New York may be facing worst financial crisis since the Great Depression: Gov Patterson

The fear is that because the wall street bonuses, a surprising large factor in the city's economy will be cut 30-40% this year. As a New Yorker, prices are going up, even in Manhattan where everything is already sold at a premium.

The pending cuts come after Paterson earlier this morning reiterated his contention that New York may be facing the worst financial crisis since the Great Depression. The state faces a $6.4 billion budget deficit next year, which the governor said could grow $26.2 billion over the next three years due to a weakening economy and deep problems on Wall Street, which is a major economic engine for the state.

Earlier Tuesday, Paterson suggested during an interview on Talk-Radio 1300 that the state's looming fiscal crisis may turn out be the worst since the Great Depression.

``We may be as challenged as we have been since the Great Depression,'' Paterson said, repeating his fear that state revenues are about to ``fall off the table'' due to Wall Street's woes.

Source

And the financial crisis only seems to be getting started.

The financial industry was hit with more downgrades and dire predictions, though the stocks rebounded in late morning after a sharp selloff in recent days.

BlackRock's Bob Doll became the latest market pro to forecast a worsening of the credit crisis, telling CNBC Wednesday that the financial sector will only hit bottom after a round of consolidation and layoffs and the end of capital raising.

"We are still of the view, stubborn as we are, that we have not seen the end of the problems and therefore financials have not made a relative bottom," said Doll, BlackRock's global investment adviser for equities, during a wide-ranging panel discussion.

Source CNBC.com

The other shoe will drop in September and will make the current crisis look like a day in the park.

Excellect, thank you for bring this up!

I've been banging the table for some time now that the largest untold story right now, is the huge revenue hit US states and cities are going to take as this financial crises continues to gather momentum.

JK

We may not have to wait till September, even though it's practically here. In the news today, more stories of "consolidations" and inability of anybody to raise capital. Layoffs - they just keep coming. Sigh.

I only wonder if they can hold this off till after the elections, they have been pulling some pretty tricky stick saves out of their hats lately, and nothing surprises me from day to day now.