Hard Times in "The City"

Back in the 90's, a friend of mine worked in "The City," which is London's financial district. There was big money to be made and people were partying. He said in the summer everybody was half pissed by 2 o'clock in the afternoon. The Globe and Mail has a long piece on how far it has fallen.

There are no official figures, and the best anyone can come up with is a running tally done by the financial website Here Is The City. The figure is shocking: Between August, 2007, and February, 2009, 133,000 jobs were lost in investment banking, private banking and asset management. Topping the list of woe is Bank of America, the new owner of Merrill Lynch, with 29,260 jobs vaporized at the two companies.

As the downturn in the global financial services industry becomes dire, the futures of other big Canary Wharf names – Barclays, Morgan Stanley, Credit Suisse, HSBC – at Europe's premier office development remain uncertain.

London partied like no other city in Europe during the boom years, which began in the mid-1990s and was driven by the massive influx of investment capital and jobs into the investment banking, asset management, underwriting, private equity and derivatives markets. By extension, business services soared. Throw in one of the hottest real estate markets on the planet and you had a recipe for extraordinary growth.

Now, London is falling as quickly as it rose. And there is little doubt things will get worse before they get better, for London is the victim of the bursting of a rare double-bubble: real estate and financial services.

This extraordinary place has vanished.

US Treasury Bubble Worries Chinese

How strange is it, that a country that is the military enemy of the United States is its biggest creditor?

With the US spending like drunken sailors, the Chinese are starting to wonder if its a safe investment:

March 13 (Bloomberg) -- China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.

“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”

They are being polite now. Wait until the US have to start making excuses, like a college student behind on his rent. This is going to get very ugly.

Investors Fleeced on Trump Project

As egomaniac Donald Trump fires people in the boardroom of his reality show Celebrity Apprentice, real investors were getting scammed on the Trump Ocean Resort Baja. Here's a shocking account of what happened. (article)

The Southern California couple paid $250,000 down payment on a 19th-floor oceanfront condo in Trump Ocean Resort Baja in 2006 before the first construction crew arrived.

But admiration for the celebrity developer and star of "The Apprentice" has now turned into anger and disbelief as Trump's luxury hotel-condo plan collapsed, leaving little more than a hole in the ground and investors out of their deposits, which totaled $32.2 million.

"I can't even stand to see Trump's face on TV," says Linda Drake, a psychologist, whose husband is a commercial airline pilot and financial adviser.

Investors were told last month their money was spent and they won't get a penny back. A single mother in suburban Los Angeles lost $200,000 and won't be able to send her sons to private universities. A Los Angeles-area businessman lost a deposit of more than $1 million on four Trump units, including two penthouses.

The project's collapse comes at a delicate time for Trump, whose casino company, Trump Entertainment Resorts Inc., filed for bankruptcy protection last month. He also is embroiled in a lawsuit to avoid paying debt on the struggling Trump International Hotel & Tower in Chicago. Trump and his children heavily promoted the northern tip of Mexico's Baja California coast. He sold 188 units for $122 million the first day they went on a sale at a lavish event in a downtown San Diego hotel in December 2006.

(...)

Buyers pressed for updates as construction fell behind schedule. They got a bombshell letter in December that said negotiations for a construction loan from German bank WestLB AG collapsed and Trump Baja had only $556,000 left. It quoted a contract clause that gave the developer a right to spend their deposits.

Another letter came in January that said Trump was removing his name.

A Feb. 16 letter from a Mexican entity, PB Impulsores, said the project was scrapped "given the extreme dislocation of the financial markets." It said there was no money left to refund deposits. The December letter says Trump was not an investor, but buyers said they were sold on his imprimatur.

It's amazing how low profile this story is considering Trump's celebrity. Who doesn't want to see this guy go down? I'm sure he's lawyered up enough that he will skate on this but it would be nice to see him at least publically shamed. To associate his name with trickery and dishonesty.

His daughter Ivanka was also involved in the project. If you've watched the show, this young woman in her 20's graduates from university and gets a job in daddy's company. Contestants on the show have to kow-tow to her as she dishes out her business advice.

Somebody email this story to Rosie O'Donnell!