Wall Street

  • 09 Jan 2008 at 2:23 PM
  • Museum

Someday, All Of Wall Street Will Be A Museum

MuseumofFinance.gif[Editor’s Note: DealBreaker correspondent Everett Stuckey just returned from covering an important event on Wall Street. His report:]
When I was an analyst scurrying back and forth to my rat’s nest/cubicle the one thing that was missing from my life (besides a soul) was another tourist trap on wall street. Cause what I really need during my red bull run is crowds of slack jawed yokels moving in slow motion down the hallowed canyon of finance. So it is with great fanfare that we announce the opening of Museum of American Finance at 48 Wall Street (where else?). Soon every huckseed from Mayberry with a Scottrade account will be descending upon Wall Street for a history lesson.
Now the so called mission of The Museum of American Finance is to promote financial literacy. Yet there’s a shocking dearth of literature in the place. In fact I’m quite sure the average person can learn more about the finance industry by watching Boiler Room.
[More on the report after the jump.]

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The Damage To Wall Street’s Investors

This has been a rough year for investors in Wall Street firms, many of whom work at the firms themselves. The Amex Broker-Dealer Index is down for the year, as are the shares of nearly every Wall Street investment bank and brokerage. With the exception of Citigroup, most started the year out with gains in their share prices. But when the broader markets plunged in February, the stocks of the banks and brokerages saw much steeper losses and few every recovered. Although there have been up weeks and down weeks, for long term investors, investing in these companies has been a losing strategy this year.
Morgan Stanley, JP Morgan Chase and Goldman Sachs all recovered into positive territory, while Merrill Lynch, Lehman Brothers and Bear Stearns struggled and, except for brief pops for Citi and Lehman, shareholders found themselves losing money all year. News of the credit crunch and subprime mortgaged related losses in late July and August, bringing the stocks in the group down even further. None of the Wall Street firms have traded higher than they did at the start of the year since July.
The sole exception to this has been the recovery of Goldman Sachs, which rose after its third-quarter earnings report revealed it had made massive gains in the areas where so many of its competitors have stumbled. It’s stock is up close to 12% year-to-date. The next be performer, with a share price decline of less than 5% for the year, is JP Morgan Chase. All of the others have declined by more than 20%. At the bottom of the barrel are Merrill and Bear, which are quickly closing in on declines as high as 30% for the year.

Wall Street Still Stressful, Less Drug Addled

wall street and drugs.jpgWall Street is a place of legendary stress. And legendary techniques for stress relief. Jim Cramer was once famous for smashing computer key boards. John Mack used to pulverize telephones. We once had an M&A bigshot throw an entire telephone console at us. There are therapists who specialize in dealing with the stresses of life in finance.
And, of course, there are drugs. Lots of drugs. New York City is famously awash in drugs these days. In fact, just the other day a journalist asked us to put her in touch with “Wall Street types who smoke a lot of pot.” We don’t know exactly how to take the assumption that we know about these things but we couldn’t help her anyway. Most of the folks we know prefer their recreation in other forms.
According to an article in the newly businessy BusinessWeek, the use of hard drugs is greatly diminished from the days of yore. And it’s all the fault of Wharton. Or something.

While Wall Street still has its rough edges, the culture is far more straitlaced today than in past eras. “It’s more institutionalized,” says one hedge fund manager. It’s no longer acceptable to deal with your stress by hurling a computer on the floor or by indulging in drink, drugs, or alcohol. As a practical matter, the threat of a lawsuit is much higher than before. And traders are generally a more professional group than in past decades. “There weren’t as many Wharton MBAs on the scene during the 80s,” says the fund manager, who spoke on condition that he not be identified.
Today, when drugs are employed against stress, they’re more likely to be the prescription variety. Another hedge fund manager, speaking on condition of anonymity, says he has been taking antidepressants for years. While his work didn’t cause his depression, it can exacerbate it. That can lead to a modification in medication or work habits. He once even closed a particularly troublesome fund at the urging of his wife, who said it was leading to severe stress that was affecting his behavior and disrupting their marriage.

There certainly are a lot more people in finance putting on the Ritz and taking the A-Train—that is, taking Ritalin and Adderall—than there were in the days before the little pills that could were invented. But is usage of the hard stuff really down as far as the article claims? If so, then Wall Street must have been under a permanent blizzard in those days.
Gives new meaning to the idea of not trusting anyone over forty. They’re probably a drug addict.
Stressed Out on Wall Street [Business Week]

Gordon Gekko.jpg
Why is Oliver Stone sitting idly by while someone else makes his sequel? Old boy doesn’t much care for the Street, in its current form. For one thing, it’s no longer a place where a little guy can earn himself some ill-gotten gains on his own two feet. “Gordon Gekko couldn’t manipulate the markets like he did back then,” Stone says. “It’s so big, so huge, that to be a minor player, you need to be a major bank.”
Also, even though he has Google Alerts set for “greed,” “CEOs and secretary hos,” “Schwarzman + crabs,” and “Wall Street + movie ideas,” nothing’s jumping out at him. Plus, stuff’s harder to “get” than it was twenty years ago. “The biggest dramatic story is Enron…But frankly I read the books, and I still can’t understand what they did. It’s very hard to do a financial movie, to make stocks and bonds sexy and interesting.”
Though one of Wall Street’s original consultants, Carl Icahn, has yet to kick it (a Snapple fact the director may not have been aware of), Stone feels “the flamboyant tycoon” has been displaced by big corporations, and thus renders a Part II of his own making impossible. This may be for the best, considering Stone’s opinion of the behaviors of these men, which he compares to peacocks swelling, and characterizes as “tasteless and disgusting.” And though in doing so we may simply be creating a crib sheet from which Stone can carry out his hate-crimes, just for fun, let’s see if we can name any flamers with some material ripe for the taking. You start.
Oliver Stone: Life after ‘Wall Street’ [Fortune]

Last night we found ourselves at some stupid fashion week party where we learned two things. First, fashion week is just fantasy football for girls. Second, there is no CDO business on Wall Street these days.
The latter became crashingly clear when we ran into a guy in the structured credit products business who we haven’t seen for years. He’s been too busy. But last night he told he hasn’t worked a night in weeks.
“It’s over. Everyone is getting fired. Entire divisions. Think vast empty wastelands,” he said.
We ordered him his favorite drink: a very dry, Hendrick’s martini on the rocks. He took the top half off it off in one swig. Then he took the bottom half off. We ordered him another.
“Right now CDO stands for Close the Door on you way Out,” he said.

Dana Vachon’s Women of Wall Street, With Penelope Trunk

womenofwallstreetmarieclaire.jpgWe were getting a pedicure yesterday and were thus in closer proximity to a stack of horrible women’s magazines than we usually like to be. Since they’re all the same mindless trash, we randomly selected the Marie Claire with a hungry-looking Ashley Olsen cover girl off the top and set to work educating ourselves about “women who choose starter husbands,” whether or not “Botox ages you” and “Grandpa crushes.” (This is an actual quote: “Donald Sutherland is hot. And not in the ‘he’s a great actor’ way. In the ‘we’d like to strip the 72-year-old down to his sock garters and get crazy with him’ way. In fact, a poll taken at a recent mojito night revealed that every woman in our office has a grandpa crush, even the ones without major daddy issues.” Like a trip to Idiot Island, isn’t it?). Anyway, just as the pederist started massaging our legs, we came across “A Field Guide to Wall Street Women,” by Dana Vachon. Obviously, we had to continue.
Seems there are four types on women on the Street: the Social Commando, the Ivy Beleaguered, the Nuptualista, and the Big Swinging Chick.
The Social Commando, according to Monsieur Vachon, hails from Los Angeles, Houston or San Francisco, works in sales, wears DVF wrap dresses, counts the $50 mojito pitcher as her signature cocktail, and has a life expectancy on Wall Street of 2-3 years. Commando goes commando so as to mix things up around the office, disarms with “charm” (read: breasts), and sleeps with as many co-workers as time will allow. Vachon says that Commando has a Brazilian ex-boyfriend named Nacho, though all of the Commandos we’re familiar with have always had a penchant for a more Aryan breed of man. Agree to disagree. Commando doesn’t stress about getting reports in on time, because that’s not what she’s there for, she’s there to have fun, which might explain why she’s been to rehab three times. Commando is everything Penelope Trunk has always wanted you to be, except she doesn’t dress halfway between a man and a harlot, she just dresses like a harlot.

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Market Contagion Spreads To Hipster DJs

anotherultragrrrloncontagion.jpgWe’re not sure what this means but we’re sure it means something when Sarah Lewitinn, the famous hipster DJ and music taste-maker who is also known as Ultragrrrl, starts worrying about subprime effects on the broader financial markets.

So while trying to find articles to explain to a friend of mine exactly what’s about to happen in our economy and how a ton of people are going to end up without jobs in wallstreet and then eventually all over america resulting in a crazy recession and an impending economic turmoil, i found this article that I literally thought was from The Onion…

Her comments are echoed today by Bloomberg’s Bob Ivry. “Federal Reserve Chairman Ben S. Bernanke was wrong. So were U.S. Treasury Secretary Henry Paulson and Merrill Lynch & Co. Chief Executive Officer Stanley O’Neal” he writes. “The subprime mortgage industry’s problems were contained, they all said. It turns out that the turmoil was contagious.”
Beep Beep Beep Beep [Ultragrrrl]
Update: We’ve swapped out the picture of Ultragrrrl to preserve our “reading on the monitor at work” friendly status. The original picture was too hot for even this market. (Or, maybe, especially this market since the boss may be looking for fire someone, anyone today.) Original picture after the jump.

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Rich People Are Awesome

wallstreetbonus.jpgDelving further into its favorite class war between the Haves and the Have-Mores this weekend, The New York Times found that in Silicon Valley, people who are rich don’t feel rich compared to their very rich neighbors. And they’ll try anything—even working a whopping twelve hours a day—to move into that next tax bracket. You know, the one that will make them feel a sense of superiority and self-worth and raison d’être. Just like us (you)!
Yes, many members of this “digital elite” feel bad about themselves because they are “surrounded by people with more wealth—often a lot more.” One gilded geek, Gary Kremen, pouts, “It’s just like Wall Street, where there are all these financial guys worth $7 million wondering what’s so special about them when there are all these guys worth in the hundreds of millions of dollars.” Reminds me of this story Keith likes to tell about sitting in the steam room of the 92nd Street Y with an inconsolable Daniel Seth Loeb, weeping over the fact that he made $150 million last year, sure, who cares about that when James Simons is spending that much on cigarettes annually?
But lest you think you and your West Coast brethren are too much alike, the Geek Squad makes sure to point out a notable difference: they feel bad about it. Sure, talent played a role in their good fortune, but so did “being at the right place at the right time” and many feel “sheepish, even at times guilty about their piles of cash.” See, they’re just as obsessed with money and chasing the top one-tenth of a percent (if squarely in the top one percent), or the top one-one-hundredth of one percent (if in the top one-tenth of one percent) as you, but in Silicon Valley, they’re introspective and self-doubting and have issues about their stacks of gold. Sometimes they even cry about it (when was the last time you shed some salty discharge over your bonus? And not the “I feel bad about my bonus because I got screwed out of three extra zeros so I’m going to silently weep about it in a little locked room” kind).
Which begs the question: Is it better to be a rich prick who questions his/her rich prickocity or a Dealbreaker reader? (I love you people, I do).
In Silicon Valley, Millionaires Who Don’t Feel Rich [NYT]