Thursday, September 18, 2008

BoogieDowner Economics

BoogieDowner had the pleasure of spending time yesterday with a CUNY Graduate School of Journalism student, Valerie Lapinski, as she researched the effects of the Wall Street crisis here in the BoogieDown. Valerie came across our site while trying to find out more about the Bronx, her newly assigned beat. We look forward to working with Valerie as she continues to report on the happenings of our beloved borough. After speaking with some folks at Sophie's Diner in Pelham Bay, here's what Valerie reports:

Even the remotest corners of the Bronx feel the shockwaves from fallen Wall Street giants this week. At the very last stop of the 6 train Wednesday, customers at Sophie’s Diner in Pelham Bay commiserated over the shiny countertops while a TV blared the day’s news in a loop: the Federal Reserve threw the American International Group an $85 billion life preserver, and the stock market sank another 450 points.

“Bear Stearns didn’t seem like a big deal,” said Michael Hafter, 46, as he waited for his Salisbury steak. “But now, one of the biggest banks in the country, and the biggest insurance company? People are noticing.”

Most of the diner’s afternoon patrons experienced some foreshadowing of a tanking economy in the past year, from lost jobs to devalued housing to the escalating cost of food and personal goods. Hafter’s first hint came from his job as a manager at the CVS Pharmacy across the street. “We get regular downloads of price increases every day. It’s a normal thing, but now it’s exorbitant. We can barely keep up,” he said.

Soaring prices were just one indicator that the economy was floundering. J.P. Morgan’s government-aided buyout of Bear Stearns six months ago was the first big rumble on the national radar, and then came the avalanche: the bailout of mortgage cornerstones Fannie Mae and Freddie Mac, Lehman Brothers going belly-up, and today’s news about the AIG.

“It sounds to me like you can’t keep money in these institutions anymore,” said Nick P., 30, at his favorite perch by the counter. Perino works as a painter and plasterer, but lately he’s turned to driving a gypsy cab for extra cash. Even though he doesn’t have any investments or property other than his car, Perino said he feels the crunch.

“It’s one big ripple effect. It reflects on everyone. Last year, I was flooded with work. Same time this year, I’m completely dead,” Perino said.

“I feel like a loser out there,” he said, gesturing to the busy intersection where he plies his trade. “I’m embarrassed. I met a beautiful chick at a bar this weekend and didn’t want to tell her what I do. I told her I was in construction.”

Nearby, Olivia DeVall, 62, nursed a bowl of tomato soup while reading a morning paper. DeVall also felt the sting of unemployment; last year she was laid off from her IT job at a major bank. Her job and others were directed overseas to India. “We knew it was coming for five or six years,” she said.

DeVall also feels the woes of the housing market as she looks to sell her apartment and move to Long Island to be closer to family. “I already think I won’t be able to sell it for the original price. There are a lot of vacant apartments for sale. Someone might like another one better than mine,” she said, taking a bite out of a grilled cheese.

“I’m almost 63 so I’ve seen a lot of downturns. But this time I can retire. I worry about the kids,” she said, chewing thoughtfully. “What kind of future are they going to have? “

In the corner of the diner, the TV rattled on. Nick Perino sipped his cup of coffee as he gazed at the screen. “They’re telling you on TV ‘don’t worry,’” he said. “But I’d be worried.”

Please leave any comments on this piece, or questions you may have for Valerie in the "comments" section.


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