PB LIKELY TO FEEL FINANCIAL FALLINGS

By Ezra Mann/OF THE COMMERCIAL STAFF

The full effects of the bankruptcy filing of Lehman Brothers and financial hardships of other banking giants will be felt more nationally than in Jefferson County, but the impact will not escape notice in Pine Bluff, said Hank Campbell, dean of the school of business and management at the University of Arkansas at Pine Bluff.

The average citizen in Southeast Arkansas with investments in annuity accounts and the real estate market could feel the ripple effects, said Campbell.

If, for example, the Teachers Insurance and Annuity Association-College Retirement Equities Fund, a major insurance corporation, were not able to recover from a financial struggle, it would result in uncertainty of retirement funds for some educators, said Campbell.

AIG, an insurance corporation with holdings around the world, could be next on the list of failed financial behemoths, said Henry Golatt, director of the Economic Research and Development Center at UAPB. Standing in line behind that is Washington Mutual. The parched credit markets mean fewer businesses will be able to open, and fewer open busi nesses will be able to maintain.

“For the most part you’re going to find that credit and access to capital is going to tighten up,” said Golatt. “You’re going to find a lot of that right off the bat.”

Campbell noted that sometimes perception is stronger than reality with so many companies finding it hard to survive. Strategic moves, including the sale of Merrill Lynch to Bank of America, are sometimes the only way out. While 30-40 percent of the average citizens in Pine Bluff will say things are the same as before, those with capital investments may change their plans for retirement, Campbell said.

“It’s a ripple effect,” said Golatt. “A lot of people stand to lose a lot of money.”

The only question now is if other investment firms will make it in a volatile market, especially with consumers increasingly opposed to tax dollars being used to bail companies out, added Campbell.

Commercial staff writer Erin France and the Associated Press contributed to this report.