Legion of Angels News Archive

ON Wall Street, when the going gets tough, will the tough get yoga mats?

Adding classes in yoga, meditation and other so-called mind-body regimens is just one way fitness professionals in the financial district are responding to recent economic uncertainties roiling their corporate clientele. Some are also offering shorter, cheaper personal training sessions and, in at least one health club, quiet discounts for members who lose their jobs.

Amid layoffs, concerns about staying buff could seem trivial. (Imagine the headline “World Markets Near Collapse: Muscle Tone Under Threat.”) Yet, businesspeople themselves wonder how a perilous financial climate will affect their physical fitness — and if exercise could help them weather hard times.

Some struggle to squeeze in any workouts at all. But others, like Amy Sturtevant, an investment director for Oppenheimer & Company in Washington, find themselves doubling down on conditioning for relief. “Professionals are doing their best not to panic, but I know a lot of professionals who are panicking” about the markets, she said. “The only way to get away from it is to have some kind of outlet.”

Ms. Sturtevant, a mother of four, is training for her fourth marathon. With brokerage clients needing more hand-holding, she said, she stints on sleep rather than skip her 5 a.m. daily boot camp and 20-mile weekend runs.

But one of Ms. Sturtevant’s training partners, a portfolio manager, said in an e-mail message that she had not been as diligent as Ms. Sturtevant and had been “scarce” at their workouts. The portfolio manager said she had weathered some tough financial cycles, “but this one has been uniquely disabling.”

“Forget the 5 o’clock wake-up to run,” she wrote. “Who is sleeping?”

One business owner, Sheri David, is backsliding for business reasons. As chief executive of Impressions on Hold, a company based in New York that sells corporate voicemail systems, a tougher sales environment has meant Ms. David sees more of her customers and less of her personal trainer. Over the summer, she dropped from five sessions a week to three; by mid-September, she said, “it turned into one day for one hour.”

Her trainer, Chris Hall, chides Ms. David to make time and, when she does, to tune out her BlackBerry, she reported. “But I say, ‘You don’t understand — there’s 27,000 reasons I have to pay attention,’ ” referring to her accounts.

For his part, Mr. Hall — whose clients have included Catherine Zeta-Jones — is now offering 30-minute, “high-core, high-intensity” sessions and shared workouts, he said, “because people don’t necessarily have as much time as they used to, and they don’t want to spend as much money.”

According to the International Health, Racquet and Sportsclub Association, there are 41.5 million health club members in the United States. To keep them on the roster, clubs may be willing to bargain. Most customers who quit the Telos Fitness Center in Dallas, for example, must pay to rejoin. But, for suddenly strapped longtime members, “I’ll put a note in their file and we’ll let them pick up their membership without any fees,” said Clarisa Duran, the center’s sales and marketing director.

For Plus One, which operates in-house fitness centers, corporate accounts are the issue; until recently, its major accounts included the investment banks Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs and Morgan Stanley. Though still operating in all of those except Bear Stearns (which closed in March), the company now must look to its recent expansion in other regions and industries for growth, said Tom Maraday, the senior vice president. (Google is one new client.)

“We’re a little experienced with stress because we went through 9/11 down here,” said Grace DeSimone, Plus One’s national director of group fitness. When disaster strikes, she noted, demand for yoga goes up, and on-site gyms exert a special pull: “People come and they want someone to talk to — it’s like Cheers.”

And, as in a bar, the televisions stay on. “In the banks, we have to keep the news on,” Mr. Maraday said. But at Cadence Cycling and Multisport Centers, TV’s show training videos rather than CNBC, because “we want this to be an escape,” said Mikael Hanson, director of performance for Cadence in New York.

During the Bear Stearns collapse, as becalmed financiers sought their escape, midday classes at the in-house gym grew crowded, according to a former Bear Stearns trader who declined to be named. When the final ax fell, they lost not just jobs but access to a club offering “everything,” she recalled, a hint of longing in her voice.

“They even gave you the shirts and shorts so you didn’t have to worry about laundry.” Now she can no longer get in her daily 5:30 a.m. workout. Her new employer has no gym and, with the markets erupting, her workday starts even earlier. “I wish there was a gym that opened at 5 in midtown,” the trader said, “but there isn’t.”

Stephanie Shemin Feingold misses a cushy fitness center, too. Since leaving a Midtown law firm in June to work at a nonprofit in Harlem, she’s been using her apartment building’s spartan fitness room. “When there are only three treadmills, it can get crowded pretty quickly,” she said.

“I’m lucky if I get in 20 minutes instead of the hour I used to do,” Ms. Shemin Feingold said. “My pants are getting tight. I’m going to have to figure out a new routine, because I can’t afford a new wardrobe.”

Fitness matters more than ever if you’re laid off, career counselors advise, not just for health, but to network and stay positive. “The last thing you want is to gain 20 pounds during a job search, ” said Dr. Jan Cannon, author of “Finding a Job in a Slow Economy.” “That just compounds that sense of, ‘What’s wrong with me?’ ”

Exercise, she added, can also spur creativity. “You know how we always have those ‘aha’ moments in the shower?” Dr. Cannon said. In the same way, “a good brisk walk can be very helpful.”

Jenny Herring, a Des Moines financial writer, usually walks or bikes for respite from the fulltime job search she began in June, after being downsized as part of the subprime mortgage fallout. But one day last month, feeling frustrated when her phone refused to ring, she varied the routine: “I said, I’m going to get outside, and I mowed the front and back yards” for exercise.

For a motivated few, extra time for conditioning actually proves a rare upside of unemployment. “A lot of people who are between jobs are using this downtime to go after a goal,” like a triathlon, said Mr. Hanson of Cadence Cycling.

Dr. Cannon recalled a client whose workouts last spring “got more frequent as time went on” — to block out the disappointment, and to give her something to get up and do every day.

“She lost 40 pounds.”

Source — The New York Times

WASHINGTON - Banks and Wall Street firms ramped up borrowing from the Federal Reserve’s emergency lending facility over the past week, a fresh sign of the credit stresses plaguing the country.

A Fed report released Thursday says commercial banks averaged $21.6 billion in daily borrowing over the past week. That compared with a daily average of $19.8 billion in the previous week.

For the week ending Sept. 17, Wall Street firms drew such loans averaging $20.3 billion. That step-up comes after six straight weeks where they didn’t draw any loans. Their borrowing averaged as high as $38.1 billion a day over the course of a week in early April.

The report comes as Fed Chairman Ben Bernanke battles the worst financial crisis in decades. In the last few days, the American financial system has been badly shaken as bad bets on dodgy mortgage-backed securities claimed more Wall Street giants.

Scrambling to break the grip of a worsening global credit crisis, the Fed and foreign central banks stepped up action Thursday pumping as much as $180 billion in money markets overseas. At home the New York Fed acted to ease a spike in overnight lending rates by injecting $55 billion into the U.S. banking systsem.

President Bush canceled an out-of-town trip Thursday to stay in Washington and meet with his top economic advisers.

Bush held a 40-minute meeting with Bernanke, Treasury Secretary Henry Paulson and Securities and Exchange Commission chief Christopher Cox along with White House and Treasury Department aides.

Investment houses in March were given similar, emergency-loan privileges as commercial banks after a run on Bear Stearns pushed what was the nation’s fifth-largest investment bank to the brink of bankruptcy. The situation raised fears that other Wall Street firms might be in jeopardy.

Bear Stearns was eventually taken over by JPMorgan Chase & Co. in a deal that involved the Fed’s financial backing.

The identities of commercial banks and investment houses that borrow are not released. Commercial banks and investment companies now pay 2.25 percent in interest for the loans.

In the broadest use of the central bank’s lending power since the 1930s, the Fed in March scrambled to avert a market meltdown by giving investment houses a place to go for emergency overnight loans. The Fed has since extended those loan privileges into next year.

The Fed’s expanded lending programs, its involvement in the Bear Stearns rescue and the government’s bailout of Fannie and Freddie have spurred concerns that these actions could put taxpayers on the hook for billion of dollars and encourage “moral hazard,” where companies take on extra risks because they believe the government will come to their aid.

Separately, as part of efforts to relieve credit strains, the Fed auctioned nearly $25 billion in super-safe Treasury securities to investment companies Thursday. Bids were placed for $49.6 billion worth of the securities.

In exchange for the 28-day loans of Treasury securities, bidding companies can put up as collateral more risky investments. These include certain mortgage-backed securities and bonds secured by federally guaranteed student loans.

The auction program, which began March 27, is intended to make investment companies more inclined to lend to each other. A second goal is providing relief to the distressed market for mortgage-linked securities and for student loans.

The Fed actions come during an especially tumultuous week. The stock market has nosedived and investors have fled to super-safe investments like Treasury securities and gold. Briefly on Wednesday investors were willing to pay more for certain Treasury securities than they expected to get back when the investments matured, a rare event.

At the start of the week Lehman Brothers, the country’s fourth-largest investment bank, filed for bankruptcy protection. A weakened Merrill Lynch, deciding it couldn’t go it alone anymore, found help in the arms of Bank of America. Insurance giant American International Group was given an $85 billion emergency loan from the Fed in a deal allowing the government to take control of the company.

So far this year, 11 federally insured banks and thrifts have failed, compared with three last year. The country’s largest thrift, Washington Mutual Inc., is faltering.

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On the Net:

Federal Reserve: http://www.federalreserve.gov/

Source — Yahoo!

NEW YORK - Stocks pulled off their lows Thursday as investors fled financial stocks and pumped money into the materials, transportation and consumer discretionary sectors. The major indexes fluctuated between modest gains and losses.

Investors dumped shares of Lehman Brothers Holdings Inc. and other financial names over worries it is becoming harder for them shore up their balance sheets.

Gains in other corners of the market helped pare Wall Street’s losses and at times led the major indexes to show modest gains. Among materials stocks, Monsanto Co. rose 4.6 percent. Railroad CSX Corp. helped transport stocks with a 8.2 percent gain and consumer discretionary stocks like Amazon.com Inc. advanced 2.2 percent.

Still, Wall Street’s discomfort with the financial sector checked a broader advance. The nervousness follows Lehman’s announcement Wednesday that it plans to sell its investment management unit and spin off its commercial real estate assets. The company is seeking to raise cash after making bad bets on holdings tied to real estate.

Traders and analysts appeared unimpressed with the steps outlined by the nation’s No. 4 investment bank, punishing the stock. Citigroup and Goldman Sachs lowered their ratings on the stock to “hold” from “buy.” Lehman fell $2.31, or 32 percent, to $4.94.

Other marquee financial names on Wall Street logged steep declines as investors worried about the health of balance sheets. American International Group Inc. fell $2.23, or 13 percent, to $15.28 and Washington Mutual Inc. lost 20 cents, or 8.2 percent, to $2.12. Among other financials, Merrill Lynch & Co. fell $3.13, or 13 percent, to $20.17 and Morgan Stanley declined $1.19, or 3.1 percent, to $37.73.

“The steps they’re taking are being seen by Wall Street as too little, too late,” said Arthur Hogan, chief market analyst at Jefferies & Co., referring to Lehman. “You’re looking at a company that was a $10 billion company last week that is a $3 billion company today.”

“They’ve got a very tough road ahead of them regardless of whether they get some assets sold off,” he said.

In midday trading, the Dow Jones industrial average fell 29.23, or 0.26 percent, to 11,239.69 after falling as much as 170 points in the early going.

Broader stock indicators were mixed. The Standard & Poor’s 500 index slipped 0.41, or 0.03 percent, to 1,231.63. The S&P’s decline left it not far above its July 15 trading low of 1,200.44 and its closing low of 1,214.91. A move below these levels could add to Wall Street’s pessimism.

The Nasdaq composite index rose 5.99, or 0.27 percent, to 2,234.69.

The indexes modest moves belied a broader pullback, however. Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where volume came to 654.8 million shares.

Bond prices showed little change. The yield on the benchmark 10-year Treasury note, which moves opposite its price, remained flat at 3.63 percent from late Wednesday. The dollar was higher against most other major currencies, while gold prices fell sharply.

Light, sweet crude fell 40 cents to $101.18 on the New York Mercantile Exchange as a strengthening dollar added to investors’ buying power. Still, the market kept at watchful eye on Hurricane Ike amid worries that it could damage energy installations in the Gulf of Mexico.

Investors also faced fresh concerns about consumers after the Labor Department reported that the number of people seeking jobless benefits dropped 6,000 last week to a seasonally adjusted 445,000. Analysts, on average, had expected a reading of 440,000. The four-week moving average rose slightly to 440,000.

The average number of claims remains at a level that some economists say is worrisome. And the report comes a week after the government said the nation’s unemployment rate rose to 6.1 percent in August, a five-year high. A shaky job market can be hard on consumers who also face tighter credit and a weak housing market. That worries investors because consumer spending accounts for more than two-thirds of U.S. economic activity.

In other economic news, the Commerce Department said the nation’s trade deficit jumped in July to the highest level in 16 months as oil imports reached a new high. That offset strong export growth.

Transportation names advanced as falling oil eased worries about fuel costs and after railroad CSX Corp. raised its 2008 and long-term financial forecasts. CSX rose $4.50 to $59.35.

UAL Corp.’s United Airlines advanced 32 cents, or 3.2 percent, to $10.29. And Continental Airlines Inc. rose $1.65, or 10 percent, to $17.72 after the company said it expects to draw more money from customers as it cuts costs and raises fees for checked bags.

General Motors Corp. rose 75 cents, or 6.6 percent, to $12.17 and was the biggest gainer among the 30 stocks that comprise the Dow industrials.

The Russell 2000 index of smaller companies fell 3.12, or 0.44 percent, to 714.04.

Overseas, Japan’s Nikkei stock average fell 1.98 percent. Britain’s FTSE 100 fell 0.89 percent, Germany’s DAX index fell 0.51 percent, and France’s CAC-40 lost 0.81 percent.

Source — MSNBC

NEW YORK - Lehman Brothers Holdings Inc.’s rescue plan got a dismal reception from Wall Street on Thursday, with shares of the battered bank plunging.

The stock price unraveled in early trading after analyst reports cast doubt that the nation’s fourth-largest investment bank can survive.

Its shares fell more than 90 percent from their 52-week high of $67.73.

Other financial stocks were also pulled lower amid fear that banks and brokerages still have more pain to go before the year-old credit crisis begins to wane. Merrill Lynch & Co. shares fell 11 percent, Goldman Sachs Group Inc. dropped 3 percent, and Washington Mutual Inc. shed 22.9 percent.

On Wednesday, the 158-year-old investment bank outlined a blueprint to sell off its well-respected investment management unit and spin off its commercial real estate assets. The strategy is part of a last-ditch effort to rescue the investment bank from bad bets on real estate-related holdings that have already laid low other storied Wall Street firms.

Lehman Chief Executive Dick Fuld, 62, the longest serving CEO on Wall Street, also said the firm would examine all other options — including a sale of the company he joined right out of college.

For investors, the strategy seemed long on hope, short on details and raised questions about timing and execution, analysts said. Investors had hoped to see a solid plan in place to offset almost $6.5 billion of losses during the past two quarters.

“Management did not successfully put to rest the issues that had been pressuring the stock,” Goldman Sachs analyst William Tanona wrote in a research report.

The nation’s fourth-largest investment bank plans to sell a 55 percent stake in its investment management division, which includes its prized Neuberger Berman asset management unit. Lehman said it is in advanced talks with several bidders, but refused to give a timeline about when a deal would take place.

Investors were discouraged that no buyer had been named. Lehman began pitching a deal to private-equity firms two months ago. Analysts believe the sale could fetch about $3 billion.

Further, the firm is also taking a big bet that a spin off of its commercial real estate assets will get a strong market reception in early 2009. The new entity will be called Real Estate Investments Global, and will be run by independent management.

Wall Street remains skittish about financial stocks since a run on Bear Stearns caused the U.S. government to orchestrate its sale to JPMorgan Chase & Co. in March. Lehman, the biggest U.S. underwriter of mortgage-backed securities, was automatically scrutinized.

Global banks have lost more than $300 billion from write-downs since the housing slump evolved into a full-blown credit crunch.

Analysts believe that trying to engineer a reconstruction of Lehman Brothers will be a tough proposition considering the environment. The current financial crisis shows no sign of ending soon, credit conditions remain tight and big acquisitions are rare. Big institutional investors — like state-owned sovereign wealth funds and private-equity firms — aren’t as willing to make major investments.

If all else fails, Fuld left open the option of selling the company.

“We remain committed to examining all strategic alternatives to maximize shareholder value,” Fuld said on a conference call on Wednesday.

Source — MSNBC

NEW YORK - Stocks capped a difficult week with steep losses Friday amid escalating worries about the financial and automotive sectors and a rebound in oil prices. The major indexes fell by more than 1 1/2 percent on the day, and the Dow Jones industrial average gave up more than 200 points to end at its lowest level in three months.

While investors have seen other triple-digit days in the past year since concerns about the economy began emerging, the Dow’s first finish under 12,000 since mid-March could deal Wall Street a psychological blow.

An afternoon downgrade of automakers helped draw out sellers in the stock market while Treasury prices rose as investors sought the safety of government debt.

A Merrill Lynch downgrade of regional banks added to the market’s initial anxiety, which ballooned Thursday when Citigroup Inc. warned of significant debt markdowns for the second quarter, Washington Mutual Inc. announced 1,200 job cuts and Moody’s Investors Service decided late in the day to downgrade the two biggest bond insurers.

Troubling news about the financial sector piled up all week, sending stocks to steep losses. Early on, the investment banks posted profit declines, Fifth Third Bancorp said it need to raise $2 billion in capital and two Bear Stearns hedge fund managers were charged with lying to investors - causing many investors to flee from stocks.

Quincy Krosby, chief investment strategist at The Hartford, said Friday’s session saw a confluence of the worries that investors have been grappling with as they try to determine where the economy is headed.

“I liken it to the GPS system saying ‘recalculating,’” she said, referring to the market’s uncertainty. “There’s no clarity, there’s no confidence.”

Krosby added: “The crosscurrents are coming at a time when the backdrop for the economy appears to be stabilizing. And yet the headline risk is unrelenting.”

The headlines Friday helped send the Dow down 220.40, or 1.83 percent, to 11,842.69. The blue chips haven’t closed below 12,000 since March 17, when the market was worried about Bear Stearns Cos. collapsing. Friday’s pullback left Coca Cola Co. as the only advancer among the 30 stocks that comprise the Dow.

Broader stock indicators also dropped. The Standard & Poor’s 500 index fell 24.90, or 1.85 percent, to 1,317.93, and the Nasdaq composite index fell 55.97, or 2.27 percent, to 2,406.09.

Declining issues outnumbered advancers by about 5 to 1 on the New York Stock Exchange, where consolidated volume came to a heavy 5.15 billion shares compared with 4.44 billion shares traded Thursday. Volume was heavy in part because of “quadruple witching” - the simultaneous expiration of four types of options contracts.

For the week, the Dow fell 3.78 percent, the S&P 500 lost 3.1 percent and the Nasdaq declined 1.97 percent.

Bond prices rose Friday as stocks sank. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.17 percent from 4.21 percent late Thursday.

Concerns over further tensions between Israel and Iran added to investors’ worries and pushed oil prices higher.

“That introduces dramatic uncertainty,” Krosby said of the investors’ reaction to unease in the Middle East.

Crude oil futures jumped $2.69 to settle at $134.62 a barrel on the New York Mercantile Exchange, recovering some of Thursday’s drop of nearly $5 per barrel on news of a fuel price hike in China.

Investors are awaiting the weekend’s meeting in Saudi Arabia of oil producers and consumer nations, which could bring some relief to the problem of soaring oil prices. But many analysts believe the gathering might end up being a mere finger-pointing session.

The concerns made for a difficult market.

“There has to be reticence about getting back in,” said Stephen Carl, principal and head of equity trading at The Williams Capital Group. “It’s definitely an ugly end to the week.”

Bond insurer MBIA Inc. fell 86 cents, or 13 percent, to $5.59, while competitor Ambac Financial Group Inc. edged up 2 cents to $2.05, after losing their “AAA” rating from Moody’s.

Another ratings move hit stocks of automakers. Standard & Poor’s Ratings Services placed the corporate credit ratings of General Motors Corp., Ford Motor Co. and Chrysler LLC on watch with negative implications. The classification means ratings have a one-in-two chance of being downgraded in the next three months. S&P believes high fuel costs will hurt the U.S. auto market through 2009.

GM fell $1, or 6.7 percent, to $13.79, while Ford lost 51 cents, or 8.1 percent, to $5.81.

The dollar fell against most other major currencies, while gold prices rose.

The Russell 2000 index of smaller companies fell 12.10, or 1.64, to 725.73.

Overseas, Japan’s Nikkei stock average dropped 1.33 percent. Britain’s FTSE 100 fell 1.53 percent, Germany’s DAX index declined 2.12 percent, and France’s CAC-40 fell 1.79 percent.

The Dow Jones industrial average ended the week down 464.66, or 3.78 percent, at 11,842.69. The Standard & Poor’s 500 index finished down 42.10, or 3.10 percent, at 1,317.93. The Nasdaq composite index ended the week down 48.41, or 1.97 percent, at 2,406.09.

The Russell 2000 index finished the week down 7.88, or 1.07 percent, at 725.73.

The Dow Jones Wilshire 5000 Composite Index - a free-float weighted index that measures 5,000 U.S. based companies - ended Friday at 13,415.89, down 374.77 points, or 2.70 percent, for the week. A year ago, the index was at 15,291.15.

Source — Forbes