The Financial Crisis: What's All This Mean for Jacksonville....

[second_pancake]

From National Mortgage News:

The mortgage-related businesses that Bank of America Corp. would get from buying Merrill Lynch & Co. might look redundant after its July purchase of Countrywide Financial Corp., but some observers say one or both of Merrill's subprime servicing units might help BoA work through its problem Countrywide loans. BoA's deal, announced Monday, to buy Merrill for $50 billion of stock could also prompt a phasing out of the brokerage company's relationship with PHH Corp., analysts said. Merrill Lynch Credit Corp., a unit in Jacksonville, Fla., that makes prime jumbo mortgages for the brokerage's clients, has outsourced much of the work to PHH for at least 10 years. But Countrywide's capabilities would make such outsourcing unnecessary after Merrill's contract with PHH expires in 2010, observers said. BoA quit most subprime mortgage lending in 2001. Industry sources said Monday that Merrill's two servicing units -- Wilshire Credit Corp. in Beaverton, Ore., and Home Loan Services Inc. in Pittsburgh -- have room to take on additional loans. "I would think that, if BofA wanted to, it would be an effective way of getting additional capacity for the old Countrywide loans," said Phillip Comeau, a principal in the consulting firm Phillip Comeau Co. and a former executive at Freddie Mac. David McDonnell, a founder of Statebridge Co., a special servicing start-up in Denver, said BoA "should probably keep Wilshire Credit intact" because it is "a needed platform in today's market."

We all know about Merrill being a major employer in Jax, but PHH is also there right off of Deerwood.  It will be interesting to see how many people in Jax will be affected by all of this and if those two companies downsize significantly, what other viable options are there for employment?  WaMu is on its last legs as well, so that's not an option.  Pretty freakin scary.

[BridgeTroll]

BoA quit most subprime mortgage lending in 2001

They all need to stop this.  Quit loaning money to people or institutions with lousy credit.

[thelakelander]

Merrill Lynch and BOA are also two of Jax's largest employers.  Combined, they have three major complexes in town.  The BOA tower downtown, BOA's complex on Southside Blvd and Merrill Lynch's offices off of Gate Parkway.  If they consolidate, is there any doubt there will be local layoffs?

[RiversideGator]

It means that we are screwed and its time to start making alternative plans.

What plans should be made?

And the misery is only beginning.

Announcements from GM next week and the upcoming shutdown of the corporate retail chains after christmas are going to take a very very heavy toll on our local economy.

What announcements from next week are you privy to?  Care to elaborate?

[Traveller]

what other viable options are there for employment?

When is Deutsche Bank's new office opening?

[RiversideGator]

lol.

what other viable options are there for employment?

When is Deutsche Bank's new office opening?

Would it be funny if this did not happen due to market forces?

[Ocklawaha]

Don't know the current picture, but 28 years ago, all PUBLIC STORAGE CORP properties in JAX were Merrill Lynch too. Libia and I got hired at the Arlington Expressway unit while attending college. In fact we designed the inside of the managers apartment with the serving window. Lynch was a great company to work for, they wanted XX numbers and NEVER got in your way to achieve the goals.

A shakeup in the ownership, moved our units from the hands of "Dusty Roads" and ML, to some super management group... They brought in a 90 day wonder from the Navy's OCS school, who "thought" he was a retired fleet admrial. Frankly I wouldn't have sailed on a garbage scow up Pottsburg Creek with the guy. Making lots of smoke and very little light, I headed for JIA - then TRAILWAYS and never looked back.
I love the scent of a 380 HP Dededc

OCKLAWAHA

[thelakelander]

Speculation begins over First Coast job losses

With shrinking mortgage industry, local experts wonder how many of 60,000 jobs could be gone

According to the Florida Agency for Workforce Innovation, about 60,000 people in the Jacksonville area work in "financial activities," representing nearly 10 percent of all nonfarm jobs.

But as the financial industry consolidates, a lot of those jobs could disappear as major firms merge and look to cut costs.

"There's going to be a loss of jobs because the mortgage industry is shrinking," said Ben Bishop, chairman of Jacksonville investment banking firm Allen C. Ewing.

Bank of America became interested in buying Merrill Lynch because of the firm's large brokerage business, analysts said. But beyond the brokerage operations, Bank of America might look at cutting a lot of Merrill Lynch's total workforce of about 60,000, said Mark Travis, chief executive of Intrepid Capital Management in Jacksonville Beach.

"That 60,000 head count - my guess is that they're going to cut it in half," Travis said.

"I think it's going to be painful," he said.

Merrill Lynch has a number of business units operating in Jacksonville, and it would not give specific data on which units employ the 2,700 people locally. But one of its major local operations is the headquarters of its mortgage company, Merrill Lynch Credit Corp. That business could be vulnerable, since Bank of America has its own mortgage operation.

"It does seem likely there will be a significant overlap" of some corporate functions between Bank of America and Merrill Lynch, said John Challenger, chief executive of Chicago-based outplacement firm Challenger, Gray & Christmas.

Challenger said Bank of America has been involved in a lot of acquisitions and has been known to cut jobs after a merger.

"It has built a real machine. It has a model and an approach," he said.

The news isn't all bad for Jacksonville. German-based Deutsche Bank revealed plans in July for a business support center in Jacksonville that will employ 1,000 people by 2011.

full article: http://www.jacksonville.com/tu-online/stories/091708/met_333213674.shtml

[second_pancake]

I don't know about the Deutchse bank deal.  I have a feeling that their plans to open in Jax will be slow-coming if at all.

The other Jax-based company that concerns me is Fidelity National Financial.  They deal in the support of mortgage servicing through a software based mortgage servicing platform.  With the few companies out there utilizing in-house systems, and their other clients being absorbed by those companies or filing BK (NetBank), where does that leave them?  Of course, I know the answer.

[uptowngirl]

Merrill Lynch and BOA are also two of Jax's largest employers.  Combined, they have three major complexes in town.  The BOA tower downtown, BOA's complex on Southside Blvd and Merrill Lynch's offices off of Gate Parkway.  If they consolidate, is there any doubt there will be local layoffs?

VERY few employee's at the BoA tower downtown, most are at the office park on Southside. Did ya'll know there is also a sizable Wachovia mortgage processing office on Emerson @95? I wonder what will happen with them? Wachovia also has a fairly large office out off of St. John called Evergreen Not sure if Evergreen got picked up or not. Of course there is also the CountryWide office off of 95 which I would assume is a duplicate of the BoA Southside office park processing center....

[NotNow]

Stephen,
I have some questions about your blog:

"So hard choices:  cut services and ignore the Sprawl rhinocerous in the living room or make geographic decisions and withdraw any further governmental subsidies supporting the sprawl from those areas, and permit no further expansion by sprawl until sufficient density to provide adequate an adequate tax base exists in the interior city first.

I think its time to do in reality what we have been hypocritically paying lip service to for the past few years anyways.  Recentralize development."

Are you saying that we BAN any development that is not in the city interior?  Is that legal?   Or Constitutional?

"Anyways, in response to an economic crisis we have to make plans for a massive influx of the hungry and the desperate and a huge spike in the marginal class of criminals that will be wandering for the next few years.

The inevitable food and soup kitchens and relief agencies and work agencies need to be planned NOW.  And they need to go in areas where the activity will be beneficial rather than destructive.  I suggest on the abandoned industrial east end of downtown.   We should be discussing how to quickly convert the buildings into emergency shelters and implement policies on how best to protect everyone's safety."

Jeez, how many hungry and desperate persons do you expect?  Those "abandoned" East side buildings, are we siezing them?  How?  Is that legal?  Or Constitutional?


"We need to plan ahead for the inevitable flood of drugs and gambling that are the mainstays of the crisis economy.

We probably need to convert programs like the DART program into an agency that seizes drug dens and turns them into emergency shelters for recently displaced families rather than simply razing the property.  Expand the excellent work and programming developed by Kevin Gay at Operation New Hope.  Probably appoint Kevin and Matthew Bowler into emergency housing department heads, in fact."

Again, Jeez, drugs and gambling are the mainstays of a "crisis economy"?  Are you predicting something beyond the Great Depression?  The decay of moral society?  Under what legal system would DART or its sythesis "seize" properties?  Is that legal?  Or Constitutional?  How are we going to pay for "emergency housing" or department heads for such a thing?  Under what basis is city government getting into this?  Is this a function of government?

"The suburban shopping centers will collapse.   Especially the strip malls and the competing mega malls.

As the corporate sprawl withers on the vine, the city should convert DVI with the task of filling the tax deed vacancies downtown with the displaced retail activity.

The Core city has a chance to compete with the rest of the city in these times, entertainment programming festivals and events will bring people in from the collapsing suburbs.  They need to be supported and encouraged.

And finally, for the love of god, the public transit has got to be fixed."

Again, Jeez, how bad do you think it will get?  If the malls and strip malls collapse, and we have (thousands?) of unemployed desparate people living in emergency city housing, do you really think there will be downtown "festivals"?  What legal vehicle would be used to convert tax liens into siezed property for the city?  Who will provide the capital to relocate retail there?  Under such conditions, where will we get the money to fix public transit?

"And finally we are going to have to make some tough choices on our legal code.

My guess is that we do not have sufficient jail space in order to accomodate the number of criminal charges that arise out of any economic crisis.

We will probably say goodbye to the practice of arresting uninsured drivers and pot smoking teenagers.

Domestic violence triples under recessions, so its something to plan for, and we will probably have to look at expanding court room facilities in order to handle the sheer volume of divorces and bankruptcies.  (which means looking at the existing federal courthouse facilities)"

As we have discussed before, JSO does not physically arrest uninsured drivers.  The charges that you see on booking forms are listed when they are arrested on other charges as well.  Arrest stats could also be showing criminal citations or notice to appear.  These are classified as an "arrest" but the defendant is given a court date and released at the point of contact.  JSO also currently encourages officers to not physically arrest for misdemeanor amounts of MJ.  I don't disagree that the rule could become policy instead of encouragement.  What do you propose to do with the "drug and gambling" that you mentioned earlier?  If you propose a program of some sort, how do we pay for it under the conditions that you describe?  Domestic violence triples during recessions?  I didn't know that.  Where is that stat?  What increase in divorces and bankruptcies do you anticipate? 

I can see that you envision very dark days ahead.  Where in the midwest following NAFTA did conditions come to this point?  If what you descibe happens, it appears that you are also describing an expansion of government power that is unprecidented in this country.  Do you think that such a move is possible?  Do you see the suspension of the constitution?  Does this jive with your arguments about the Patriot Act?  I'm not trying to be a smart a&& here, I really want to know how you came to these conclusions.

[NotNow]

I think that first it should be established that such actions are legal.  Then it should be established that they are necessary, or that conditions warrant such actions.  Then, in light of such an economic nightmare, establish where the funds for such massive social programs would come from. 

My libertarian nature says that such government intervention in markets is unconstitutional as well as undesirable.  I don't believe that the economic picture portends such a disaster is looming, but I am not a trained economist.  I am always willing to listen to a viable argument.

[peestandingup]

Maybe Notnow should take a drive through Normandy (my neck of the woods) & look at all the abandoned strip malls, the huge land lots with years old "shopping center coming soon!" decayed signs sticking out of them & the ones that are built that have like 2 occupants (out of 10+ spaces). You might as well open those up & let me ride my motorcycle inside of them, doing donuts, play crashup derby & stuff, cause they ain't coming back. Oakleaf has a lot as well.

To be fair, there's a lot in the core too, but not to this degree. And at least the core still holds some kind of real value (walkable, condensed, history, etc). Serves these idiots right.

[NotNow]

My original questions stand.  How do you propose doing these things?  I'm not sure why you think I need to drive down Normandy, but I am pretty familiar with it.  Are you suggesting that my questions about the legality of the government siezing buildings is somehow responsible for the vacancies?  What is it that you would prefer me to do?  Should we just raise the red flag and start communes?  Sieze all of the "rich" peoples money and property and kill them?  What is it that you want?

[ChriswUfGator]

My original questions stand.  How do you propose doing these things?  I'm not sure why you think I need to drive down Normandy, but I am pretty familiar with it.  Are you suggesting that my questions about the legality of the government siezing buildings is somehow responsible for the vacancies?  What is it that you would prefer me to do?  Should we just raise the red flag and start communes?  Sieze all of the "rich" peoples money and property and kill them?  What is it that you want?