Was the dismal June jobs report for Massachusetts a one-month anomaly? Or is the state going to start following the lead of the nation?

If it’s the latter, that’s not a  good thing.

As has been well documented, the nation has produced three consecutive monthly jobs reports that can only be categorized as weak. The U.S. has averaged 75,000 jobs created per month for the last three, far below the approximately 125,000 that economists say are necessary to keep up with population growth. Thus, the nation’s unemployment rate has remained stubbornly north of 8 percent.

As for the state, it has generally fared better — until June, that is. Through the first five months of this year, Massachusetts had added about 35,000 jobs, or 7,000 per month. This rate is roughly double that of the state’s increase in working-age people for that time; thus, Massachusetts’ job less rate slid from 6.9 percent in January to 6 percent in May.

But June was a step back. The state reported a net loss of 2,600 jobs, with the jobless rate remaining at 6 percent, according to the state Executive Office of Labor and Workforce Development.

It’s only one month. But it isn’t only one report. Earlier this month, the Associated Industries of Massachusetts reported that business confidence among Bay State merchants plunged to its lowest level in June since last fall.  Lack of business confidence almost always means lack of hiring.

There’s a lot on people’s minds. For instance, the ongoing economic crisis in Europe and the inability of Congress to compromise on how to reduce the federal deficit.

People’s minds become even more unsettled when they hear reports like the one released Tuesday by the Aerospace Industries Association and economist Stephen Fuller, which found that Massachusetts ranks in the top 10 states vulnerable to defense cuts in 2013 should the “fiscal cliff” scenario unfold — no deficit agreement reached, and nearly $1 trillion in defense cuts kick in over the next decade ($500 billion in automatic cuts, with $487 billion already planned). The report can be found here — http://bit.ly/MF143u. It suggests Massachusetts can lose as many as 60,000 jobs as result of reduced defense spending.

There were some positives in the Massachusetts June jobs report. Professional, scientific and business services — among the highest-paid positions — added 1,900 (0.4 percent) jobs over the month, the sector’s 12th consecutive monthly gain. Over the year, the sector added a robust 27,800 (5.9 percent) jobs.

Furthermore, the state’s total of 3,254,000 people with jobs is the most since November 2008.

But it’s not the most ever.  Until there is clear direction on how (or if) Congress will deal with our huge deficit, employers appear to be refraining from investing in human capital.

Monday’s news that the average price for regular-unleaded gas sold in Massachusetts moved up 9 cents, to $3.479, was a sobering halt to a streak where in 11 of 12 weeks, gas prices declined.

It appears at least some experts are saying “hope you enjoyed it.”

Because the future — futures, that is — suggests that rising gas prices may be more than a one-week aberration.

According to a report on cnbc.com, the August RBOB gasoline futures gained nearly 1.5 percent and closed above $2.85 a gallon on Monday, mirroring a climb in oil prices as the U.S. dollar weakened and tensions rose in the Middle East.

That puts gasoline futures at their highest prices in nearly two months, surging over 20 cents in July alone, according to the report, which goes on to say that analysts point out that retail gas prices often follow the trend in the futures market within a week or so.

Addison Armstrong, director of market research at Tradition Energy, told cnbc.com that retail demand is also picking up and “supplies are low.”

Doesn’t it figure? As soon as the American consumer sees some semblance of relief, he can’t help but splurge again.

Armstrong also noted that refinery utilization — the ratio to capacity at which refineries are operating — is up to 92.7 percent, compared to a more typical 89.5 percent for this time of year.

Result: Tighter supplies.

Just imagine how much more demand for gas might occur if this country ever went through several months of robust job creation.


On Monday morning, the first Trader Joe’s in New Hampshire will open on the Daniel Webster Highway in Nashua.

According to some reports — at least one of which extends as far back as 2006 — the Gate City may soon land the state’s first Whole Foods Market as well.

The New Hampshire Union Leader raised the issue again with a story in Saturday’s editions that quoted Nashua’s economic development director, Thomas Galligani.

Galligani, who a decade ago was the No. 2 under Matt Coggins in Lowell’s Department of Planning & Development, told the newspaper that Whole Foods, a natural and organic food store, that no specific site has been made public but “it has been known that they are planning to open here for quite some time.”

He was citing a Whole Foods quarterly report from 2006, which said as much.

“These deals are super top-secret because of the competitiveness among supermarkets,” Galligani told the Union Leader, adding that there were still no definitive plans on file with the city from Whole Foods.

Whole Foods, a public company, reported sales of more than $10 billion for its most recent fiscal year, which ended last September. It has more than 300 stores.

Trader Joe’s, which also bills itself as a seller of natural foods,  is privately held.


Four summers ago, about 10 veteran bankers from throughout the region visited The Sun for a roundtable discussion on the state of their industry and how their individual operations were weathering what had become a deep recession — the worst since the 1930s.

Their general view: Yes, the national economy (particularly the mortgage-lending industry) is suffering. Yes, the big national banks have behaved very badly. And despite that, things are pretty cool here.

Four years later, those points can be summed up, in order, as follows: Yup, absolutely and not quite.

Not everybody made it, per se. In April 2010, the former Butler Bank became the first Massachusetts bank to be seized by the Federal Deposit Insurance Corp. since 1994. It was eventually taken over by Connecticut-based People’s United Bank.

A little more than a year earlier, Lowell Cooperative Bank was recapitalized, and converted to a privately held stock institution. New management, led by Richard Bolton, was brought in.

The other three Lowell-based banks — Enterprise Bank, the Lowell Five Cent Savings Bank and Washington Savings Bank — were all on more sound footing, but executives there all held various degrees of worry about what their futures held.

Fast-forward to today. Several big banks have suffered, including Bank of America, Citigroup and most recently, J.P. Morgan Chase. Smaller institutions have generally fared better, although there is still grumbling nationwide that they’re more stingy about lending.

The government weighed in as well, and in a big way. In July 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank for short. The new legislation, named for its two main authors, former U.S. Sen. Christopher Dodd and outgoing U.S. Rep. Barney Frank, is designed to make financial institutions more transparent about their finances and operations. So-called “bank stress tests” are part of the deal.

The law has more than its share of critics, in no small part due to its sheer volume. According to a recent story by OneNewsNow, Ammon Simon, policy counsel at the Judicial Crisis Network, said the law took 2,319 pages to enact, and contains 3,826 pages of financial regulations and guidance.

For banks, that takes time, it takes resources and, of course, it takes money. And who do you suppose is most disadvantaged by this?

That’s right. Small banks.

But in Lowell, anyway, a funny thing happened from there to here: Lowell-based banks, right now, are doing great.

Washington Savings Bank has seen loan volume increase 18.8 percent, year over year, through the first six months of this year and deposit growth increase 10.9 percent, according to CEO Jim Hogan. The bank has held the highest possible rating (five stars) from bank consultant Bauer Financial for 85 straight quarters.

Enterprise Bank reports steady loan and deposit growth of about 9 percent each quarter and announced Friday that it will open its 21st branch office early next year, in Lawrence.

And Lowell Cooperative, under Bolton, reversed a $2.4 million loss in 2010 to a profit of $920,000 last year, according to figures provided by Bauer. It has clawed back from a zero-star rating — “troubled and problematic” — to an “adequate” rating of three stars.

But at the top of the local list, at least in terms of year-over-year comparisons, is the Lowell Five. The city’s oldest continuously run bank (founded in 1854) recently announced that through the first six months of this year, deposits are up 23 percent and loans are up 21.3 percent from the same time a year ago. That’s about triple the statewide averages of 7.5 percent and 7.8 percent, respectively, according to Lowell Five President David Wallace.

Wallace cites the bank’s physical expansion — it recently opened its first New Hampshire branch in Nashua, and plans to open another office early next year in North Andover, as well as a high-school branch at Nashoba Valley Technical School in Westford — its marketing strategy and diversity of customers.

“We’ve been able to pick up a lot of business with municipalities,” he said in a telephone interview on Tuesday. “We’ve been working with treasurers and town officials. We’ve also been helping out general contractors who have had trouble getting bonds secured.”

Wallace also said deposits are likely getting a boost from people’s added propensity to save, given their desire to deleverage from high debt levels incurred from the early stages of the most recent recession.

“We bankers try to play the yield curve and with 10-year Treasurys down to 1.5 percent, that means there’s no yield to speak of for savers,” he said. “But we do offer strength and stability.

“What we’re hearing is that we’ve been responsive to people’s needs.”

Wallace said the Lowell Five’s stability can be seen in its Tier 1 capital ratio, which he said ranks fourth in the state (among 68 Massachusetts-based banks) at 13.5 percent. The figures is basically a measure of how effectively banks can protect against losses.

Lastly, Wallace said the bank got a $3.5 million boost when it was able to take off the books a loan it made to the former owners of the Grandview condominium complex out on Pawtucket Boulevard. The loan eventually resulted in a deed in lieu of foreclosure, where the borrower conveyed all interest in the property to the Lowell Five to satisfy a loan that was in default (and avoid foreclosure proceedings).

Lowell Five’s improved financial performance recently earned it a five-star rating from Bauer Financial.

The costs and resource challenges of Dodd-Frank are real. But Lowell-based banks have, on balance, proven to have weathered the storm.

Until recently, Michael Goldstein had never been to Lowell other than to visit the old Registry of Motor Vehicles office out on Chelmsford Street.

But Goldstein, a Concord resident who founded Empire Loans in 1985, tells us he’s been missing out.

“You guys have a real jewel there,” he said during a brief phone interview Wednesday afternoon. “I’m about to have lunch at that French place down the street here…”


“LaBoniche, right. I’ve been there once before and it was great. And that bakery around the corner — what is it — Brewed Something….”

Brew’d Awakening.

“Brew’d Awakening, yes. That place is cool!”

Goldstein is a third-generation pawn broker. He founded Boston-based Empire Loan in 1985, and his new Lowell office, tucked in beside CVS on 43 Merrimack St. — is the company’s sixth.

Empire points out on its website that pawn brokering is the world’s “second-oldest profession.” And while the industry itself hasn’t always had the most sterling of reputations, government crackdowns and more effective marketing on how the business actually works have made it more comfortably mainstream.

Marc Gundersheim, a cousin of Goldstein’s who helped open the Lowell store, said in an interview at the store that the chain was attracted by the city’s downtown foot traffic and “ongoing renaissance.”

He said the presence of another pawnshop just across the street — Chris McCarthy’s Lowell Jewelry & Loan — was by no means a deterrent.

“I think us being here will help both businesses,” he said. “It tells potential customers that this is where our type of business is. It’s no different than fast-food chains.”

The pawn industry — also referred to as “collateral lending” — works in three ways.

• Customers can “pawn” personal items (a gold or diamond ring, for example) in exchange for cash over four-month period. The amount of the loan is determined by after an evaluation by Empire’s expert staff. And they are expert. General Manager Steven Duva, for example, is a graduate of the Gemological Institute of America, according to Empire Loan’s website.

Once the customer agrees to the amount, he/she gets cash on the spot.

Gundersheim explained that all initial loans are four months in length and carry a 3 percent interest charge (this is per state regulations). At that point, customers can either pay principal and interest and get their item back, or arrange to pay interest only and extend the lending period for another four months.

“People who are really struggling may go this route,” Gundersheim said.

Should customers be unable — or unwilling — to pay back their loans, the pawn broker keeps the collateralized item, and will potentially sell it.

• People can sell gold to Empire in exchange for cash. With the price of gold up five-fold over just a few years, this is gaining in popularity, Gundersheim said.

• Pawn shops have a retail business. Items for sale include those that were sold directly to the business and those left behind after loan customers failed to repay what was owed.

Gundersheim said another advantage of using a pawn broker are that there are no credit checks involved, and no interrogation about income or assets. And if the customer can’t (or won’t) repay a loan, the only consequence is forfeiture of the collateralized item.

And, for shoppers, there’s the pricing. Empire boasts that its inventory of jewelry is available for up to 30 percent lower than other jewelry outlets.

“My wife was looking for a gift and when she came to Empire she wondered why she didn’t shop at pawnbrokers before,” Gundersheim said.

Empire Loan, which has a staff of four, is open six days per week.

Apparently it isn’t enough for Nouriel Roubini, the esteemed New York University economics professor, to be correct even once. He needs to let us know how perfect he is in predicting the future of the economy at any given time.

Roubini (called “Dr. Doom” for his consistently negative outlooks) found fame after predicting the housing crash. He wasn’t the only one — Bob Shiller of Yale University also gets credit in some circles. But the media’s need to embrace one figurehead as being the all-ever wise one runs rampant in several subjects.

Until it gets old, of course. Or flat-out wrong. Elaine Garzarelli found brief fame after she called the 1987 stock-market crash. But she rarely got it right thereafter (and the market popped back up like a pogo stick), and the media soon looked for another sage.

For now, anyway, Roubini is king when it comes to what’s going on with our economy.

But I digress.

Last week, Roubini tweeted — of course — that the “perfect storm” scenario he forecast for the global economy earlier this year is unfolding.

Never mind that none of the four elements of his perfect storm —  sluggish growth in the U.S., European debt troubles, a slowdown in emerging markets, particularly China (if you call 8 percent GDP “slow”), and military conflict in Iran — is of any particular surprise. The important thing is that the good professor told you this would be so.

And yes, the timing of Roubini’s statement is not coincidental. It comes just after China’s report Monday that its inflation rate for June was 2.2 percent — its slowest in two years (and we all thought low inflation was a good thing). That gave him the four horsemen of economic doomsday. Already in his informational arsenal were three straight monthly reports of tepid U.S. job growth and ongoing (if somewhat fluctuating) reports of European financial stress. And Iran military conflict? That’s been a wild card for the better part of 35 years, so you almost never go wrong in saying it’s present.

It’s not entirely Roubini’s fault that his tweet has garnered so much attention. The press has been brainstormed into thinking that any piece of detail that is thrown up on Twitter requires our undivided attention,  and hence qualifies as “news.”


Who knows if Roubini turns out to be right? For the record, his predicted doomsday takes place in 2013. In all likelihood, by then something else will be holding our attention.


A penny saved is a penny earned, Ben Franklin is credited to have said (perhaps erroneously).

But as a Milford optician proved, save enough of them and you can pay off your mortgage.

Today’s oddball story: Thomas Daigle wanted to make his last mortgage payment “memorable” — specifically, by paying it with pennies.

According to The Associated Press, citing the Milford Daily News, Daigle dropped off about 62,000 pennies ($620) at the Milford Federal Savings and Loan Association on April 24 to complete his mortgage obligation.

He was nice enough to alert his bankers ahead of time — after all, the payment weighed 800 pounds, according to the report.

Daigle said he started saving his pennies after moving into the home in 1977, saying he was expressly doing so to help pay off the mortgage.

No word on what Mr. Daigle’s original mortgage rate was. But with the inflation that wreaked economic havoc during the 1970s and early ’80s, it could very well have been above 10 percent.

At the start of this year I picked four companies with local operations that I saw as having potential to generate decent returns for individual investors. It’s a “task” I’ve done, just for fun, for about eight years now.

The close of trading last Friday marked the unofficial close of the first half of the year. That’s a good time to take inventory of the progress so far this year, even though my official rule is to not bail on anything I picked at the start of the year. Perhaps sometime I will change that, but not now.

The four stocks I chose were American Science & Engineering, a Billerica-based provider of sophisticated screening devices used at high-security areas; Enterprise Bank, of Lowell; Staples, the Framingham-based office-supplies retailing giant; and Verizon Communications Inc., the ubiquitous wireless and wireline telephone service provider.

Long-story-short, I am trailing the S&P 500 by about seven percentage points. The S&P has returned 8.3 percent  through last Friday, not counting dividends, which would add about another percentage point for six months of payouts. My four picks have returned 2.3 percent, including dividends.

So not great, but not horrendous either. And while we’re not going to make any excuses, a singular event is responsible for the lag — namely, American Science & Engineering’s shockingly poor earnings announcement on May 14. Up to that point, shares of AS&E were trading at $66.66, down about $1.50 on the year. But after the company announced fiscal fourth-quarter earnings of 15 cents per share (analysts were expecting 83  cents per share) on revenues of $39.3 million (analysts were expecting $59.3 million), shares plunged below $50; they have since rallied back by about $7.

So there you go; the perils of investing in any single stock (aside: I don’t actually own shares of ASEI. The only shares among these four I do own are those of Enterprise, which did quite nicely in the first half of this year, thank you.).

Shares of Verizon also did well, although I’d say that was mostly a value play. Staples struggled a bit, affected by a slowdown in Europe.

Let’s see how the second half goes.

Aron Ain

It’s no easy following in the footsteps of your big brother. Especially when said big brother builds from scratch a company that over a generation becomes a global force with more than $500 million in sales.

But Aron Ain has proven to be more than up to the task. It’s nice that somebody notices.

Ain was recently named the prestigious Ernst & Young Entrepreneur of the Year in New England for the Technology category. He was selected by a panel of judges, with the award issued last week at a gala in Boston.

Ain’s brother, Mark, formed Kronos Inc., then a maker of workplace time clocks (“Did you ‘punch in?’”), in 1977. Two years later, fresh out of Hamilton College, his younger brother Aron came aboard. Aron perfomed several roles over time, working his way up until taking over for Mark as CEO in 2005. By then, Kronos had become a $500 million-per-year software company, offering solutions for time and attendance, payroll, human resources and schedule optimization, and employed more than 1,000 people in four buildings along Route 129 in Chelmsford.

It’s easy to see that Kronos (the word is Greek for “time”) has changed markedly since its founding 35 years ago. Less obvious is its successful change just in the past seven years, the time of Aron Ain’s tenure as CEO.

For example, in 2007, Aron Ain played a leading role in negotiating the sale of Kronos — then a public company — to a private-equity firm, Hellman & Friedman, for $1.8 billion.

And just last year, he accompanied Gov. Deval Patrick and a coalition of business executives, academic leaders and government officials on the Massachusetts-Brazil Innovation Economy Mission to pursue job growth and economic development partnerships between Massachusetts and Brazil.

Ain has built the company up to annual sales of more than $800 million. He continues to think globally, opening offices in China and making the aforementioned inroads in Brazil.

Kronos also instituted what it calls a Technology Employee Development (TED) program, where new hires rotae through six different departments before landing where they best fit for the long term.

Thirty-five years after starting up, Kronos still has elements of a startup. It’s why Ernst & Young gave its top technology entrepreneur award — an award that often goes to somebody running a small company — to Aron Ain.

A story on Yahoo Finance (http://yhoo.it/MUQWWR) attributes a National Association of Manufacturers study as finding that as many as 1 million private-sector jobs could be lost by 2014 due to $1.2 trillion in federal budget cuts that would go into effect if Congress fails to come up with a solution to the ever-widening federal deficit — nearly $16 trillion and counting — by year’s end.

The cuts would likely increase the national unemployment rate (currently 8.2 percent) by 0.7 percentage points and decrease Gross Domestic Product (currently about 2 percent) by nearly a full percentage point,  NAM concluded.

But aside from the national impact, consider the potential impact on Massachusetts, especially now when from many corners, you may hear crowing about how things are “not as bad.”

Consider that roughly half of aforementioned federal budget cuts would involve the defense industry, with about $55 billion of that expected to take place next year.

Consider that global defense contractor Lockheed Martin is on record as saying that a majority of its 100,000 global positions is at risk, although it added that it ultimately would trim just a small percentage. But that would presumably be also the case with rivals Raytheon and BAE Systems, both of which employ several thousand people within 20 miles of Lowell.

Consider also that a new report from the University of Massachusetts’ Donahue Institute on Massachusetts’ military installations has found that the bases support more than 45,000 jobs and add about $13.7 billion to the state’s economy each year.

Consider that Hanscom Air Force Base, the headquarters of the U.S. Air Force Electronic Systems Center, had the largest economic impact of all state bases, contributing more than $8.4 billion in fiscal year 2011 through operational and procurement activities.

Consider that while the defense industry has been so good to Massachusetts in the past decade, that very same Donahue Institute’s director of economic and pubic research, Marty Romitti, told the Boston Globe that “up to 30,000” defense-related jobs in Massachusetts could be at risk.

Consider the above statement’s impact, regardless of whether you believe the state added 40,000 jobs last year or 9,000 — because either way, it’s a pretty big hit.

Consider another tidbit from the Donahue report — namely, that Massachusetts received nearly $13.9 billion in contracts from the U.S. departments of Defense and Homeland Security in fiscal 2011 — up 83 percent from 2003. Much of these expenditures are related to the wars in Iraq and Afghanistan, wars that are either completed or winding down.

Consider that while many people are under the expectation that medical devices are the key to Massachusetts job growth, according to yet another study (from the Battelle/BIO State Biosciences Industry Development), the state had 20,182 medical-device employees, down 19 percent from 2001. And don’t look for that to improve anytime soon. Medical-device manufacturing has its own job-creation obstacles (r.e., 2.3 percent tax on revenues as part of the Patient Protection and affordable Care Act, aka ObamaCare).

Now you know why government officials and civilians alike are worried about protecting the kind of high-end jobs that have allowed the U.S. to maintain its military might — and allowed Massachusetts to boast of its relative economic strength in the environment of a punk national recovery.

They should be worried.

They don’t call it a “fiscal cliff” for nothing.


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