New York City Comptroller William C. Thompson, Jr. joins New York City Mayor Michael Bloomberg at a City Hall news conference regarding the impact of Wall Street conditions on the City’s economy on Monday, September 15, 2008. Pictured (l to r) are: Bloomberg; New York City Council Speaker Christine Quinn; and, Thompson. Photo credit: Marla S. Maritzer

View Economic Notes with focus on Wall Street impact
View Economic Notes News Release with focus on Wall Street impact

New York City Comptroller William C. Thompson, Jr. issued the following statement at a news conference today with Mayor Michael R. Bloomberg regarding the impact of Wall Street conditions on the City’s economy:

Today is a sad and stunning day. Thousands of people are losing their jobs, and many are unsure about their future. Every job on Wall Street results in the creation of additional jobs – and this unfortunately ripples in the opposite direction as well.

It is troubling that so many back office workers and support staff suddenly are out of work. It is equally distressing that many small satellite businesses and their employees inevitably will be affected. Let us never forget the pain that this incredible collapse has caused.  

The approximately 640,000 retirees, beneficiaries, and City employees who are invested in the New York City Pension Funds should know that their money is safe and secure. Although we own a number of Lehman Brothers securities, they represent a very small percentage of the Pension Funds. 

As of last week, the Funds held more than 2 million shares of Common Stock in Lehman Brothers, valued at more than $15 million. However, I must emphasize that our investments in Lehman Brothers securities are just a miniscule percentage of the Funds, which currently total more than $100 billion. 

Since I took office in 2002, the Trustees of the Pension Funds and I have reduced the Funds’ exposure to risk by diversifying our portfolio beyond the traditional asset classes. In light of recent events in the economy and financial markets, this approach is helping us withstand the tough times. By dramatically increasing the amount we invest in private equity, real estate and other asset classes, we have ensured the long-term health of our portfolio.

Of these investments, we currently have roughly $550 million in private equity and real estate assets managed by Lehman Brothers’ Investment Management Division (IMD). This division also manages U.S. Government bond portfolios and other portfolios totaling approximately $4.8 billion. Fortunately, these funds, as part of the IMD, remain a separate legal entity from Lehman Brothers Holdings and are not part of the bankruptcy filing.

The City’s Pension Funds are healthy, and we are ready for the trying times that are no doubt ahead. New York City has weathered previous Wall Street troubles, such as the financial crisis of the 1970’s, the stock market crash in 1987 and the burst of the dot-com bubble only a few years ago. I have confidence in New Yorkers and our ability as a resilient city to create a stronger future.

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