I know I’ve said that the Jamie & Doug in the Morning Show is the best call-in program in finance, given Jamie Dimon’s reliably amusing anti-regulation rant, but the true connoisseur should also really get a kick out of David Viniar’s calmer, wonkier, more NPR-appropriate chat. I certainly do. We’ll maybe have more to say about it later.
My enjoyment is, however, complicated by the fact that at this time of year I feel certain feelings. Specifically, feelings about Goldman Sachs comp, which will be terrible, horrible, down 115%, whatever, and yet … still … somehow … I want it. Have we talked about this before? Sometimes I miss investment banking. A thing that some people not in the industry don’t know about investment banking is that it is an awesome job, in the specific sense that many people would do it for free, or even pay money to do it, and in the even more specific sense that sometimes they do. (For, um, fairly loose definitions of “pay money.”) This happened twice during my time at Goldman. Let’s all luxuriate in a chart:
And I tell you what: when January 2009 and 2010 rolled around, and I found out that I’d been paying Goldman to work there for the last three months, I was like, “yeah, that seems right. It’d be cheap at twice the price.”
More generally you can speculate why comp accruals are so much lower in the fourth quarter than any other time of year – the answer does not, btw, appear to be “because revenues are lower” or anything dull like that, since they’re not especially, with 2008 as an important exception – and come up with explanations like “you encourage employees to stick around for 9 months by accruing at a better rate than you’ll actually pay, and then hose ’em at the last minute,” or “the PR hit of a mid-year kajillion-dollarcomp accrual isn’t that big since you didn’t actually pay anything and since people can’t annualize numbers, while the PR benefit of a fourth-quarter rollback is a bit of a plus.” So, maybe. In any case, I’m not sure you’d take the 4Q2011 accrual – which is not only positive, it’s bigger than Q3, and almost the same as 4Q2010 despite the lower headcount – as an unambiguously good sign. Maybe it means that comp is moving to a broadly smoother and less market-driven path. Maybe it means that banking at Goldman is no longer as awesome as it used to be. Some people think so.
I don’t know what else to say about GS comp. It’s down (both on headcount reduction and reduced pay per head), it’s still higher than JPM by more than enough to buy your own plant if that’s your thing, it’s still a bigger number than some other numbers and a smaller number than some other other numbers. Fin.