State of Ohio Received Some of AIG’s Bailout

You can add $490 million to Ohio’s federal stimulus total.

That’s the amount Ohio has received from AIG since the federal government put the world’s largest insurer on life support last fall. Sunday evening AIG released information regarding how it spent over $70 billion of the $180 billion it has received from U.S. taxpayers through the U.S. Treasury Dept. and the Federal Reserve.  Ohio and several other states were on the list of businesses or government entities for which AIG used federal funds to settle debts.

From AIG’s press release on Sunday:

Municipalities in the states listed on Attachment C received a total of $12.1 billion from AIGFP between September 16, 2008 and December 31, 2008 in satisfaction of Guaranteed Investment Agreement (GIA) obligations. GIAs are structured investments with a guaranteed rate of return. Municipalities typically use GIAs to invest the proceeds from bond issuances until the funds are needed.

Screen Grabs from Attachment C:

Ohio Sunday Papers – Casinos: State Newspapers No Likey

• Huron County’s 18.3% unemployment rate – Associated Press
• State making more records available online – Columbus Dispatch
• Banks face long climb – Cincinnati Enquirer
• New Schools Fall Short of Strickland’s Standards – Columbus Dispatch
• Editorial: Fool’s Gold (Casinos) – Toledo Blade
• Editorial: False Promises (Casinos) – Columbus Dispatch
• Editorial: Highway Funds, er, Safety – Toledo Blade
• Editorial: Strickland – Let Charter Schools Bloom – The Plain Dealer
• Editorial: Trust in Change (Higher Ed) – Akron Beacon-Journal
• Op-Ed, Dennis Willard: Big Brother, Big Brother, big money – Akron Beacon-Journal
• Op-Ed, David Skolnick: Congressman Ryan Man of the Hour – Youngstown Vindicator
• Op-Ed, Thomas Suddes: Gambling Promoters & Their Self Serving Ideas – The Plain Dealer
• Op-Ed, Jonathan Riskind: Pollution plan fuels bipartisan fight – Columbus Dispatch
• Op-Ed, Joe Hallett: Ohio needs to upgrade Capitol statuary – Columbus Dispatch

Add Condom Sales to Recession-Proof Business List

From the Columbus Dispatch on Saturday:

Nationwide, sales of male contraceptives in food, drug and mass-merchandise stores increased 6.4 percent in the last 13 weeks of 2008 compared with 2007, according to the Nielsen Co., which tracks products.

Nielsen also counts how many condoms are sold, and that number went up 2.4percent in the same period.

The trend continued in January, with sales up 5.3 percent compared with the previous year and per-unit sales up 1.6 percent, Nielsen found.

Condom sales are pretty much recession-proof, said Carol Carrozza, vice president of marketing at Ansell Healthcare in Red Bank, N.J. Ansell is one of the largest manufacturers of condoms in the world.

“In this time of fear, people tend to be coupling more,” Carrozza said. “There’s a nesting effect, and people are staying home.”

Reluctance to have children in uncertain times also adds to the condom boom, she said.

The piece also dealt with Hilliard, Ohio condom entrepreneur Brian Frank.  His business, Undercover Condoms, has had a “rise” in sales even though the economy is “flagging.”

If you want to wrap your rascal, or your mate’s, go visit Undercover Condoms.  Buy Ohio!

What Would You Do if Your Budget Increased 10x?

According to an article in today’s Plain Dealer, the first stimulus money to begin reaching Ohio poses an interesting dilemma for the state’s community action agencies – how do you effectively spend it all?

… Ohio is concerned that local, nonprofit community action agencies – where the $267 million will end up – will not have the capacity to spend such an enormous amount of money over the next two years.

Before the federal stimulus package, Ohio would have received about $21 million for this program, said Mark Shanahan, energy adviser to Gov. Ted Strickland.

“We are looking at what the new federal rules are and whether we can use up to 20 percent of the money for job training,” he said. …

The $267 million being talked about is Ohio’s amount from the U.S. Dept. of Energy to do energy efficiency upgrades in the homes of the elderly, low and middle income earners.

One Piece of Good Economic News for Ohio

From the Columbus Dispatch:

The economic news in Ohio last year was mostly bad, but there was a bright spot: State exports grew by nearly 7 percent from 2007, officials said.

Numbers released this month by the U.S. Department of Commerce International Trade Administration show that Ohio’s export total for 2008 grew to more than $45 billion, up 6.87 percent.

Ohio is the seventh-largest exporting state in the nation and is the only state to increase exports every year since 1998, according to the Department of Development.

Bloomberg: Cleveland, Detroit Canaries in the Coal Mine for Coming Commercial Real Estate Problems

From Bloomberg on Monday:

March 9 (Bloomberg) — If you want to know what’s going to happen to commercial real estate across the U.S., look no further than Cleveland and Detroit.

Those two metropolitan areas lead the U.S. in mortgage delinquencies for owners of office buildings, apartments, malls and warehouses, a sign that cities hurt by the housing crisis will see their commercial markets dragged down next.

Commercial properties with mortgage payments 60 days late or more rose to 3.93 percent as of March in the Cleveland area and to 3.75 percent in the Detroit area, according to data compiled by Bloomberg. The North American commercial property delinquency rate is 1.1 percent, according to Standard & Poor’s. …

… Cleveland’s office vacancy rate was 14.8 percent in 2008 and is forecast to rise to 20.4 percent in 2010, according to CBRE Econometric Advisors, part of CB Richard Ellis Group Inc., the largest U.S. commercial real estate broker. A rate above 20 percent would be the highest since 1991, according to Jon Southard, principal at CBRE Econometric.

Cleveland’s unemployment rate was 7.1 percent in December. Ohio’s unemployment rate was 8.8 percent in January as the state lost 214,600 non-farm jobs, including 90,600 in manufacturing and 12,000 in financial services.

NYT Magazine: Cover Story on Cleveland’s Foreclosures Crisis

Click the image below and check out an excellent piece in the  New York Times Magazine on the particular issues of home foreclosures in Cleveland.  Currently, 1 in 13 homes in the city are vacant.  Featured prominently in the article is Tony Brancatelli, member of Cleveland’s City Council.  Slavic Village is the scene of many of this article’s illustrations of individual issues in the Cleveland housing market.

Ohio’s Jobless Rate Makes Big Jump

From the Ohio Department of Job and Family Services this a.m.:

Ohio and U.S. Employment Situation (Seasonally Adjusted)

Ohio’s unemployment rate was 8.8 percent in January, up from the revised rate of 7.4 in December, according to data released this morning by the Ohio Department of Job and Family Services. Ohio’s nonfarm wage and salary employment decreased 59,700 over the month, from 5,271,900 in December, to 5,212,200 in January.

“Ohio’s labor market showed continued decline in January,” ODJFS Director Douglas Lumpkin said. “The unemployment rate rose to 8.8 percent as job losses increased in both the goods-producing and service-providing industries.”

The number of workers unemployed in Ohio in January was 524,000, up from 445,000 in December. The number of unemployed has increased by 181,000 in the past 12 months from 343,000. The January unemployment rate for Ohio was up from 5.7 percent in January 2008.

The U.S. unemployment rate for January was 7.6 percent, up from 7.2 percent in December.

Strickland Makes Right Call on Importance of Auto Industry Supply Chain

Yesterday, Gov. Ted Strickland looked great and sounded all the right themes on CBS’ Face the Nation.  Of all the governors on the panel, he was the only one to say anything remotely newsworthy.  In Ohio and Michigan we understand the U.S. auto manufacturing is not only the Big Three, it’s the quarter of a million Americans working making parts and supplies for GM, Ford and Chrysler.  In Ohio, the number of people employed in the auto parts industry alone is over 97,000. (MEMA)

In answering questions regarding what are the largest problems in Ohio, Strickland told CBS’ Bob Schieffer that unemployment and foreclosures were huge issues, and continued about the importance of the auto industry – domestically and foreign-owned:

SCHIEFFER: What if one of the auto companies goes under?  How will that impact out in your state?

STRICKLAND: Hugely — hugely. And it will not only impact the Big Three; it will impact all auto
companies, including Honda and Toyota and all the others, because they have the same supply network.
And this supply chain is very fragile, and if it starts to collapse, it could have a cascading effect that could, quite frankly, cripple an industry that has been so vital to the economy of our entire nation for so long. So it’s very important that the auto industry get the help it needs to survive.

And I’ve had officials from the Honda corporation come to me, say to me, Governor, we’re not usually in
the business of advocating for our competitors, but it is so important that the auto industry and the Big
Three be preserved.

Otherwise, the economy of this country will suffer perhaps irreparable harm, and we just cannot let that
happen.

Governor Strickland’s fears are also dealt with by the Economist in the Feb. 19th edition.  In an article with the subhead, GM and Chrysler Say the Need Help, So Do Their Suppliers, the author says there are three large problems facing President Obama’s new U.S. Auto Industry Task Force, including, “The third is what help should be given to the car-parts industry, which receives far less attention than its famous customers, but which is facing acute problems of its own.”

One of the hallmarks of our current economic crisis is the constant unwinding of problem after problem.  Too many foreclosures turned into failed mortgage backed securities turned into uncapitalized credit default swaps.  In the case of the auto industry, failure of one or more of the Big Three turns into parts suppliers belly up turns into problems for the foreign-owned U.S. car plants.

Ohio Sunday Papers – It’s the Economy and Education with a smattering of Fisher, Brunner

• Editorial: Lawmakers must stop Strickland from killing charter schools – The Plain Dealer
• Editorial: Governor needs to tweek how he pays for education reform – Akron Beacon Journal
• Editorial: No Stimulus for Teardown – Toledo Blade
• Op-Ed, William Hershey: Ohio Dems Face Likely ‘Family Fued’ – Dayton Daily News
• Op-Ed, Thomas Suddes: Will Ohio House Dems Hold Together on Budget? – The Plain Dealer
• Op-Ed, Joe Hallett: Governor Sinned a Bit in Securing Manna from Washington – Columbus Dispatch
• Welfare rolls soaring in Ohio – Columbus Dispatch
• Toledo aid agencies fear what’s over horizon – Toledo Blade
• Late bill payments cost state – Columbus Dispatch
• Big repairs needed for U.S. automakers – Toledo Blade
• How would you spend $500 million taxpayer dollars? – The Plain Dealer
• Dems’ fight a cost of success – Cincinnati Enquirer
• Op-Ed, Dennis Willard: Race crucial for Fisher, Brunner – Akron Beacon Journal
• Brunner: Senate bid not a conflict – Columubus Dispatch
• Ohio tries to clean up payday lending one more time – The Plain Dealer
• Op-Ed, Jonathan Riskind: Obama’s economic plans leave some edgy, angry – Columbus Dispatch
• Development board’s City Center planning only quasi-public – Columbus Dispatch
• Farmland disappearing – Columbus Dispatch
• Preservationists hope to see some stimulus – Columbus Dispatch
• Ohio businesses must file sales taxes electronically for first time this year – The Plain Dealer
• Ohio officials OK new workers compensation program – Dayton Daily News\
• KELLY PAVLIK COVERAGE – The Youngstown Vindicator

Ohioans Have Submitted Nearly 7,500 Project Ideas to State’s Stimulus Site

After only a couple of weeks, Ohioans are responding to Governor Ted Strickland’s call for stimulus project ideas in a big way.

According to the state’s stimulus website, as of Friday 7,495 proposed projects had been catalogued.  For now, the state is using the website to share stimulus information and collect data from organizations, counties, cities and the like regarding their “stimulus-ready” project proposals.  The information being collected is not an application for stimulus dollars, but rather a first step for the state in getting a big picture inventory of proposals.  Project proposers meeting stimulus requirements will be contacted about the formal application process.

Once stimulus dollars are being spent, the state’s site will be a place to check up on progress and see how our money is being spent.

Go here to see the site’s FAQ.

New Ohio Development Director (Interim) Mark Barbash

Governor Ted Strickland acknowledged during Lt. Gov. Lee Fisher’s Senatorial campaign presser that Ohio Department of Development Assistant Director Mark Barbash will step in as director on an interim basis.

Barbash’s other title at Development is Chief Economic Development Officer.  That work, alongside Fisher for the last two years puts the department in good shape from a continuity standpoint.

Barbash, a former investment banker, also served in private and public sector economic development roles in the city of Columbus.  Before being hired by Fisher in 2007, Barbash last served as director of the Columbus Ohio Department of Development.

Fisher has relinquished the directorship of Development due to his bid for U.S. Senate.

White House Releases State by State Job Creation Numbers from Economic Stimulus

According to the White House, the state of Ohio will net 133,000 jobs as a result of the recently passed – and today signed by President Barack Obama – American Recovery and Reinvestment Act.

This is the economic stimulus bill passed by Congress last week in time for Diva Pelosi to make her trip to Europe.

Click Here for State by State List of Jobs to be Created

Voinovich Crankiness Continues

An article which will apparently be in tomorrow Plain Dealer (it posted on the web tonight) has Sen. George Voinovich saying his budgets as governor could beat up Gov. Ted Strickland’s budgets.  He also criticized state governors for pushing for federal dollars in direct aid to state budgets.

What’s with this guy?

He never dealt with anything remotely like what Strickland and the Ohio General Assembly are facing with the current economy and drop in state revenues.  Has he forgotten that a lot of state programs are actually federal programs?  Why wouldn’t we opt for more money for Medicaid rather than cut the program when it’s needed most?

Paul Krugman had a great column in the New York Times not too long ago titled, Fifty Herbert Hoovers.  He pointed out how important federal stimulus dollars were to state governments because state governments cannot use temporary deficit spending as a tool — most states have to balance their budgets by law.  This idea was fine when Alan Greenspan and others thought we were too advanced for the business cycle, but the cycle is back and we’re not through the downslope.

The Daily Graphic: Homes Sold For Loss Q4 2008: U.S. & Columbus, Ohio

On February 3, Zillow.com released their fourth quarter 2008 Real Estate Market Report.  In a statement the online real estate marketing and market research firm said in part, “Eighth Consecutive Quarter of Declines is Worst So Far: Home Values Fall 11.6% in 2008; One in Six Homeowners is Underwater, According to Q4 2008 Zillow® Real Estate Market Reports.”  The charts below are courtesy of Zillow.

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