Oh, the poor babies! I never realized the amount they suffer, especially with a $32,000 a tear bill for a private school. Oh, the injustice of it all.<br><br>w.<br><br><div class="gmail_quote">On Thu, Mar 1, 2012 at 2:09 PM, Ron Force <span dir="ltr"><<a href="mailto:rforce2003@yahoo.com">rforce2003@yahoo.com</a>></span> wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex"><div><div style="font-size:12pt;font-family:times new roman,new york,times,serif"><div><span>They're really suffering. From David Frumm:</span></div>
<div><br><span></span></div><div><div>Mac Abelson <a href="http://www.bloomberg.com/news/2012-02-29/wall-street-bonus-withdrawal-means-trading-aspen-for-cheap-chex.html" target="_blank">reports</a> in <i>Bloomberg</i>
on what happens when people working on Wall St. get smaller bonuses. It
turns out that some of America's wealthiest are having trouble
adjusting to life with a smaller six-figure income:<br>
</div>
</div>
<a name="135d04f97b12690c_body_text_0"></a><div><div style="margin-left:40px">The
smaller bonus checks that hit accounts across the financial-services
industry this month are making it difficult to maintain the lifestyles
that Wall Street workers expect, according to interviews with bankers
and their accountants, therapists, advisers and headhunters.<br>
</div>
</div>
<a name="135d04f97b12690c_body_text_8"></a><div><div style="margin-left:40px">“People
who don’t have money don’t understand the stress,” said Alan Dlugash, a
partner at accounting firm Marks Paneth & Shron LLP in New York who
specializes in financial planning for the wealthy. “Could you imagine
what it’s like to say I got three kids in private school, I have to
think about pulling them out? How do you do that?”<br>
…<br>
</div>
</div>
<a name="135d04f97b12690c_body_text_7"></a><div><div style="margin-left:40px">Richard Scheiner, 58, a real-estate investor and hedge-fund manager, said most people on Wall Street don’t save.<br>
</div>
</div>
<a name="135d04f97b12690c_body_text_5"></a><div><div style="margin-left:40px">“When
their means are cut, they’re stuck,” said Scheiner, whose New
York-based hedge fund, Lane Gate Partners LLC, was down about 15 percent
last year. “Not so much an issue for me and my wife because we’ve
always saved.”<br>
</div>
</div>
<a name="135d04f97b12690c_body_text_6"></a><div><div style="margin-left:40px">Scheiner
said he spends about $500 a month to park one of his two Audis in a
garage and at least $7,500 a year each for memberships at the Trump
National Golf Club in Westchester and a gun club in upstate New York. A
labradoodle named Zelda and a rescued bichon frise, Duke, cost $17,000 a
year, including food, health care, boarding and a daily dog-walker who
charges $17 each per outing, he said.<br>
</div>
</div>
<a name="135d04f97b12690c_body_text_1"></a><div><div style="margin-left:40px">Still,
he sold two motorcycles he didn’t use and called his Porsche 911
Carrera 4S Cabriolet “the Volkswagen of supercars.” He and his wife have
given more than $100,000 to a nonprofit she founded that promotes
employment for people with Asperger syndrome, he said.</div>
<div style="margin-left:40px">Scheiner pays $30,000 a year to be part of
a New York-based peer-learning group for investors called Tiger 21.
Founder Michael Sonnenfeldt said members, most with a net worth of at
least $10 million, have been forced to “reexamine lots of assumptions
about how grand their life would be.”</div>
<div style="margin-left:40px">While they aren’t asking for sympathy, “at
their level, in a different way but in the same way, the rug got pulled
out,” said Sonnenfeldt, 56. “For many people of wealth, they’ve had a
crushing setback as well.”<br>
…<br>
</div>
</div>
<a name="135d04f97b12690c_body_text_2"></a><div style="margin-left:40px">The
malaise is shared by Schiff, the New York-based marketing director for
Euro Pacific Capital, where his brother is CEO. His family rents the
lower duplex of a brownstone in Cobble Hill, where his two children
share a room. His 10-year- old daughter is a student at $32,000-a-year
Poly Prep Country Day School in Brooklyn. His son, 7, will apply in a
few years.</div>
<div style="margin-left:40px">“I can’t imagine what I’m going to do,”
Schiff said. “I’m crammed into 1,200 square feet. I don’t have a
dishwasher. We do all our dishes by hand.”</div>
He wants 1,800 square feet -- “a room for
each kid, three bedrooms, maybe four,” he said. “Imagine four bedrooms.
You have the luxury of a guest room, how crazy is that?”<div> </div><div><br></div> <div style="font-family:times new roman,new york,times,serif;font-size:12pt"> <div style="font-family:times new roman,new york,times,serif;font-size:12pt">
<div dir="ltr"> <font face="Arial"> <hr size="1"> <b><span style="font-weight:bold">From:</span></b> Art Deco <<a href="mailto:art.deco.studios@gmail.com" target="_blank">art.deco.studios@gmail.com</a>><br> <b><span style="font-weight:bold">To:</span></b> <a href="mailto:vision2020@moscow.com" target="_blank">vision2020@moscow.com</a> <br>
<b><span style="font-weight:bold">Sent:</span></b> Thursday, March 1, 2012 9:39 AM<br> <b><span style="font-weight:bold">Subject:</span></b> [Vision2020] One Part of the System that is Broken<br> </font> </div><div><div class="h5">
<br>
<div><div><h1><br></h1><div> </div></div><div><div align="left"><span title="2012-02-29T08:48:31+00:00">February 29, 2012, <span>8:48 am</span></span><h3>
Bonuses Dip on Wall St., but Far Less Than Earnings</h3><address>By <a rel="nofollow" href="http://dealbook.nytimes.com/author/kevin-roose/" title="See all posts by KEVIN ROOSE" target="_blank">KEVIN ROOSE</a></address><div>
<div>Brendan McDermid/ReutersThomas P. DiNapoli, the comptroller of the State of New York.</div><div><b>9:07 p.m. | Updated </b></div><div>It is apparently going to take more than shrinking bank profits to put a big dent in Wall Street bonuses.</div>
<div style="color:rgb(255,0,0)"><font size="6"><b>The
total payout to security industry workers in New York is forecast to
drop only 14 percent during this bonus season, according to a <a rel="nofollow" href="http://www.osc.state.ny.us/press/releases/feb12/022912.htm" target="_blank">report issued on Wednesday</a> by the state comptroller, <a rel="nofollow" href="http://topics.nytimes.com/top/reference/timestopics/people/d/thomas_p_dinapoli/index.html?inline=nyt-per" title="More articles about Thomas P. Dinapoli." target="_blank">Thomas P. DiNapoli</a>. By comparison, profits last year plunged 51 percent.</b></font></div>
<div>“The
securities industry, which is a critical component of the economies of
New York City and New York State, faces continued challenges as it works
through the fallout from the financial crisis and adjusts to regulatory
reforms,” Mr. DiNapoli said in a statement.</div><div>Hurt by the European
debt crisis, a sluggish economic environment at home and the
introduction of new regulations that have threatened once-profitable
business lines, the nation’s largest banks had a weak 2011. <a rel="nofollow" href="http://dealbook.on.nytimes.com/public/overview?symbol=GS&inline=nyt-org" title="More information about Goldman Sachs Group Inc" target="_blank">Goldman Sachs</a> reported that profit dropped 67 percent from 2010. <a rel="nofollow" href="http://dealbook.on.nytimes.com/public/overview?symbol=MS&inline=nyt-org" title="More information about Morgan Stanley" target="_blank">Morgan Stanley</a>’s earnings fell more than 40 percent.</div>
<div>In
all, securities firms in New York made an estimated $13.5 billion in
2011, down sharply from $27.6 billion in 2010, according to the
comptroller’s estimates. It is the second consecutive year that Wall
Street’s profit fell by more than half.</div><div>“The financial industry is in the midst of structural change,” said Ronnie Lowenstein, the director of the New York City <a rel="nofollow" href="http://topics.nytimes.com/top/reference/timestopics/organizations/i/independent_budget_office/index.html?inline=nyt-org" title="More articles about Independent Budget Office" target="_blank">Independent Budget Office</a>. “It’s not just the boom and bust cycle we’ve seen in the past.”</div>
<div>Despite
the difficult environment, New York firms paid roughly $20 billion in
year-end cash compensation to their employees. The average bonus was
$121,150, down just 13 percent from the year before as the head count
shrank. In 2006, the year before the financial crisis, the average
investment bank employee took home a bonus of $191,360.</div><div>But the
comptroller’s estimates do not include noncash compensation given for
last year and so may not give the full picture given that many banks
dole out a larger portion of their annual payouts in stock.</div><div>Still,
a dip in year-end cash compensation is cause for concern for New York
government officials. Before the financial crisis, Wall Street accounted
for 20 percent of the state’s tax revenue. Last year, that tally was 14
percent. For New York City, the share dropped to 7 percent of tax
revenue from 13 percent over the same period.</div><div>“The city budget is
dependent on a very small group of people — the 1 percent, if you will,”
said Nicole Gelinas, a senior fellow at the Manhattan Institute. “If
the 1 percent isn’t doing well, the city’s not doing well.”</div><div>Not
only is it local and state governments that are feeling the pinch of
lower Wall Street pay. High-end restaurants, luxury goods stores and the
real estate market in New York stand to suffer as well. Mr. DiNapoli
estimates that every job lost in the securities industry in New York
costs two city jobs in other industries.</div><div>For the Wall Street firms
themselves, compensation has presented a quandary. It is their biggest
cost and banks have been cutting thousands of jobs amid the worst year
for banks since the financial crisis. Yet at the same time, keeping pay
relatively stable is critical to retaining and rewarding employees.</div><div><a rel="nofollow" href="http://topics.nytimes.com/top/reference/timestopics/people/d/james_dimon/index.html?inline=nyt-per" title="More articles about James Dimon." target="_blank">Jamie Dimon</a>, the chief executive of <a rel="nofollow" href="http://dealbook.on.nytimes.com/public/overview?symbol=JPM&inline=nyt-org" title="More information about JPMorgan Chase & Company" target="_blank">JPMorgan Chase</a>, said at an investor conference on Tuesday that even in tough times, he would not pay his employees less than the going rate.</div>
<div>“We
are going to pay competitively,” Mr. Dimon told a roomful of analysts
and investors at the conference. “We need top talent. You cannot run
these businesses with second-rate talent.”</div><div>Wall Street continues
to be a lightning rod for politicians and critics who contend that the
industry’s pay packages are too high. In 2010, the average pay,
including bonuses, in the securities industry in New York City hit
$361,180. (Figures are not yet available for 2011.) At that level, Wall
Street paychecks are 5.5 times higher than those in the rest of the
private sector.</div><div>Banks are wrestling with ways to trim the tab,
including paying more stock and less cash. At Morgan Stanley, for
instance, cash bonuses were capped at $125,000 — a small fortune to many
Americans, but a pittance for investment bankers and traders used to
seven-figure payouts.</div><div>Some top executives at the bank, including
James P. Gorman, the chief executive, deferred the entire cash portion
of their bonuses.</div><div>“It’s a pickle,” said Alan Johnson, a
compensation consultant who advises big banks on their pay plans.
“Paying employees and giving attention to the external constituents, be
they politicians or regulators, is a very delicate balance.”</div><div>As
Wall Street struggles to adapt to leaner times, government officials are
asking themselves what it means if the industry never returns to its
heights before the crisis.</div><div>“Local and state politicians see this as a cycle we’ve seen a million times,” Ms. Gelinas of the Manhattan Institute said.</div><div>“They’re
kind of conditioned to kick the can down the road, because down the
road, Wall Street comes and rescues them. The problem is, they’re not
looking at the structural change,” she said.</div><div>In an interview on
Wednesday, Mr. DiNapoli said that while he believed that “the ups and
downs and the cycles are always there” on Wall Street, he and other
state officials had been forced to prepare for the possibility that
securities firms might never be able to hoist up the local and regional
tax base.</div><div>“This could be the new normal,” he said.<br></div></div></div></div>-- <br>Art Deco (Wayne A. Fox)<br><a rel="nofollow" href="mailto:art.deco.studios@gmail.com" target="_blank">art.deco.studios@gmail.com</a><br>
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