It did not take a bunch of chanting unemployed college graduates to stick it to Wall Street. All it took was Wall Street. The losers: 200,000 unemployed hot shots.
They were on the fast track in 2007. It was a fast track to oblivion. The bubble burst, and it is not coming back.
I don’t know where they went. I don’t much care. But I do know that all the chatter in the financial media about “buy stocks now; they are a bargain” is belied by the gutted careers of these people.
Business Week ran a long article on the devastation, with lots of human interest stories. Their world came crashing down on them. They never saw it coming. That is the crucial fact. These people were telling Americans where to invest their money, but they did not see it coming. They were blind-sided. Even after three years, they did not see it coming. It was the blind leading the blind into the ditch.
In 2009, over 100,00suffered the same experience.
Like I care.
But it’s nice to see that the free market extracts justice, at least to some degree. If it were not for the Federal Reserve and the bailouts, it would have imposed even more justice.
Wall Street rebounded from the financial crisis of 2008 with the help of unprecedented government support, including loans from the U.S. Federal Reserve. Goldman Sachs posted record profit the following year, and bonuses paid to securities-firm employees in New York City rose 17 percent to $20.3 billion, according to New York State Comptroller Thomas DiNapoli.
Now, faced with higher capital requirements, the failure of exotic financial products and diminished proprietary trading, the industry is undergoing what Steven Eckhaus, chairman of the executive-employment practice at Katten Muchin Rosenman LLP, called “a paradigm shift.”
It’s about time.
The Gucci shoe boys are slowly waking up to smell the coffee — and it’s not $7 a cup at Starbucks. It’s at home, where they wait for a return call that does not come.
Banks, insurers and asset managers in Western Europe have been hardest hit, announcing about 105,000 dismissals this year, 66 percent more than the region’s losses in 2008 at the depths of the financial crisis, Bloomberg data show. The 50,000 job cuts in North America this year are more than twice last year’s and fewer than the 175,000 in 2008.
It’s payback time — from the free market. There is lots more payback coming. Lots more.
“It’s a once-in-a-generation challenge,” said John Purcell, founder of London-based executive search firm Purcell & Co. “Everyone who has worked in the City since 1985 will have no idea of how to cope with this level of dislocation.”
So, it’s not just in the USA. It’s all over the West.
Bonuses have been cut.
Wall Street bonuses are expected to fall in 2011 from the $128,530 average last year, DiNapoli, the state comptroller, said in October. Even so, when Goldman Sachs set aside 24 percent less to pay employees in the first nine months than in the same period last year, the amount, $10 billion, was equal to $292,836 for each of its 34,200 workers as of Sept. 30. That’s nearly six times the median household income in the U.S., where 49.1 million live in poverty, according to Census Bureau data.
It’s enough to break your heart, isn’t it?
The bubble popped in 2008. It will not be coming back anytime soon. Neither are these careers. It was fun while it lasted. It’s gone.