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Even though I'm enjoying a chilly afternoon on Fire Island with a superb view of the Great South Bay, I thought I'd share this tidbit with you all:
Officials at JP Morgan Chase have launched a major round of layoffs in the firm's vaunted investment banking department, axing dozens of executives in an attempt to downsize the unit amid a massive slowdown in business, CNBC has learned.
People at the firm say at least two hundred executives were laid off over the past two days - a move unrelated to the firm's recent purchase of Bear Stearns.
A spokeswoman for JP Morgan confirmed the cuts and said many of the people leaving were junior bankers.
As many as half the people in the mergers and acquisition department were told they no longer have jobs, one executive told CNBC.
And JP Morgan CEO Jamie Dimon is looking to cut even deeper into other areas of the firm's workforce to reflect both the soured business conditions as well the addition of employees following the Bear Stearns purchase.
Dimon is one of Wall Street's most prolific cost-cutters; earlier in the year, he told investors he wanted to create a "fortress-like" balance sheet that could withstand the credit crisis and put JP Morgan in a position to take on perennial Wall Street powerhouse Goldman Sachs, Bill Smith, who runs Smith Asset Management in New York, said.
Oh, I forgot a paragraph - or 2:
Most firms have been cutting between 5 percent and 10 percent of their staff; the JP Morgan cuts may run deeper even though the bank hasn't been stung as hard as other firms with losses related to investments in subprime bonds.
There are as many as 1,000 executives in the firm's investment banking department, the spokeswoman said, meaning once the final tally of cuts is known, the total number of job reductions could be closer to 20 percent or possibly more.
thanks for sharing this privileged information
Yeah - I never saw that news flash coming in a million years.
Haha, nice... nothing to say but hateration one-liners. Must be tough when everything coming out from news and data is pointing down these days eh? *waiting for more hater attacks*
I agree with malraux - it's a bullish sign!
A close friend of ours got laid off this week. She's a single mother who has supported her kids for ten years on a fifth-tier Wall Street paycheck, despite the worst efforts of her deadbeat ex. If she doesn't find a comparable job within 6-12 months, her condo may add to the growing inventory that some megabears have been salivating over. She worked hard for a long time to earn that apartment. Naturally, moving back to the Bronx wouldn't be the end of the world. I just don't feel right celebrating, even if mass layoffs mean prices may someday drop to within our reach.
west81st. Remember the flip side to this story:
A single mother who recently got her life back on track financially in 2005, watched in horror and sadness as RE appreciated far far far above any amount of money she could save or invest. She did not want to get into a condo with 0 down, IO Neg ARM because she wanted to protect her family from financial ruin...
If prices come down, she may finally have a chance to afford a place... wheras prior, you'd have to commit financial suicide and throw all common sense out the window
bugelrex: I'm well aware of the flip side, because that's pretty much where our family is. We're hoping to finally see our caution and frugality vindicated, but that doesn't totally desensitize us to the pain of the unlucky gamblers. Maybe 90%, but not totally.
I'm with bugelrex: exorbitantly self-paid Wall Streeters getting huge bonuses securitizing mortgages that should have never been given in the first place to people who don't understand what LIBOR is or were guaranteed, "Oh, you can always refinance!"
And we keep on hearing that mentality here - JuiceMan, among others, who claim that they're "comfortable" assuming a risk they can't even quantify.
So what goes up must come down. I rent precisely because I refuse to take out a 40-year mortgage or any other of the miscreant products that Wall Streeters have come up with to try to keep us spending more than we make. We - and Wall Street - are suffering from the aftermath of a long, hard party, and real-estate agents, it would seem, are still trying to get people to take a sip of their hair-of-the-dog drink by encouraging people to buy what is vastly, vastly overpriced.
"who claim that they're "comfortable" assuming a risk they can't even quantify."
spoken by a guy that has a 5 year ARM on a house in Fire Island and (reportedly) makes a 60% return in year betting on emerging markets (aka horse racing). Your risk profile is upside down steve and you do not practice what you preach. Big surprise.
JuiceMan: not following rest of the thread too closely, but will debate you on your likening emerging markets to horse racing. Have you been reading the news papers lately? Turns out, it's investing in real estate in the US that's like horse racing. The emerging markets index (e.g., EEM) has given over 30% a year over the last 4 years - while being extremely diversified (largest, best funded companies in across ~30 countries, across all major sectors). Emerging markets had a bit of a hiccup earlier this year, and now most of the individual country indices are back testing their peaks.
Much of the growth over the next couple of decades will likely come from emerging markets.
eric_cartman, i understand your point but dont really follow your reasoning. what specific em countries do you refer to and why do you think growth will continue? your last line is a strong statement, just want some color.
cartman, I don't have an issue with emerging markets. What I have an issue with is steve babbling on and on about how risky a 10/1 ARM is when he himself holds a 5/1 ARM and claims a 60% return in emerging markets. As for real estate investing, it should be left to the experts, joe speculator is learning this the hard way. As for buying a home to live in, it is a different process all together with a different set of challenges and benefits. It should not be confused with real estate investing.
Oh juicy, I have a 5/1 ARM that I could pay off tomorrow. What risk is there in getting a 1.5% lower interest rate for 5 years if I can pay it off?
But then of course, juicy, you don't understand risk because you think that imputed rents have nothing to do with market rents, and real estate prices have nothing to do with leverage or incomes.
It happens - so you know - I am extremely well diversified, just outside of the US, which is where the growth is. Is there risk? Yes. But I've spent 25 years working in foreign countries or in something related to them. I know the risk. To me, gold is an unquantifiable risk (sorry, MMafia) - it has no industrial uses, and could collapse tomorrow for no reason. Give me Brazil any day.
If you - even once - JuiceMan, showed any evidence for anything you say, you might be remotely credible. "Rents just have to rise a little and property prices fall a little for market rents to be equal to imputed rents."
Direct JM quote = Direct BS.
I've showed you what I'm invested in and how. If you plan to relinquish a property in 9 years, go ahead, get a 10-year ARM. But if you plan to stay there for 30 years, then you're a fool to do it.
Unless you can pay it off, with zero risk. Indeed, if I paid my small ARM (about $270k) off from my margin account, I'd be paying 4% rather than 5.15%.
You have no credibility, JM. None.
credibility steve? That's funny. Every single one of your quotes is a blatant plagiarization of some economic white paper that you have read but barely understand. Couple that with all of your Google and Wiki sound bytes and you have a truckload of BS. If you didn't cheat you way into Columbia, you probably would understand the difference between marginal and effective tax rates, that data mapping isn't systems conversion, and that when you are comparing monthly costs in a rent vs. buy scenario you have to deduct principal. In case you forgot steve, you were the one that backed down when asked to go through a logical exercise utilizing real numbers. Why is that? You do humor me with your pathetic attempts to get people to read your posts. My guess is that you are the #1 reason streeteasy implemented the "ignore this person" functionality and the #1 person it is used for.
AND...on top of all of that, you have man boobs.
well said juceman.
Your "real numbers" ignore the opportunity cost of investing in other than real estate, the risk premium assigned to owning property rather than renting it, and a short-term interest rate for a long-term investment.