Wall Street | The New York Observer

An Obscene Protest

Tue, 20 Oct 2009 13:02:19 -0400

Popular disgust over the fat premiums that financial executives bestow upon themselves is burgeoning, and rightly so. Those Wall Street piggy banks are filling up with billions upon billions of government-subsidized dollars.

But anyone infuriated by the grossly inflated compensation of the masters of finance should check out the incredible earnings of the top executives in the health insurance business. They’re among the most highly paid suits in the country—not owing to any skill...

A Claptrap to Lure the Groundlings

Tue, 09 Jun 2009 18:51:13 -0400

This seems like a good time to step back and see where we are and how we got that way.

In last Sunday’s Times, William Cohan and Sandy Lewis laid out a very convincing debunking of what many people with a grain of common sense and market experience believe to be a rosy propaganda barrage about the state of the economy and Wall Street, a barrage that is essentially delusional.

What Cohan...

The Real Wall Street

Tue, 14 Apr 2009 19:44:16 -0400

At a time when legitimate businesses and financial services firms are subjected to ridicule and contempt on a daily basis, it’s worth noting that the private sector is living up to its financial commitment to the 9/11 memorial under way at ground zero.

The National September 11 Memorial and Museum received pledges of $55 million from four financial giants more than a year ago. That sum represented a significant portion of the $355 million that...

Who Will Be Left Holding The Bag?

Tue, 14 Apr 2009 19:30:00 -0400

Unless I’m mistaken, it was only seven months ago that Lehman Brothers slipped beneath the waves and others of this great republic’s signature financial institutions were poised to follow—unless upwards of a trillion dollars in Public Capital were quickly transfused onto their balance sheets.

Now, suddenly, banks are talking about robust and satisfactory first-quarter profits (largely, I suspect, by shoving the bad stuff below the line, as we bankers say) and complaining that the...

Dance to the Music of Geithner

Tue, 07 Apr 2009 13:09:40 -0400

Let me begin this week’s sermon by quoting from myself, from a piece I wrote for Forbes.com last October:

“Most halfway educated people know about idiots savants, people who are dyslexic, autistic or otherwise gravely impaired by ‘normal’ cognitive and psychological metrics, but who can reel off complex algorithms and theorems or intuit great scientific truths. I submit that there is a corollary genus, the savant idiot: festooned with credentials, diplomas, laurels and prizes...

Ex-Bear Stearns COO Busts Police Building Price to $26 M., But Holds Head High

Tue, 31 Mar 2009 19:15:14 -0400

Even if most of New York’s well-heeled homeowners have figured out that their exceptionally huge real estate isn’t worth quite what they once imagined, a few are having a hard time making the adjustment. They’re like smiley Dutch florists in post-bubble 1638.

Trump Park Avenue, for example, that beautiful old hotel-turned-condo, hasn’t had any price cuts on its five remaining big penthouses, according to the listings Web site Streeteasy, even though some have been...

Three Little Words Tell You Civilization Is Collapsing

Tue, 24 Mar 2009 19:33:03 -0400

We frequently identify the shaping forces of human affairs as “isms”: communism, fascism, capitalism, mercantilism, socialism and so on. In looking over the wreckage-strewn landscape of global finance, however, it seems to me that words ending in “ity” should have their turn at bat. “Rapacity” and “duplicity” are too easy, too obvious. “Timidity” works, but my inner jury is still out on Geithner, so I’m going to let it pass. The three little “ity”...

Public Service and Private Greed

Sun, 22 Mar 2009 13:48:48 -0400

On Election Day in 1960, my family placed a hand lettered sign in our living room window on East 59th street in Brooklyn that read “Kennedy for President”. A few months later, as a seven year old boy, I remember watching President Kennedy on our black and white television ask us to pledge “what we could do for our country”. It was a thrilling, inspiring moment. I think that...

The Bear Facts

Tue, 17 Mar 2009 13:48:17 -0400

House of Cards: A Tale of Hubris and Wretched Excess on Wall Street
By William D. Cohan
Doubleday, 468pp, $27.95

Four years ago, on a grayish morning in late May, I left my Brooklyn home and made my way to Central Synagogue on Manhattan’s East Side. I came thither to pay my last respects to an old friend, Mickey Tarnopol, whose life had finally been claimed by a long...

Pushed to the Margins, Finally

Tue, 24 Feb 2009 12:14:07 -0500

At the brink of global ruin, many Americans suddenly seem willing to consider sensible ideas that were always deemed unthinkable, and to reject foolish notions that were once deemed brilliant. Soon we may be mature enough to observe how other developed countries solved problems that have baffled us for generations.

Nationalizing major banks, temporarily at least, is a radical notion that today looks far more prudent than handing over hundreds...

Bloomberg Breaks Out the Elbow Grease for Wall Street

Wed, 18 Feb 2009 15:54:36 -0500

After Lehman Brothers collapsed last fall, it quickly became clear to the Bloomberg administration that the spiraling economic crisis was going to hit New York especially hard. The financial sector had been the city’s economic engine, driving real wages and estate prices up citywide.

So the Bloomberg administration did what it so often does when it wants to think big: It ordered the creation of a point-by-point action plan, fed in...

When Wall Street Goes Dancing in the Dark

Tue, 17 Feb 2009 12:33:56 -0500

Tim Mahoney, the chief executive officer of BIDS Trading, wears cuff links shaped like frogs with crowns. A friend gave them to him when Mr. Mahoney launched his business, with the message that at the heart of every ugly start-up is a prince.

Mr. Mahoney’s company is what Wall Street types know as a “dark pool” of liquidity—an electronic space where big investors can trade large blocks of stock without knowing who’s on the...

Don’t Blame the Bonuses

Tue, 03 Feb 2009 19:01:12 -0500

With jobs in jeopardy and investments limping, it’s understandable that Main Street takes comfort in finding a bogeyman to blame for the country’s current economic miseries. And last month, when the New York State comptroller announced that Wall Street handed out $18.4 billion in bonuses for 2008, Main Street didn’t even have to get up from its easy chair to find a suitable villain. The White House amplified the chorus of boos, as...

My Economic Solution: Send $6 Million Men 25 Percent Unbonuses

Tue, 03 Feb 2009 18:42:12 -0500

When Yeats wrote of a “rough beast” slouching to be born, I doubt he expected that his apocalyptic monster would turn out to be a pig.

Well, it has. And I want blood. I want sausage. And so should anyone whose modest mite has been decimated by the hoggishness of Wall Street and the fanciful monetary and regulatory theories of the fools in Washington notionally charged with keeping an eye on the...

Round Up the Usual Suspects!

Tue, 27 Jan 2009 18:33:12 -0500

Suddenly, everyone’s discovered that Paulson’s original thrust—to use TARP to buy “toxic” assets off bank balance sheets—was right, and that the subsequent tack—to use TARP money to bolster bank capital accounts—was wrong. Everyone has also seen the light with regard to Lehman: that letting the big investment bank fail was an error of terminal proportions.

Hindsight’s wonderful, isn’t it?

It’s also crap.

The crux of any asset-purchase scheme,...

The Frat Boys Who Lit the Boom

Fri, 16 Jan 2009 11:56:53 -0500

The Journal's Matthew Karnitschnig and Susanne Craig have the low-down on last week's annual gathering at the St. Regis of Wall Street's very own secret fraternity, Kappa Beta Phi, which contains some of the true titans of city-based finance. The frat's current mood, understandably, is a bit sullen, like a bad hangover you simply can't shake:

"I feel like the mayor of New Orleans after Katrina," quipped Alfred E. Smith IV, the group's leader, or...

A Short-Term Curse

Sun, 04 Jan 2009 11:49:39 -0500

Author Michael Lewis and hedge fund manager David Einhorn in The New York Times over the weekend on the genesis of the current crisis: "Our financial catastrophe, like Bernard Madoff’s pyramid scheme, required all sorts of important, plugged-in people to sacrifice our collective long-term interests for short-term gain. The pressure to do this in today’s financial markets is immense. Obviously the greater the market pressure to excel in the short term, the greater the...

If Not Wall Street Bonuses, What?

Tue, 25 Nov 2008 16:20:05 -0500

“People aren’t going to stop living, and dining out is one of the most therapeutic things people can do,” said Tracy Nieporent, marketing director and partner in the Myriad Restaurant Group, which owns Tribeca Grill, Nobu and other pricey eateries around the city.

Yes, this economy is quite depressing, but people still have to eat (and live) in New York, and the million-dollar question is whether everyone’s going...

The Local: Code Red on Black Friday

Sun, 23 Nov 2008 19:42:27 -0500

Recession or not, when Erin Lima makes the trip from Philadelphia to New York City, “shopping is inevitable.”

“Every time you come here you have to,” she said, while browsing the handbag section of Bergdorf Goodman on Saturday with her husband in tow. “You can’t help yourself.”

The Limas and another couple got “the best deal ever” on a weekend at the Embassy Suites Hotel in Battery Park...

City Expects Wall Street Bonuses To Plunge Over 50 Percent

Fri, 21 Nov 2008 15:28:50 -0500

Hold on to your hats, ladies and gentlemen, Wall Street bonuses are headed for an epochal fall. According to estimates from the city Comptroller’s office provided to The Observer today, year-end bonuses will total $14.5 billion for 2008, an over 50 percent drop from 2007, when $28.9 billion was paid out to Wall Streeters.

Of course, the figures are merely an estimate for now, but the low projection jibes with the bleak year in...

Now It's 70,000 Financial Services Layoffs

Mon, 17 Nov 2008 17:44:04 -0500

From The New York Times: "However dismal the outlook for Wall Street workers appeared at the end of the third quarter, the situation has gotten worse than most predictions. At the beginning of September, Moody’s Economy.com had predicted that 45,000 to 65,000 financial workers in the New York area would lose their jobs by the middle of 2010. Now Moody’s is predicting 70,000, even accounting for the fact that some workers would find new...

The Local: FiDi--Now, More Than Ever, Almost 24-7

Sun, 16 Nov 2008 22:08:23 -0500

When Jongmin Park and his wife Soye moved from Battery Park City to a condo at 90 William Street three years ago, the conversion of the Financial District into a 24-hour retail and residential neighborhood was just beginning.

When they first arrived, all the restaurants and stores closed on the weekends and the neighborhood turned into a “ghost town,” he said. Things have changed so much since then that Mr....

The Local: Wall Street on Election Eve

Sun, 02 Nov 2008 20:41:17 -0500

Rocky Twyman, a Seventh Day Adventist who rallied hundreds of Americans to pray for lower fuel prices at gas stations across the country last spring and summer, camped in front of the New York Stock Exchange on Halloween for the inauguration of his latest movement: "Pray Down the Greed on Wall Street."

"This is just the beginning of our movement," Mr. Twyman said as a camera crew lingered impatiently for an interview. "We are...

Will $20 B. in Bonuses Be Enough To Save Real Estate?

Mon, 27 Oct 2008 13:46:54 -0400

Bloomberg News reports today that Wall Street investment firms, even in the midst of the financial crisis, could dole out as much as $20 billion in year-end bonuses. Goldman Sachs, for instance, currently budgets an average of $210,300 for each employee, a 32 percent drop from 2007's average but still significant.

The real question now is what effects these bonuses will have on New York real estate in early 2009. Traditionally, the bonuses trickle...

The Local: FiDi Five Weeks On

Sun, 26 Oct 2008 22:20:22 -0400

Symptoms of the credit crunch in the Financial District became obvious over the summer, when commercial and residential vacancy rates rose and a slew of new luxury condos spilled onto the market as rentals. Now, signs offering occupants incentives like no brokers’ fees and one month’s free rent are as plentiful on the sidewalks as camera-toting tourists.

The Financial District has certainly become an apartment hunters’ market since Lehman Brothers officially folded just over...

Advice for Canned Wall Street Masses: Learn to Drill, Baby!

Wed, 15 Oct 2008 11:48:33 -0400

Time to start updating your resume if you work on Wall Street, as major job cuts are likely to hit New York’s financial and insurance sectors in thecoming months, according to the Wall Street Journal. The state’s finance and insurance employment numbers have hovered close to 345,000 through August of this year, showing little change in spite of the ongoing meltdown in the financial markets.

But major job cuts loom: Global investment-banking...

Hollywood Rushes Wall Street Sequel, Sans Stone

Tue, 14 Oct 2008 11:44:55 -0400

With the ups and downs of the Dow during the last month feeling like a ride on the Cyclone, it's no wonder that 20th Century Fox wants to get their long-gestating Wall Street sequel, generically titled Money Never Sleeps, back on the fast track. The follow-up to Oliver Stone's seminal 1987 film has been knocking around the Fox lot since May 2007 when the studio announced it was going ahead with the project without...

The Local: Shrinks Anticipate Expansion

Sun, 12 Oct 2008 19:12:15 -0400

One of the inadvertent beneficiaries of the Wall Street meltdown may be the city’s mental health professionals. Many of them said their practices have either grown or stayed stable over the past year, as the economy worsened and the conditions that spawned Wall Street's meltdown coalesced.

They believe, grimly enough, their business will only boom as the bust reverberates.

"This is multi-level stress in that it is financial,...

The Local: Randiest Retail Rides Wall Street Crisis

Sat, 04 Oct 2008 16:19:37 -0400

Last week was probably not the most fortuitous time to open a new store in Manhattan. Sex shop Passion opened anyway Sept. 30 on West 14th Street.

After a slow first night, traffic had picked up by the end of the third day of business.

"Stocks may be down, but cocks are up," Tyrone, the manager, said deviously as a few older men and a gay couple ...

Washington Is the New London

Mon, 29 Sep 2008 14:28:59 -0400

New York's political leaders and private sector executives have fretted for years that the city might lose its reputation as the world's financial capital to London. Now, it looks like the city should've been worrying about Washington instead.

The Wall Street meltdown and its litany of fallen titans has shifted the nation's financial muscle a bit down I-95, according to The Washington Post this weekend: "[W]ith the Street now looking to the U.S. Treasury...

The Local: The Annotated Geoffrey Raymond

Mon, 29 Sep 2008 13:23:44 -0400

Artist Geoffrey Raymond did not have much luck soliciting signatures on his portrait of ousted AIG Chairman Hank Greenberg when he displayed it outside the firm's Wall Street headquarters last week.

When Mr. Raymond first unfurled "The Annotated Spitzer" outside of the New York Stock Exchange 15 minutes after the governor resigned on March 12, over 100 passersby reveled in the schadenfreude, scrawling messages like "Spitzer or Swallow" around the head...

Wall Street: The Year's Biggest Rebranding

Thu, 25 Sep 2008 10:43:04 -0400

Could the financial crisis have spawned the year's biggest rebranding, however unintentionally?

Wall Street was losing its financial mojo long before this month's crisis ended the investment banking industry. The Street and its environs exist today more as a tourist trap for gawkers, foreign and domestic, and as a booming residential community, wherein condo marketers capitalize on the capitalism only as needed.

In the minds of millions, here and abroad, Wall Street's rep as a...

'The Losers Have Insufficient Money to Pay the Winners'

Tue, 23 Sep 2008 15:37:15 -0400

"For every buyer there is a seller, so the amounts lost would zero out and no party would gain an advantage. We would just get to reset the clock. This is as fair as things can be made, given where we are. What is causing the panic in the markets right now is the realization that the losers have insufficient money to pay the winners. The domino effect of multiple collapses cannot be stemmed...

Three Conundrums for Manhattan Housing, Post-Crisis

Mon, 22 Sep 2008 12:44:45 -0400

The Journal today tosses its Manhattan real estate analysis into the ring, citing three likely problems facing the borough's housing market thanks to the Wall Street crisis. The first two are rather obviously frightening: job losses in the city's most lucrative field and tighter mortgage-lending.

The third is less obvious: the dollar has been getting stronger against the euro and the pound.

The third headwind is a stronger dollar. Jonathan Miller, Miller Samuel's president, estimates...

Which Brooklyn Nabe Will Wall Street Impact Most? Vote Now!

Mon, 22 Sep 2008 11:59:12 -0400

Brownstoner's holding a vote today on how much (not if!) Brooklyn's housing prices will fall because of the Wall Street crisis. The votes center on the blue-chip neighborhoods like Brooklyn Heights and the up-and-comers like Clinton Hill. Have your voice heard!...

'Wall Street as It Has Long Been Known Will Cease to Exist'

Mon, 22 Sep 2008 08:41:42 -0400

Might we need a new catchphrase to describe high finance in New York? From the Wall Street Journal this morning:

With the move, Wall Street as it has long been known -- a coterie of independent brokerage firms that buy and sell securities, advise clients and are less regulated than old-fashioned banks -- will cease to exist. Wall Street's two most prestigious institutions will come under the close supervision of national bank regulators, subjecting them...

How to Make the Most of the Wall Street Crisis

Tue, 16 Sep 2008 19:51:37 -0400

Kevin Phillips was a top aide to Richard Nixon 40 years ago (he coined the term “Sun Belt”). Since then, he’s turned into a professional scold, warning particularly about the nation’s dependency on the financial services industry.

Mr. Phillips, author of Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, fortuitously published earlier this year, e-mailed on Monday evening...

Bloomberg Addresses Pending Financial Job Losses

Mon, 15 Sep 2008 15:03:21 -0400

Mayor Bloomberg addressed the Wall Street crisis this afternoon, recounting conversations he's had with executives at Bank of America and Merrill Lynch over possible layoffs: "Greg Fleming, the President and COO of Merrill, and Ken Lewis, the President and CEO of Bank of America, have informed me that they believe jobs losses in the New York area will be relatively minimal."

As for Lehman's 12,000 New York area employees?

Like everyone else, I had hoped Lehman...

Obama: Blame the G.O.P.

Mon, 15 Sep 2008 14:37:49 -0400

GRAND JUNCTION, Colo.—Barack Obama seized on the Wall Street crisis this morning to make the argument that the country can't afford another four years of Republican rule.

With an arid bluff behind him, Obama called the bankruptcy of Lehman Brothers and the problems with other major financial institutions on Wall Street “a serious, serious situation. As bad as anything we have seen.”

Later in his speech he said, “We just woke up to news...

The Real Estate Effects of the Wall Street Mess

Sun, 14 Sep 2008 22:43:38 -0400

The weekend Wall Street crisis will affect New York real estate. Here's how:

Apartment sales ~ Manhattan recorded over 10,000 home sales in 2007, but sales numbers have been off throughout the city in 2008. In Manhattan in the second quarter, home sales were down 21.8 percent annually, according to a Miller Samuel-Douglas Elliman report. In Queens, 23.7 percent; and, in Brooklyn, over 43 percent. The Wall Street crisis, due to the inordinate influence of...

Lehman Watch: Firm To Spin Off Commercial Real Estate Holdings

Wed, 10 Sep 2008 12:00:58 -0400

As investment bank giant (and major New York employer) Lehman Brothers teeters on the brink of joining Bear Stearns in that great trading floor in the sky, the announcement comes that the bank will spin off its commercial real estate holdings into a public company.

From a new Lehman Brothers' release:

The Firm intends to spin off to its shareholders $25 billion to $30 billion of its commercial real estate portfolio into a separate...

Bankers, Guard Your Nuts

Thu, 28 Aug 2008 11:08:27 -0400

From the Wall Street Journal this morning:

The securities industry pays well, but employment is highly volatile. And autumn is typically the season of greatest sadness. Horrid credit conditions and this summer's steady drip of firings suggest the ax will fall with full force when Wall Street hobbles back to business after Labor Day. ...

How bad could it get? Many recruiters claim this may be the direst financial crisis in decades. And the...

Bumped Bankers Go Bonkers!

Tue, 26 Aug 2008 11:31:14 -0400

A year ago this month, Nick, a 31-year-old West Villager from Pennsylvania with short dark brown hair, was laid off from his job as a private-equity salesman at what he called a “mid-tier” bank. As bonus season approached, his prospects did not seem bright. But his spirits, curiously, were. “Being a bachelor who rents in New York, I didn’t have a lot of commitments or responsibilities,” he said....

Bernanke on 'Gale Force' Whipping Through Economy

Fri, 22 Aug 2008 12:03:22 -0400

Federal Reserve Chairman Ben Bernanke sounded understandably ominous when talking about the national economy today at a Fed retreat in Jackson Hole, Wyo.

According to The Times:

Inflation has accelerated to levels not seen for decades, even as the housing slump and weak job market take a toll on household spending.

Indeed, Mr. Bernanke opened his speech by describing the financial crisis as a “gale force” and said the nation faced “one of the most challenging...

A Kinder, Gentler Sheriff of Wall Street

Mon, 11 Aug 2008 09:08:26 -0400

The Wall Street Journal this morning on state Attorney General Andrew Cuomo's regulatory pushes against investment banks and credit-rating agencies:

If the 50-year-old is now hitting his stride, it is attributable to some key strategic hires as well as a style that pursues institutions without demonizing individuals in the manner preferred by his predecessor, former New York Gov. Eliot Spitzer.

"Andrew Cuomo certainly has been an aggressive attorney general, and he hasn't resorted to...

'Economic Divorces' Up as Wall Street Slumps

Fri, 01 Aug 2008 12:48:52 -0400

We missed this a couple of weeks ago in the Post (a recent Economist story on London divorces jarred our memory), but a shakier Wall Street has apparently started to split up more Manhattan marriages.

When Tom discovered Cindy had begun cheating on him since he was laid off, their marriage was about as stable as a hedge fund.

Three months later, with Tom still out of work, Cindy packed her...

A Very Special Wall Street Warriors

Tue, 29 Jul 2008 16:55:58 -0400

The second season of Wall Street Warriors, a reality show broadcast on the hi-definition cable channel Mojo with the tagline “Gambling at Its Finest,” was released on Monday, giving viewers without HDTV the chance to “witness the extreme power and intense competition that defines Wall Street through the eyes of those who thrive there.”

The first two seasons are the top two ranked reality shows on iTunes today, so apparently...

The Local: On Wall Street, Cautious Fatalism

Mon, 28 Jul 2008 19:41:03 -0400

Wall Street was swarming with camera-toting, fanny-pack-sporting tourists last Friday afternoon, but few of them dared venture past the doorman standing sentry outside the pristinely intimidating Hermes boutique on Broad Street.

Inside, a woman from Abu Dhabi, wearing a black abaya accented by a diamond-encrusted, Chanel wristwatch and an oversized, patent-leather bag emblazoned with the interlocking C’s logo, browsed the selection of branded watches while her four young daughters, dressed in matching...

Cipriani, Tavern On The Green Guys Plead 'Business As Usual' at Special Events Gala

Wed, 25 Jun 2008 14:15:14 -0400

Two of the city's top banquet behemoths were honored last night at the International Special Events Society's Annual Big Apple Awards at Cipriani Wall Street:

Michael Desiderio, chief operating officer of Tavern on the Green, and Joe Cozza, vice president of sales and marketing at Cipriani USA--both of whom are facing significant challenges these days in keeping their illustrious New York institutions afloat.

Tavern, for one, faces a potential bidding war to keep its sprawling...

Wall Street and Real Estate: Hurry Up Already

Thu, 05 Jun 2008 10:22:41 -0400

A Reuters article this morning tosses a little sunshine into an otherwise gloomy assessment of the effects of a shakier Wall Street on Manhattan real estate:

The full impact of Wall Street layoffs on the Manhattan real estate market could take a year or possibly longer to work...