which has produced an earnings drag, increased write-downs and higher loan loss provisions, has also filtered into the Canadian market and will likely linger into the first half of 2009. “Consequently, we believe that headwinds to the banks’ earnings and concerns of capital adequacy will remain in the forefront as the banks begin the journey into 2009, and with it, the remaining perils from the past year, plus those yet unknown,” he said. As a result, the analyst said now is not the time to change his cautionary stance on the sector. Instead, he said it is time to remain “selective and mindful.” Mr. Aiken suggested that strong domestic operations should bode well for the retail market leaders TD, Royal and to a lesser extent CIBC. He also expects higher provisioning will come from the U.S. exposures of TD, Royal and Bank of Montreal, as well as the ripple effects to Bank of Nova Scotia’s Latin America assets. “Overall, valuation outlook will be largely predicated on the depth and breadth of the U.S. economic slowdown,” the analyst said. “Further credit deterioration will result in higher provisions, while added margin compressions will also depress earnings, offering little justification for any meaningful near term increase in valuations.”
  10. The owner of Yogen Fruz, Cultures and several other food court stalwarts is adding stand-alone coffee and doughnut shops to its suite of brands. MTY Food Group Inc. said it has entered into a binding agreement to purchase all of privately held Country Style Food Services Holdings Inc. for an undisclosed price. The buy allows MTY to seize "the opportunity to strengthen its position and foothold in the Ontario quick service franchise industry and launches itself as a major player in the coffee and sandwich segment" the company said in a statement. Montreal-based MTY was already on the acquisition trail before it announced the Country Style purchase, but this latest acquisition takes it into new territory. Country Style is one of the biggest coffee and doughnut retailers in Ontario and is a household name in that province, but lags behind market leader Tim Hortons Inc. in number of stores and perceived quality among consumers. It does have significant reach however with 488 outlets, and is just the latest expansion for MTY. MTY acquired Taco Time Canada Inc. from its U.S.-based parent last November for $7.85-million. The deal gave it 117 of the quick service Mexican food restaurants, mostly in Western Canada. A couple months earlier it added 27 Tutti Frutti restaurants, solidifying its base in Quebec. Earlier this year MTY reported a 16% increase in fourth quarter net income to $2.84-million. For its fiscal year ending Nov. 30 of last year, the company earned $9.91-million, an 8% increase over a year earlier. MTY says Country Style's sales were approximately $94-million for the last 12 months, more than a third of the system-wide sales reported by MTY last year. The combined company would still be a shrimp compared with Tim Hortons, which reported sales last year of more than $2-billion and has a market capitalization of $5.9-billion. The chain is so omnipresent throughout much of the country that it has tried to expand in the U.S. with mixed results. While consumer spending has been crimped, fast food companies have been decent stock investments since the fall market crash. Shares of Tim Hortons are breakeven over the last seven months compared to a 26% drop for the S&P/TSX composite index. MTY has also proven itself a solid investment in uncertain times. Over the last seven months, the venture exchange-listed stock has dropped only 3%. http://www.financialpost.com/story.html?id=1492403
  11. I need to buy this book for a course I'm taking this semester. The Concordia bookstore does not have it in stock. It regularly costs $150. I then checked amazon.ca, and found it being sold there for $1.06!!! Only catch is that I have to wait 2-4 weeks for it to ship. But I think I can manage, because this course does not revolve around the text apparently. I placed an order with them for a grand total of $7, shipping included! For a business school, you would think that their prices would be more competitive!
  12. Tunisair May Sell Stake as Country Divests Assets (Update2) By Mahmoud Kassem June 5 (Bloomberg) -- Tunisair, the national airline of Tunisia, may sell a 15 percent stake as the North African country disposes of state assets amid an equities boom. ``We might sell more shares to a strategic investor, but the government will always want to hold a controlling stake,'' Adel Gaida, chief financial officer of Tunisair, or Societe Tunisienne de l'Air, said in an interview yesterday in London. ``We have been thinking of doing this for some time, though we don't have a timetable.'' Tunisia is selling assets to attract investment as buyers, particularly from the oil-rich Persian Gulf region, pour money into a country that isn't on emerging-market equity indexes and is commonly classed as a ``frontier market.'' Tunisia's main stock index, the Tunindex, has advanced 13 percent this year, making it the best-performing index in North Africa. Tunisair rose 0.8 percent to 4.05 dinars in Tunis trading as of 11:50 a.m. The stock has gained 6.6 percent this year, giving the company a market value of 329 million Tunisian dinars ($278 million). The airline serves more than 50 destinations in 25 countries and carried 3.5 million passengers last year. The government holds 74 percent. Companies on the Tunindex have one of the cheapest average price-to-earnings ratios in the Middle East at 13 times estimated earnings. The Dow Jones Arabia Titans 50 Index, a measure of 50 Arab stocks in 10 countries, trades at 21 times estimated earnings. The Tunisian government raised as much as $2.25 billion from the sale of a 35 percent stake in Telecom Tunisie, the country's largest telephone company, in 2006. Tunisair Expansion Tunisair is expanding in Africa and adding trans-Atlantic and Asian destinations, Gaida said. The carrier owns a 51 percent stake in Air Mauritania, which it formed as a joint venture in December 2006. Air France-KLM Group has a 5.6 percent stake in Tunisair, while 20 percent of shares trade freely. ``We are planning to add New York, Montreal, Beijing and Tokyo on our list of destinations, but that won't happen until we get our new fleet starting from 2011 because we would need A350s for the long haul,'' Gaida said. The airline's primary business is flying vacationers from Europe to beaches in Tunis. Airbus SAS, the world's largest planemaker, said on April 29 that Tunisair agreed to a 16-plane order valued at as much as $2 billion at list prices. Tunisia plans to acquire three twin- aisle A350-800 airliners, three A330-200s and 10 single-aisle A320s from the Toulouse, France-based manufacturer. ``We prefer to stick to one manufacturer because it saves us costs in maintenance,'' Gaida said. ``We will pay 10 percent of the cost of the new Airbuses and the remainder we will seek credit for.'' Tunisair's revenue rose 12 percent in the first quarter, compared with the same period a year ago. The company may distribute a dividend on 2007 profit this year, Gaida said. To contact the reporter on this story: Mahmoud Kassem in London at [email protected] Last Updated: June 5, 2008 06:06 EDT http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXYjvLDxX8pg
  13. Charlotte in same predicament as Wall Street By IEVA M. AUGSTUMS, AP Business Writer Ieva M. Augstums, CHARLOTTE, N.C. – The financial collapse has hit the city known as Wall Street South. For years, Bank of America Corp. and Wachovia Corp. helped turn Charlotte into a financial powerhouse. Now, the big banks have thrust it into the same predicament as the real Wall Street — the city is losing thousands of jobs and an unquantifiable amount of prestige. Residents who invested heavily in the banks have seen their wealth dissipate and lifestyles change radically. "It's kind of sad, disheartening because the banks have been the backbone of Charlotte for so long," said Carl Clayton, a 55-year-old retired school teacher. The loss of so many bank jobs is causing upheaval in other industries. Consumers who have been laid off or fear being out of work are curtailing their spending, forcing restaurants and retailers to close — among them Morton's, a high-end steakhouse, and a 15-month-old Home Depot Design Center. Even some of the Charlotte's lively night clubs have shuttered their doors. "There's a bit of a state of disbelief," said Bob Morgan, president of the Charlotte Chamber of Commerce. "We are seeing things happen that no one else has contemplated before." Charlotte remains the nation's second-biggest bank town by assets — second to New York, and in front of San Francisco. But, Morgan said, "we don't know what the city is going to look like once we emerge." "We do know that tremendous wealth has already been lost." A big reason why is the amount of banking shares owned by people who have worked for Wachovia, now owned by Wells Fargo & Co., and Bank of America. Both have used their stock to compensate employees. Bank of America's shares have been among the hardest hit among financial companies. The company has lost more than 56 percent of its value since it closed on its acquisition of investment bank Merrill Lynch & Co. at the beginning of the year. The stock is down nearly 85 percent from a year ago. Last year, before Wachovia was acquired by Wells Fargo, its shares had slid 85 percent. Clayton estimates he has lost about $60,000 because of stock holdings in the two banks, along with other North Carolina banks, including BB&T Corp. "I had a lot of bank stock, but now it's gone," Clayton said. "What wealth I had, is gone." Residents and employees never expected such a downfall. Wachovia, once headquartered in Winston-Salem, N.C., joined the Top 5 ranks of national banks after it was acquired by Charlotte-based First Union Corp. in 2001. The combined company took Wachovia's name. Banker Hugh McColl Jr. led NationsBank Corp. through some 70 acquisitions starting in the early 1980s. His biggest coup was San Francisco-based BankAmerica Corp., a financial institution bigger than NationsBank. He adopted the name and also moved the headquarters to Charlotte. Some say Charlotte's troubles began in 2006, when Wachovia acquired mortgage lender Golden West Financial Corp. for roughly $25 billion at the height of the housing boom. With that purchase, Wachovia inherited a $122 billion portfolio of deteriorating mortgages, leaving the company with huge losses. Charlotte residents were unnerved as they watched Wachovia falter and then be taken over by Wells Fargo in what amounted to a fire sale late last year. Down the street, at Bank of America, things were looking just as bleak. A series of bad bets in the investment banking unit over the past year sank companywide profits, and as Bank of America completed its acquisition of struggling investment bank Merrill Lynch & Co., shareholders watched its stock price slide to historic lows. Both Wells Fargo and Bank of America have said they remain "committed" to Charlotte. Wells Fargo, based in San Francisco, has said Charlotte will be its eastern headquarters, though it remains unclear exactly what that means. The fear is that Wells Fargo, as it completes its integration of Wachovia, will keep shedding Charlotte positions. Wachovia has about 20,000 employees in the city. Bank of America, meanwhile, with about 15,000 employees in Charlotte, is eliminating some 35,000 jobs companywide. North Carolina already has nearly 400,000 unemployed workers. The jobless rate was 8.7 percent in December, the highest since 1983, according to the most recent available data. Charlotte, with a population of nearly 700,000, is the 20th-largest city in the country. About 45 percent of the residents of its home county, Mecklenburg, make more than $50,000 a year, according to data supplied by the Charlotte Chamber of Commerce. Outside the downtown offices buildings filled with bank employees, there's a sense of disbelief as people huddle together drinking coffee or smoking cigarettes and then shuffle off to their jobs. When a reporter approached employees for interviews, they declined to speak, or said they didn't want to give their names, worried about keeping their jobs. Charlotte relies on the banks for more than employment — its lifestyle, even its skyline has depended on Wachovia and Bank of America. Wachovia sponsors the city's annual PGA tournament, among the most popular on tour, while Bank of America's name is on the football stadium and the bank is a sponsor of one of NASCAR's top auto races. Both fill towering downtown office buildings — Wells Fargo, now by way of Wachovia, is building a 48-story headquarters and adjoining city arts campus. The bankers and traders who work for both helped create the demand — and now vacancies — for the high-rise condos near by. "I have received more calls over the past month from people wanting to list their homes, with a majority of them having financial problems," said Rich Ferretti, a broker at Jamison Reality in Matthews, a suburb of Charlotte. Stores in the city's affluent SouthPark area are less crowded on the weekends. And a recent happy hour at Capital Grille, located just across from Bank of America's headquarters, was sparsely attended. Charlotte also faces civic and philanthropic repercussions. Unlike Wachovia, Wells Fargo's executives have few North Carolina ties. Bank of America typically offers up the lead gift on projects. "We will honor our existing commitments and we are still in the process of determining any future commitments," Wells Fargo spokeswoman Mary Eshet said. Now, the city is waiting for major changes. "A lot of our friends work for the banks," said Leslie Hunter, a 38-year-old mother of two. "People are not stopping everything, but their awareness has increased." After being laid off from his bank consulting job 11 months ago, Jim Edwards' daily routine of networking, applying for jobs and going to the gym keeps his spirits up. "I've been out of work and living on my retirement income," said the 62-year-old, who added it's been a struggle finding employment because no one is hiring. While many unknowns remain, Mayor Pat McCrory is optimistic. "Charlotte does have very strong resilience and I anticipate that a lot of the talent that's moving out of the banks will stay," he said in an interview with The Associated Press. Some job relief may be moving in. GMAC Financial Services and Morgan Stanley are rumored to be looking to move at least parts of their companies to the Charlotte area. GMAC Financial Service's chief executive, Al G. de Molina, used to be Bank of America's chief financial officer. Morgan Stanley has already hired at least four former Wachovia executives to help the New York-based firm's retail banking expansion effort. McCrory wouldn't talk about the two firms, but said the large amount of talent in Charlotte will "attract others in the financial services industry to set up here." "We're going through a major adjustment, but when the economy rebounds, I think Charlotte will rebound the quickest," he said.