Video: The Opportunity in Online Lending

By Leslie Gersing, President, Skylight Video Productions| September 2015 |

Skylight Video Productions staffed and field produced two videos for the Kimberlite Group, a boutique investment bank focusing on advice and merchant banking in real estate and financial institutions. Here, Kimberlite President Dave Connelly discusses “The Opportunity in Online Lending.”


The Real Estate Disruption in Asset Management

By Leslie Gersing, President, Skylight Video Productions | September 2015

Skylight Video Productions staffed and field produced two videos for the Kimberlite Group, a boutique investment bank focusing on advice and merchant banking in real estate and financial institutions. Here, CEO Mike Coster discusses “The Real Estate Disruption in Asset Management.”

Your Smile is Your Greatest Fashion Accessory

By Leslie Gersing, Producer | September 2016 |

American Association of Orthodontists hired Vidicom to produce a 30-second video to publicize the growing number of adults seeking orthodontic treatment. The spot drew hundreds of people to AAO’s “Your Smile is Your Best Fashion Accessory” pop-up event linked to New York fashion-week. I worked with the client to come up with a strategy, interviewed AAO’s spokesperson, and produced the spot using client and outside video and participants’ corporate logos. The spot aired on local New York TV stations and was also posted on AAO’s Facebook, Twitter and other social media sites.

FINRA: Securities Helpline for Seniors

By Leslie Gersing, President, Skylight Video Productions | June 2015 |

Skylight Video Productions staffed and field produced coverage of the Industry Regulatory Authority’s annual meeting in Washington, DC. Here, FINRA’s Susan Axelrod and Jeffrey Pasquerella discuss FINRA’s new Securities Helpline for Seniors. Lines are open from 9 a.m. to 5 p.m., Monday through Friday, at 844-57-HELPS (844-574-3577).

Farm Bill signed into law, New Yorkers brace for food stamp cuts

President Obama signed the Farm Bill today at Michigan State University in East Lansing, Michigan, while the law’s principal Democratic sponsor, Sen. Debbie Stabenow (D-MI)  said the nearly $1 trillion law, four contentious years in the making,  “works for every American.”
The President praised Democrats and Republicans for coming together to pass the bill, saying, “My position has always been that any farm bill I sign must include protections for vulnerable Americans. And thanks to the good of Debbie and others, this bill does that.”
The measure cuts about $9 billion from the Supplemental Nutrition Assistance Program, or SNAP, over the next decade.

Video: SNAP Changes Put Millions at Risk, Say Advocates

 Many advocates for the hungry found themselves sighing with relief at that figure; House Republicans wanted $40 billion in food stamp cuts over the same period.  Still an estimated 850,000 households are set to lose an average $90 per month in food benefits.

“We’re really very disappointed how it turned out, said Hannah Lupien, Policy Director at the West Side Campaign Against Hunger in Manhattan, the nation’s oldest grocery style food pantry.   “Our elected officials and advocacy groups are declaring it a victory. There’s nothing victorious about hungry people losing an average of $90 in benefits every month.”  Lupien says about 25 percent of them are in New York City

Hannah Lupien                               Policy Director                               West Side Campaign Against Hunger

 The farm bill targeted New York and 12 other states (depending on whom you talk to), that qualified people for SNAP benefits by giving them just $1 worth of home heating assistance under a program known as LIHEAP.  Congress viewed the so-called “heat and eat” program as a loophole, and raised the minimum qualifying grant to $20 per household.

WSCAH serves about 11,000 people each month. Before the Farm Bill’s passage, Lupien and her colleagues projected it would be providing emergency food assistance to 128,000 this fiscal year, up from 75,000 in 2008.

“We’re unsure what New York and other states that utilize this program will be able to do to compensate for that change from $1 to $20, says Lupien. “We’re certainly not going to able to keep everyone on the program and certainly the intention of the Congress is to make sure …again, that those 300,000 households in New York, lose their benefits.”

These benefit cuts come on top of the expiration of an emergency increase in food aid in November, which affected everyone on SNAP.  As Margarette Purvis, President of the Food Bank for New York, points out in a February 7th letter to The New York Times.

Charities will not be able to step in and save the day. In New York City, we’ve already seen what happens when SNAP benefits are cut: 85 percent of the food pantries and soup kitchens in Food Bank for New York City’s network saw more people on their lines after across-the-board cuts to SNAP went into effect this past November than they saw in the immediate aftermath of Hurricane Sandy, and roughly half reported food shortages in that first month alone.

Since then, emergency unemployment benefits expired for another 1.7M Americans, during a bitter winter when fresh produce is seasonally unavailable. Senate Republicans blocked an effort to restore the benefits earlier this week.

 “We know that we will see some people who we’ve never seen before  because they’ve lost those $90 in snap benefits. What we believe is that we’ll see a lot of our same customers, more frequently. As opposed to seeing someone maybe once, twice, three times a year, maybe we’ll see them 4-5-6 times a year,” Lupien says.
Meanwhile,  New York advocates for the hungry are turning to the state, to push for an increase in the minimum wage. They’re also working with New York City’s new mayor and City Council to provide universal, free school feeding programs to all children, so the low-income kids won’t have to trade between the stigma of food hand-outs and empty bellies.

Maria Coronado’s First Trip to WSCAH

Back in Michigan, the President likened the bill to a “Swiss army knife,” because it does so much more than just help farmers, it helps jobs, innovation, research, infrastructure, and energy.  He added, “The truth is a lot of folks go through tough times at some points in their lives. That doesn’t mean they should go hungry.  Not in a country like America.”
Congress did increase funding to food pantries by a total $200M over the next decade, but Lupien says, “that $200 million is a drop in the bucket compared to the cuts that have been implemented, really in a war against our low-income neighbors.”
After leaving the food pantry, I stopped off at my local grocery store. It wasn’t lost on me that I could easily go there and buy whatever I needed – or wanted – to eat.  Right in front me in the checkout, an older woman was holding her SNAP benefits card in one hand and, returning a package of coffee, a can of milk and a bottle of orange juice with the other. She didn’t have enough to cover the grocery bill.  As she left with her much smaller bundles, the cashier said, “you still have 20 cents on the card.”
The Pits

The Pits

Nearly every day, I have to report on something that very few people care about: the yields investors receive to buy Spanish government bonds. 

Bond yields are measurement of how much it costs to get a loan.  During this year, Spain’s economy was so weakened, it had to pay 7% to get a 10-year loan.  Consider that US 10-year bonds, or Treasuries, are paying under 2%, and you realize what a burden this interest rate can be.  And who pays for these loans? Spaniards of course. In the form of taxes, mostly. 

But Spain’s people are suffering. The nation is in its second recession in 3 years. Unemployment  is  nearly 25%  Again, the United States unemployment rate is currently 7.9%.

You would hardly notice how badly Spaniards are suffering if you travel through the most touristic cities.  When we toured Southern Spain last month, the highways were spectacular (we even avoided the toll roads without problems). Restaurants seemed full in the old quarters of Cordoba, Sevilla, and Grenada.

But there were tell-tale signs, literally. Everywhere we went, I saw these signs. See the red one that says “Se Vende?”  That means, FOR SALE.

For sale sign in Cordoba, Spain
copyright: Leslie Gersing

The pain in Spain is partly a result of the same real estate bubble we experienced in the United States –a massive construction boom nurtured through the low cost of borrowing money.  Banks loaned money like water from an endless well.

We saw giant, brand-new condominium complexes all along the Spanish riviera; so many units built that they swamped available demand.  Now many of them are ghost towns.    There are so many unsold or foreclosed properties in Spain, the Madrid government is setting up a “bad bank” to purchase the “toxic assets” and sell them off at more than 50% discounts. 

The default rate on Spanish consumer debt just hit a record.  Credit has now dried up or is very expensive to get. If you’ve lost your job, you can’t afford to repay your loans or buy much of anything else. 

I heard a story from Annie, who owns a converted farmhouse in Almeria.  She and the neighbors own groves full of olive and orange trees.  The olive trees were everywhere we drove and seemed to thrive in the arid Sierra Nevadas.

Olive grove in Purullena, Spain
copyright: ljg456

Each year the olives are harvested and delivered to a coop like this one in Ugijar, where they’re pressed to make oil.

Olive oil cooperative factory, Ugijar Spain
copyright: ljg456

But the orange trees are another matter.  Annie said it cost so much to water her own orange trees, she made no money when it came to harvest time.

Annie’s orange trees, near Almeria, Spain
copyright: Leslie Gersing
Annie’s just an ex-pat with a summer home in this rugged area of southern Spain. She’s not a farmer, who depends on these ancient trees to survive.  Annie said water has become so expensive for the locals, many have cut their trees down to nubs. That keeps the trees from dying, but leaves them in a dormant state, so they won’t need much irrigation.
Many Spaniards have also been cut to the quick; well-educated and proud, but forced to move back home with their parents or grandparents.  Their government is cutting budgets, so school books must be purchased; children who need meals must pay more or they won’t be fed.  Government workers are laid off, their pensions are cut; there’s no money for infrastructure. People can’t afford to buy much of anything.
The government raised the VAT to 21% from 18% in September. Talk about a regressive tax: can you imaging having to pay 21 cents on every dollar spent on food? 

Now last week, demand for Spanish government bonds was described as “insane.” What’s insane about this is the growing belief among bond investors that Spain will formally request a government bailout from its European Union partners. Just rumors of that request have driven Spanish bond yields down. Ironically, Spain’s capitulation, and acceptance of strict terms for borrowing money, have helped the euro and European markets rise.
And when demand rises for bonds, the interest rate goes in the opposite direction. So 10-year bond yields are now about 5.46%.  That’s down from 5.66% at the prior auction, and 1.5% below their peak.  But remember, US 10-year bond yields are about 1/3 that rate. 

The problems are not just confined to the Euro Zone’s fourth largest economy.  Portugal received a sovereign bailout and adopted tough reforms to reduce government spending.  Portuguese 10-year bonds are down about 2% since mid-September:  the government  pays about 7.7% to borrow money. You could say that’s a bargain from nearly 18% in January.

On November 14, many Portuguese are going to strike against austerity measures they say are destroying their nation, not growing the economy.  Spanish unions have just announced they are going to take to the streets that day, too. 

It’s worse in Greece, where overall unemployment is above 25%, and about 50% for the young. Tens of thousands went on strike this week, as the government planned to make another $17 billion in cuts and tax hikes in order to secure the next “tranche” of bailout money from the “Troika” of European Union, European Central Bank and IMF lenders.  Many Greeks say Germany and other wealthy nations in the European Union profit at their expense.  Greek animosity showed its ugly side when the head of Europe’s most properous economy, German Chancellor Angela Merkel, was portrayed as a Nazi during a recent visit to  Athens. Some demonstrators blame Germany for keeping an irrationally tight control on the aid spigot, forcing them into practical bondage.

A recent New York Times article mentioned the rising popularity of a neo-Nazi party, which blasts immigrants and people deemed insufficiently  “Greek.”  Robbers are mugging people on the streets, as food and fuel become too espensive for the increasing numbers of newly-destitute.

I just learned that most Greek olive oil isn’t even made by Greeks. Some of my favorite Greek olive oils are actually products of large multinational corporations in Italy or Holland. Greeks just grow the fruit; they don’t own the means of production.

Spanish bond yields sound pretty boring, and complex.   But it’s allowed me to learn a little bit about what happens when governments decide to cut spending as a means to reduce their deficits.

There’s a reason politicians, businesses and economists are divided over the notion of stimulating economies with cash and other incentives, instead of putting themselves on a budget diet. There’s a reason this has become a central argument in the 2012 presidential election.

The next time I buy olive oil, I’ll remember what’s happening in Spain..