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from Global Investing:
On Bankers and Busing
Bankers are having a rough time of it lately. It is not just that their companies are collapsing beneath them and their bonuses are the subject of global hate and derision. They also have to put up with the barbs of journalists (who are very familiar with being at the bottom of the popularity pile).
The latest example comes from Tim Dowling, scribbling away for Britain's Guardian newspaper. Mr Dowling has penned a useful primer for bankers who suddenly find themselves living in the real world.
You can read the complete guide by clicking here. But Global Investing's favourite tip concerns the use of London's celebrated buses:
"When a bus comes into view, raise your right hand as if you were hailing a taxi. Get on at the front and tell the driver where you are going. He will name a price. Haggling is frowned upon, as is suggesting a route. Buses have no business class as such, but the top deck, if there is one, offers superior views."
So cruel. So very cruel.
The new Wall Street doesn’t include champagne
In the 1987 cult classic movie “Wall Street“, Michael Douglas plays a ruthless stockbroker desperate to cash in on a seemingly endless supply of wealth and swanky perks lavished on hot-shot traders.
Ahhh, the 80s…
More than twenty years later, most would agree that corporate greed still exists — but the perks may be dwindling.
Executives speaking at the Reuters Global Finance Summit say their cash-strapped firms are ushering in a new approach to corporate spending. Gone are the days when flying business class was deemed a necessity, when the soda in the fridge was free and no expenses were spared. Reining in spending is the new trend sweeping Wall Street as firms struggle to stay afloat in tough times. To hear some experts tell it, there’s no other choice.
“To watch the financial industry change as radically as it’s changed, to see the economy changing as radically as it’s changing, you’d be offensively imprudent if you didn’t change your spending,” says banking analyst Meredith Whitney.
In Germany, finance experts are already doing their part in cutting costs with a plan that limits top executives’ payout and may even curb the salaries of those working at government-owned companies. In the U.S., the Treasury is reportedly mulling a new requirement that puts firms on the hook to raise private capital if they want to qualify for government money.
Is Wall Street poised for a makeover?
There’s no question Wall Street is undergoing a transformation of sorts with the recent rash of job losses and do-or-die consolidations. But once the dust has settled – what then?
It just may be the start of Wall Street’s warm and fuzzy rebirth, Forbes reports.
“The new Wall Street will be, in some ways, a friendlier place,” writes Michael Maiello. “Investors are no longer interested in secretive hedge fund managers and inscrutable quant trading strategies, and so personal relationships and personal responsibility on the part of financial advisers will be paramount virtues.”
But this supposed new Wall Street — where banks both big and small can flourish, where the personal touch is paramount — has a lot of skeptics to win over. Just today, Fidelity Investments said it was reviewing its staffing amid speculation of 4,000 layoffs. Meanwhile, reports that battered banks have set aside an estimated $20 billion for bonuses is surely confounding news for the thousands of newly-axed bankers left in their wake. What’s more, a new survey shows that most financial professionals aren’t just hoping for a bonus, they’re expecting it.
Is Wall Street capable of making a positive change, or is it headed for more of the same? Share your thoughts with us below.
Think wall street types will lie low until the dust settles. Personal greed and the quest for glory which has driven much of wall street activities in the past is at odds with the kinder, gentler wall street. Old habits die hard.
The bright side of financial turmoil
Who says it’s all gloom and doom on Wall Street? Sure, job cuts are fast and furious these days, but the deepening financial crisis is bringing about some interesting unintended consquences. Time magazine reports that although the government bailout caps the salaries of top executives, it may actually prop up the bonuses of rank and file bankers.
True, those bonuses are substantially lower than they would’ve been had the markets not imploded in recent weeks — but not nearly as low as one might expect.
Compensation consultant Alan Johnson predicts the average managing director at an investment bank will be on the receiving end of a $625,000 bonus this year, with top bankers earning as much as $1 million. That may be a tough pill to swallow for the taxpayers footing the bailout bill, but some argue that bankers shouldn’t be penalized for their firm’s bad decisions.
Banks already recognize the importance of rewarding newly acquired talent. Bank of America last week offered retention packages to more than 15,000 Merill brokers in a bid to stave off defections. Only time will tell if it works.
Do Wall Street payouts need to be reined in? Share your thoughts below in the comments section.
Too easy to say, its ‘not right’ for bankers to get large bonus pay outs on the back of bail outs. It has to be relative to the individuals contribution in terms of revenue to bank. The banks have loaned money, that is what all companies do in tough times, the government reached out and held up the main banks because they were fearful of a total collapse and confidence panic in the market. If the money was not given in contract where it was stipulated there are constraints on bonus pay-outs to employees because we have loaned out the money then fine but it is not the case, therefore the banks are free to run their business as they see fit. Couple of points are to retain the best people in the market, one has to pay top bonuses. The money if not loaned then the government gets a stake at a rock bottom price which makes for an excellent investment correct? If so then when the share price rockets at whatever point in the future, then the government stand to make a healthy profit, makes perfect sense to me – there are no favours here, the governments will cash in at some point – not that the tax payer will benefit! Tough job making money for these guys, very bright, very sharp, top of their game and the bonus is relative to how much money they have made for the bank so why should they not get paid what they signed upto – because the government used tax payers money? One investment bank who is paying out excellent bonuses have already paid back the bail out money and made enough to pay its employees good bonuses. It is wrong in a sense, but wrong of the governement not to have managed it better rather than the banks for paying well. Tax payers should be compensated according to share price increase of the ‘investments’ (rather than bail-outs) that the government has made, let’s see some money flowing back into our pockets in terms of rate cuts and benefits to the public off the back of the hefty profits the governments of the world will make when things turn around.
Yes, you just have to wait (forever) for one of these filthy, overcrowded red things to come along.
Then you can see just how bad a service is provided by those who are berating you for what you have done.
PS your average public sector employee has had every form of Public service benefit from the NHS onwards subsidised by your high tax. So next time one of these moaners has a go at you remember, you paid ££££ in tax every year so that they could pay £ in tax.