Goldman Sachs targeted as 'Jaws' joins battle over banking crash

Lawyer Jacob 'Jaws' Zamansky has filed a lawsuit against Goldman Sachs. Photograph: John Rizzo/Bloomberg News

He is known as "Jaws", the perfect nickname for a lawyer entangled in a lawsuit filed against a massive investment bank that has been dubbed a "vampire squid" by its critics. But Jacob Zamansky, a renowned Wall Street defender of the little guy, with a record of extracting large settlements from giant firms, does not fear the tough reputation ofGoldman Sachs.

Indeed, he is happy to be helping on a class-action lawsuit against the bank taken out on behalf of a group of shareholders seeking millions of dollars in damages for alleged illegal behaviour. "Goldman misled these investors. So they came to me," Zamansky said.

However, Zamansky's lawsuit is just one of a swarm of legal problems that surround Goldman, whose name once typified blue-blooded banker wealth but now attracts a legion of critics who see it as a byword for out-of-control greed.

Then news broke that Goldman's chief executive, Lloyd Blankfein, had appointed his own lawyer, in the shape of top criminal defence attorney Reid Weingarten. The firm insisted that such a step was merely routine, but some of the bank's detractors saw it as a sign that criminal charges might be edging closer to Goldman and its senior staff. What is beyond doubt is that the bank is facing choppy legal waters due to its actions around the mortgage industry before and during the financial crisis and the bursting of the house price bubble.

The firm agreed last year to a $550m (£336m) settlement in a suit alleging that it misled investors in one sub-prime mortgage investment vehicle. But that could be just the beginning. Goldman has also revealed recently that it could eventually pay out as much as $3.4bn because of other expected legal cases.

This is where suits such as Zamansky's come in. The class action is grouping together a number of shareholders who say the firm's activities around one now notorious security, known as Abacus, have caused them massive losses. But Zamansky says the issue has a wider symbolism for a nation with a moribund economy that many people blame on the actions of big banks. "This gets to the core of the crisis … their business model was against the law," said Zamansky.

Goldman is fiercely contesting the claims and has repeatedly said it did nothing wrong. But what might really worry its top executives is not the rising tide of private lawsuits but the possibility that the US department of justice may be laying criminal charges. The firm was hit with a subpoena in June, asking for documents related to the mortgage security industry and other topics. That follows on from Goldman's starring role – along with other major banks – in a Senate report that detailed numerous examples of bad behaviour as it sought to investigate the origins of the financial crisis. The report found many banks guilty of privately trash-talking the mortgage debt they were happily selling. There have also been allegations, robustly denied by Goldman, that Blankfein may have perjured himself during testimony to the Senate.

The market's sensitivity to the issue was shown by the dramatic fall in Goldman's share price when news broke that Blankfein had hired Weingarten. Indeed, in the space of a few hours more than $2.5bn was wiped off the firm's market value as traders digested the news, although the price later recovered. The instant reaction is perhaps partly explained by looking at some of Weingarten's previous clients, who include executives involved in scandals like Tyco and Enron.

However, Goldman insisted that Weingarten's appointment was routine – and some observers agree. "It was not big news," said Columbia University law professor John Coffee.

Others were less sure. They pointed to the fact that Weingarten is best known for his work as a defence lawyer in white-collar criminal cases and in some ways was an unusual choice for Blankfein if he was not expecting trouble. They also point to Weingarten's close ties to the department of justice, where he has previously worked in its public integrity section.

Whatever happens legally, Goldman's supporters will take heart from the fact that other top banking figures who played key roles during the financial crisis – such as Lehman head Dick Fuld and John Thain of Merrill Lynch – also hired their own lawyers, but have yet to face any criminal charges.

What is more clear is the intense damage done to Goldman's reputation in the years since the crisis. Even as the bank's bottom line has recovered and it has resumed paying out handsome bonuses worth billions of dollars to its staff, it still has a huge image problem. "Their image has been greatly tarnished. They were the best and the brightest, but all that has been called into question," said Zamansky.

Goldman-bashing is now practically a national sport among pundits, who question why banks have remained so wealthy and profitable, even as the country grapples with a devastated housing market and high unemployment.

Even the religious have got in on the action. A group of nuns called the Sisters of St Francis of Philadelphia led a high-profile campaign earlier this year over the huge amounts that Goldman executives were paying themselves. Now they are planning further meetings. "They have a business model, but we have a justice model," said Sister Nora Nash.

Yet many observers say the bank is as powerful and influential as ever. "It is still large. They have close allies throughout the administration and in Congress, and they are going to make a lot of campaign contributions in the coming election," said Baker. Indeed, Goldman's wealth is the subject of a popular mocking Twitter account. Called @gselevator, it purports to tweet the overheard comments of Goldman employees as they ride the company lifts. One recent update read: "Suit#1: Was that really an earthquake? Suit#2: No, I just dropped my wallet."

Perception is important in the world of finance and, with lawyers and the justice department circling, not many people at Goldman are laughing at the moment. "They have become the whipping boy," said Coffee.

Three years after Lehman, a new debt crisis looms

Financial crisis: traders on the floor of the New York Stock Exchange shortly after the collapse of Lehman Brothers in September 2008. Photograph: Mario Tama/Getty Images

The F word is back. Back in the financial markets, back in the conclaves of central bank governors, back among the manufacturers and the high-street retailers. The four-letter word is fear.

Back in the spring, few imagined that we would be approaching the third anniversary of the collapse of Lehman Brothers on 15 September with such a sense of unease. The belief in early 2011 was that economic recovery was now well enough embedded for central banks to start raising interest rates and for finance ministries to crack on with the job of reducing budget deficits.

Although pockets of optimism remain, the mood today is different. Ben Bernanke, the chairman of the Federal Reserve, has said the US central bank will discuss possible ways to stimulate growth when it meets next month. The Bank of England appears to be heading in a similar direction. There is anxiety at the International Monetary Fund that blanket austerity will tip fragile western economies back into recession. Concerns are once again being expressed about the health of the banks, about America's national debt and, above all, about whether the eurozone can survive its current crisis intact.

Standard Chartered and HSBC were the two UK-based banks to emerge relatively unscathed from the first financial crisis, partly because their global reach allowed them to benefit from the rapid recovery in Asia. This, though, is how the chief economists at the two banks see things.

"America is drowning in debt, Europe is imploding as problems in the euro area intensify, while, in contrast, Asia's economy is cooling, as growth rates moderate from a strong to a solid pace," says Gerard Lyons at Standard Chartered. Putting the possibility of a recession in the US as high as one in three and of an eventual euro crisis as high as one in two, Lyons adds: "It should be little surprise that there is increased uncertainty and heightened risk aversion across financial markets."

Stephen King at HSBC describes the world as a "frozen economic tundra", with the power of central bankers to influence events on the wane. "After the Great Recession, there has sadly been no 'Great Recovery'," King says. He too is unsurprised that investors are rushing for the exit, given the bickering between Democrats and Republicans on how to tackle America's budget problems, and the inability of Europe's politicians to sort out the single currency.

"The west is increasingly looking like a bad version of Japan. And, like Japan, our political leaders are offering few answers."

Collapse

This is not how it was supposed to be. It took time for policymakers to comprehend the enormity of the shock administered to the global economy by the collapse of the US housing market, but once the penny dropped in the autumn of 2008, they were at pains to show that lessons had been learned from the 1930s. Banks were recapitalised to prevent them from going bust, interest rates were slashed, money was created, public spending was increased.

To widespread relief, there was no second Great Depression. Unemployment in the US rose to almost 10% but not the 25% seen in the 1930s. Industrial production and international trade started to pick up in the spring of 2009. By and large, countries resisted the temptations of protectionism.

Over time, however, it has become clear that the recovery has been both slow and costly. If it is aborted, the risk is that the global economy will return to where this all started in 2007, with another crisis in the banking system. The recovery has been slow because the crisis was caused by over-indebtedness among private individuals and banks. Both, in the jargon of the markets, were over-leveraged: they had borrowed an awful lot of money, in other words, in anticipation of asset prices going up and up. When the bubbles burst, households and banks realised how exposed they were. As a result, they started to pay off their debts and even when the cost of borrowing came down to virtually zero, the demand for credit remained weak.

As HSBC's King notes: "The ambient noise of deleveraging is now deafening." But western economies have become so dependent on debt-driven growth in the good years that they are finding the sobering-up process painful. As things stand, it will take the UK longer to return to pre-recession levels of output than it did in the 1930s.

What's more, this lacklustre recovery has not come cheap. As private demand fell, governments stepped up their spending. They cranked up the electronic printing presses, they bought shares in banks and they allowed budget deficits to balloon, gambling that any damage to the public finances would be temporary. Again, things have hardly gone according to plan. Quantitative easing has proved a double-edged sword: it has flooded financial markets with cash and may well have underpinned activity. But it has also pushed up commodity prices, leading to higher inflation and a squeeze on real incomes that has held back recovery.

By effectively nationalising a good chunk of the debts accumulated by the private sector, western governments have now raised concerns about their own solvency. The US has seen its credit rating downgraded; Europe's problems are even more acute after bailouts for Greece (twice), Ireland and Portugal, followed in the past month by emergency action by the European Central Bank to drive down the interest rate on Italian and Spanish bonds.

Just as in the summer of 2008, the assumption is that the global economy will experience a slowdown but not a full-blown contraction. Central banks are still providing massive amounts of monetary stimulus through record-low interest rates, even though finance ministries are tightening fiscal policy by raising taxes and trimming spending. Large corporations outside of the banking sector have money in the bank that could be used for new investment. And consumers should feel better off next year as inflation falls.

Soft landing

Financial markets want to believe the "soft landing" scenario but somehow can't quite bring themselves to do so. The fear comes from the knowledge that commercial banks in Europe are up to their eyeballs in sovereign debt from the weaker peripheral countries, so a default would trigger a feedback loop back into the financial system. Banks have more capital than they had three years ago and are less heavily leveraged. Yet there are doubts about whether they could survive a double-dip recession. And until consumers are spending more freely, there will be a temptation for companies to hoard their cash rather than invest it.

Economic downturns usually go through five distinct phases: bubble, denial, acceptance, panic and recovery. This fifth phase officially started two and a half years ago, but the drip-drip of disappointing news from the around the world in recent weeks has made financial markets highly averse to taking risks. Higher unemployment, slower growth, currency tensions have all led to a rush for safe havens.

The markets are now wondering whether this is one of the rare crises that has a sixth phase – relapse. At root, the suspicion is that the problems that caused the crisis in the first place have not been solved, that politicians are offering weak leadership, and that the next few months could see the start of phase two of the Great Contraction.

Hurricane Irene claims lives and leaves trail of destruction

A woman rescues belongings from houses damaged by Hurricane Irene in Columbia, North Carolina. Photograph: John Bazemore/AP

New York breathed a sigh of relief on Sunday after hurricane Irenepassed over without major damage to the city, but the storm still caused deaths, serious floods and power blackouts affecting more than a million people as it swept up the north-eastern seaboard of the United States.

Irene weakened quickly after making landfall near Atlantic City, New Jersey, at about 5.30am local time. By the time it made landfall again, at Coney Island four hours later, it had been downgraded by the National Hurricane Center to a tropical storm with winds at around 65mph – much weaker than the 85mph that was forecast late on Saturday.

But while the storm failed to bring the devastating surge of water that had been feared in New York City, it was still powerful enough to claim lives and cause widespread damage elsewhere.

The biggest impact was felt on Sunday night in upstate New York and New England where many communities suffered devastating floods after rivers burst their banks and Irene's torrential rains fell on ground already saturated by unusually high downpours earlier this month.

In the Catskills mountain town of Windham, where Irene dropped 10 inches of rain starting on Saturday night, the downtown area was "wiped out" by flood water, fire chief Michael Scarey told the Mid-Hudson News.

In nearby Prattsville, National Guard soldiers rescued 21 people who had been trapped in a motel by fast-moving water that blew out bridges and roads all over the county, according to Reuters. Local website, theWatershed Post, carried pictures and video of towns across the area that were under water and without power.

Further north, Vermont was experiencing its worst flooding in almost 40 years, according to local reports. Many towns, including Brattleboro, Wilmington, Rutland and Grafton, were under water on Sunday night.

President Barack Obama warned the storm and its aftermath were not over: "This is a storm that has claimed lives.

Our thoughts and prayers are with those who have lost loved ones," he said. "Many Americans are still at serious risk of power outages and flooding which could get worse in the coming days. I want people to understand that this is not over."

Irene claimed three lives as it passed over the north-eastern seaboard. In New Jersey a 20-year-old woman was found dead in her car on a flooded rural road. The woman, who has not yet been identified, had earlier called police after she and her car were washed away by a flash flood.

"She left her house, went in her car and was swept away," said New Jersey governor Chris Christie.

About 30 miles (48km) north-west of Manhattan in New York's Rockland County, a man was electrocuted by a downed power line after he tried to save a child who had gone out into a flooded street that had live wires, officials said. The child is now in hospital in a serious condition.

And in Prospect, Connecticut another person was killed in a fire that investigators believe was sparked by fallen wires.

The death toll now stands at more than 15 with lives lost all along the storm's track from the Carolinas to Virginia and up through Pennsylvania, where a man was killed in his tent by a falling tree, to New York and beyond.

A nuclear reactor in Maryland was shut down after it was damaged by wind. Others were taken offline or were operating at reduced capacity as precautionary measures.

More than six million homes and businesses lost power as the storm passed up the east coast. Two million people were warned or ordered to flee its path. The storm also spawned tornadoes in parts of Virginia, New Jersey and Delaware. A twister destroyed 15 buildings in the popular holiday town of Lewes in Delaware.

But flooding is likely to be the major problem this week. Parts of Philadelphia were heavily flooded, with water reaching street-sign levels in some areas. Flash flood warnings were issued up and down eastern and central Pennsylvania. "The rivers may not crest until Tuesday or Wednesday. This isn't just a 24-hour event," Pennsylvania governor Tom Corbett said on Sunday.

New York's public transport system is likely to be disrupted next week. On Sunday, transport workers waited for winds to die down before they were able to inspect train and subway lines.

New York governor Andrew Cuomo said it was too early to say when normal service would be resumed.

The region's major airports were closed on Sunday and were likely to be closed for at least part of Monday as airlines waited for transport systems to be restored so passengers could reach them.

Hurricane Irene: Michael Bloomberg makes last-ditch evacuation plan

The Manhattan skyline as hurricane Irene approached New York. Michael Bloomberg has urged people living in the Zone A evacuation area to evacuate. Photograph: KeystoneUSA-Zuma/Rex Features

The mayor of New York, Michael Bloomberg, led a last-ditch, final push on Saturday evening to persuade residents of low-lying and coastal areas to evacuate for their own safety before the arrival of hurricane Irene.

With only a few hours to go until darkness fell and hurricane-strength winds begin to gust over the city, Bloomberg said only 1,400 people had so far checked into evacuation centres, which have been set up to accommodate 70,000.

There were no estimates of how many of the 370,000 people living in the Zone A evacuation area had heeded the mandatory orders, Bloomberg said.

"Time is running out. It's going to get dark in a little while … If you haven't left you should leave now. Not later this evening, not this afternoon, immediately," he urged.

By 9pm on Saturday, as Irene's outer bands began to deliver heavy rain on the city and a tornado watch was issued, the number of people in evacuation centres had risen only to 5,500.

Hurricane conditions are expected to hit New York in the early hours of Sunday, with the eye of the storm brushing over the city at about 10am EDT.

Police patrolled Zone A with loud hailers on Saturday evening, and volunteers knocked on doors in public housing areas with offers of transport, but many residents were refusing to leave.

Outside an evacuation centre in south Brooklyn, near her home in the waterside neighbourhood of Red Hook, Niyelle Manley said that a third of her neighbours were preparing to ride out the storm at home.

"We warned a lot of them but I guess they took it as a joke" she said. Manley, who arrived at the centre with her wheelchair-bound mother, Patricia and her two-month-old daughter, Kallyah, lives in the projects on the first floor of a block near the pier. She talked her mother into leaving, she said, but had no luck persuading seven or eight families out of 20 in her block who remained.

Bloomberg warned those in Zone A who had not left that lifts in public buildings would be shut down and they could find themselves without power. New Yorkers in the prime evacuation zone, including Battery Park City, Coney Island, Manhattan Beach, Far Rockaway, Midland Beach and South Beach in Staten Island, had to be out by 5pm on Saturday.

Political leaders and officials up and down the east coast were echoing Bloomberg's evacuation call as Irene lumbered towards them, bringing wind speeds of 85mph and the high risk of storm surges and inland floods

In neighbouring New Jersey, the governor, Chris Christie, said about 5,300 people had moved into the emergency shelters, with about 1 million in total leaving the shore area over the last 24 hours.

But he said there had been "hiccups", with particular resistance from elderly people in the Atlantic City area. "There are a few remaining residents who have refused to evacuate," he said.

He added: "Certainly we're not going to put you under arrest to make you leave but we do have your safety first and foremost in out minds."

Corey Booker, mayor of Newark, New Jersey, told CNN he had been going door to door warning residents to flee the storm.

"I benefited a lot from the surprise factor as the mayor showing up," he said. "I think they got the point, and hopefully they'll behave appropriately."

The hurricane caused 7ft waves and forecasters warned of storm-surge damage on the coasts of Virginia and Delaware, along the Jersey shore and in New York harbour and Long Island sound.

New York's entire transportation network began closing at noon, for the first time in its history, however there were still almost-normal levels of taxis in the city. Bloomberg said people could walk to one of 78 evacuation centres, and if people were desperate, they could even flag down a police car.

He added that mass transit was "unlikely" to be back in operation on Monday.

Con Ed, the city's largest utility, said it may be forced to cut off power to 6500 customers in lower Manhattan and Wall Street if significant amounts of salt water got into the system, according to Associated Press.

About 1 million people are now without power and the storm has yet to hit a major population centre.

By Saturday afternoon, 500,000 residents had lost power in North Carolina, and utility companies expected more outages as the hurricane moved north. Power outages were also reported in Virginia, Maryland, Delaware and Washington DC. South-east Virginia is also undergoing blackouts. Dominion Resources, the power company, said about a third of its 212,000 customers there were without power by about 4pm. But the heavy rain also took down power lines around the city of Richmond, where about 50,000 were without power, as well as in the Washington suburbs.

The latest advisory from the National Hurricane Centre, in the early evening, put the hurricane 315 miles south southwest of New York City, and said the eye of the storm would move over the mid-Atlantic coast on Saturday night and south New England on Sunday, with maximum winds of up to 80 mph. The hurricane warning has been discontinued south of Surf City, North Carolina.

Hurricane Irene hits New York

A panorama of New York's skyline taken as Hurricane Irene approached. Photograph: KeystoneUSA-Zuma/Rex Features

5.20am ET: Welcome back to our live coverage of Hurricane Irene's progress, as the eye of the storm is expected to pass through New York City in the next few hours, and move north towards New England.

President Obama: 'This is going to be touch and go'

Debris and sand littering a road as Hurricane Irene came ashore near Atlantic Beach, North Carolina, 27 August 2011. Photograph: Reuters/Steve Nesius

6.37pm ET: The mayor of Philadelphia, Michael Nutter, has declared the city's first state of emergency in 25 years. He warns of extensive and long-lasting blackouts:

Due to severity of the storm, you may experience power outages of a week, 10 days or two weeks.

Meanwhile, New York City warns that ferry services will soon be ending. The Staten Island ferry already moved to an hourly service and will stop at 10pm, if not sooner. The subway system and other mass transit have been closed for some hours now.

The Washington Post's Capital Weather Gang (@capitalweather) says that DC can expect the worst of the storm-lashing between 8pm and 2am tonight.

6.23pm ET: Youjung Byun writes in with this photo as witness to the manic emergency supplies shopping that was going on earlier on Saturday in New York. Youjung captions his picture thus:

I took a photo of people stacking up foods and water from Key Food Supermarket on Grand Street in Williamsburg, Brooklyn. People in the supermarket were obviously nervous and anxious, most of them filled their shopping cart up full. By the time when I went, the water was sold out.

One guy was using his traveller's suit case: it was filled with canned foods, water and crackers.

6.07pm ET: Further from Suzanne Goldenberg, who has been listening to the 5pm podcast from the National Weather Service's hurricane centre:

The biggest threat, she says, comes from storm surges, with winds piling the water towards the shore line in the Norfolk area, Delaware Bay, the Jersey shore, New York Harbour and Long Island Sound at particular risk.

Note: we have a new moon and extra high tides in any case. High tide is at 8am tomorrow morning for New York City, which pretty much coincides with the arrival of Irene.

Suzanne summarises further:

The update also notes that while Irene might be shifting a little to the east, and out over the ocean, that is unlikely to bring relief. The storm will produce between 6-12 inches of rain across a 150-mile swathe to its west. Some areas can expect up to 20 inches of rain.

The other danger, highlighted in the podcast, is downed trees, with strong winds bringing down trees and causing minor structural damage to buildings.

On cue, here is Patrick Wintour, the Guardian's British political editor, who seems to have chosen a possibly inopportune time to be vacationing in the Hamptons:

We are expecting 70 mile per hour winds over the next 24 hours and power blackouts here in Long Island south seashore. Cars are parked from trees, water in the bathtub, flashlights at the ready and life vests for the young ones. Playing stormy music, ping pong and Lego, and watching the hour but not the weather channel. Roar of the ocean can be heard from kitchen garden and is growing louder. The winds and rain get serious by midnight.

I think we see some British sangfroid there. Keep calm and carry on, Patrick.

Rikers Island prison, home to 12,000 inmates. Photograph: Seth Wenig/AP Photo

5.52pm ET: My colleague Paul Harris draws my attention to this piece from Mother Jones about the status of the Rikers Island prison, which lies in the waters between Queens and the Bronx. (Former IMF chief Dominique Strauss-Kahn, of course, was recently a guest.) The predicament of the prison's 12,000 inmates and guards has a new pertinency as Mayor Bloomberg delivered a tough message about the compulsory evacuation of 250,000 people from Zone A vulnerable areas. Mojo notes:

According to the New York City Department of Correction's website, more than three-quarters of Rikers Island's 400 acres are built on landfill – which is generally thought to be more vulnerable to natural disasters. Its 10 jails have a capacity of close to 17,000 inmates, and normally house at least 12,000, including juveniles and large numbers of prisoners with mental illness – not to mention pretrial detainees who have yet to be convicted of any crime. There are also hundreds of corrections officers at work on the island.

We were not able to reach anyone at the DOC for comment, but the New York Times's City Room blog reported: "According to the city's Department of Correction, no hypothetical evacuation plan for the roughly 12,000 inmates that the facility may house on a given day even exists. Contingencies do exist for smaller-scale relocations from one facility to another."

5.31pm ET: The figure for the number of people without power along the United States' eastern seaboard keeps rising. Suzanne Goldenbergupdates us:

About 1 million people are now without power because of Hurricane Irene – and the storm hasn't even reached the major population centres yet. As the storm moved north, power outages were reported in North Carolina, Virginia, Maryland, Delaware and Washington, DC.

The biggest outages so far are in North Carolina, where more than 500,000 households were without power by afternoon. South-eastern Virginia is also experiencing blackouts. The power company Dominion Resources said about a third of its 212,000 customers in south-eastern Virginia were without power by 4pm.

The heavy rain also took down power lines around the city of Richmond, where about 50,000 people were without power, as well as in the suburbs of Washington, DC.

Mayor Bloomberg updates New Yorkers on City's response to Hurricane Irene. Video: YouTube

5.14pm ET: Michael Bloomberg's remarks about using the law to move people out of the Zone A evacuation areas are the most telling element of this afternoon's press conference. Learning the lessons of Katrina, the New York mayor is not pussyfooting around with the mandatory evacuation of low-lying areas: the message is that if people do not go of their own accord, the police will be force them to leave.

This is a storm where if you're in the wrong place at the wrong time, it can be fatal … the thing that makes the most sense is to first comply with the mandatory evacuation.

Outside the mayor's jurisdiction, on Long Island, county and town officials are also enforcing the compulsory evacuation of some 400,000 people,reports the New York Times.

President Obama with Homeland Security Secretary Janet Napolitano at Fema headquarters. Photograph: Getty Images/Ron Sachs

4.33pm ET: The Guardian's US environment correspondent,Suzanne Goldenberg (@suzyji), has filed this report from Washington, DC about the situation facing the state of Vermont. Vermont, which is at least 200 miles north of New York City, is not normally troubled by tropical storms, but has already seen an unseasonably large amount of rain this month.

Vermont was expected to be well clear of Irene, but White House reporters who visited Fema's headquarters in Washington with Barack Obama earlier today have been told the state is at risk of severe flooding.

Vermont's governor, Peter Shumlin, declared a state of emergency on Saturday. According to the pool report, quoting an unidentified Vermont briefer:

"The weather service is saying that every river in the state will probably flood over the next two days, so we are preparing for that. Our quick water rescue teams pre-deployed. They will be in place by noon tomorrow. And the National Guard is also standing by ready to support us.''

State officials in Vermont are also warning people to be "self-reliant", and brace themselves for the possibility that they will not have power for two or three days.

The eye-catching detail there is "every river in the state" likely flooding.

3.56pm ET: What is conspicuously apparent is that Mayor Michael Bloomberg is making sure that he's out in front of the media and fully engaged. This new tweet (@MikeBloomberg) is typical of his messaging in this weather-related crisis – in marked contrast, as the New York Times pointed out, to his somewhat mysterious absence during last Christmas's snowstorm, for which he took a lot of flak:

I want to assure our city that we will get through this. We are New Yorkers, and New Yorkers have always risen to the challenge #Irene

And so here is also answering questions at this afternoon's press conference, talking about issues of flooding risk, power cuts and telecoms outtages, and also addressing the status of evacuation plans. So far, he says, there are only 1,400 people using the evacuation centres (for locations, see this pdf map):

We've prepared for a large number of people; we're not worrying about running out of capacity. We have room for 70,000 people, with cots and beds for 40,000 … we don't think it'll come remotely close.

He also reports that compliance with the compulsory evacuation of low-lying areas like the Rockaways, on the south shore of Long Island, has generally been good – 80% of inhabitants there have left. But he warns that if people refuse to leave, they will feel the force of the law:

We are going to break down doors if we have to.

The relatively low number of people so far turning up at the evacuation centres tallies with reports from my colleague Karen McVeigh (follow her at @karenmcveigh1), who has been talking to evacuees in Brooklyn:

At one evacuation centre in Brooklyn, close to the waterside neighbourhood of Red Hook, staff said that only "about 100" people had turned up so far. Niyelle Manley, 24, who arrived at the centre with her two-month-old baby Kallyah, and wheelchair-bound mother, Patricia, said that out of the 20 families in her block, seven or eight had stayed behind.

"We warned a lot of them but I guess they took it as a joke," said Niyelle.

The Manleys live in the projects, on the first floor of a block near the pier in Red Hook and left home after a volunteer arranged transport for them. "I ain't happy about it but something has to be done on account of my grand-daughter," said Patricia, 52. They were waiting outside John Jay High School in Park Slope for another vehicle to take them to another shelter better equipped for wheelchair users.

Meanwhile, New Jersey Governor Chris Christie (see Matt Wells's account if his press conference below) has tweeted the following advice