Wall Street

“People aren’t going to stop living, and dining out is one of the most therapeutic things people can do,” said Tracy Nieporent, marketing director and partner in the Myriad Restaurant Group, which owns Tribeca Grill, Nobu and other pricey eateries around the city.

Yes, this economy is quite depressing, but people still have to eat (and live) in New York, and the million-dollar question is whether everyone’s going to forgo the metaphorical strip steak in favor of the frozen ravioli at home.

What’s the big worry?

In a word: bonuses. Year-end Wall Street bonuses are likely to fall by more than 50 percent in 2008, down from $28.  read more »

Recession or not, when Erin Lima makes the trip from Philadelphia to New York City, “shopping is inevitable.”

“Every time you come here you have to,” she said, while browsing the handbag section of Bergdorf Goodman on Saturday with her husband in tow. “You can’t help yourself.”

The Limas and another couple got “the best deal ever” on a weekend at the Embassy Suites Hotel in Battery Park City, she said: $250 a night on a deluxe suite overlooking the park, with a cook-to-order breakfast and free drinks during cocktail hour included in the rate. “Can you stand it?” Ms.  read more »

Hold on to your hats, ladies and gentlemen, Wall Street bonuses are headed for an epochal fall. According to estimates from the city Comptroller’s office provided to The Observer today, year-end bonuses will total $14.5 billion for 2008, an over 50 percent drop from 2007, when $28.9 billion was paid out to Wall Streeters.

Of course, the figures are merely an estimate for now, but the low projection jibes with the bleak year in finance, one that saw the collapse of the financial sector and the dissolution of two of the biggest investment houses: Bear Stearns and Lehman Brothers.  read more »

From The New York Times: "However dismal the outlook for Wall Street workers appeared at the end of the third quarter, the situation has gotten worse than most predictions. At the beginning of September, Moody’s Economy.com had predicted that 45,000 to 65,000 financial workers in the New York area would lose their jobs by the middle of 2010. Now Moody’s is predicting 70,000, even accounting for the fact that some workers would find new positions."

When Jongmin Park and his wife Soye moved from Battery Park City to a condo at 90 William Street three years ago, the conversion of the Financial District into a 24-hour retail and residential neighborhood was just beginning.

When they first arrived, all the restaurants and stores closed on the weekends and the neighborhood turned into a “ghost town,” he said. Things have changed so much since then that Mr. Park’s biggest complaint about living there is no longer a lack of amenities, but the nearly constant din of construction.

“This place used to be geared towards billionaires,” Mr.  read more »

Rocky Twyman, a Seventh Day Adventist who rallied hundreds of Americans to pray for lower fuel prices at gas stations across the country last spring and summer, camped in front of the New York Stock Exchange on Halloween for the inauguration of his latest movement: "Pray Down the Greed on Wall Street."

"This is just the beginning of our movement," Mr. Twyman said as a camera crew lingered impatiently for an interview. "We are going to do all we can to alert these Wall Street executives that God is watching them. God is over all of this. He is the one that can destroy them if they keep doing this.  read more »

Bloomberg News reports today that Wall Street investment firms, even in the midst of the financial crisis, could dole out as much as $20 billion in year-end bonuses. Goldman Sachs, for instance, currently budgets an average of $210,300 for each employee, a 32 percent drop from 2007's average but still significant.

The real question now is what effects these bonuses will have on New York real estate in early 2009. Traditionally, the bonuses trickle down into everything from luxury condo sales to beefier broker commissions to retailers' abilities to expand. A solid bonus year--the last couple, 2006 and 2007, each saw bonus totals of over $33 billion (PDF)--generally means a solid succeeding year for local real estate (though the relationship is far from hard and fast, particularly when it comes to the apartment market).  read more »

Symptoms of the credit crunch in the Financial District became obvious over the summer, when commercial and residential vacancy rates rose and a slew of new luxury condos spilled onto the market as rentals. Now, signs offering occupants incentives like no brokers’ fees and one month’s free rent are as plentiful on the sidewalks as camera-toting tourists.

The Financial District has certainly become an apartment hunters’ market since Lehman Brothers officially folded just over five weeks ago, on Sept. 15. Elsewhere in real estate, however, the financial crisis' impact remains unclear.  read more »

Time to start updating your resume if you work on Wall Street, as major job cuts are likely to hit New York’s financial and insurance sectors in thecoming months, according to the Wall Street Journal. The state’s finance and insurance employment numbers have hovered close to 345,000 through August of this year, showing little change in spite of the ongoing meltdown in the financial markets.

But major job cuts loom: Global investment-banking fees have fallen by 23 percent in 2008 and equity capital markets have reverted to levels last seen in 2003. In the wake of the tech crash and 9/11, the city’s securities industry lost 18 percent of its jobs, according to figures from the state Department of Labor, and there is reason to think that the upcoming wave of layoffs will be worse.

So what does this mean for the average Wall Street bum? We’ll let the Journal have the last word on that: “In a global economy characterized by excess financial-services capacity and a deficit of energy sources, enrolling in an engineering course might not be a bad idea.”  read more »

With the ups and downs of the Dow during the last month feeling like a ride on the Cyclone, it's no wonder that 20th Century Fox wants to get their long-gestating Wall Street sequel, generically titled Money Never Sleeps, back on the fast track. The follow-up to Oliver Stone's seminal 1987 film has been knocking around the Fox lot since May 2007 when the studio announced it was going ahead with the project without Mr. Stone but with Michael Douglas returning as the iconic Gordon Gekko. However after the historical upheavals in the financial world during the last month, and what reportedly amounted to a shoddy script from writer Stephen Schiff (The Deep End of the Ocean), a page one rewrite is now in order. Unfortunately, the studio just announced that they hired Allan Loeb, he of 21 infamy, to handle the new duties.

Of course there are bigger problems with this project than just the script or the fact that neither Mr. Stone nor original writer Stanley Weiser are involved. The original film came out over twenty years ago. That's a loooooong time fellas!  read more »

One of the inadvertent beneficiaries of the Wall Street meltdown may be the city’s mental health professionals. Many of them said their practices have either grown or stayed stable over the past year, as the economy worsened and the conditions that spawned Wall Street's meltdown coalesced.

They believe, grimly enough, their business will only boom as the bust reverberates.

"This is multi-level stress in that it is financial, political, [and] social, and rocks the foundations, or perhaps the myth, that this country rests upon," said addiction recovery specialist Bob Lynne, who managed the state of New Jersey's therapeutic response to the September 11 attacks.  read more »

Last week was probably not the most fortuitous time to open a new store in Manhattan. Sex shop Passion opened anyway Sept. 30 on West 14th Street.

After a slow first night, traffic had picked up by the end of the third day of business.

"Stocks may be down, but cocks are up," Tyrone, the manager, said deviously as a few older men and a gay couple perused the merchandise on Oct. 2. "I would have expected to get mostly homosexuals, but we get a fair amount of heterosexual men, too. They always leave blushing."

Not all city sex retailers are as upbeat as Tyrone.  read more »

Artist Geoffrey Raymond did not have much luck soliciting signatures on his portrait of ousted AIG Chairman Hank Greenberg when he displayed it outside the firm's Wall Street headquarters last week.

When Mr. Raymond first unfurled "The Annotated Spitzer" outside of the New York Stock Exchange 15 minutes after the governor resigned on March 12, over 100 passersby reveled in the schadenfreude, scrawling messages like "Spitzer or Swallow" around the head of Wall Street's disgraced nemesis. Mr. Raymond went on to collect 350 comments on the Spitzer portrait, less than a dozen of which were encouraging, setting the still-unsurpassed record in his nine-piece "Annotated" series.  read more »

New York's political leaders and private sector executives have fretted for years that the city might lose its reputation as the world's financial capital to London. Now, it looks like the city should've been worrying about Washington instead.

The Wall Street meltdown and its litany of fallen titans has shifted the nation's financial muscle a bit down I-95, according to The Washington Post this weekend: "[W]ith the Street now looking to the U.S. Treasury for an unprecedented bailout, it's suddenly Washington that has become the center of financial action--creating, at least for this instant, an unlikely shift of power and influence."

Could the financial crisis have spawned the year's biggest rebranding, however unintentionally?

Wall Street was losing its financial mojo long before this month's crisis ended the investment banking industry. The Street and its environs exist today more as a tourist trap for gawkers, foreign and domestic, and as a booming residential community, wherein condo marketers capitalize on the capitalism only as needed.

In the minds of millions, here and abroad, Wall Street's rep as a beacon of atavistic capitalism should continue to fade, supplanted by the image of a thoroughly gentrified neighborhood that merely pays lip service to its roots. Think of Greenwich Village today.  read more »

"For every buyer there is a seller, so the amounts lost would zero out and no party would gain an advantage. We would just get to reset the clock. This is as fair as things can be made, given where we are. What is causing the panic in the markets right now is the realization that the losers have insufficient money to pay the winners. The domino effect of multiple collapses cannot be stemmed by any government, even by running the printing press overtime. The only solution is to wipe the underlying derivatives off the books and ensure these bets are never made again by creating laws to send those who make them in the future to jail." ["Bob Knakal Will Not BS You About the Wall Street Crisis"]

The Journal today tosses its Manhattan real estate analysis into the ring, citing three likely problems facing the borough's housing market thanks to the Wall Street crisis. The first two are rather obviously frightening: job losses in the city's most lucrative field and tighter mortgage-lending.

The third is less obvious: the dollar has been getting stronger against the euro and the pound.

The third headwind is a stronger dollar. Jonathan Miller, Miller Samuel's president, estimates one in three new apartments are sold to foreigners, primarily Western Europeans.

Brownstoner's holding a vote today on how much (not if!) Brooklyn's housing prices will fall because of the Wall Street crisis. The votes center on the blue-chip neighborhoods like Brooklyn Heights and the up-and-comers like Clinton Hill. Have your voice heard!

Might we need a new catchphrase to describe high finance in New York? From the Wall Street Journal this morning:

With the move, Wall Street as it has long been known -- a coterie of independent brokerage firms that buy and sell securities, advise clients and are less regulated than old-fashioned banks -- will cease to exist. Wall Street's two most prestigious institutions will come under the close supervision of national bank regulators, subjecting them to new capital requirements, additional oversight, and far less profitability than they have historically enjoyed.

Kevin Phillips was a top aide to Richard Nixon 40 years ago (he coined the term “Sun Belt”). Since then, he’s turned into a professional scold, warning particularly about the nation’s dependency on the financial services industry.

Mr. Phillips, author of Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, fortuitously published earlier this year, e-mailed on Monday evening his thoughts about the unfolding fiscal crisis: “There’s very little excuse for Wall Street’s sad but pervasive mixture of myopia and incompetence. Clues to the excesses were everywhere.”

It’s O.K., in other words, not to feel too badly about what went down with Lehman Brothers, Merrill Lynch, et al.  read more »

Mayor Bloomberg addressed the Wall Street crisis this afternoon, recounting conversations he's had with executives at Bank of America and Merrill Lynch over possible layoffs: "Greg Fleming, the President and COO of Merrill, and Ken Lewis, the President and CEO of Bank of America, have informed me that they believe jobs losses in the New York area will be relatively minimal."

As for Lehman's 12,000 New York area employees?

Like everyone else, I had hoped Lehman Brothers could be saved, along with the jobs that employ more than 12,000 people who live in the New York area. Lehman Brothers had provided countless New Yorkers with an opportunity to pursue the American Dream, and it’s a sad day for our city to see it close its doors.

 read more »

GRAND JUNCTION, Colo.—Barack Obama seized on the Wall Street crisis this morning to make the argument that the  country can't afford another four years of Republican rule.

With an arid bluff behind him, Obama called the bankruptcy of Lehman Brothers and the problems with other major financial institutions on Wall Street “a serious, serious situation. As bad as anything we have seen.”

Later in his speech he said, “We just woke up to news of financial disaster and this morning he said the fundamentals of our economy are still strong. Senator McCain, what economy are you talking about?”

He launched into a Clintonesque discussion of "fundamentals.  read more »

The weekend Wall Street crisis will affect New York real estate. Here's how:

Apartment sales ~ Manhattan recorded over 10,000 home sales in 2007, but sales numbers have been off throughout the city in 2008. In Manhattan in the second quarter, home sales were down 21.8 percent annually, according to a Miller Samuel-Douglas Elliman report. In Queens, 23.7 percent; and, in Brooklyn, over 43 percent. The Wall Street crisis, due to the inordinate influence of the Street on local apartment and townhouse sales, will likely drive the number of deals further downward as the year ends. This could give a hefty advantage to buyers.  read more »

As investment bank giant (and major New York employer) Lehman Brothers teeters on the brink of joining Bear Stearns in that great trading floor in the sky, the announcement comes that the bank will spin off its commercial real estate holdings into a public company.

From a new Lehman Brothers' release:  read more »

From the Wall Street Journal this morning:

The securities industry pays well, but employment is highly volatile. And autumn is typically the season of greatest sadness. Horrid credit conditions and this summer's steady drip of firings suggest the ax will fall with full force when Wall Street hobbles back to business after Labor Day. ...

How bad could it get? Many recruiters claim this may be the direst financial crisis in decades. And the longer the crunch lasts, the better the chances become that this crack could cause Wall Street even more pain than the big downturn of the early 1970s.

About 17% of securities industry workers lost their jobs from 1972 through 1974. In New York City, nearly one in four did. Smart bankers should start squirreling away those nuts before the cold snap hits.

A year ago this month, Nick, a 31-year-old West Villager from Pennsylvania with short dark brown hair, was laid off from his job as a private-equity salesman at what he called a “mid-tier” bank. As bonus season approached, his prospects did not seem bright. But his spirits, curiously, were. “Being a bachelor who rents in New York, I didn’t have a lot of commitments or responsibilities,” he said. And when a friend who was building a polo club in West Palm Beach, Fla., invited him to come help out for a few months, Nick thought, What the hell, sublet his apartment and hopped on a direct flight south.  read more »

Federal Reserve Chairman Ben Bernanke sounded understandably ominous when talking about the national economy today at a Fed retreat in Jackson Hole, Wyo.

According to The Times:

Inflation has accelerated to levels not seen for decades, even as the housing slump and weak job market take a toll on household spending.

Indeed, Mr. Bernanke opened his speech by describing the financial crisis as a “gale force” and said the nation faced “one of the most challenging economic and policy environments in memory.”

The Wall Street Journal this morning on state Attorney General Andrew Cuomo's regulatory pushes against investment banks and credit-rating agencies:

If the 50-year-old is now hitting his stride, it is attributable to some key strategic hires as well as a style that pursues institutions without demonizing individuals in the manner preferred by his predecessor, former New York Gov. Eliot Spitzer.

"Andrew Cuomo certainly has been an aggressive attorney general, and he hasn't resorted to some of the more extreme practices of his predecessor," says Stanley Arkin, a veteran New York defense lawyer.

We missed this a couple of weeks ago in the Post (a recent Economist story on London divorces jarred our memory), but a shakier Wall Street has apparently started to split up more Manhattan marriages.

When Tom discovered Cindy had begun cheating on him since he was laid off, their marriage was about as stable as a hedge fund.

Three months later, with Tom still out of work, Cindy packed her bags and hired a divorce lawyer.

"I lost my family, lost my kids, lost my income, lost my identity," Tom told his divorce lawyer, Dawn Cardi, the founding partner at her Park Avenue firm.  read more »

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The second season of Wall Street Warriors, a reality show broadcast on the hi-definition cable channel Mojo with the tagline “Gambling at Its Finest,” was released on Monday, giving viewers without HDTV the chance to “witness the extreme power and intense competition that defines Wall Street through the eyes of those who thrive there.”

The first two seasons are the top two ranked reality shows on iTunes today, so apparently quite a few people have tuned in to follow the six frat-boyesque, wanna-be masters of the universe—like former hedge funder Timothy Sykes, who famously turned $12,415 Bar Mitzvah gift money into $1.  read more »

Wall Street was swarming with camera-toting, fanny-pack-sporting tourists last Friday afternoon, but few of them dared venture past the doorman standing sentry outside the pristinely intimidating Hermes boutique on Broad Street.

Inside, a woman from Abu Dhabi, wearing a black abaya accented by a diamond-encrusted, Chanel wristwatch and an oversized, patent-leather bag emblazoned with the interlocking C’s logo, browsed the selection of branded watches while her four young daughters, dressed in matching jeans and pink plaid shirts, jockeyed for a spot on the Hermes rocking horse. She had never been to New York City before, she said, so decided to join her husband on one of his many business trips here to do a little shopping.  read more »

Two of the city's top banquet behemoths were honored last night at the International Special Events Society's Annual Big Apple Awards at Cipriani Wall Street:

Michael Desiderio, chief operating officer of Tavern on the Green, and Joe Cozza, vice president of sales and marketing at Cipriani USA--both of whom are facing significant challenges these days in keeping their illustrious New York institutions afloat.

Tavern, for one, faces a potential bidding war to keep its sprawling 27,000-square-feet digs at Central Park. Cipriani, meanwhile, is struggling to hold onto its liquor licenses after CEO Giuseppe Cipriani pleaded guilty to tax charges last year.

I asked the friendly Mr.  read more »

A Reuters article this morning tosses a little sunshine into an otherwise gloomy assessment of the effects of a shakier Wall Street on Manhattan real estate:

The full impact of Wall Street layoffs on the Manhattan real estate market could take a year or possibly longer to work through.  read more »

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“I literally had to sit there and tell him that he had to tell his wife that she had to stop spending.He was actually scared she would leave him because their financial situation changed so drastically." - Manhattan divorce lawyer Nancy Chemtob on a client whose net worth had dropped from $20 million to $8 million.

From a Sunday New York Times article on the economic anxieties wracking the merely rich--and how these anxieties, from weight gain to marital strife, are making themsel  read more »

The day after Bear Stearns shareholders approved the firm’s sale to JPMorgan Chase, the clubby men’s salon frequented by the fallen masters of the universe was buzzing as usual.

Suited, silver-haired men and their early-middle-aged protégés reclined in chairs while getting preened and massaged by young women inside John Allen’s on 46th Street and Vanderbilt Avenue, barely a block from the now-former Bear Stearns headquarters at 383 Madison.  read more »

If you have the chance, get in on the ground floor of the Wall Street Journal's three-part series on the collapse of Bear Stearns. The first part debuted this morning under the headline "Lost Opportunities Haunt Final Days of Bear Stearns."

The story has everything--egos clashing, a confrontation in the office gym, ominous phone calls, bridge tournaments, and, of course, real estate (at least tangentially):  read more »

It seems like ages since Daniel Boulud introduced his $28 burger back in 2001, much to the horror of old-school carnivores who resented haute cuisine's appropriation of the popular, affordable American food staple.   

Today, the DB Burger is $32--a price tag that few sophisticated foodies would bat an eyelash at--and it has spawned a horde of pricier imitations, including Mr. Boulud's own truffle infused Royale. At $81, Old Homestead steakhouse had also briefly claimed the most expensive burger in the city mantle, but now it too has been left in the dust: The Wall Street Burger Shoppe has unveiled the $175, "Richard Nouveau," burger, named after the fictional mascot of the Web site Pocketchange—an exhaustive account of conspicuous consumption in Manhattan—the Daily News reports today.  read more »

As the speculation around Bear Stearns turns from when and if to how and by whom, the below excerpt from The Observer's John Koblin shows just how far the investment bank has tumbled in little over a year. The excerpt is from a story dated Jan. 21, 2007.

When it comes to the relentless pursuit of prime Manhattan real estate in the last six months, Bear Stearns is unmatched.  read more »

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If Manhattan’s masters of the universe are not buying baubles for their partners on Valentine’s Day, what other obvious signs of belt-tightening does one see on Wall Street these days? I visited the Street's BMW dealership—another product of the boom—to see if bankers are skimping on their own toys as well.  read more »

Investment bank Bear Stearns has reported its first-ever quarterly loss. The loss of about $854 million over the fourth quarter of 2006 exceeded fears about how badly the bank's investments in subprime mortgages would affect it, according to The New York Times.

The Wall Street Journal on Wednesday reported that top executives at Bear Stearns would skip year-end bonuses for themselves.

Goldman Sachs, the world's largest investment bank, is set to report on Tuesday a record annual profit of $11 billion, according to news reports this morning. More importantly for New York City and its real estate market, the average Goldman Sachs year-end bonus is expected to average an astounding $600,000 per employee--about double the average paid at other firms.

Despite Jesse Jackson’s warning of an impending “economic tsunami” from the subprime mortgage crisis, the only people marching on Wall Street on Monday afternoon were the business people whizzing past the few dozen protestors chanting “Restructure Loans—Don’t Repossess Homes” on the corner of Broad and Exchange streets.

Most business people strode past picket-wielding demonstrators, nonplussed by the accusations of “predatory lending” and “white-collar crime” being lobbed from the podium inside the metal barricades one block south of the New York Stock Exchange. As one speaker called on “Wall Street to help out the main street," a suited passerby shook his head and muttered, “Yeah, well, don’t buy something you can’t afford.”

Some spectators, like lawyer Angelo A. Paparelli, agreed that the government needs to do more to stem the two million mortgage foreclosures that are expected in the next two years.  read more »

The city will have to keep waiting to find out how much Wall Street will take home in year-end bonuses. The state Comptroller's office usually releases by mid-December estimates of the total bonus amount and average bonus per Wall Streeter, but Comptroller spokesman Robert Whalen tells us today that the estimates won't be out until early January.  read more »