<blockquote>"
But New York’s Gordon Gekkos played a crucial role in reinventing New York in the 1970s, when even the city’s champions wondered if the nearly bankrupt city was going to go the way of Detroit, said Kurt Andersen, the writer and a co-founder Spy magazine at the height of the 1980s Wall Street boom.
“If you look at two things, other than the ineffable spirit of New Yorkers, that made the city better again, you look at police and crime, and prosperity,” Mr. Andersen said. “And in speaking about prosperity, we’re talking about the tremendous sums of money that, despite 1987 and 2000, kept gushing into the city thanks to the people wearing yellow ties.”
Wall Street’s highfliers helped rebrand the city in the eyes of the world, Mr. Andersen said, from a tired postindustrial necropolis to a sleek 21st-century financial dynamo.
And that is the city today. Or it was."</blockquote>
Dim Lights, Big City
For Young Financiers, Risk Hits HomeBy ALEX WILLIAMS
September 21, 2008
SourceBEFORE Nicole Wong took a job as an analyst at JPMorgan Chase after graduating from Brown University in 2001, she wasn’t exactly sure what one did every day as a junior financier — or, in New York mythology, apprentice master of the universe.
“I really entered the industry not knowing what the heck people did,” she recalled. But that hardly seemed to matter.
To her, Wall Street, not law or medicine, was where the action was, she said. Inspired by images of power and prestige from books like “Liar’s Poker” and movies like “Wall Street,” a life scrambling up the rungs of the financial services ladder seemed like an adventure as much as a vocation.
And for a time, that’s just what it was. Days spent surrounded by multimillion-dollar trades were followed by lavish nights spent entertaining clients at hot restaurants like Nobu.
It was a challenging but exhilarating life, “and somebody else was picking up the tab,” said Ms. Wong, 28. “I guess if I came from a wealthier background it wouldn’t have been so dazzling. But to me, this was so glamorous. This is why I moved to New York.”
And, yes, the money was good.
But after the seismic disruptions in the financial sector last week, she is not sure the Wall Street life will be quite the same any time soon, if ever.
“The business is going to change,” said Ms. Wong, whose position selling mortgage-backed securities for UBS was eliminated in the spring. “There are just going to be far fewer people doing this, and far fewer clients to take out. Even if you do have clients to take out, you’re not going to be spending as much out. This is definitely going to suck the fun out of the industry.”
And perhaps not only the fun.
The most recent generation of strivers on Wall Street — those in their 20s — are too young to remember the last recession and too new to the business world to have experienced the dot-com bust or the post-9/11 gloom. They arrived in a New York boomtown: money was seemingly being minted in the hedge-fund and private-equity sectors; investment banks were paying gigantic bonuses.
For them, Wall Street was mythic terrain. For people with the conqueror gene, its outsized risks and rewards seemed like a personal challenge, a peak to be scaled.
Now, Wall Street is more like “Survivor.” Thousands of layoffs loom as the industry shrinks and consolidates. And even when recovery comes — presuming it does — traders and bankers said profits would most likely be lower, deals fewer, bonuses minuscule and regulation greater.
A result may be a more subdued Wall Street, one where professionals make a comfortable living but where the enormous payouts and outrageous bravado have faded. If so, this cultural shift could change not only the industry, but New York, which has adapted to a quarter-century-long (if occasionally interrupted) financial boom.
“There was so much optimism, so much froth,” said Delilah Rothenberg, 25, who now works at a private equity firm in Manhattan; she was an associate at Bear Stearns until that firm imploded in March. Even recently, she added, investment professionals in their 20s “were buying all kinds of luxuries on credit because they expected the money to keep coming in: watches, cars, apartments, boats.”
In recent years, compensation packages soared “by double-digit rates, which of course created an impression of impregnability,” said Adam Zoia, a managing partner of Glocap Search, a New York-based recruiter.
As recently as last year, a first-year investment banking analyst on Wall Street made $125,000 to $150,000, including bonuses, according to Options Group, a recruiting and consulting firm based in New York. An investment banking associate, which is one rung above that, made $250,000 to $300,000.
“Bonuses will be substantially lower in investment banking as well as many other areas,” said Michael Karp, the company’s chief executive. The people who once browsed Porsche showrooms may simply be happy to have a job, any job.
“The party’s over,” Ms. Rothenberg said.
And so is the compact that young bankers make with themselves: punishing workweeks for huge pay down the road.
“The whole glamour of investment banking is that you’re going to earn so much money that in the end it’s going to be worth it,” said a 22-year-old former JPMorgan Chase analyst who was laid off in May and later found work at a private equity firm, but only after going to nearly 40 interviews. “If you get rid of the bonus, then there’s basically no point.”
Young traders and bankers were willing to endure brutal hours and high stress to taste a rarefied New York life, said Dr. Rosalind S. Dorlen, a clinical psychologist in Summit, N.J., who said she sees a large number of Wall Street workers in her practice.
“There is something nice about being king,” Dr. Dorlen said, describing the mind-set of young Wall Street players. “The sense of power, the sense of omnipotence, the sense of testosterone. What other reason are people attracted to being an investment banker than to flex muscles? It’s ‘Whose wallet is larger?’ ”
Such swagger meant that Wall Street hotshots were never beloved figures on New York’s cultural landscape. It’s no coincidence that the protagonists of books and movies like “The Bonfire of the Vanities” and “American Psycho” tended to be narcissistic jerks, or worse.
But New York’s Gordon Gekkos played a crucial role in reinventing New York in the 1970s, when even the city’s champions wondered if the nearly bankrupt city was going to go the way of Detroit, said Kurt Andersen, the writer and a co-founder Spy magazine at the height of the 1980s Wall Street boom.
“If you look at two things, other than the ineffable spirit of New Yorkers, that made the city better again, you look at police and crime, and prosperity,” Mr. Andersen said. “And in speaking about prosperity, we’re talking about the tremendous sums of money that, despite 1987 and 2000, kept gushing into the city thanks to the people wearing yellow ties.”
Wall Street’s highfliers helped rebrand the city in the eyes of the world, Mr. Andersen said, from a tired postindustrial necropolis to a sleek 21st-century financial dynamo.
And that is the city today. Or it was.
Even before the recent carnage, the city’s financial services sector had shed about 9,200 jobs from September 2007 to June, according to the state comptroller’s office. Industry analysts predict that thousands more may disappear after the meltdowns at Lehman Brothers and Merrill Lynch. And even the leading Wall Street minds seem to have no idea when the industry might rebound; at the depths of the crisis last week 2010 sounded like an optimistic estimate.
And that makes business students very wary. “There’s a certain scary factor that’s come into this,” said Roy C. Smith, a professor at the New York University Stern School of Business and a former general partner of Goldman Sachs. “My students have a stunned look in their eyes.”
Steven Song, 29, who started as an analyst at a Manhattan investment bank in 2001 and recently left a job at a hedge fund, runs a volunteer organization that provides mentoring and guidance to college undergraduates who aspire to work in finance. He said that several students he works with expressed reservations last week about pursuing jobs on Wall Street because of a perceived lack of opportunities.
“There are fewer banks that are out there now, and each one that’s out there remaining is hiring fewer people,” he said.
One top student recently asked him for a “list of smaller, boutique investment banks and brokerage firms instead of going for big-name shops,” he said. “In previous years that would never be the case unless you were a quote-unquote marginal candidate.”
Merrill Lynch and Lehman Brothers could once be counted on to hire 20 to 30 graduates from the M.B.A. program at the Wharton School of the University of Pennsylvania, a spokeswoman for the university said. Those graduates will now have to look elsewhere, said Gautam Tambay, 26, a first-year student in the program, “so there just aren’t as many opportunities anymore.”
Another M.B.A. student said that students were starting to wonder where they would find jobs to pay off their student loans. So, imagine legions of M.B.A.’s pinching pennies to pay off student loans. That will change New York as we know it.
“New York’s going to take a big hit,” said Bryan Gunderson, 28, a former investment banker for Lehman Brothers. “This city is priced for people who work on Wall Street. It’s ridiculous that cocktails cost $15 in New York.”
The 23-year-old Wall Street phenoms who are used to spending $300 or more for a bottle of vodka at a West Chelsea nightclub, he said, are “going to have to tone it back.”
Tom Wolfe, the author of “The Bonfire of the Vanities,” said that “if Wall Street really does take a hard shot, it will diminish the image of New York as capital of the Western world.”
But then, Wall Street — and the fantasyland it helped create in New York — was likely to shrink even without a credit crisis.
“I hate to use the phrase ‘masters of the universe,’ but they’re not in investment banking anymore, they’re in hedge funds,” Mr. Wolfe said. And “hedge funds don’t need glass office towers. They can run $15 billion with 25 people” in the leafy suburban sanctuaries where their directors live.
“The new Wall Street,” he said, “is Greenwich, Conn.”
In a possible indication of night life to come, Mr. Gunderson and his girlfriend invited friends to their West Village apartment last week to “party like it’s 1929.”
“If all the radio stations were playing big band music and this message were headed your way through the main switchboard, I would swear this was the Great Depression,” the invitation read.
“Unless you just lost your job,” the invitation continued, “or your fund is down more than 20 percent, please bring beer or booze.”