Bragging rights gone on Wall Street
By Michael Powell and Ben White
The Washington Post
NEW YORK — To walk three years ago through the Morgan Williams bar was to feel the swagger of the gilt-laden young.
At the corner of Broadway and Exchange Place, in a split-level, glass-enclosed bar with stencils of Wall Street titans on the mahogany walls, you could watch the rosy-cheeked J.P. Morgan broker unleash the corporate platinum card, Dom Perignon and Cohiba cigars all around for his 20-something trader buddies. Stylish women eyed carefully brushed men.
Dating was Darwinian: Big Five accountants were fine, analyst guys finer, investment bankers finest. The highlight of the first date came when the young stud leaned in close and whispered about his net worth.
And now? IPO this: Shares are low and volume is lower. The Kings of the Dow are hiring lawyers and contemplating perp walks. The princes and princesses are getting laid off and thinking about teaching, or plastics.
At the Morgan Williams bar today, the tables are empty, the barkeep wipes a clean counter, and the pencil drawings on the wall call to mind mug shots. The owners hope to sell by November.
"Bar sales are just pathetic," says Geoffrey Moler, head chef and general manager. "I go to all the places around here. ... There's nobody in 'em."
In New York's gelded age, Wall Street's young and formerly stock-endowed inhabit a disorienting universe — a place where, for the first time in their adult lives, their stock picks no longer float up and further up, the Hamptons rental isn't automatic (some wannabe chateaux stood empty half the summer) and layoffs can happen to them.
Wall Street's shedding load, and the golden young are taking it in the neck. New York firms already have slashed at least 32,000 securities jobs since 2000, or about 10 percent. And the cuts just keeping coming: J.P. Morgan announced recently that it would cut 4,000 jobs, or 20 percent of its work force. Goldman Sachs, Credit Suisse First Boston and Lehman Brothers also have their axes sharpened, targeting 10 to 15 percent of their investment bankers.
This doesn't count the hundreds of lesser achievers whom the human-resources types are quietly but rather firmly "counseling out" out of the finance firms.
A senior manager at an old-line securities firm, a man with three houses and a swell sailboat, just jumped to a new hedge fund — in part because he didn't want to stick around and fire all those young analysts he'd spent years wooing.
"I've just heard about two more major rounds of cuts from major firms — it's the toughest environment I've seen in 15 years," says Marc Lackritz, president of the Securities Industry Association. "The uncertainty permeates everything, and that's really tough on the kids who thought they were geniuses and the market only got better."
Year-end bonus envelopes will come in thin. Merrill Lynch officials have suggested that managers lower bonus "expectations" among the junior ranks. Goldman Sachs has hinted that some unfortunates might receive nothing this year.
"The bottom line is that no one likes to find they don't have a job or the money they expected," says Evan Schwartzfarb, 28, a Harvard graduate who landed on Wall Street in 1996.
Schwartzfarb did the late-1990s hip-hop. He was a Bear Stearns analyst, hopped to a Web company, crashed, hopped to some other projects, crashed ... and found himself in a new and not so inviting world. So he enrolled in Columbia University Business School, at $30,000 per year.
"The mood at school," he says, "is pretty apprehensive."
The apple martinis still go for $12 at Asie de Cuba. Manhattan's hiply fashionable restaurants, Babbo and Tao and the Tasting Room, are hardly empty. But there's a lot less talk of starter lofts. Investment banks no longer compete with some profitless dot-com for the affections of a 24-year-old.
If you're lucky enough to snare an I-banking job, you just keep your mouth shut and log the seven-day weeks.
"Who is better off?" asks a banker, 32, with an earring he pops in on weekends and a collection of Hugo Boss suits. "The people who got let go with reasonable packages or the people left holding the hot potato?"
David Moore, 45, is a venture capitalist with a funny bone. He does standup at comedy clubs on weekends. One day recently, a venerable investment bank invited him in to lighten the gloom by telling a few jokes about politics and the economy before its 7:15 a.m. national conference call.
Moore's sympathetic to the plight of the young capitalists, but only to a point.
"It's better that it's not so easy to be a zillionaire, anyway," he says. "A lot of what happened in the last five years didn't make sense.
"If you're a 28-year-old and you see a $300,000 portfolio become $100,000, well, good. You're wiser now."
And the women? They offer an anthropological dating guide.
"For a while everyone wanted a dot-commer with an IPO," explains a chic if severe young woman. She has the toes of her shoes sharpened to a stiletto point, a degree in European history from Smith College and an interest in equities. "Now it's back to investment bankers — they're safer investments."
Another young woman sips a $9 glass of a lesser Bordeaux and explains that her boyfriend broke up with her after she complained that this was the first summer she didn't have a beau with a house in the Hamptons. |
