KeNo's Housing and Economic Portal: Tuesday December 21 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

NYC OTB bailout vote fails in State Senate - (www.newsday.com) The New York City Off-Track Betting Corp. began shutting down wagering parlors and stopped taking bets over the telephone and Internet last night after a bailout failed in the State Senate.

Lawrence Schwartz, OTB chairman and a top aide to Gov. David A. Paterson, said he expected all operations to cease by midnight. He predicted the closure of harness tracks across the state and possibly no horse racing at Belmont Park next spring without NYC OTB, which took in $840 million in bets last year. More than 1,000 OTB employees were expected to be out of work. "We are out of cash," Schwartz said. "We are out of business today because the Senate didn't act." The bailout needed 32 votes to pass but garnered only 29: all Democrats and two Republicans. There were 21 "no" votes - all Republicans..... The shutdown of NYC OTB will likely add to this year's $315-million state budget deficit. Schwartz said it would cost "millions of dollars" to shutter the parlors and lay off employees. He also said the state would be responsible for $100 million owed to creditors and $504 million in pension and health benefits for OTB workers.

Two bank closures bring year total to 151 - (www.reuters.com) U.S. authorities shut down two banks on Friday, bringing the number of closures this year to 151, as smaller financial institutions continue to struggle with depressed real estate markets and a lack of job growth in the economy. The Federal Deposit Insurance Corp has said it expects bank closures to peak this year after 140 closures in 2009. The bulk of this year's closures have been smaller institutions, each with less than a billion dollars in assets, as large banks have recovered more quickly from the 2007-2009 financial crisis. The FDIC announced the following closures on Friday: * Paramount Bank of Farmington Hills, Michigan. Had total assets of $252.7 million and $213.6 million in total deposits. Level One Bank will assume Paramount's deposits and branches and open as normal on Saturday. The Paramount failure will cost the FDIC's deposit insurance fund about $90.2 million. It was the fifth closure of an FDIC-insured bank in Michigan this year.

Build America Bonds’ End Poised to Batter Muni Market - (www.bloombeg.com) The looming end of the federally subsidized Build America Bonds program may push up yields in the $2.8 trillion municipal securities market and put more financial pressure on cash-strapped states and cities, investors said. Senate Democrats backing the subsidy, which has helped finance bridges, roads and other public works, fell short in a bid to get the program added to a bill extending the 2001 and 2003 income-tax cuts. That failure was the latest in efforts to keep the Build America program alive beyond its scheduled end on Dec. 31. The securities, which carry taxable interest rates similar to corporate debt, have allowed state and local governments to access investors abroad and others who don’t buy traditional tax-exempt bonds. That has eased the supply of tax-exempt bonds and buoyed prices, which move inversely to yields, a trend that may reverse next year if the program is killed. “It could get pretty ugly,” said Rob Novembre, managing director at Arbor Research & Trading Inc. in New York, who runs the company’s municipal-trading operation. “Whoever owns munis could potentially experience some pain.”

Issuers East to West Rush to Offer Build America Bonds - (www.bloombeg.com) From California to New York, issuers are rushing to take advantage of Build America Bond subsidies by accelerating sales of the securities before the program ends. States and municipalities were set to sell more than $3 billion of the securities next week, according to data compiled by Bloomberg late yesterday. In Chicago, San Francisco, Los Angeles and New York state, issuers said they’re hurrying to market before the program expires Dec. 31, absent an extension. “We were trying to beat the clock, so we fast-tracked the financing to take advantage,” Charles Perl, deputy chief financial officer of the San Francisco Public Utilities Commission, said yesterday. The district moved up a planned $350 million Build America debt sale to next week, months ahead of its previous schedule, he said yesterday in an interview. The U.S. government pays 35 percent of the interest costs for the bonds to help communities build roads, bridges and other infrastructure.

Delta attendants say 'no' to union - (www.startribune.com) Flight attendants at Delta Air Lines narrowly rejected union representation in the first of three votes to organize the majority of employees at the world's second largest airline. The results, announced shortly after the close of voting Wednesday, were 9,544 votes against the union, and 9,216 in favor of the Association of Flight Attendants (AFA) or other unions. The margin was 328 votes, or 1.7 percent. AFA President Pat Friend said Delta's management ran "the largest anti-union campaign that this country has ever seen" and the union would challenge the fairness of the election and seek a revote. Delta rejected the union's claims as "ridiculous" and said it looked forward to integrating its workforce two years after the merger of mostly nonunion Delta and heavily unionized Northwest Airlines. If the result stands, it means that 7,200 former Northwest flight attendants, including 1,900 based in Minnesota, will no longer be represented by the union or be covered by their existing contract. Delta said it will announce a transition plan for those workers at a later date.