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Through the boom times in the stock market and the securities business, New York thrived. But now, the city's top financial boffin is warning that times, they are a changin', and the culprit is the subprime mortgage mess. It's not that those expensive Park Ave. co-ops were bought with subprime loans; the problem is that those co-ops were bought by the guys securitizing and trading those loans. And that business, friends, is deader than Monty Python's parrot.
City comptroller William Thompson Jr. said in a report Monday that the city could face a budget shortfall of more than $6-billion in fiscal 2011.
“New York City’s economy is at a turning point,” Mr. Thompson said. “Turmoil in the nation’s housing and mortgage markets has reverberated through the financial sector, threatening to produce a marked slowdown in local economic activity.”
“The principal threat to both the national and local economies is the unfolding subprime mortgage debacle and its collateral effects on credit markets,” Mr. Thompson said in his report. “The resulting financial losses and layoffs are likely to fall disproportionately on New York firms and workers.”
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