Lost in all the talk about a smaller, more regulated Wall Street is the effect the changes may have on people who don’t actually work in the industry. After all, bankers and traders make a nice wage, and rich people pay more in taxes. Is New York permanently losing its breadwinners? Yes, says a senior fellow at the Manhattan Institute, and it may have an effect on all city residents.
Speaking to Crain’s New York, Nicole Gelinas said the securities industry in the city currently employs just 170,000 people, down from a record 195,000 a decade ago. And all signs suggest that number will never again return to pre-recession levels.
So what’s the big deal? Despite employing just 4% of New York City’s workforce, bankers account for nearly 20% of total wages. Add in the fact that high-earning bankers get taxed at a more intensive rate, and we’ve got a potential problem on our hands.
"New York City and state have become unnaturally dependent on Wall Street," Gelinas told Crain’s. "It became a huge industry and helped pay for more police and social services. We don't have other ways of funding the budget."
However, we’ve still got two “good” things going for us. First, New York City has created more jobs in the last five years than during any five-year period in the last 50. And that’s without any help from Wall Street. So we’re becoming less reliant on that IV drip.
Second, banks continue to screw up, which isn’t necessarily good news for them or their victims but it’s been a nice boost for New York. As of late last year, New York had reaped more than $5 billion from settlements between banks and local regulators in 2014, roughly 18 times what it accounted for in the budget. Ironically, missteps by banks have cut – and added to – New York’s surplus. What will we ever do if Wall Street cleans up its act?
What’s In a Signature? (eFinancialCareers)
We reached out to a certified handwriting analyst who often consults with companies on hiring decisions to breakdown the signatures of Wall Street's elite. Blankfein, Dimon, Gross and Ackman all get skewered.
Big Payday at Boutiques? (eFinancialCareers)
Boutique investment banks pay more than any other firm on an average pay per head basis. Is this the reality?
‘Streamlining’ at JPM (Bloomberg)
J.P Morgan is considering scaling back some of its trading businesses, including its interest-rates and prime brokerage units as well as its so-called delta-one equities desk. However, Daniel Pinto, chief executive officer of J.P. Morgan’s corporate and investment bank, said the bank wouldn’t fully be exiting any businesses and didn’t foresee major job cuts. Elsewhere, J.P. Morgan was just ranked the world’s riskiest bank.
The Best Places to Work (Fortune)
Here are the 20 best places to work in financial services in the U.S., though it’s based more on workplace culture than pay and prestige. None of them are banks. There are a few brokerage and asset management firms. however.
‘Breaching Trust and Agreements’ (Bloomberg)
Perella Weinberg Partners has fired four bankers within its restructuring advisory group for attempting to launch their own firm. Now they are open to having those conversations, it appears.
DB and CS Handing Out Raises (FT)
Deutsche Bank and Credit Suisse are following in the footsteps of other banks by planning salary increases for junior staffers. It’s likely a combination of trying to remain competitive on the recruiting trail while also downplaying bonuses as part of compensation packages.
Phone Tag (Matt Levine)
Here’s one of the more interesting fraud cases you’ll hear. An SEC attorney called an investment firm to discuss potential insider trading by one of the company’s employees. Except it was the staffer in question who picked up the phone, so he pretended to be another employee and said his boss wasn’t around. When the phone rang again the next day, he pretended to be his boss. It didn’t work. Elsewhere, a waiter/fake hedge fund manager stole $1 million from clients and then tried to fake his own death. It too didn’t work.
Buzz Around the Office
Hmm… (Business Insider)
CNN’s latest report on terrorism has gone viral. The sub-tab: “ Terrorism Recruiting. ISIS Lures Victims With Kittens, Nutella.”
Quote of the Day: “Talking about music is like dancing about architecture.” – Steve Martin