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redneck
1000+ Penny Miser Member
1273 Posts |
 Posted - 12/16/2009 : 18:06:23
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Done with our tax dollars....
Wall St. Bonuses Boom; Luxury Sales Are Proof
Swank Restaurants, Art Auctions, Porsche Dealers Report Good Times
By TROY MCMULLEN
Dec. 14, 2009
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A year ago, plunging stock portfolios and massive layoffs dampened year-end bonuses on Wall Street, forcing high-flying traders and hedge fund managers to put a lid on lavish spending.
Wall Street Bonus Babies Return
A year ago, Wall Street traders and hedge funders were keeping a lid on spending as the recession... Expand
A year ago, Wall Street traders and hedge funders were keeping a lid on spending as the recession and a tanking stock market dampened bonus season. But with the stock market up a whopping 50 percent or more so far this year and Wall Street financial firms again reporting big profits, lavish spending by Wall Streeters is already making a comeback. New York cigar shops, Lamborghini and Ferrari dealerships, steak houses and five-star restaurants have already seen an uptick in spending. And with the holiday season fasting approaching, they?re happily bracing for a spending surge.
But with the stock market up sharply and financial firms from Goldman Sachs to Bank of America once again reporting soaring profits, big bonuses are expected to return to Wall Street.
Not all financial firms will be doling out big bonuses, of course. Just last week the Obama administration's pay czar, Ken Feinberg, released new rulings that will curb pay packages for some of the highest-paid employees at companies receiving what the administration deems "exceptional assistance" from the government, including AIG, Citigroup, General Motors and GMAC.
President Barack Obama lashed out at Wall Street on Sunday, calling bankers "fat cats" who "don't get it."
"I did not run for office to be helping out a bunch of fat cat bankers on Wall Street," Obama said in an interview broadcast on CBS's "60 Minutes."
Still, luxury retailers who cater to this group are already reporting a sharp rise in interest from monied financial industry employees.
"We've already seen stronger sales," said Wayne Duris, general manager of New Country Porsche of Greenwich, Conn., a Manhattan suburb packed with money managers and investment bankers.
Duris said November sales at his showroom doubled compared with last year and that December is already off to a strong start, thanks to interest from Wall Street traders. His company recently sold two new Porsches -- with price tags of more than $100,000 -- to Wall Street professionals.
"People are feeling like they can spend again as the economy gets a little bit better," Duris said.
There are other signs that bankers are loosening their wallets as bonus season approaches.
A recent auction of modern art at Sotheby's beat estimates by bringing in $182 million. Retail sales at luxury retailers such as Saks and Burberry also rose for the first time in more than a year. And five-star restaurants in Manhattan are once again packed.
One Wall Streeter recently spent about $38,000 to rent out the lower Manhattan restaurant Tribeca Grillfor 100 guests, according to a manager there. Nobu, another expensive eatery in Tribeca, has seen bookings for parties by Wall Street firms soar in recent months compared with the same period last year, the restaurant said.
Another reliable indicator that Wall Street is expecting a big bonus season: high-end real estate sales are on the rise. Kathy Cole, a property broker with Coldwell Banker Timberline Real Estate in Vail, Colo., said she has already fielded calls from several people in the financial industry wanting to see listings for ski homes with price tags north of $3 million.
In Manhattan, where the number of home sales soared 45.6 percent in the third quarter compared to the second quarter, real estate brokers report an uptick in luxury sales.
That includes the $10.5 million shelled out by William J. B. Brady, a banker atCredit Suisse who recently bought a triplex penthouse with Venetian-style arches in New York's Greenwich Village.
Analysts predict that this year's Wall Street bonuses, which will be paid early in 2010, will be higher than last year, when a recession put a clamp on year-end payouts.
Incentive pay is set to rise about 40 percent, according to Johnson Associates, a compensation consulting firm in New York. The group said fixed income and equities workers will see the biggest payouts, as both areas had strong rebuilding years.
In contrast, declines of 15 percent to 30 percent are projected at hedge funds, private-equity firms and prime-brokerage operations, as assets under management continue to suffer. The payout levels are lighter than the boom years 2006 and 2007, but the Johnson Associates survey shows a steep recovery from last year.
Goldman Sachs, Morgan Stanley and JPMorgan Chase's investment bank are expected to pay record combined bonuses this year. The firms will hand out $29.7 billion in bonuses, according to analysts' estimates. That's up 60 percent from last year and more than the previous high of $26.8 billion in 2007.
But not all investment banks are doling out cash bonuses this year.
Goldman Sachs is planning to pay top executives in restricted stock rather than cash, the company announced recently. The move comes after the company was heavily criticized for setting aside more than $16 billion for top employees.
Wall Street Bonus Season Begins
The size of this year's bonus payments to investment bankers is also obscuring Manhattan's continued struggles in the financial sector.
The number of finance industry jobs in New York City has fallen by 41,400 in the two years through August, according to the New York State Department of Labor.
None the less, the bull market is ushering in a renewed appetite for luxury among big-spending Wall Street firms.
Todd Rome, president of Blue Star Jets in Manhattan, one of the world's largest private aircraft charter brokers, said that several groups of Wall Street traders have already chartered fully catered planes to fly to the Super Bowl in Miami in February.
"Starting last month, this business has had a facelift," said Rome, whose firm as access to over 4,000 aircraft worldwide. "It starting to feel like we never really had a recession."
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Kurr
1000+ Penny Miser Member
2906 Posts |
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giddyup99
Penny Pincher Member
USA
154 Posts |
Posted - 12/16/2009 : 19:24:20
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If the companies in question paid back the bailout funds, I guess I don't really care about the bonus's. Just shows that they didn't really need the bailout cash like we were told. I personally think we were sold a bill of goods on the TARP deal anyhow. More about central control than anything else.
I'm not an economist, but anytime anyone comes to me and says I need a bunch of money, QUICKLY, and is really light on the details I would assume they are doing something illegal, stupid, or both.
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Experience is what you get when you don't get what you want. |
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slickeast
1000+ Penny Miser Member
USA
2533 Posts |
Posted - 12/17/2009 : 08:13:06
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quote:
Originally posted by giddyup99
If the companies in question paid back the bailout funds, I guess I don't really care about the bonus's. Just shows that they didn't really need the bailout cash like we were told. I personally think we were sold a bill of goods on the TARP deal anyhow. More about central control than anything else.
I'm not an economist, but anytime anyone comes to me and says I need a bunch of money, QUICKLY, and is really light on the details I would assume they are doing something illegal, stupid, or both.
Well said my friend, well said. |
You don't have to be the BEST you just have to be.......SLICK
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brian0918
Penny Collector Member
USA
315 Posts |
Posted - 12/17/2009 : 10:24:40
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| Many banks were forced by the government to accept these bailouts, invalidating the notion that "we the people should have a say in the company". The simple reality is that where force is involved, such as the government forcing a company to take money, or a government forcibly taking money from its people, all morality goes out the window. The government should not have taken the money, and should not have given the money. Likewise, the government should not be dictating private pay and bonuses, and should not be applying any other force. The best solution now is to shut down the Fed and other improper govt. institutions, sell their resources, and use the money from that sale to help reimburse those impacted by the government's force - namely, everyone. |
"The man who speaks to you of sacrifice, speaks of slaves and masters. And intends to be the master." -- Ayn Rand
Searched: $2230 Nickels; Liberty: 1; Buffalo: 4; War: 20; 2009: 2; 2010D: 8 |
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Country
1000+ Penny Miser Member
USA
3121 Posts |
Posted - 12/17/2009 : 10:48:14
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| These outrageous bonuses are nothing but stealing money from the shareholders. These executives think they own the companies they run, but they are really employees of the shareholders - the real owners of the company. Every wonder why the stock market hasn't gone up in the USA for the last decade? It's these theives who have stolen the profits and reduced the value of the company that they are employed. Hand picked board members, friends of the top executives, government that does not enforce the rights of shareholders, have allowed this theft. |
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– Theodore Roosevelt
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Wall St. Bonuses Boom
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