salary caps on wall street are offically being discussed

haven't caps been discussed for nearly a year now? And any cap could not possibly be imposed onto banks like Goldman that dumped their TARP money.

Banks not subject to the caps will be indirectly effected because they won't have to pay as much to compete for talent. i.e. Some banks were paying bankers based on what their competitors would pay instead of based purely on performance.

They can't possibly cap Goldman's salaries because that would be against free market principals.

85% marginal tax rates on any income over 2mm. That will cap it.

alpie, i think they're trying to add them to the general banking regulations, as a means of risk control and decentivation of excessive risk taking, and as GS is a bank, yes they can regulate it, just like they can regulate leverage.

really bad spelling.

So if they cap the pay to the employees, more for the Goldman shareholders!

spelling, the true measure of intelligence ; )

They will just give bigger salaries and other types of compensation that is not strucured as bonus. Also, if comp. get too low at the big banks, top talent will go to smaller firms/banks. Yes, I know you can argue that the "top talent" contributed to the blow up. However, not all of them did. Also, people who are able to make money for firms will find high paying jobs.

nycbuyer1... what you fail to realize is that a HUGE chunk of compensation regardless of where you worked (RE broker, I-Banker, Comm Banker, Trader, Dog Walker, Ferragamo salesman, Doorman, Cops) came from the BUBBLE and the competition the RE Bubble created in all aspects of the economy... ===> ALL COMPENSATION goes to crap... unless you can charge more.... last time I chked.. 7 unemployed bankers for every one employed.

W67th, I understand how money flows through the economy. There is no question that the economy is weaker and we are in the painful process of a number of bubbles unwinding.

My comment referred the to individuals who would be affected by the caps.

I am not sure where you are getting your statistics. There is not an 88% unemployment rate in the financial services industry which is what 7 out of 8 would be. Not all financial services positions are dependent on the bubble .. real estate or otherwise. I work in the industry, I am still employed, and making what I made in 07.

NYC RE is toast. good morning!

I posted this link yesterday. It obviously went unnoticed while i believe it's gonna have some huuuge consequence on NY Real estate market which many of you think is driven by Wall street bonuses:
http://news.yahoo.com/s/ap/20090731/ap_on_bi_ge/us_bailout_bonuses

Keep in mind that the House passed a bill that would have put a 90% tax on bonuses. That bill passed 328-93 vs. the current bill's 237-185. No need to get too excited just yet! Any bill that is tough enough to eventually force rainmakers to defect to foreign firms will either never get to the President's desk, will be found unconstitutional, or has built in loopholes. The threat and discussions of such bills will result in reforms for sure, but I doubt any bill with real teeth would ever come of it.

"Any bill that is tough enough to eventually force rainmakers to defect to foreign firms will either never get to the President's desk, will be found unconstitutional, or has built in loopholes."

"Rainmakers"???

Why are we trying so hard to keep this so-called "talent" who got us into this mess in the first place?

Please -- by all means -- DEFECT! And don't let the door hit you in the a$$ on the way out!

First of all, I am by no means one of those rainmakers. Secondly, if you truly believe that ALL executives/bankers are responsible for the credit crisis, then there's really no point in us discussing further. Yes, there should be reform in regulations and pay, but don't underestimate the contribution of just a few rainmakers. In many businesses, 10 to 20% of the top performers bring in 80% to 90% of the revenue. When these people move to another firm, a large percentage of the clients/revenue go with them.

and with them any opportunity that the gov't may have to get paid back. this is not a simple issue despite matt's usual attempt to provide a definitive answer.

marco_M, CC good afternoon sunshine!

nycbuyer, congrats on your $100K to $300K salary and being still employed. FYI, I worked on the "STREET" for a decade w/ a stint in an Ivy MBA in between, before starting my own commercial RE investment firm. Let's just say come bonus time, I've never seen so many grown men degenerate into backstabbing little bitches at a slumber party a frienemy house. And their # 1 way of justifying a higher comp was to look towards the "hot desk", whether it was tech/comm in 2001 or MBS desk in 2006 and say if they get X, we should get X-(5%X). Well guess what, High Freq Front-Running is toast as is selling MBS that they've got no way of valuing (isn't that what i-banks are supposed to do, value financial assets?.... so X = a lot less than 2007 or 2001?

Hold on Loosely! nycbuyer... love that song...

yawn. Jealous of banker salaries, hopeful of huge corrections, lack of logic, just another typical streeteasy thread.

Fundamentally, large financial institutions that provide key, indispensible services like international funds transfer, municipal bond underwriting, mortgage issuance and servicing, basic banking products, etc. had no business being levered 30 or 40 to 1 taking unprecedented risks against their own balance sheets. This is unwinding, and the process, while slow, will eventually play out. These jobs will likely not return. So if we call prop desks at bulge bracket firms "Wall Street", then Wall Street is indeed severely thinned out.

BUT

That doesn't mean that there won't be a whole new group of risk takers backed by the world's capital chasing outsize gains. They will gravitate to other forms of investment partnerships, be they hedge funds, private equity, or whatever new flavor is created as a result of the side-lined talent (and make no mistake, there is plenty of talent out there).

I really think we focus too heavily on Wall Street in discussing NY real estate. It no doubt has an impact, and the impact is beyond just the jobs on Wall Street. But NYC is a destination for so many more than just "Wall Street" folks. I would be curious to hear back from some RE professionals on what percentage of their buy side client base has been Wall Street buyers over the past 5 or so years. In thinking through my building (it's a relatively small building so I know most tenants), out of 45 units, only 4 have "Wall Street" jobs. Anecdote for sure, but I would be surprised if more than 10% of potential buyers are "Wall Street" folks.

W67th, you make a lot of assumptions which are wrong. You also seem ready to argue. Besides, there are a lot people who would be happy to make $100 to $300K. You sound as if $100-$300K in comp is something that should be snickered at. That is not what I make and I would not look down on anyone who made that kind of living (or any income that is earned honestly).

I agree with you about the greedy guys jumping to the "hot desk" of the day. This is why I believe that these same people will land somewhere else to chase the money. If you ca comp at the big banks, they will just go elsewhere.

the thing i don't understand is the abiding belief that there will continue to be some huge pot of money for wall street or its descendants. just going back 20 yrs, the number of big money wall street people was a fraction of what it became and big money wasn't that much bigger then than ceo's, movie stars, etc.

yes, there will be some people making what anyone in their right mind would think of as good if not great money, but hopefully not the obscene sums that we saw prior to the meltdown.

Agreed cc

Nycbuyer. I may come across as an assshole but my kids and wife would argue that point (hopefully). :)

here is an example. Some nimrod on roids gets $250mm over 5 years to ball. That is an ungodly sum to do anything 'beneficial' for our society, much less play ball. But if you look at consumerism in terms of home take out equity that was driving cable contracts and $3000 bleeder seats and $70 hot dogs, well $250mm doesn't look like much. That's where I think this bubble economy got us, $1mm re broker incomes and $250mm 'ball' players.

further on this: not only did we lose $11 trillion in notational wealth but perhaps more importantly we lost (although the exquisite irony is that we actually never had it in the first place) most of the engine that was driving incomes. not sure if the proper term here is trickle up or trickle down but $4,000 bottles of wine and $3,000 yankee tickets are gonna fall in value as well.

article in barrons this week about art galleris giving 30% disocunts. partys over!

JM, a couple of asterisks and you could be wonderinfant.

cc, sadly we are beginning to resemble a banana republic. it's awfully tough for the unrepresented and/or disenfranchised to tilt the balance of power (wealth) once the transfer has been so successfully accomplished.

i read an interesting article in a local paper (peoria, illinois, no less) about an announcement made by Cat to its employees. Of course, with Cat doing better and all the noise about the coming happy days from the stimulus the laid off employees would like to know what their odds of being called back to work are. In the interest of honesty, Cat told its employees that it doesn't know how many people will get their jobs back, and to consider that "information" when making employment decisions. More telling, however, was that the company said that it did not foresee EVER returning to employment levels that occurred at the height of its profits, 2008. It said that even if business returned to those levels, it would have fewer employees, although it didn't quantify. even more than before the bottom line rules, and if the "powers" that be need to go to emerging markets to get their profits, either for reduced costs in production or greater potential consumption or selling bonds and securities, well so be it and fuck the american workers.

wonderinfant...lol

wonderinfant AR? Here are a couple quotes from this thread:

"I wish the crash would just happen faster. so tough just waitin for prices to break, but alas they will"

"85% marginal tax rates on any income over 2mm. That will cap it."

"NYC RE is toast. good morning!"

"Why are we trying so hard to keep this so-called "talent" who got us into this mess in the first place?"

"article in barrons this week about art galleris giving 30% disocunts. partys over!"

and you are calling me wonderinfant......LMAO.

JM, it was the yawn. wonderboy, aka wonderinfant, always starts his posts with a *yawn*.

a joke. seriously.

oh, I guess I'm not up on wonderboy or his antics.

How are you AR? Good weekend? Tried the Fatty Crab in the UWS this weekend and have to say, it was pretty good. Don’t bring vegetarians.

No problem. Doing well, JM. Still haven't made it to the Fatty Crab on the UWS. Went to see Rock of Ages on B'way today. Very funny.

Constantine is in Rock of Ages right? I saw him in Jacques Brel and was mildly impressed. I do love that 80's hair band music though, I once had front row tickets to a Motley Crue / Warrant concert.

group hug.

w67th, yes indeedy.

JM, this is just absurdly fun, decent to very good music. my first concert was van halen. if you haven't already, read klosterman, rock city fargo.