<p>Liars, damn liars, and Bernie Madoff :)</p>
<p>I want to know what college the study authors went to, so that I can forbid my children from ever going there.</p>
<p>:)…</p>
<p>There are certainly people leaving for better opportunities. Many others, however, felt a responsibilty to stay and help dig these banks out of the hole. That’s out the window with a salary cap. </p>
<p>What are you seeing Dstark?</p>
<p>Example of “better opportunities” in today’s economy:
[Fired</a> exec: ‘Starbucks saved my life’ - CNN.com](<a href=“http://www.cnn.com/2009/LIVING/worklife/02/05/starbucks.saved.my.life/index.html]Fired”>Fired exec: 'Starbucks saved my life' - CNN.com)</p>
<p>At least now we know how HMom5 can afford to pay three full freight tuitions. Hopefully, not with a bonus from our bailout money though. ;)</p>
<p>I am sure she is not using the bailout money. Come to think of it, she is probably contributing more to the bail out money than most people on this board. If she is senior enough her tax return is probably audited by her firm to make sure there is no violation. </p>
<p>There is a mom on this board who has been asked to come out of retirement. She has said only for the same price and not in bonus.</p>
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<p>I fail to see the difference. The cap prevents their current companies from retaining these good people vs worthy opportunities at non-capped companies. It’s labor market distortion.</p>
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<p>You’re wrong about that. The 9 largest banks were ordered to accept the money by Paulson.</p>
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<p>Oh, sure, that’s what I’m thinking if I’m a Board Director in one of these companies. I’m weighing two resumes - a 15-year veteran of Wall St. or some young one without any experience and I’m justifying to myself, hire the one young - he’s fresh blood - maybe he knows what he’s doing. I won’t be sued for negligence by shareholders. Don’t be naive.</p>
<p>I’m seeing bonuses drastically cut.</p>
<p>I’m seeing some people leaving for hopefully better opportunites. Most think bonuses aren’t coming back to anywhere near what they were. That’s one reason people are leaving. But not the cap. The cap effects very few people.</p>
<p>Some people are staying, but worried.
Some people are being let go.</p>
<p>Some customers are being told to find another firm. Not because these customers are losing money for the brokerage firms. Some make good money for the firms. The brokerage firms don’t want the risk.</p>
<p>I’m seeing customers of banks unable to get loans.
I see a couple of the top brokerage firms deleveraging like crazy. (but you don’t have to be in the business to know that loans are very hard to get and firms are deleveraging).</p>
<p>I see a lot of gloom and doom from the small amount of private equity people I know.
I see money managers that don’t have a clue what is going to happen. (Nobody really knows).</p>
<p>I miss a lot.
I see a small window of the investment world.</p>
<p>Don’t you need to make six-figures to be a middle class anywhere, not just NYC? I am not even sure if income of around $150 is much at all anymore even if mortgage is paid up and a kids is on almost full scholarship. You never know if the job is going to be there tomorrow, so people just stopped spending. In addition, while some people believe that Spending Plan will help, we believe otherwise, so our policy has been to behave like we are in a hole for very long time.</p>
<p>Some of the comments are just mind boggling. On another thread a teenager writes that anyone can do these jobs, they’re easy and if you can take the long hours, anyone can do them. And thinking some young, fresh talent can come in and make things right. Wow!</p>
<p>What Dstark says is true, many understand it will be years before anything is business as usual. But they also understand there is an important role for the industry is economic recovery and maintaining global competitiveness. Since the ability to highly leverage is gone, what will happen to companies that can’t stand alone now? Mergers. And acquisitions. Maybe your company is heading south and needs saving. Who you gonna call?</p>
<p>I would like to see good people stay in place. The only dog I’ll have in the race is my own investment in the firm I’ve worked at long term. My own departure has been planned since 9/11, planning to leave NYC when my youngest went to college which happened in September.</p>
<p>But as much as everyone thinks it’s obscene, these people like those in Hollywood, athletes, corporate lawyers, high end consultants and many others live large. No one cared much during boom times. And while the actual cap only applies to a few, being watched by big brother will impact the compensation of all. These folks have 3 or 4 kids in private schools, a couple of homes and have lost a bundle in the market. They know they have talent, can make money for themselves and others and believe in capitalism. Like it or not, people are entitled to live the lives they want.</p>
<p>They also know this is politics, the Thains and the crowd who voted to take bonuses this year shot themselves in the foot. This has forced the come back to take on a different form.</p>
<p>Well Hmom5, I probably see some things in a similar way that you do, but I also see things differently and I have come to some different conclusions.</p>
<p>There are some very, very bright people working in Wall Street. I don’t think these people are brighter than other bright people in other fields who make a lot less money. But they are super bright.</p>
<p>Then there are the people that confuse brains with bull markets. These people are not that bright, but they think they are.</p>
<p>Then we have the people who don’t understand risk. They used other people’s money or the firm’s money, leveraged it, gambled with it, gambled with it recklessly. This is one reason the economy is in the mess we’re in now.</p>
<p>These people gambled with other people’s money and lost. Society lost big time. The losses are staggering. Trillions and trillions.</p>
<p>The ramifications are we are going to get a smaller financial community. Which is a good thing. We can’t afford a larger financial community.</p>
<p>Hopefully, the young people with brains will go into other fields.</p>
<p>I do not feel sorry for families with 3 or 4 kids in private schools. I think there are people in society that have more needs.</p>
<p>I don’t feel sorry for the financial community. They just need to look in a mirror to see who caused the financial problems.</p>
<p>I don’t see such a need for “living large”, but that is a personal opinion, and other people are free to make their own choices.</p>
<p>However, the risks and gambles that those “large livers” made have impacted the global economy. Now they are taking our tax dollars, billions of them, and there is no oversight whatsoever. I quibble with those whose need to “live large” includes my money. Before there as government intervention, I may not have agreed with the lifestyle, but I could look the other way. Once our tax money became part of their bailout bonuses, those “living large” have to answer to more than their own whims and greed.</p>
<p>I, for one, am glad that the financial community will get smaller. We need to be a country that rewards more than the ability to move other people’s money around, and a lot of it recklessly or illegally.</p>
<p>We live in Morris County NJ about 30 miles west of NYC. The Midtown direct train is walkable and we see many making the daily commute. Still, for working parents, that equates to a 7 am-7pm day minimum. Houses are much more affordable than NYC, maybe from 400K to the sky’s limit. </p>
<p>We love our community and have raised our two children in public schools while living in a house that garland would appreciate. We only tore down the sand box out back about 3 years ago and our youngest is 19! We work locally, make enough to pay astronomical property taxes and avail ourselves of NYC when we like. We paid for public college for our son and save for retirement. No big vacations or new cars here. Our son has been able to commute to NYC via train to participate in many music related activities and is now auditioning for grad school in the fall in music performance.
We’ve been able to provide enrichment for our kids and they’ve thrived. No nannies but ALOT of jugggling work schedules. </p>
<p>There are just so many ways that families make it work and I find to fascinating to hear people’s stories here.</p>
<p>One thing no one has mentioned yet… there are executives at these financial institutions who work in completely different areas-- not mortgages, not credit-- and have nothing to do with this mess. I do think it may be hard for them but I also think that all these businessmen were so generously rewarded because their jobs involve <em>risk.</em> Plenty of intelligent people go to school much longer and take jobs (doctors, etc) without risk because they want a solid career, a sure thing. If you are willing to take risk, you may be generously rewarded but you may also be subject to downturns in the economy like we have now. It’s part of the business decision these executives made when they decided to go into financial services.</p>
<p>No one on The Street is asking you to feel sorry for them. These people have an education, skills and want to use them to live well. Their choice. And they shouldn’t do it with anything but private capital. The guys forming boutiques and moving to private equity won’t make a dime if investors don’t see the value in putting money in them and companies don’t see the value in hiring them.</p>
<p>And while Wall Street certainly had a role in the mess we have, it was far from being alone. The government had a larger role and Main Street had a pretty darn big one too.</p>
<p>So as recovery proceeds, are the fees going to be paid to the large banks who need to pay us back or the boutiques formed by all the talent that left them? That is the question.</p>
<p>Yes, no one NEEDS to live large, but this is America and some choose to.</p>
<p>“And while Wall Street certainly had a role in the mess we have, it was far from being alone. The government had a larger role and Main Street had a pretty darn big one too.”</p>
<p>This statement bugs me because it just tells me wall street hasn’t learned that much from this crisis.</p>
<p>And it’s not just your statement. The people I know in the business haven’t learned anything.</p>
<p>Wall Street was a major player in this crisis, and wall street needs to step up and say we f@@@@@ up. Not say the government was at fault, or main street.</p>
<p>Otherwise, we are just going to repeat the same bad stuff that was done. </p>
<p>“So as recovery proceeds, are the fees going to be paid to the large banks who need to pay us back or the boutiques formed by all the talent that left them? That is the question.”</p>
<p>I don’t understand what you wrote.</p>
<p>I don’t understand the appeal of the private equity business. At one time, a long time ago, you could buy good businesses put a little leverage on them and make a lot of money. The last few years, you buy crappy companies, and put on leverage so high small problems could blow the companies up (which is what is happening).</p>
<p>Well, I guess valuations are lower now, so future private equity deals will work for awhile. But, I don’t really see the genius.</p>
<p>I only speak for one person. Personally, I was far removed from the mess. But please, if you’re in the business you understand how Mr. Greenspan presided over the creation of the mess. F & F were not created by the banks.</p>
<p>In a sense, however, I suppose you’re right. As a senior person at a major bank we should have never played Greenspan’s game and shut down the high rollers long ago.</p>
<p>You don’t believe talent is there that’s needed for the recovery? Don’t hire a bank or be their client. Again, no one will make a cent if there are no clients. But I’m seeing lots and lots of clients who need a bank and will quickly be hiring.</p>
<p>As for PE, it takes many forms. LBO’s will be dead for some time. HF’s, who knows. If VC’s aren’t investing for long, we’re all in trouble. Who do you think the wealthy are looking to with what they have left? It will all be back yet will take time. Would I redirect young people interested in banking as a career? No. Everything has cycles. What’s doing better now?</p>
<p>I think Greenspan is the number 1 cause. </p>
<p>“You don’t believe talent is there that’s needed for the recovery? Don’t hire a bank or be their client. Again, no one will make a cent if there are no clients. But I’m seeing lots and lots of clients who need a bank and will quickly be hiring.”</p>
<p>I never said there wasn’t talent that’s needed for the recovery. </p>
<p>We have to change the way we do things. We need to use less leverage. A little less risk taking. It’s going to take time to get a real recovery.</p>
<p>“Don’t hire a bank or be their client. Again, no one will make a cent if there are no clients. But I’m seeing lots and lots of clients who need a bank and will quickly be hiring.”</p>
<p>I don’t understand what this has to do with what I said.</p>