Poor widdle babies
by David Atkins ("thereisnospoon")
If the media wants to know what the protesters are upset about, this should provide a clue:
Wall Street executives, facing demonstrators camped for a fourth week in New York’s financial district, say they’re anxious and angry for other reasons.
An era of decline and disappointment for bankers may not end for years, according to interviews with more than two dozen executives and investors. Blaming government interference and persecution, they say there isn’t enough global stability, leverage or risk appetite to triumph in the current slump.
Wait, what? Aren't these the same guys whose bonuses shot up dramatically in 2010 just two years after they crashed the world's economy and then got bailed out by taxpayers?
Well, yes. As it turns out, bonuses are going back down this year. How far down? The lowest point since the crash. Which, apparently, is still pretty darn sweet:
The declines in pay will be widespread, with the average managing director taking home $1 million in compensation, down from $1.5 million in 2010, according to Alan Johnson, managing director of Johnson Associates Inc., a New York-based pay consultant.
Senior management—whose pay is tied closely to performance—could see their compensation plunge as the KBW Bank Index, a collection of large banking stocks, has fallen by nearly one-fifth over the past 12 months. Investment banks have shared the pain as shares of Morgan Stanley are down 42% year-to-date, and Goldman Sachs has plunged 41%.
Even professionals who work in areas that have fared better this year, including some commodities and emerging-markets businesses, are still likely to take home pay that's flat to down slightly from a year earlier.
How ever will the poor babies be able to survive on an average of $1 million a year? Why, that level of pay is almost insulting. If it comes down much farther, these Masters of the Universe are going to have to take the jobs of those lazy teachers.
In all seriousness, given the downturn in the stock market and the poor performance of many financial sector firms, this shouldn't have come as much of a shock. Except it did: Wall street professionals were actually counting on increased bonuses this year:
Most Wall Streeters are eternally optimistic about their bonuses. World markets may be sputtering, but maybe their firm is hanging in just fine. Or their department – didn’t it get a co-advisor role on that deal nobody remembers back in April?
This mentality may help explain why 41% of Wall Street employees say they expect a bigger bonus this year than in 2010. Only 30% saw their bonuses headed south, while 21% took the “unch” option and 8% said they don’t expect to get a bonus, according to a survey released today by online recruiting site eFinancialCareers.com.
That’s despite the worrying earnings outlook described in today’s WSJ.
The biggest reason people thought their bonus might be going up: “personal performance,” cited by 45% of survey respondents.
The average Wall Streeter is essentially a narcissist who believes that he's really that much smarter and harder working than everyone else. It doesn't matter if he contributes anything of value to society; it doesn't matter if his company is failing or succeeding. It doesn't matter if his actions crash the entire world's economy. He's worth it, because he just is. And if he doesn't get his God-given right to make millions of dollars, there's something wrong with the world and the parasites in government and society who are stopping him from getting his due.
The whining is simply phenomenal:
The new rules are the result of “societal objectives of a populist administration in Washington,” private-equity investor Wilbur Ross said in an e-mail. John Phelan, co-founder of MSD Capital LP, a New York-based fund that manages assets for billionaire Michael Dell, said “the whole capitalist system is being called into question...”
“This is the first time that people don’t necessarily believe it will get better,” said Weinstein, whose Third Avenue office has two exits “like a high-end plastic surgeon” to assure discretion. “Compensation has been recalibrated...”
Phelan said he’s worried about “social unrest.”
“My taxes are going up,” he said. “Everybody hates me. I have two friends who bought land in New Zealand. They’re trying to convince me to go...”
This one is my favorite:
Bankers aren’t optimistic about those gains. Options Group’s Karp said he met last month over tea at the Gramercy Park Hotel in New York with a trader who made $500,000 last year at one of the six largest U.S. banks.
The trader, a 27-year-old Ivy League graduate, complained that he has worked harder this year and will be paid less. The headhunter told him to stay put and collect his bonus.
“This is very demoralizing to people,” Karp said. “Especially young guys who have gone to college and wanted to come onto the Street, having dreams of becoming millionaires.”
I can see the headlines now: oppressed 27-year-old Ivy League graduate makes $500,000 a year after just three years on the job at a big financial firm. Now, all of a sudden he may make only 3/5 that amount. How ever will he survive? When will society give him what he deserves?
What he deserves, in reality, is to spend a few years living like these people. Or, if that's too harsh for a person of his educational attainment, he deserves to live like any other 27-year-old who graduated from a decent school with a degree, but didn't sell their soul to manipulate other people's money on Wall Street. The average starting salary for college graduates in this country is $27,000. The median salary for the very small percentage of young Americans with a Masters degree? $60,000. Poor widdle baby.
For too long, taking massive risks with other people's money has been a golden ticket to insane riches not encountered in other segments of society. As a summa cum laude student at UCLA in the early aughts, I saw first-hand the ridiculous recruiting bonanzas from financial firms. No other industry was making the same promises, and no other industry was recruiting remotely as heavily from the academic elite.
People who went to work on Wall Street were making six figures their first day on the job, while everyone else struggled to find employment at mediocre pay. Wall Street and their allies have been on a campaign for years if not decades to "normalize" that fundamental imbalance. They expect that imbalance to continue even after crashing the world's economy and receiving no-interest loans from taxpayers.
That 27-year-old trader should be making no more and no less than any other graduate from a similar school in a different field. The fact that they've been making a killing isn't a reflection of their inherent worth, nor of the natural order. It's the product of a system deliberately rigged to allow them to do so on the backs of everyone else. It's high time that the cream of the crop of our academic institutions produce professionals devoted to actually improving society, rather than destroying it for no other purpose but their own enrichment.
That's what the protests are about, and they will continue until that imbalance is corrected.