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Losing NYs golden goose (Wall Street is never bouncing all the way back)
New York Post ^ | 10/12/2012 | Nicole Gelinas

Posted on 10/13/2012 10:05:58 AM PDT by SeekAndFind

Five years after the beginning of the financial crisis,” Wall Street “remains in transition,” state comptroller Tom DiNapoli reported Tuesday. The industry is “still working through the fallout from the financial crisis.” No kidding.

Yet both the state and city governments, which depend on Wall Street to pay the bills, are still partying like it’s 2007. Unless they sober up soon, they’re in transition to nowhere.

At first glance, DiNapoli’s report on Wall Street’s impact on New York seems inconsistent. Wall Street should ink healthy profits this year — $15 billion, or twice last year’s levels. That’s back to where it was in 2006, before the crisis.

But Wall Street is shedding jobs — 4,800 over the summer.

And the industry never replaced the jobs it lost after 2007. Employment is still down 20,200 jobs since the crash, to 172,000 — a much slower bounce-back than after the last two recessions.

In 2000, keep in mind, Wall Street had 195,400 jobs — a number it’s never again reached.

Bonuses are falling, too, for the second year in a row — even though last year’s $20 billion was about 43 percent below the pre-crisis payout.

The numbers make sense, though — and are grim news for New York.

Profits are the difference between what the Wall Street firms take in — “revenues” — and their expenses. And revenues are still nowhere near the 2006 or 2007 level — in fact, they’re about 57 percent below the 2007 mark, and still falling.

So to keep profits high, Wall Street has slashed its biggest expense: jobs, and pay for those who still have jobs.

This trend is getting worse.

(Excerpt) Read more at ...

TOPICS: Business/Economy; Culture/Society; News/Current Events; US: New York
KEYWORDS: bonus; newyork; wallstreet

1 posted on 10/13/2012 10:06:04 AM PDT by SeekAndFind
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To: SeekAndFind


Morgan Stanley chief James Gorman said last week, “there’s way too much capacity” — meaning extra people — “and compensation is way too high.” Still. “The industry is still overpaid.”

And Gorman and his Wall Street peers have also figured out that their employees have nowhere to go if they’re unhappy.

So look out below — still. In the early ’80s, the average Wall Streeter made only twice the average private-sector income in other industries. It rose to six times that during the bubble years — but it’s now back to five times the average salary, and sinking.

2 posted on 10/13/2012 10:06:46 AM PDT by SeekAndFind
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To: SeekAndFind


In 2008, Wall Street covered about $4.5 billion of the city’s tax payments — 12 percent of the total. Last year, it was $2.8 billion — 7 percent.

The state, meanwhile, got $8.7 billion from the securities industry last year, or 14 percent of its tax dollars. That was down from $12 billion — or 20 percent — in 2008. (The state numbers are bigger because Albany relies so heavily on income taxes.)

3 posted on 10/13/2012 10:08:18 AM PDT by SeekAndFind
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To: SeekAndFind

Many financial jobs are relocating outside New York as well.

4 posted on 10/13/2012 10:16:07 AM PDT by Vince Ferrer
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To: SeekAndFind
Well, golly duh. Here are the reasons that Wall Street is in trouble:

1. $228 Trillion in derivative exposure by the big banks

2. High speed trading that no human can match

3. Banks with Prop Trading Desks that make bets opposing the advice they've given to their investors

4. Lack of trust by investors after recent crash

5. No one wants to risk what they have left.

5 posted on 10/13/2012 10:16:07 AM PDT by Dr. Thorne (Democrats - The Treasonous Pervert Party)
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To: SeekAndFind

Revenue is DOWN 57%, and profits are UNCHANGED! Sounds like there are some seriously talented people in charge of this industry.

6 posted on 10/13/2012 10:16:17 AM PDT by Doctor 2Brains (If the government were Paris Hilton, it could not score a free drink in a bar full of lonely sailors)
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To: SeekAndFind
computer trading requires no bonuses... maybe a few for the programmers though
7 posted on 10/13/2012 10:16:41 AM PDT by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: SeekAndFind

I don’t know if Wall Street is never bouncing all the way back but until the area shrinks their high-tax nanny-state governments, there will be a lot of outstanding minds who will never choose to work there.

8 posted on 10/13/2012 10:39:09 AM PDT by OrangeHoof (Our economy won't heal until one particular black man is unemployed.)
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To: Vince Ferrer

Milton Friedman in his 1972 book, “Free to Chose” pointed out that in 1950 well over half of all Fortune 500 companies were headquartered in New York City, but by that time, it was down to less than 200, and falling. As he put it, New Yorkers, who believe in redistribution, redistributed jobs and industry to the rest of the country. New Yorkers never learned their lesson, they still insist on killing the geese that lay the golden eggs.

But, in this, they are a lot like other Americans.

9 posted on 10/13/2012 11:19:19 AM PDT by Lonesome in Massachussets ( Message to President Obama: Mene, mene, tekel, upharsin)
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To: SeekAndFind

They killed the golden goose with a bunch of scamming and distortions. The world is on to the “leading” economy.

10 posted on 10/13/2012 12:43:11 PM PDT by SaraJohnson
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