Sep 17 2008
How Will the Financial Crisis Hurt Baltimore?
Everyone knows that the financial market has been collapsing recently, but it’s unclear how the current crisis might affect Baltimore. Almost certainly no one will know for sure until the dust settles, but one can always speculate.
Almost certainly New York City has the most to lose. Out of New York’s population, it’s estimated that over a half a million people work in finance. Already 25,000 people at Lehman Brothers have lost their jobs. There will undoubtedly be more losses to come.
While it’s been a while since Baltimore has been a major player in the finance world, the current crisis could have an effect on the major institutions that still operate here.
For instance, Morgan Stanley’s plans to expand their operations in Fells Point by 900 people along with expansion into a new building in Harbor Point could be brought into question with news today that they are in talks with Wachovia for a possible sale.
Click HERE to read the article
The Baltimore Sun reported today that Constellation Energy, one of Baltimore’s few remaining fortune 500 companies, might be considering a sale to a French Energy Company.
Click HERE to read the article
Legg Mason, who’s funds were once stars in the overall market, are now being battered…especially the Value Trust Fund, which had previously set a record for beating the S&P 500 for 15 years in a row.
Click HERE to read the article
Undoubtedly, Baltimore will feel the effects of the financial crisis in one way or another. However, Baltimore as a whole is well positioned to weather the economic downturn better than most other regions. Baltimore is still booming in healthcare and education, and the economic effects of military speding and the Base Relocation Plan will be beneficial for years to come. While we can not rest on our laurels, we may may remain cautiously optimistic. Let’s hope that when that dust settles, we’ll only need a slight brush off the shoulders and be able to continue the economic prosperity of the past several years.
5 Comments to “How Will the Financial Crisis Hurt Baltimore?”
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Well today we learned that BG&E’s parent Constellation Energy will be bought by MidAmerican Energy Holdings, a sub of Warren Buffet’s Berkshire Hathaway. Not a bad company to be purchased by if you’re going to be bought out. I guess Baltimore’s largest financial service employers would be Legg Mason, T. Rowe Price, and perhaps Bank of America. Am I missing others? As of today those seem to be doing OK. Although Legg’s stock has been getting crushed for over a year now. It seems their restructuring and business swap with Citigroup a couple years back has then in a better position then they would have been. It’s true about their mutual funds – Value Trust etc. It seems people are fleeing these types of traditional expensive funds for much better priced ETFs and index funds.
At least Berkshire Hathaway says “not much will change” with their acquisition of Constellation Energy. Sounds like they want to try to keep many of the jobs here in Baltimore. I can imagine there would likely be lay-offs. I wonder if George Bush’s son-in-law’s job is safe. I guess we can now say that Legg Mason is the only Fortune 500 company left in Baltimore. It’s not just a Baltimore problem, just a sad sign of the times.
I don’t think LM is a Fortune 500 company. Fortune 1000, maybe.
You are right. I double checked and Legg Mason is actually ranked 619…so not fortune 500. I guess Black & Decker would be the only other Fortune 500 company in the Baltimore area then?
A Fortune 500 ranking seems to me to be a pretty subjective way to value a company since it’s based on revenue, not profits. Legg is undoubtedly going through serious trouble at the moment, but it was actually more profitable last year than quite a few companies on the Fortune 500. The list seems to be biased towards companies that have a lot of sales but may have slim profit margins, like grocery store or drug store chains. T. Rowe was much more profitable than some of the companies on the list (GM, for instance, was third last year but lost millions).