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Tuesday, September 16, 2008

Governor on the Larger Stage

- Mr. W.B. ($28.40) won for Kasey K at Philly Park yesterday. However, yours truly, engrossed as I am these days in the events playing out on a much larger stage, spaced out and missed it entirely. Well, at least I'll get credited for my share of the $12,600 in earnings the horse collected. And this was a 5K claiming event. Pretty easy to make your claiming investment back these days, just by running the horse back at the same level when permitted.

Governor Paterson is performing on that larger stage with his role in the attempted rescue of insurance giant AIG. Forget Lehman and Merrill; for reasons beyond my pay scale, it's AIG that seems to be causing the bulk of the distress on Wall Street, and I get the feeling that the Fed will not allow the company to fail. Maybe.

The Governor insists that the steps he took will not involve state taxpayer money. Nonetheless, the call is out for the state legislators to return to Albany once again in an attempt to make further budget cuts (or not); this in the homestretch of the election.

Assembly Speaker Sheldon Silver said that his chamber was "ready to assist in any way we can." Except of course to approve a racino at Belmont. Seems almost silly to even mention that since the state has long left a potential infusion of cash from the Aqueduct parlor on the table. Or in the Aqueduct parking lot, to be more accurate. You gotta think though at some point the matter of Belmont is going to come up again. And again, I don't think that depending on gambling revenue is a good thing, especially since the slots bubble will eventually burst just as the others have.

But check out some of these numbers to get an idea of how serious the situation is.

Paterson said the state treasury has already suffered a 97 percent drop this year from the largest banks' corporate taxes and he predicted as many as 30,000 Wall Street-related jobs could now be lost in a "worst-case scenario."

He also feared that state coffers could see up to $1 billion less in tax revenues over the next six to eight months.

Wall Street accounts for 20 percent of state revenue, or $12 billion, and 9 percent of the city's revenue, or $3.6 billion. [NY Post]
If you're in a state or city pension plan, don't worry, because they had only a "minuscule" portion of the funds invested in Lehman.
The state's $154 billion pension fund owns about 5 million shares of Lehman common stock....Jim Fuchs, a spokesman for State Comptroller Tom DiNapoli, said losses from Lehman could total about $400 million.

Lehman shares held by the state were worth about $80.6 million at the start of September and were valued at $1.05 million yesterday.
As Atrios would say, WHHEEEEEEEE

- Another point I meant to mention about Capital Play in the last post was the objections raised to their bid by NYRA's Charles Hayward over the summer. He questioned Mohegan Sun's role in the group, suggesting a serious conflict of interest given their successful casino operation in nearby Connecticut.
“They’re going to make much more money for every dollar wagered in Connecticut than they would in New York. If they have a lot of New Yorkers who are going to Connecticut right now, do they really want those people to go to Aqueduct or do they want them to go to the woods of Connecticut?” [Throughbred Times]
Seems like a valid point. Of course, NYRA could very well harbor some bitterness towards Capital Play due to the deceptive negative advertising campaign they mounted against NYRA late in the franchise race; and I wouldn't blame them if they did.

- If you're interested, this column in the Times is, I think, an excellent overview of just how this week's mess on Wall Street came about.

3 Comments:

Anonymous said...

Hayward is not quite right on his assertation that the Mohegan's would send customers from Aqueduct up to CT. If he understood the dynamics of the casino business these days, he would know that on a per customer basis, the gaming companies are making more on food, beverage, lodging, other enteratinment and shopping than they are inside the gaming parlors. Therefore, if Cap play or any other operator built a world class facility with all the amenities at the Aqueduct site, there would be no reason to encourage customers to leave there and head elswhere when you could get them to spend their discretionarty dollars on all the available options on site. Hayward is doing nothing more than "fear mongering," so hopefully the Legislature is a better study of the gaming business than Charlie. Just based on sheer population, folks will come to Aqueduct and under CapPlay and S L Green plans, have numerous ways to enjoy their experience, of course including a play on the ponies. Maybe DelNorth's plan for "slots in a box" is meant to keep the ignorant VLT player enclosed in the box until they are broke with no other options within site on which to spend their dough? Why not just steal it from them on their way in the door?

Anonymous said...

Screw the state or city pension plans,take care of your own money like everyone else.

Also,do away with free health care for retired state or city workers.
enough is enough.

Tax payers have had enough.

jk said...

If you read Mohegan's quarterly financial reports, you will see Yonkers has taken a bite out of their business. The Big A racino will take another bite. Mohegan is smart enough to know it is better to have a piece of that action than to lose it all to another competitor. As good as Mohegan is, they can not control if folks decide to stay closer to home.

Since Mr. Heyward is so worried about Mohegan, he should take a trip to their race book and clone it at the Big A.

Hat tip to Gov. Patterson for his leadership on the AIG rescue. He helped save a lot of NY based jobs. Its nice to finally have a gov. who gets stuff done.