Image above: Financial sector workers look on during Occupy Wall Street demonstration 9/26/11. From original article.
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.
“I don’t think it’s a time to make money -- this is a time to rig for survival,” said Charles Stevenson, 64, president of hedge fund Navigator Group Inc. and head of the co-op board at 740 Park Ave. The building, home to Blackstone Group LP Chairman Stephen Schwarzman and CIT Group Inc. Chief Executive Officer John Thain, was among those picketed by protesters yesterday. “The future is not going to be like a past we knew,” he said. “There’s no exit from this morass.”
An anemic global economy, the European sovereign debt crisis, U.S. unemployment stuck above 9 percent and swooning stock markets have sapped the euphoria that swept Wall Street in 2009 as it rebounded to record profits after the credit crisis. The benefits of a $700 billion taxpayer bailout and $1.2 trillion in emergency funding from the Federal Reserve have faded. Next week Goldman Sachs Group Inc. may report its second quarterly loss per share since going public in 1999, according to the average estimate of 26 analysts surveyed by Bloomberg.
‘Financial Bubble’
“They’re not going to make the kind of money they wanted,” said William Hambrecht, chairman of San Francisco- based WR Hambrecht & Co., who designed the Dutch auction of Google Inc.’s 2004 initial public offering. “I’m not sure people really have come to terms with the fact that what we had was a financial bubble.”
New rules from the Basel Committee on Banking Supervision will more than double capital requirements for banks. Fixed- income revenue could fall 25 percent under a draft of the Volcker rule, which may outlaw so-called flow trading, according to an Oct. 10 note from Brad Hintz, a Sanford C. Bernstein & Co. analyst. Leverage has been cut by more than half at banks including Goldman Sachs and UBS AG, and an Oliver Wyman and Morgan Stanley report estimates that regulation may reduce returns on equity by 4 to 6 percentage points.
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.”
Ways to Profiteer
Not everyone is worried about the banks.
“I wouldn’t shed too many tears for Wall Street,” Neil Barofsky, 41, the former special inspector general for the Troubled Asset Relief Program who is now teaching a class on the financial crisis at New York University School of Law, wrote in an e-mail. “The systemic advantage that the too-big-to-fail banks enjoyed in the lead-up to the financial crisis may be diminished in the near term, but the structure is still essentially the same and will almost certainly help catapult them to record profits and bonuses once the good times return.”
Ross, 73, the billionaire chairman of New York-based WL Ross & Co., said Wall Street’s “inherent ingenuity” shouldn’t be discounted and that “the history of the investment community shows that it will find ways to profiteer.”
Others identified potential financial bright spots, including so-called black-swan and tail-risk funds designed to protect against market shocks. One black-swan fund, Universa Investments LP, whose Santa Monica, California, office features a Japanese print of a wave about to break over fishermen, produced returns of 20 percent to 25 percent this year, through August, according to a person familiar with the matter.
More Secular
Still, almost all corners of Wall Street are suffering. James Staley, head of JPMorgan Chase & Co.’s investment bank, estimated last month that third-quarter trading revenue may drop by 30 percent and investment-banking fees by 50 percent. The Standard & Poor’s 500 Index had its worst decline in the quarter since 2008, and Brent crude-oil futures saw their longest slump. The average yields demanded on U.S. commercial-mortgage bonds in excess of Treasuries climbed the most in three years.
“Unlike some other slowdowns, this feels more secular,” said Wilson Ervin, a Credit Suisse Group AG senior adviser who stepped down as chief risk officer in 2009.
Recalibrated Compensation
While there had been “an understandable path” out of the turmoil of 2008, there’s a more encompassing uncertainty now, said Frederick Lane, vice chairman of investment banking at St. Petersburg, Florida-based Raymond James Financial Inc.
“There’s going to be some disillusionment, similar to physicians,” said Lane, 62. “The notion that somehow going to medical school would deliver you substantial wealth and prestige is no longer true.”
Ilana Weinstein, CEO of search firm IDW Group LLC, said in an interview that she had nothing good to offer a trading executive in his early 40s who complained last month about morale at his bank, one of the six largest in the U.S.
“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.”
Michael Karp, 42, CEO of New York-based recruitment firm Options Group Inc., said Wall Street pay will fall 30 percent this year, and more for executives. It will be flat or down even in businesses doing relatively well, such as emerging markets and commodities, he said.
Job Cuts
Those are the survivors. The biggest global banks already had been cutting jobs at the fastest rate since 2008 when Bank of America Corp. said last month that it will eliminate 30,000 positions. London-based HSBC Holdings Plc, Europe’s largest lender, aims to shed the same amount. UBS, Switzerland’s biggest bank, is shrinking after a $2.3 billion trading loss.
“Sharply” falling profits will lead to almost 10,000 financial-services job cuts in New York City by the end of 2012, according to a report released yesterday by New York State Comptroller Thomas P. DiNapoli. The prospects for Wall Street “have cooled considerably,” he said in a statement.
“The stress levels are getting very high,” said MSD Capital’s Phelan.
The 46-year-old hedge-fund manager said the current aversion to risk across Wall Street could jeopardize profits.
“It’s one of the things I struggle with: Everybody’s risk- off, so should I be risk-on?” he said. “There are so many things I have to worry about.”
Two former Goldman Sachs managing directors who asked not to be identified because they weren’t authorized by their current firms to speak, one a former management committee member and the other a trading head, also said they were worried that investment bankers have lost their appetite for risk.
Torrisi Italian Specialties
Uncertainty didn’t stop some on Wall Street from profiting during the U.S. housing collapse, when Deutsche Bank AG trader Greg Lippmann helped create and profited from a multibillion-dollar market in subprime-based derivatives. He said Wall Street will have fewer exotic products to sell and trade, drawing an analogy to the popular no-reservations restaurant Torrisi Italian Specialties.
“No choosing, great food, low price, no pizzazz,” said Lippmann, co-founder of New York hedge fund LibreMax Capital LLC. “A couple of years ago, the hottest place to go would be someplace that they just spent $5 million decorating and they’ve got three or four models answering the phones. People want stripped-down now.”
Everybody Hates Me
That isn’t diminishing lobbying efforts to soften rules mandated by the Dodd-Frank Act, which would reduce risk, curtail proprietary trading and force more transparency in the $601 trillion derivatives market. Large financial institutions have been “exceedingly aggressive at trying to roll back reform” and have largely succeeded, said Greenlight Capital Inc. President David Einhorn, 42, who bet against Lehman Brothers Holdings Inc. in the months before that firm’s collapse.
Leon Cooperman, the first Goldman Sachs Asset Management CEO and head of hedge fund Omega Advisors Inc. in New York, said Wall Street has been “excessively” blamed and President Barack Obama has “continued to project himself as anti-wealth, anti- business and socialist in his leanings.”
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.”
He isn’t planning to visit.
“I’m not one of those extreme people,” he said.
Occupy Wall Street
A version of that social unrest is taking place in lower Manhattan’s Zuccotti Park, where Occupy Wall Street protests against bank bailouts and income inequality have gained support from Nobel Prize-winning economists Joseph Stiglitz and Paul Krugman. On October 1, police halted a march over the Brooklyn Bridge, arresting about 700, and have used pepper spray.
“We have too many regulations stopping democracy and not enough regulations stopping Wall Street from misbehaving,” Stiglitz, an economics professor at Columbia University, told protesters the next day. “We are bearing the cost of their misdeeds. There’s a system where we’ve socialized losses and privatized gains. That’s not capitalism.”
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.”
.
Wall Street Angry and Anxious
SUBHEAD: Bankers fret as Wall Street players see ‘No Exit’ from current financial woes.
By Max Abelston on 11 October 2011 for Bloomberg News -
(http://www.bloomberg.com/news/2011-10-12/wall-street-sees-no-exit-from-financial-woes-as-bankers-fret.html)
Image above: Financial sector workers look on during Occupy Wall Street demonstration 9/26/11. From original article.
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.
“I don’t think it’s a time to make money -- this is a time to rig for survival,” said Charles Stevenson, 64, president of hedge fund Navigator Group Inc. and head of the co-op board at 740 Park Ave. The building, home to Blackstone Group LP Chairman Stephen Schwarzman and CIT Group Inc. Chief Executive Officer John Thain, was among those picketed by protesters yesterday. “The future is not going to be like a past we knew,” he said. “There’s no exit from this morass.”
An anemic global economy, the European sovereign debt crisis, U.S. unemployment stuck above 9 percent and swooning stock markets have sapped the euphoria that swept Wall Street in 2009 as it rebounded to record profits after the credit crisis. The benefits of a $700 billion taxpayer bailout and $1.2 trillion in emergency funding from the Federal Reserve have faded. Next week Goldman Sachs Group Inc. may report its second quarterly loss per share since going public in 1999, according to the average estimate of 26 analysts surveyed by Bloomberg.
‘Financial Bubble’
“They’re not going to make the kind of money they wanted,” said William Hambrecht, chairman of San Francisco- based WR Hambrecht & Co., who designed the Dutch auction of Google Inc.’s 2004 initial public offering. “I’m not sure people really have come to terms with the fact that what we had was a financial bubble.”
New rules from the Basel Committee on Banking Supervision will more than double capital requirements for banks. Fixed- income revenue could fall 25 percent under a draft of the Volcker rule, which may outlaw so-called flow trading, according to an Oct. 10 note from Brad Hintz, a Sanford C. Bernstein & Co. analyst. Leverage has been cut by more than half at banks including Goldman Sachs and UBS AG, and an Oliver Wyman and Morgan Stanley report estimates that regulation may reduce returns on equity by 4 to 6 percentage points.
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.”
Ways to Profiteer
Not everyone is worried about the banks.
“I wouldn’t shed too many tears for Wall Street,” Neil Barofsky, 41, the former special inspector general for the Troubled Asset Relief Program who is now teaching a class on the financial crisis at New York University School of Law, wrote in an e-mail. “The systemic advantage that the too-big-to-fail banks enjoyed in the lead-up to the financial crisis may be diminished in the near term, but the structure is still essentially the same and will almost certainly help catapult them to record profits and bonuses once the good times return.”
Ross, 73, the billionaire chairman of New York-based WL Ross & Co., said Wall Street’s “inherent ingenuity” shouldn’t be discounted and that “the history of the investment community shows that it will find ways to profiteer.”
Others identified potential financial bright spots, including so-called black-swan and tail-risk funds designed to protect against market shocks. One black-swan fund, Universa Investments LP, whose Santa Monica, California, office features a Japanese print of a wave about to break over fishermen, produced returns of 20 percent to 25 percent this year, through August, according to a person familiar with the matter.
More Secular
Still, almost all corners of Wall Street are suffering. James Staley, head of JPMorgan Chase & Co.’s investment bank, estimated last month that third-quarter trading revenue may drop by 30 percent and investment-banking fees by 50 percent. The Standard & Poor’s 500 Index had its worst decline in the quarter since 2008, and Brent crude-oil futures saw their longest slump. The average yields demanded on U.S. commercial-mortgage bonds in excess of Treasuries climbed the most in three years.
“Unlike some other slowdowns, this feels more secular,” said Wilson Ervin, a Credit Suisse Group AG senior adviser who stepped down as chief risk officer in 2009.
Recalibrated Compensation
While there had been “an understandable path” out of the turmoil of 2008, there’s a more encompassing uncertainty now, said Frederick Lane, vice chairman of investment banking at St. Petersburg, Florida-based Raymond James Financial Inc.
“There’s going to be some disillusionment, similar to physicians,” said Lane, 62. “The notion that somehow going to medical school would deliver you substantial wealth and prestige is no longer true.”
Ilana Weinstein, CEO of search firm IDW Group LLC, said in an interview that she had nothing good to offer a trading executive in his early 40s who complained last month about morale at his bank, one of the six largest in the U.S.
“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.”
Michael Karp, 42, CEO of New York-based recruitment firm Options Group Inc., said Wall Street pay will fall 30 percent this year, and more for executives. It will be flat or down even in businesses doing relatively well, such as emerging markets and commodities, he said.
Job Cuts
Those are the survivors. The biggest global banks already had been cutting jobs at the fastest rate since 2008 when Bank of America Corp. said last month that it will eliminate 30,000 positions. London-based HSBC Holdings Plc, Europe’s largest lender, aims to shed the same amount. UBS, Switzerland’s biggest bank, is shrinking after a $2.3 billion trading loss.
“Sharply” falling profits will lead to almost 10,000 financial-services job cuts in New York City by the end of 2012, according to a report released yesterday by New York State Comptroller Thomas P. DiNapoli. The prospects for Wall Street “have cooled considerably,” he said in a statement.
“The stress levels are getting very high,” said MSD Capital’s Phelan.
The 46-year-old hedge-fund manager said the current aversion to risk across Wall Street could jeopardize profits.
“It’s one of the things I struggle with: Everybody’s risk- off, so should I be risk-on?” he said. “There are so many things I have to worry about.”
Two former Goldman Sachs managing directors who asked not to be identified because they weren’t authorized by their current firms to speak, one a former management committee member and the other a trading head, also said they were worried that investment bankers have lost their appetite for risk.
Torrisi Italian Specialties
Uncertainty didn’t stop some on Wall Street from profiting during the U.S. housing collapse, when Deutsche Bank AG trader Greg Lippmann helped create and profited from a multibillion-dollar market in subprime-based derivatives. He said Wall Street will have fewer exotic products to sell and trade, drawing an analogy to the popular no-reservations restaurant Torrisi Italian Specialties.
“No choosing, great food, low price, no pizzazz,” said Lippmann, co-founder of New York hedge fund LibreMax Capital LLC. “A couple of years ago, the hottest place to go would be someplace that they just spent $5 million decorating and they’ve got three or four models answering the phones. People want stripped-down now.”
Everybody Hates Me
That isn’t diminishing lobbying efforts to soften rules mandated by the Dodd-Frank Act, which would reduce risk, curtail proprietary trading and force more transparency in the $601 trillion derivatives market. Large financial institutions have been “exceedingly aggressive at trying to roll back reform” and have largely succeeded, said Greenlight Capital Inc. President David Einhorn, 42, who bet against Lehman Brothers Holdings Inc. in the months before that firm’s collapse.
Leon Cooperman, the first Goldman Sachs Asset Management CEO and head of hedge fund Omega Advisors Inc. in New York, said Wall Street has been “excessively” blamed and President Barack Obama has “continued to project himself as anti-wealth, anti- business and socialist in his leanings.”
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.”
He isn’t planning to visit.
“I’m not one of those extreme people,” he said.
Occupy Wall Street
A version of that social unrest is taking place in lower Manhattan’s Zuccotti Park, where Occupy Wall Street protests against bank bailouts and income inequality have gained support from Nobel Prize-winning economists Joseph Stiglitz and Paul Krugman. On October 1, police halted a march over the Brooklyn Bridge, arresting about 700, and have used pepper spray.
“We have too many regulations stopping democracy and not enough regulations stopping Wall Street from misbehaving,” Stiglitz, an economics professor at Columbia University, told protesters the next day. “We are bearing the cost of their misdeeds. There’s a system where we’ve socialized losses and privatized gains. That’s not capitalism.”
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.”
.
Image above: Financial sector workers look on during Occupy Wall Street demonstration 9/26/11. From original article.
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.
“I don’t think it’s a time to make money -- this is a time to rig for survival,” said Charles Stevenson, 64, president of hedge fund Navigator Group Inc. and head of the co-op board at 740 Park Ave. The building, home to Blackstone Group LP Chairman Stephen Schwarzman and CIT Group Inc. Chief Executive Officer John Thain, was among those picketed by protesters yesterday. “The future is not going to be like a past we knew,” he said. “There’s no exit from this morass.”
An anemic global economy, the European sovereign debt crisis, U.S. unemployment stuck above 9 percent and swooning stock markets have sapped the euphoria that swept Wall Street in 2009 as it rebounded to record profits after the credit crisis. The benefits of a $700 billion taxpayer bailout and $1.2 trillion in emergency funding from the Federal Reserve have faded. Next week Goldman Sachs Group Inc. may report its second quarterly loss per share since going public in 1999, according to the average estimate of 26 analysts surveyed by Bloomberg.
‘Financial Bubble’
“They’re not going to make the kind of money they wanted,” said William Hambrecht, chairman of San Francisco- based WR Hambrecht & Co., who designed the Dutch auction of Google Inc.’s 2004 initial public offering. “I’m not sure people really have come to terms with the fact that what we had was a financial bubble.”
New rules from the Basel Committee on Banking Supervision will more than double capital requirements for banks. Fixed- income revenue could fall 25 percent under a draft of the Volcker rule, which may outlaw so-called flow trading, according to an Oct. 10 note from Brad Hintz, a Sanford C. Bernstein & Co. analyst. Leverage has been cut by more than half at banks including Goldman Sachs and UBS AG, and an Oliver Wyman and Morgan Stanley report estimates that regulation may reduce returns on equity by 4 to 6 percentage points.
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.”
Ways to Profiteer
Not everyone is worried about the banks.
“I wouldn’t shed too many tears for Wall Street,” Neil Barofsky, 41, the former special inspector general for the Troubled Asset Relief Program who is now teaching a class on the financial crisis at New York University School of Law, wrote in an e-mail. “The systemic advantage that the too-big-to-fail banks enjoyed in the lead-up to the financial crisis may be diminished in the near term, but the structure is still essentially the same and will almost certainly help catapult them to record profits and bonuses once the good times return.”
Ross, 73, the billionaire chairman of New York-based WL Ross & Co., said Wall Street’s “inherent ingenuity” shouldn’t be discounted and that “the history of the investment community shows that it will find ways to profiteer.”
Others identified potential financial bright spots, including so-called black-swan and tail-risk funds designed to protect against market shocks. One black-swan fund, Universa Investments LP, whose Santa Monica, California, office features a Japanese print of a wave about to break over fishermen, produced returns of 20 percent to 25 percent this year, through August, according to a person familiar with the matter.
More Secular
Still, almost all corners of Wall Street are suffering. James Staley, head of JPMorgan Chase & Co.’s investment bank, estimated last month that third-quarter trading revenue may drop by 30 percent and investment-banking fees by 50 percent. The Standard & Poor’s 500 Index had its worst decline in the quarter since 2008, and Brent crude-oil futures saw their longest slump. The average yields demanded on U.S. commercial-mortgage bonds in excess of Treasuries climbed the most in three years.
“Unlike some other slowdowns, this feels more secular,” said Wilson Ervin, a Credit Suisse Group AG senior adviser who stepped down as chief risk officer in 2009.
Recalibrated Compensation
While there had been “an understandable path” out of the turmoil of 2008, there’s a more encompassing uncertainty now, said Frederick Lane, vice chairman of investment banking at St. Petersburg, Florida-based Raymond James Financial Inc.
“There’s going to be some disillusionment, similar to physicians,” said Lane, 62. “The notion that somehow going to medical school would deliver you substantial wealth and prestige is no longer true.”
Ilana Weinstein, CEO of search firm IDW Group LLC, said in an interview that she had nothing good to offer a trading executive in his early 40s who complained last month about morale at his bank, one of the six largest in the U.S.
“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.”
Michael Karp, 42, CEO of New York-based recruitment firm Options Group Inc., said Wall Street pay will fall 30 percent this year, and more for executives. It will be flat or down even in businesses doing relatively well, such as emerging markets and commodities, he said.
Job Cuts
Those are the survivors. The biggest global banks already had been cutting jobs at the fastest rate since 2008 when Bank of America Corp. said last month that it will eliminate 30,000 positions. London-based HSBC Holdings Plc, Europe’s largest lender, aims to shed the same amount. UBS, Switzerland’s biggest bank, is shrinking after a $2.3 billion trading loss.
“Sharply” falling profits will lead to almost 10,000 financial-services job cuts in New York City by the end of 2012, according to a report released yesterday by New York State Comptroller Thomas P. DiNapoli. The prospects for Wall Street “have cooled considerably,” he said in a statement.
“The stress levels are getting very high,” said MSD Capital’s Phelan.
The 46-year-old hedge-fund manager said the current aversion to risk across Wall Street could jeopardize profits.
“It’s one of the things I struggle with: Everybody’s risk- off, so should I be risk-on?” he said. “There are so many things I have to worry about.”
Two former Goldman Sachs managing directors who asked not to be identified because they weren’t authorized by their current firms to speak, one a former management committee member and the other a trading head, also said they were worried that investment bankers have lost their appetite for risk.
Torrisi Italian Specialties
Uncertainty didn’t stop some on Wall Street from profiting during the U.S. housing collapse, when Deutsche Bank AG trader Greg Lippmann helped create and profited from a multibillion-dollar market in subprime-based derivatives. He said Wall Street will have fewer exotic products to sell and trade, drawing an analogy to the popular no-reservations restaurant Torrisi Italian Specialties.
“No choosing, great food, low price, no pizzazz,” said Lippmann, co-founder of New York hedge fund LibreMax Capital LLC. “A couple of years ago, the hottest place to go would be someplace that they just spent $5 million decorating and they’ve got three or four models answering the phones. People want stripped-down now.”
Everybody Hates Me
That isn’t diminishing lobbying efforts to soften rules mandated by the Dodd-Frank Act, which would reduce risk, curtail proprietary trading and force more transparency in the $601 trillion derivatives market. Large financial institutions have been “exceedingly aggressive at trying to roll back reform” and have largely succeeded, said Greenlight Capital Inc. President David Einhorn, 42, who bet against Lehman Brothers Holdings Inc. in the months before that firm’s collapse.
Leon Cooperman, the first Goldman Sachs Asset Management CEO and head of hedge fund Omega Advisors Inc. in New York, said Wall Street has been “excessively” blamed and President Barack Obama has “continued to project himself as anti-wealth, anti- business and socialist in his leanings.”
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.”
He isn’t planning to visit.
“I’m not one of those extreme people,” he said.
Occupy Wall Street
A version of that social unrest is taking place in lower Manhattan’s Zuccotti Park, where Occupy Wall Street protests against bank bailouts and income inequality have gained support from Nobel Prize-winning economists Joseph Stiglitz and Paul Krugman. On October 1, police halted a march over the Brooklyn Bridge, arresting about 700, and have used pepper spray.
“We have too many regulations stopping democracy and not enough regulations stopping Wall Street from misbehaving,” Stiglitz, an economics professor at Columbia University, told protesters the next day. “We are bearing the cost of their misdeeds. There’s a system where we’ve socialized losses and privatized gains. That’s not capitalism.”
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.”
.
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