"Boston Fed will channel $1.8m to 6 Mass. cities; Urban grants may be widened to all of N.E." by Deirdre Fernandes | Globe Staff, January 15, 2014
The Federal Reserve Bank of Boston will inject $1.8 million into six struggling Massachusetts cities as part of its first-ever effort to transform urban neighborhoods by encouraging local officials to work more creatively with businesses and nonprofit groups.
If the initiative is successful, Boston Fed officials hope to expand the competitive grant program throughout New England and provide a model for the 11 other Federal Reserve banks across the country to extend their roles in community development.
“Our desire is to have a more direct impact, real impact on these cities,” said Eric S. Rosengren, president of the Boston Federal Reserve Bank.
Rosengren on Wednesday will announce the first six municipalities to win grants of between $100,000 and $700,000, using funds provided by private foundations and the state. Twenty mid-size Massachusetts cities, including Lawrence, Somerville, Chelsea, Worcester, Holyoke, Fitchburg, and Fall River, competed for grants.
But the money is only a small part of the point. Federal Reserve officials and their partners in the program are trying to push community leaders to think more imaginatively about how to repair civic psyches and rebuild economies….
After you guys spent all that time destroying and sucking the lifeblood out of them?
Many of the cities are combatting high unemployment, low student achievement, and an uncertain future.
Chelsea, for example, has experienced spurts of hope, replacing dingy, industrial buildings with condominiums and attracting the first Starbucks coffee shop to what city leaders hope will become a mixed-use development of housing, retail, and offices.
The former shipbuilding city has already enlisted a network of nonprofit agencies, backed by multimillion-dollar grants, to provide financial counseling to families, employment training to troubled teens, and tutoring to children.
Yet even with these efforts and resources….
And that's the $uce$$ story!
Chelsea officials say that winning a Boston Fed grant would provide a “seal of approval” and help them bring together disparate factions to build durable civic institutions and leadership to tackle the deeply ingrained problems that could take years, if not decades, to solve. Chelsea wants to use the money to reach out to residents and businesses to clean litter off the city streets, link up schools and nonprofits to help children and families access financial resources, and boost the city’s housing inspection to address unsafe conditions.
“There’s a lot of good things happening in Chelsea today,” City Manager Jay Ash said. Still…. “we are frustrated that we haven’t had the deep impact on the lives of residents who live in our neighborhood.”
The Boston Fed’s initiative is part of a renewed focus under Rosengren to apply the bank’s economic research to the real world and improve New England communities.
Derivatives, MBS swindles, default swaps, and all the other looting schemes?
The effort grew out of out of a two-year study of Springfield that examined why that Western Massachusetts city, the state’s third-largest, continued to fail even as state government and nonprofits poured millions of dollars into revitalization efforts.
The study compared Springfield to similar aging industrial cities, such as New Haven, that were making progress.
The Boston Fed’s economists found that it did not matter where the city was located, whether it was predominantly white or Hispanic, or even what types of industries were based in the community. The primary driver of success: sustained leadership and collaboration between businesses, government, nonprofits, and community groups.
The research found that in more thriving cities such as New Haven, colleges and universities worked with government officials and private industry to provide workforce training and funding to lure companies. In Providence, a nonprofit foundation worked with business executives to develop ideas and a consensus on downtown development projects. And in cities such as Evansville, Ind., dynamic mayors forged public-private partnerships with businesses and charitable foundations.
But few urban revitalization programs focus on the more systemic issues that can help communities to build their own social, economic, and civic resources, Rosengren said. Instead, they direct money to a particular building project or a specific need, such as education or health care, Rosengren said.
Rosengren acknowledged that solving such problems could take decades, extending far beyond the three-year grant program. But, he said, “We cannot ignore these cities.”
Through the year-long application process, Fed officials have worked with all 20 Massachusetts cities that applied for grants, encouraging them to bring different partners to the proposal, pushing them to reach out to business executives, and asking them to hone in on the data to track and measure success.
In Chelsea, that meant not bringing in only the nonprofit and government officials, but also business owners….
If the city hopes to address unemployment, education, and problems such as overcrowding in housing, businesses will have to get involved, said Ann Houston, executive director of Neighborhood Developers, which builds affordable housing and offers financial literacy programs. “It really got us to think about how you have to have every sector involved,” Houston said. “People’s lives aren’t segmented into agencies.”
The grants are funded by several donors, including the Living Cities Funders Collaborative, a New York foundation; Massachusetts Competitive Partnership, a Boston nonprofit that promotes economic growth; and MassDevelopment, the state’s quasi-public development agency.
Boston Fed officials said they believe they have the right formula to give mid-size cities the necessary boost, but they add that the program is still an experiment.
The Fed will monitor the award recipients over the course of the grant to determine what works, said Richard Walker, senior vice president of the Boston Fed.
“This will put them in a position to map their potential,” Walker said.
The banks love us, yay!!!
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"Boston’s financial industry has banner year" by Beth Healy | Globe Staff January 10, 2014
Boston’s investment business is back in a familiar place: awash in money.
Thank heavens someone is.
To the surprise of many, 2013 turned out to be a huge year for the stock market, marking a psychic return to better times for the city’s large community of money managers.
Related(?): The wealthiest philanthropists did not give as much in 2013 as they gave before the Great Recession, even as a strong stock market and better business climate have continued to concentrate American wealth in the top 1 percent of earners.
Many now have record assets under management after stocks surged nearly 30 percent last year and created hundreds of billions of dollars in new wealth.
“It snuck up on them,’’ said Alex Thomson, a longtime executive recruiter in Boston’s investment arena. “All of the political discussions put a damper on most people’s expectations.’’
Even as the year progressed, the market’s upward streak came with little celebration. The year was so dominated by worries over the shutdown of the US government and a stubborn economy that there was none of the exuberance that often accompanies a big year in the market.
They were trying to keep it quiet lest we lynch them.
“There was very little euphoria,’’ said Bruce Herring, group chief investment officer in Fidelity Investments’ global asset allocation group. “Most of us were pleasantly surprised by the magnitude” of the gains.
Meanwhile, Americans’ retirement nest eggs quietly recovered, and the investment accounts of schools, charities, and pension funds fattened.
Yeah, sure, everyone is getting rich.
The Massachusetts state pension fund, for instance, added nearly $7 billion to its coffers, or 13 percent, just through November.
Related: Mass. pension plan ranks worst in US, study finds
Also see: Checking My Mass. State Pension Statement
Globe told me it was all good.
MFS Investment Management grew its assets by a staggering one-quarter, or $90 billion. Fidelity Investments grew by $200 billion, or 12 percent.
I'll bet it's a real hoot at Fidelity. I wonder where she ranks now.
These money managers didn’t grow in lockstep with the stock market because they also invest in other types of instruments. And bonds, for example, had a difficult year. Even so, Loomis, Sayles & Co., a Boston firm that primarily manages bond funds, saw its assets rise 8 percent, to $200 billion.
“It was a good year,’’ said Mark Donovan, cochief executive of Boston Partners, in stark understatement. His firm, a unit of the Dutch financial giant Robeco Group, nearly doubled in size last year, from $27 billion to $51 billion.
His cochief, Joseph Feeney, recalled the firm’s low, back in March 2009, when assets slumped to $7 billion — “a near-death experience,’’ he said. But the gains of the past several years have washed that away. Over the next five to seven years, he said, “I don’t think it’s outlandish, given momentum and performance, that we could close to double assets, to $100 billion.’’
A bit of swagger is a marked change from the years after the financial crisis of 2008, which not only dealt investors and money managers stunning losses, but also threw a blanket of caution over the industry.
Indeed, despite one of the greatest bull markets of all time since 2008, hiring in this region’s finance businesses is still sluggish. According to the Federal Reserve Bank of Boston and the Bureau of Labor Statistics, the number of jobs in the securities and investment field in Massachusetts grew just 1.9 percent last year, through November.
“Massachusetts has yet to post year-over-year job gains in finance and insurance in 2013 — and in fact has not seen year-over-year growth in the sector since August 2007,’’ said Robert Clifford, a policy analyst at the Boston Fed.
A case in point is Robeco Boston Partners. It has 125 employees today, almost exactly the same number as when the market crashed in November 2008. Other firms have cut jobs. Fidelity last fall cut several portfolio managers in its institutional arm, as part of a restructuring.
Fidelity said its investment business is strong and growing globally, but that its managers “regularly review resources to ensure they are aligned.’’
Even so the financial sector remains one of Boston’s largest employers. And hiring may at last be starting to show signs of ticking up, according to Thomson, the recruiter. Firms stayed cautious during the long, slow economic recovery, he said, and that caution is likely to show up in bonus checks as well.
While investment managers are paid on the growing piles of assets of they manage, top executives haven’t forgotten the excesses of 2007, Thomson said. “They want to make sure [2013] is not an anomaly of a year.’’
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Boston’s investment business is back in a familiar place: awash in money.
Thank heavens someone is.
To the surprise of many, 2013 turned out to be a huge year for the stock market, marking a psychic return to better times for the city’s large community of money managers.
Related(?): The wealthiest philanthropists did not give as much in 2013 as they gave before the Great Recession, even as a strong stock market and better business climate have continued to concentrate American wealth in the top 1 percent of earners.
Many now have record assets under management after stocks surged nearly 30 percent last year and created hundreds of billions of dollars in new wealth.
“It snuck up on them,’’ said Alex Thomson, a longtime executive recruiter in Boston’s investment arena. “All of the political discussions put a damper on most people’s expectations.’’
Even as the year progressed, the market’s upward streak came with little celebration. The year was so dominated by worries over the shutdown of the US government and a stubborn economy that there was none of the exuberance that often accompanies a big year in the market.
They were trying to keep it quiet lest we lynch them.
“There was very little euphoria,’’ said Bruce Herring, group chief investment officer in Fidelity Investments’ global asset allocation group. “Most of us were pleasantly surprised by the magnitude” of the gains.
Meanwhile, Americans’ retirement nest eggs quietly recovered, and the investment accounts of schools, charities, and pension funds fattened.
Yeah, sure, everyone is getting rich.
The Massachusetts state pension fund, for instance, added nearly $7 billion to its coffers, or 13 percent, just through November.
Related: Mass. pension plan ranks worst in US, study finds
Also see: Checking My Mass. State Pension Statement
Globe told me it was all good.
MFS Investment Management grew its assets by a staggering one-quarter, or $90 billion. Fidelity Investments grew by $200 billion, or 12 percent.
I'll bet it's a real hoot at Fidelity. I wonder where she ranks now.
These money managers didn’t grow in lockstep with the stock market because they also invest in other types of instruments. And bonds, for example, had a difficult year. Even so, Loomis, Sayles & Co., a Boston firm that primarily manages bond funds, saw its assets rise 8 percent, to $200 billion.
“It was a good year,’’ said Mark Donovan, cochief executive of Boston Partners, in stark understatement. His firm, a unit of the Dutch financial giant Robeco Group, nearly doubled in size last year, from $27 billion to $51 billion.
His cochief, Joseph Feeney, recalled the firm’s low, back in March 2009, when assets slumped to $7 billion — “a near-death experience,’’ he said. But the gains of the past several years have washed that away. Over the next five to seven years, he said, “I don’t think it’s outlandish, given momentum and performance, that we could close to double assets, to $100 billion.’’
A bit of swagger is a marked change from the years after the financial crisis of 2008, which not only dealt investors and money managers stunning losses, but also threw a blanket of caution over the industry.
Indeed, despite one of the greatest bull markets of all time since 2008, hiring in this region’s finance businesses is still sluggish. According to the Federal Reserve Bank of Boston and the Bureau of Labor Statistics, the number of jobs in the securities and investment field in Massachusetts grew just 1.9 percent last year, through November.
“Massachusetts has yet to post year-over-year job gains in finance and insurance in 2013 — and in fact has not seen year-over-year growth in the sector since August 2007,’’ said Robert Clifford, a policy analyst at the Boston Fed.
A case in point is Robeco Boston Partners. It has 125 employees today, almost exactly the same number as when the market crashed in November 2008. Other firms have cut jobs. Fidelity last fall cut several portfolio managers in its institutional arm, as part of a restructuring.
Fidelity said its investment business is strong and growing globally, but that its managers “regularly review resources to ensure they are aligned.’’
Even so the financial sector remains one of Boston’s largest employers. And hiring may at last be starting to show signs of ticking up, according to Thomson, the recruiter. Firms stayed cautious during the long, slow economic recovery, he said, and that caution is likely to show up in bonus checks as well.
While investment managers are paid on the growing piles of assets of they manage, top executives haven’t forgotten the excesses of 2007, Thomson said. “They want to make sure [2013] is not an anomaly of a year.’’
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