The bonus money is going to blow your mind.

Sales volume have doubled in the first quarter compared to last year.
The reported price sale price from 3 of the biggest brokers are: +7%,+3%,+3%.

Tell me, who the HELL is buying????

dude, you can keep repeating yourself, but this thread just gets funnier and funnier each time you try and rationalize your royal poop....

Simple logic which you can't comprehend.

Explain why sales volume doubled and prices went up last quarter????
You can't, because that high school brain of yours lack simple logic.

SOMEWHEREELSE,

"Explain why sales volume doubled and prices went up last quarter????"

TRY!

Never go full retard

> The reported price sale price from 3 of the biggest brokers are: +7%,+3%,+3%.

Right after they went down 5%!

I love it.

Keep digging, ericho!

look what happened to shawn penn "I am Sam"

"Explain why sales volume doubled and prices went up last quarter????"

"Right after they went down 5%!"

MUHAHAHAHAHAHAHAHAHA!!

IS THIS THE BEST YOU CAN DO????
MUHAHAHAHAHAHAHAHAHA!!
MUHAHAHAHAHAHAHAHAHA!!
MUHAHAHAHAHAHAHAHAHA!!

Dude.
Where are you getting the 5% down for Q4 of 09?

"While Elliman and Corcoran have the median price down about 4 percent quarter-over-quarter, Brown Harris Stevens and StreetEasy.com report median price increases of about 2 percent."

http://www.reuters.com/article/idUSTRE6040O820100105

StreetEasy.com says Median Price went up 2 percent!!!!

BOOOYAH!

> MUHAHAHAHAHAHAHAHAHA!!

I guess thats what happens when you get so badly wrong... you go backward and fall into a black hole and go insane....

> IS THIS THE BEST YOU CAN DO????

Not even close. I just did the bare minimum here, and that proved you wrong.

> Where are you getting the 5% down for Q4 of 09?

Miller Samuel Q4 2009, median down 4.7% over previous quarter.

Can I get a.... WHOOPS!

How the heck is 4.7 = 5%????

its called, well, rounding.

I guess your third grade class hasn't gotten there yet.

;-)

it is not the bonus size or the cost to buy that blows my mind about new york. it's the sheer stupidity of all those on this site that post as if they are in 6th grade. if this is the best of the best, dog help us.

(and i thought all of the med students i went to school with were arrogant dumb pricks...scary to see the law/banker mobs open their mouths...)

ha!
You bears are too much.
On good days, the Miller Samuel index is pure BS and on bad days it's the holly bible.

I trust Streeteasy more. 2% InCREASE in price in Q4 of 09.

> On good days, the Miller Samuel index is pure BS and on bad days it's the holly bible

strawman.

I've said over and over again it has its faults, and will sway off, but its the best standard we have. And its still way down...

btw, ericho, you finish that math class yet?

lets dust this one off

well, there was certainly some blowing.

Whatever, maybe it will be up for individuals but down in total because there are fewer individuals involved.

hows this lookin this year ?

Down.

Bullish!!!!!!!!

My banker buddies say the bonus so good this year they may just donate the bulk of it to the IRS so julialarge won't have to death panel her aged mother, who used to be her father.

Every banker I know except Lev Fin bankers is pretty sure their bonus will be down 10-20% this year. They've been pretty spot on in years past.

i've heard speculation that we may be off 30% from last year's bonus. sigh.

But coppers up.

Let's just say Malraux is back buying Damien Hirsts. Except they're postcards. Of other postcards of Damien Hirsts.

"They've been pretty spot on in years past."

A testament to how good investment bank management is at expectations management. After all, where do you think the press gets the numbers (bonuses up 10% or down 30% or whatever) that they print in all the articles that start coming out right about now...

Folks,
Since Spring of 2009, prices in Manhattan have stabilized and in some areas up.
Market's up.
Commodities are up.

You folks have been wrong wrong wrong.

Just for example.
Prices in Long Island City New development are up 10-15% since Spring of 2009.

:)

Oh, ericho, you will (hopefully) realize the folly of your ways in a couple years. LIC will be a pathetic bloodbath in 2-4 years. It's just a shame you can't see the train coming. But I still love that you're talking a big game when LIC is down 30-40% from the peak - takes cojones.

LOL
You said that since March of 2009..that's 18 months ago!!!

Bear in mind, i bought in SPRING of 2009.

:)

"LIC is down 30-40% from the peak"

If only you knew.
Majority new condos in the hunter's point area sold for an average of 630-650 per square foot over the past 4 years. Out of the 1,000s of units, only 20-30 units close above 900 psf. Majority of units over the past 5 years have close on an average of 630-680 psf.

> You folks have been wrong wrong wrong.

Only if you continue to make up things folks didn't say.

Still waiting for you to show me where I said prices would go down another 40%.
Oh yeah, and the thread where I said the market was going down.

Dig yourself a little deeper, ericho...

"Still waiting for you to show me where I said prices would go down another 40%. "

It's ALL OVER THIS site.
Everyone knows you were calling for a 90% down from the peak.

i call for a 100% down from the peak, whatever that means

as in football " a down"??

90%?? which drug were you taking when he said that??

:)

Hey, you bears love throwing out numbers last spring. I recall WBOTTOM said LIC will be down another 30% from last spring. Like J. Cramer would say...BOOYAH! to you bears!

BTW, W bottom?
Try V.

Muahahhahaahhahahaaa!!!

> "Still waiting for you to show me where I said prices would go down another 40%. "
> It's ALL OVER THIS site.
> Everyone knows you were calling for a 90% down from the peak.

Then you should have no problem finding me just one example, right?

c'mon ericho.... lets see it...

put up or...

> 90%?? which drug were you taking when he said that??

LOL. Something hallucinogenic, obviously.

Ericho is fighting all the RE claims made by the cast of Fantasia.

Ouch, is that your cash sitting in the bank instead of hard assets?

http://www.finviz.com/futures_charts.ashx?t=DX&p=d1

Anyone that listened to any of the bears here the last 2 years would had missed the bottom.
The V bottom that is.

All you bears were screaming SELL in the March of 2009.

http://www.finviz.com/futures_charts.ashx?t=ES&p=w1

ouch!

poor, ericho, still delusional. Now he's answering questions noone asked (and missing the actual questions).

You claim I was saying SELL March 2009, then you're nuts or just dishonest.

I said over and over again, buy SSOs.
140%!

sorry to burst your.... bubble.

"Anyone that listened to any of the bears here the last 2 years would had missed the bottom.
The V bottom that is. "

So, I'm not a bear now?

Come on ericho, just waiting for you to find ONE example where I said to sell at the bottom, or that RE would go down 40% more.

Come on ericho, just one!

No where to go but UP unless you are some where else.
No where to go but UP unless you are some where else.

I love it when a bear wears a bull suit.

I love it when someone makes bogus accusations, gets caught, and then dances around.

Can I get a... TOLD YOU SO!

"Goldman Surprises 100 Partners With Tens Of Millions In Mid-Year Bonus"

"Goldman Sachs has secretly handed its top London-based employees tens of millions of pounds-worth of free shares following a decision to cap their pay in the wake of this year's Labour Government tax on bank bonuses."

"Many Goldman partners left after a one million pound bonus cap was put on their bonuses last year, and those who remain are apparently "frustrated" with their pay, says the Wall Street Journal."

http://www.businessinsider.com/goldman-surprises-100-partners-with-mid-year-bonus-of-tens-of-millions-in-stock-2010-10

Can New York-based staff be far behind?

Hmmm...

http://www.crainsnewyork.com/article/20101011/FREE/101019990

"Many Wall Streeters still in denial on bonuses"

Banking pros haven't gotten memo on how much lower their year-end pay will be, a survey says. The new reality: Go back 20 years, when bonuses were about one tenth what they were last year.

Last month, Sanford C. Bernstein & Co. analyst Brad Hintz attended a party with his former partners at Morgan Stanley at the Metropolitan Museum of Art's cavernous hall housing the Temple of Dendur. After a few drinks, a senior executive opened up to Mr. Hintz and said that to offset this year's fall in revenues due to the crummy economy and rise in operating costs from stricter regulation, pay would have to decline in the next few years to “1990's level.”

“I said, ‘You mean 2000,'” Mr. Hintz recalled.

“No, we've run the numbers and it's 1990,” the executive said, adding that bankers were plenty well-paid back then.

Word of this painful 20-year retreat has evidently not reached the rank-and-file. Fully 50% of Wall Street employees say they expect higher bonuses this year compared to last, according to a survey released Monday by recruiting firm eFinancialCareers. Only 20% of the 2,145 securities industry professionals surveyed expect their bonuses to decrease. Bonuses typically account for the vast majority of a Wall Streeter's pay.

It's possible that the people who responded to the survey are simply those having good years and will be paid accordingly. But data from the major investment banks suggest that bonuses will in fact by down sharply for most employees this year. At Goldman Sachs, the industry's standard-setter for pay, the amount set aside for compensation and benefits was 18% lower in the first half compared to last year's first half, according to a regulatory filing.

There's no reason to believe bonus pools will shoot higher in the second half, since banks are expected to start reporting dreadful third-quarter results later this week.

A return to 1990 pay levels would put bonuses at about one tenth the amount people in the business have grown accustomed to. The average bonus in 1990 was about $16,000, according to data from the New York state comptroller's office, compared to $124,000 last year. A return to paydays circa the George H.W. Bush administration would cause terrible problems for city and state leaders who have come to rely heavily on Wall Street incomes for tax revenue.

If there's any good news in this bleak scenario, it's that it will take several years for pay to drop to 1990 levels, Mr. Hintz said. Still, he says banks and brokerage houses will likely have no choice but to grind pay down because of pressure from shareholders to maximize returns while revenues look, at best, stagnant for years to come.

“Pay is the 800-pound gorilla on Wall Street,” Mr. Hintz said. “And the gorilla does not want to go on a diet.”

"Wall Street Pay Is Going To Hit a Record $144 Billion This Year"

"So much for this idea that it's going to be a sad year on Wall Street characterized by layoffs and horrible bonuses.

According to a survey undertaken by The Wall Street Journal pay is going to hit a record this year for the second year in a row.

All told, pay is expected to hit $144 billion, up 4% from last year."

http://www.businessinsider.com/wall-street-pay-record-144-billion-2010-10

Honestly, I have no idea what to believe any more.

One of the traders at my firm was telling me that trading volume is crazy low (equities and fixed income) and no-one is making money. He thinks big lay-offs in sales and trading are coming in the next couple of months (industry-wide).

But then I read the Journal this morning and scratch my head...WTF??

M&A hit by fall in confidence

"Some of the world’s top business leaders are reversing plans for mergers and acquisitions due to a sharp deterioration in confidence over the past month amid fears of the uncertain macroeconomic outlook."

http://www.ft.com/cms/s/0/f7d407a6-da10-11df-bdd7-00144feabdc0.html?ftcamp=rss

agree equity and FI trading have been awful; but hard to argue with the WSJ's nums

Not hard to argue with it. This was also in the article:

"The data showed that revenue was expected to rise at 29 of the 35 firms surveyed, but at a slower pace than pay. Wall Street revenue is expected to rise 3%, to $448 billion from $433 billion, despite a slowdown in some high-profile activities like stock and bond "

So far the revenue numbers in the IB departments are not up. JPM showed increased revenues bankwide, but less revenue and profits in IB. Citi only showed greater profits because it reduced its loan losses reserved.

The WSJ article may still be right, but again, it certainly can be argued with. It is also based on a survey, not actual data or even financial analysis.

I guess the WSJ didn't survey the guys in the Crain's article. Anyway, I wonder what the impact of foreclosure litigation reserve losses will be at JPM, Citi and BoA.

Probably a really good use of money. Legal is cheap in comparison to the numbers related to the foreclosure mess. And so long as it is in legal limbo they don't have to show the losses.

So: net slight real cash expense and outflow (to lawyers) but you get to postpone the real losses indefinitely, hence higher reported profits and more bonuses. Hooray!

So BoA Merrill laid off some 10+% of investment banking last month, many in industries and M+A. Sounds like an up year to me!

http://www.bloomberg.com/news/2010-11-04/goldman-s-compensation-pool-shrinks-fastest-as-traders-fortunes-dwindle.html

Goldman's Pay Pool Shrinks Fastest as Traders' Fortunes Dwindle

By Christine Harper - Nov 3, 2010 Wall Street traders, who typically receive the fattest year-end bonuses among bank employees, are poised to suffer the biggest pay cuts as revenue at their divisions dropped an average of 12 percent so far this year.

Goldman Sachs Group Inc., the New York-based bank that makes most of its money from trading and set a Wall Street pay record in 2007, slashed average compensation 26 percent in the first nine months. By contrast, Charlotte, North Carolina-based Bank of America Corp., which employs branch managers and brokers as well as bankers and traders, raised average pay 10 percent.

While some compensation consultants say traders’ pay will rebound as soon as revenue recovers, new regulation and capital requirements may lead to sustained reductions in the multimillion-dollar awards that sparked popular outrage and spurred investigations by politicians and regulators after the 2008 financial crisis, analysts say.

“The industry will be significantly less profitable going forward, also significantly less risky,” said Douglas J. Elliott, an economics fellow at the Washington-based Brookings Institution and a former JPMorgan Chase & Co. banker. “The lower profitability means there will be less net revenue to distribute between the shareholders and the employees. I do think there will be a squeeze on compensation over time.”

Compensation Reversal

Compensation trends at eight of the world’s biggest banks (see table below) show the reversal that has taken place since the first quarter, when many trading desks earned money every day for three months. While average pay per employee has dropped 0.8 percent this year at the eight banks, it has fallen 11 percent at six that focus most on trading, such as Goldman Sachs and the investment bank unit of Credit Suisse Group AG.

“There’s been a drop-off in activity -- predominantly around client volumes and related trading flows -- that has impacted the revenues,” said John Lee, a New York-based partner at recruitment firm Heidrick & Struggles International Inc. who leads the North American global markets practice.

Fixed-income traders’ pay will probably fall as much as 30 percent this year, according to a new report from New York-based compensation consultants Johnson Associates Inc. Compensation for merger advisers will be flat to 5 percent higher, and investment bankers who manage stock and bond sales will see a range between 5 percent up and 5 percent down, the report said. Pay for retail and commercial bankers will be slightly higher, and asset-management staff will see increases up to 15 percent.

‘Gotten Harder’

“The economics of these firms and their pay is less than we would have thought three or six months ago because things have clearly gotten harder,” said Alan Johnson, president and founder of Johnson Associates. For traders “it’s going to be harder to make large amounts of money without being able to take risk or use as much capital” because of rule changes, he said.

At New York-based JPMorgan, the second-biggest U.S. bank by assets, the total compensation pool for the first nine months fell 1.2 percent from the same period in 2009, and average pay per worker dropped 8 percent. Within the firm’s investment bank, the pool shrunk 10 percent, even as the number of employees swelled 6.2 percent, to slash average pay 15.5 percent.

Goldman Sachs’s compensation pool fell 18 percent this year, the fastest of all the banks, and more than its 14 percent revenue decline. When compared with rivals’ investment bank units, Goldman Sachs’s drop is second biggest after the 20 percent reduction in compensation expense at Credit Suisse. The figures include a tax levied on bonuses by the U.K. government.

Banks report their expense for compensation and benefits, which includes salaries, bonuses and severance costs. Because many pay packages include stock awards that vest over several years, each year’s compensation expense can include a portion of previous equity awards vesting in the current year.

‘Tough’ Environment

“We are seeing compensation down from 2009 anywhere from 22 to 27 percent” for traders, said Michael Karp, chief executive officer of recruitment firm Options Group in New York. “We are in a tough regulatory environment, and in a situation where revenues and volumes are down, it’s hard for any bank to pay its employees more.”

Spokesmen for all eight banks declined to comment.

New regulations following the worst financial crisis since the Great Depression have focused on reducing risk-taking at banks and requiring them to do a better job aligning pay with performance. New York-based Morgan Stanley and Credit Suisse in Zurich are among banks paying a larger portion of year-end bonuses in restricted stock over several years or cash that can be clawed back if trading positions or investments backfire.

Dodd-Frank Impact

The Dodd-Frank financial reform law passed in the U.S. in July requires regulators to write stricter rules for proprietary trading, or bets firms make with their own capital, and derivatives trading, which was one of the fastest-growing sources of investment bank revenue before the crisis.

Executives at Goldman Sachs, the most profitable securities firm in Wall Street history, estimated earlier this year that proprietary trading made up about 10 percent of its revenue, while derivatives contributed as much as 35 percent. Derivatives are contracts whose value is based on underlying securities such as stocks or bonds or changes in currencies, interest rates or the weather.

Provisions in the Dodd-Frank law will shave between 18 percent and 21 percent from 2010 pretax earnings at the largest U.S. banks, Standard & Poor’s analysts wrote in a report this week. Many of the new rules won’t take effect fully until 2013, when a better economy may help offset some of the drop in revenue, the analysts said.

Basel III

In addition, the Basel Committee on Banking Supervision is drafting new global requirements known as Basel III that increase the capital banks must hold and limit leverage, or the use of borrowed money. While the requirements won’t begin taking effect until 2013, and won’t be implemented fully until 2018, they could herald a long-term change in profitability and compensation, according to Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York.

“Under Basel III, it looks very difficult for the major trading groups of any of the banks to beat their costs of capital based on historic margins,” said Hintz, who was rated the top analyst covering broker-dealers in a survey of fund managers published by Institutional Investor magazine last month. To improve margins “you can increase commissions and spreads or you can cut the compensation of the people who work there, and my guess is that both of them happen.”

Replacing Revenue

Banks may cut pay for administrative staff, including those in human resources, communications and finance, by outsourcing more tasks to low-wage countries such as India and by using technology to automate benefits and other internal functions, said Robert Dicks, a principal at New York-based Deloitte Consulting LLP who focuses on compensation and benefits. He said Wall Street firms currently pay such back-office employees as much as four times what they would get elsewhere.

“These firms are recognizing that they need to streamline, they’ve got to become more efficient, and that money very quickly comes back to the front-office producers” such as bankers, brokers and traders, Dicks said. “Wall Street adapts very fast.”

Investment banks are also seeking ways to replace revenue from complex structured products such as collateralized debt obligations that fell out of favor after they led to losses and government bailouts. A surge in government bond and foreign exchange trading that buoyed earnings last year and early this year has also faded.

2 Rupees

Goldman Sachs is looking at opportunities for growth in emerging markets such as Brazil, Russia, India, China and South Korea, according to David Hendler, an analyst at CreditSights Inc. in New York who recently met with David Viniar, the company’s chief financial officer.

Competition for investment banking deals in emerging markets can mean minimal fees. In August, three people familiar with the situation said Goldman Sachs submitted a bid to manage a share sale by state-owned Power Grid Corporation of India Ltd. that would have generated a fee of 2 rupees (5 cents).

“It’s a big question mark for these companies where they’re going to find new revenue to make up for some of the businesses, like structured credit, that have gone away,” said Eric Moskowitz, head of market intelligence in the global financial markets practice of Los Angeles-based executive search firm Korn/Ferry International. “While many are seeking growth in emerging markets, they’re finding that the fees they receive in those markets are often much lower than they can make in the developed countries.”

Return on Equity

Even with the new Dodd-Frank rules and Basel capital requirements, Goldman Sachs hasn’t revised its target of generating an average 20 percent return on equity throughout the economic cycle, which takes into account that some periods will be lower and some will be higher.

The firm’s annualized return on equity for the first three quarters was 11.6 percent, or 13.2 percent excluding one-time costs for a U.K. bank tax and a $550 million settlement with the Securities and Exchange Commission in July. That compares with a 19.2 percent annualized return on equity in the first nine months of 2009.

Revenue from trading fixed-income, currencies and commodities, the biggest money-maker for most investment banks, fell at six of the eight banks, while equities trading revenue dropped at five. The biggest declines were the 42 percent drop in fixed-income trading at Credit Suisse and the 32 percent fall-off in equities trading at Goldman Sachs during the first nine months of the year compared with the same period in 2009.

Among the gainers, Morgan Stanley posted a 41 percent rise in fixed-income trading and a 29 percent improvement in equities, and UBS AG’s negative fixed-income revenue a year ago swung to a gain this year.

Wide Gap

While earnings at banks such as Bank of America, New York- based Citigroup Inc. and JPMorgan featured lower trading revenue this year, firms were able to release reserves set aside for bad loans in previous years. That helps staff in areas outside of the investment bank most, said Rose Marie Orens, a senior partner at Compensation Advisory Partners LLC in New York.

“That’s going to really go to the core bank more than to the investment bank,” Orens said. Still, “it’s not to say that their actual pay is getting closer” to that of investment bankers and traders, she said.

Indeed, the gap between what traders make and the average compensation of bank employees is wide. Goldman Sachs’s $387,655 per worker -- down from an average $527,192 in the first nine months of last year -- compares with Bank of America’s average $92,723 per employee and Citigroup’s $72,264. Neither Bank of America nor Citigroup provide compensation and employee numbers for their investment bank, so the figures include loan officers and tellers as well as traders and advisers.

UBS, Morgan Stanley

While the totals for the eight firms show faster declines in investment bank pay than in overall compensation, there are exceptions. Average pay per employee at UBS’s investment bank, which is hiring to rebuild its fixed-income operation, surged 14 percent, while the Zurich-based bank’s overall average rose less than half a percent. Average pay at Morgan Stanley, which owns the largest U.S. brokerage, also climbed as the company sought to add employees.

At Frankfurt-based Deutsche Bank AG’s investment bank, average pay slid 3.6 percent to 285,353 euros ($403,004), exceeding the average at Goldman Sachs.

Investment banks pay out a larger percentage of revenue to their employees than do consumer banks. For example, 39 percent of the revenue generated by JPMorgan’s investment bank went to pay employees compared with 28 percent for the bank as a whole. Goldman Sachs has set aside 43 percent of revenue to pay workers this year, and Morgan Stanley has allocated 50 percent.

‘Total Aberration’

Banks often revise their ratios of pay to compensation at the end of the year, which can mean they dole out much more or less than appeared likely after the third quarter. Last year Goldman Sachs slashed its full-year ratio of compensation to revenue to 36 percent, its lowest level ever, after having set aside 47 percent for the first nine months.

Not everyone sees the decline in traders’ pay this year as a symptom of a long-term change in compensation.

“Assuming we’re headed back into an economic growth phase, we’ll look back at this and it will be a total aberration,” said Joseph Sorrentino, managing director at compensation consultant Steven Hall & Partners LLC in New York. “I do get the sense that once we have a rebound that these positions are going to return to their previous levels.”

The following is a table of compensation and employees at eight global banks that have reported earnings for the first nine months of this year.

Company Comp Employees Comp/
Employee

Bank of America $26.3bn 284,169 $92,723

Citigroup $18.64bn 258,000 $72,264

Credit Suisse CHF11.23bn 50,500 CHF222,337

Deutsche Bank EU9.59bn 82,504 EU116,285

Goldman Sachs $13.72bn 35,400 $387,655

JPMorgan Chase $21.55bn 236,810 $91,014

Morgan Stanley $11.99bn 62,864 $190,682

UBS CHF13.14bn 64,583 CHF203,506
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.
.

It's a bit bizarre to have the Bloomberg story just above appear on the same day as the NYT article below. I guess we can be confident that someone will be right.

"These are not boom times for financial firms. Trading is down and new regulations threaten to take a bite out of future profits. Some firms have been handing out pink slips. Morgan Stanley even posted a loss in its last quarter.

Yet Wall Street pay seems to defy gravity: Bonuses will be up this year, according to a study to be released on Thursday by a Wall Street compensation expert, Alan Johnson. The survey shows that overall compensation in financial services will rise 5 percent this year, with employees in some businesses like asset management getting increases of 15 percent.

..."

http://dealbook.blogs.nytimes.com/2010/11/03/wall-street-gets-its-groove-back/?ref=business

BLAH BLAH BLAH from the talking heads and useless analysts

Helicopter Ben just dropped $900 billion into the US, and global economy!!!!!

Wake up you Wall St haters, fear mongers and chicken littles! A tepid economic recovery is underway, Republicans now control the house (YEAH!) and consumers are feeling less suicidal and spending, six months of private sector hiring....Isn't that what we all want? Oh and Wall St is going to have a huge 4Q with QE2....Banks and Investment banks hold huge inventories of US Treasuries and just got the best stocking stuffer known to man. The rear view mirror is not where any of you should be looking. Look out into a much brighter future....As far as NYC Real Estate goes, prices will be highly correlated to NYC employment which is still largely driven by Wall St.

Here's the saying you can all take to the bank, "DON'T FIGHT THE FED!!!"

There's our 1200 on S&P as i have said back in August. There's a good chance we will melt up into year end.

http://finance.yahoo.com/q?s=^GSPC

:)

This move was too easy. As i have mentioned for almost 2 years now on this site. Follow Junk bonds. It's all you need to know.

http://finance.yahoo.com/echarts?s=SHIAX Interactive#chart1:symbol=shiax;range=1y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Enjoy the ride up.

Why is there discrepancy between the Bloomberg and NYTimes article? Are they measuring the same things? Is one using older data than the other?

There's not really a discrepancy if you read them closely. One is talking about banks and the other covers a broader area and specifically says bonus money down for traders and up for asset managers. The market is up but volume is not.

If the best case is 5% off a down year....

it kills me to apply a pasty, but here ya go

http://www.bloomberg.com/news/2010-11-04/goldman-s-compensation-pool-shrinks-fastest-as-traders-fortunes-dwindle.html

"slashed average compensation 26 percent in the first nine months"

shhh, nobody tell steveF.

Hedge fund bonuses signal rosier times
By Sam Jones in London

Published: November 5 2010 01:25 | Last updated: November 5 2010 01:25

US hedge fund managers can expect to see the size of their bonuses increase again this Christmas – even as Wall Street’s top banks slash the size of those for their employees.

According to new research by Hedge Fund Research and headhunters Glocap, year-end bonuses for US hedge fund employees will rise by 5 per cent this year – having increased on average by 15 per cent last year.

The figures highlight the extent to which the industry – long synonymous with huge pay-outs – has bounced back strongly from its nadir in 2008 and is again distributing huge sums to attract top talent even as many other US financial institutions try to rein in bonuses amid a hostile political and regulatory environment.

Wall Street’s pre-eminent investment bank, Goldman Sachs, for example, has seen its average pay-out to employees shrink by 26 per cent over the first nine months of the year, according to a survey released on Thursday by consultancy Johnson Associates.

Average pay at JPMorgan, meanwhile, fell 8 per cent over the same period, the survey said.

http://www.businessinsider.com/poverty-on-wall-street-as-bonuses-plummet-12-2010-11

hey kiss, i'd love to see where hedge fund comp is gross and per manager 2010 vs 2005 and 2006--my guess is gross and per manager comp is still way off those levels

whatever the case, seems there will be a bit of pain for the street, and i bet comp levels there, esp gross are way off prior peaks (when NY RE was ramping)

I think that's right, but thematically the trendlines seem to be assets are starting to flow again to the buy side, and the sell side is under regulatory pressure to get out of prop trading. Not sure what RE impact will be, but smart people find a way to make money and sell side folks will move over time to the buy side.

"hey kiss, i'd love to see where hedge fund comp is gross and per manager 2010 vs 2005 and 2006--my guess is gross and per manager comp is still way off those level"

also keep in mind hedge fund employment was off worse than bank employment. The last stat I got was that 1/3 of funds had closed.

November 16, 2010 3:45 PM

Wall Street profits on pace to hit $19B

What recession? Despite headwinds caused by weak recovery, regulatory reform and pared payrolls, New York's financial industry is on track to post its fourth most profitable year ever.

The bonus pool is expected to be smaller than in 2009—when $20.3 billion in bonuses were handed out—as money set aside for compensation by member firms of the New York Stock Exchange declined in the first half of the year, the report said. But the average payout could rise because the money will be shared by fewer workers.

“The industry continues to restructure and downsize as it adapts to changes in its economic and regulatory environment,” the report said, adding that Wall Street could lose another 7,000 jobs before it begins a sustained turn around. In the last two recessions Wall Street contracted by about 20% in the city, leading Mr. DiNapoli's office to predict that the additional losses are on the horizon.

http://www.crainsnewyork.com/article/20101116/FREE/101119885

This article shows, IMHO, that the winter will be a cold one for sales in NYC. If the bonus per person is much higher - for SIGNIFICANTLY LESS PEOPLE - that means less money flowing into RE. Simple enough...

Every banker I know expects comp to be down on avg per head. There are a few specialties that will be up from last year. They're expecting avg to be down 15-25%.

> Wall Street profits on pace to hit $19B

The profits are partially coming from paying less in compensation. Great for the stockholders.

booooom

“We expect full year comp expense to be accrued at 40.4% of revenues, the second lowest level since Goldman has been a public firm, reflective of both mgmt discipline and the impact of new hires over the past year.”

Goldman just announced that total comp for 2010 is down 5% vs. 2009, which was a down year.

Comp down, but their base increase 50-100% back in 2010.
Net?

UP

I don't know anything in particular about Goldman's pay practices, but generally "compensation" refers to base + bonus, not just bonus, so I'd imagine the base is already considered in the total.

This is how I'm reading it...

----------------------------------------
2009:
salary = $250k (paid in 2009)
bonus = $750k (paid in 2010)
total comp = $1m

2010:
salary = $400k (paid in 2010)
bonus = $450k (paid in 2011)
total comp = $850k
----------------------------------------
2010 personal tax return:
$750k plus $400k = $1.15m

2011 personal tax return:
$450k plus $400k = $850k

----------------------------------------
The above scenario probably made the 2010 income numbers look better than what was reported in the media. One thing to remember is that the lower comp is not only due to lower revenue, but it's also due to a trend in paying a smaller percentage of revenue as comp.

I wonder if the 2011/2012 NYC budget accounted for that.

Ericho: total comp = salary + bonus.

total comp = all-in comp = salary+bonus = DOWN

Man, you've really needed to be schooled in the basics lately.

salary, for the better paid on wall st, at hedge funds and in PE, represents a tiny part of gross comp

"Only half of Wall Streeters "satisfied" with bonus, survey says"

"How many people do you know were awarded a bonus at work last year? On Wall Street, only 8% of professionals described as "bonus-eligible" failed to get one.

Of the vast majority of bankers who did get a bonus, 56% reported their payout was higher than the prior year. Yet Wall Streeters evidently are one tough-to-please crowd: Only half decribed themselves as "satisfied" with their bonus."

http://mycrains.crainsnewyork.com/in_the_markets/2011/01/only-half-of-wall-streeters-satisfied-with-bonus-survey-says.php

> Ericho: total comp = salary + bonus.
> total comp = all-in comp = salary+bonus = DOWN
> Man, you've really needed to be schooled in the basics lately

I know! Painfully bad.

Goldman announced 14% decline in TOTAL comp.

> Comp down, but their base increase 50-100% back in 2010.
> Net?
> UP

Ericho, really, your math sucks nowadays. What's going on?

I have not heard from one single person who isn't very disappointed with the bonus numbers. All I hear is "bad", "very bad", "awful", not even one single "ok". Not only is the bonus down significantly even accounting for any base salary increase last year, a greater percentage is being deferred. Perhaps more important is the fact that they are ALL worry that comp will get worse in the future even IF revenue goes up.

Ericho certainly did get the "blow" part right... even if unintentionally.
;-)

In my group, bonuses were awful. Much worse than expected. It's not just the bonus that's down, it's the total comp. This is bad. :-(

Every banker I know is very concerned that comp will continue to decline meaningfully over the long-term. Several director level guys are considering switching to industry bc they think they'll have better odds of making more money or they'll make the same amount of money and have a better lifestyle.

Which could have an effect on housing prices as much as the actual comp decline. If they're taking 15 or 30 year mortgages, their earnings potential will matter as much, if not more, than current earnings.

Some people think deferred compensation is not so bad because they get the money in the future, until they realized that they might lose about 2X their yearly deferred comp when they leave the company unless their next employer make them whole.

Example:
An employee gets $300K in deferred comp each year for the next 3 years. Assuming a 3 year vesting schedule, if she decides to leave the company after the 3rd year bonus, she will lose $100K from year 1, $200K from year 2, and the full $300K from year 3. That totals $600K or 2X the yearly deferred comp. This gets worse if a larger percentage of total comp is deferred or if the company stock declines. How many of them are confident about their company stock at this point?

Deferred comp will result in less mobility which means total comp will rise slowly at best and possibly decline over the years.

"Some people think deferred compensation is not so bad because they get the money in the future, until they realized that they might lose about 2X their yearly deferred comp when they leave the company unless their next employer make them whole."

True. I wonder how it affects people moving around. Obviously, you are less likely to leave if you don't take your money with you. BUT it also means the new places can offer bigger packages with the same restrictions.

SWE - I think one of the sure things that happens is it slows down lateral movement between companies, and if that slows it also slows the pace of competition for personnel and the commensurate increases in comp from all the jumping. It becomes more "expensive" for a company to hire someone since they will probably have to promise to make up any lost deferred comp.

But I don't think this is a bad thing at all. The 1998-2000 internet era was arguably one of the hottest periods of innovation and money raising in the last couple of generations, yet compensation was a fraction of what it became in recent years. Will people be poor because compensation goes back to "only" double what it was then? (Double would definitely be a step down from where we got to.)

Just think of all of those 08 & 09 stock grants that are vesting.

Total comp is down. But comp for "top talent" (read - a tiny slice of total workforce) is up. Hence, total comp for the vast majority of employees is down.

That is very good news for NY real estate, because..... *crickets chirping*

JM - Your point might be off in two ways. First, if the % of comp that is deferred has only gone up recently, then by definition the amounts vesting are smaller, %-wise, than what is being deferred.

Second, people make big purchases based on their outlook over long periods of time. If the future holds lower comp, they will spend less even if they have it today. If the future is murky, they will also spend less. What they pocket today that was promised to them a year or two ago means nothing. In their minds it was already theirs and unlikely to change their plans now that they turned "money owed me" to "money in my bank account". IOW - stop living in the past. ;)

yes sunday, and the handcuff effect of deferred comp prevents the mobility required to effect big gains in comp over a career--unless one is a serious-assed rainmaker, new firms arent going to make a new hire whole on deferred comp walked away from--so, year to year, at a given job comp will be lower, and over the course of a career, comp will be waaaaay lower

stanley for 2010: gross comp said to be gen'lly awful--and then the terms: 60% bonus in stock, vests over 3 years; 40% in cash, with 33% payable immedaitely, 33% at midyear and 33% at year end

id heard bad, but this is really bad

woops you AvUWS already said mosta what i just said

> Just think of all of those 08 & 09 stock grants that are vesting.

Unfortunately for Wall Street, less than the compensation not paid and deferred.

Can't keep quiet any longer.
How many ppl who have REAL knowledge of REAL numbers are commenting here? It appears to be very few, if any.

For the past few years I read these threads and bloomberg articles and find the results to be pretty much the exact opposite of what really happens. The exception is 2008. "Bearish" articles comments => better than anticipated bonus. "Bullish" articles => worse than anticipated bonus.

To dispel specific comments
1) Just because firmwide bonus allocation is down 10-15%... does that really mean anything in a pyramid where the guys at the top get a lot more. What if a handful of them take less, but rest of ppl still do better? Just sayin'... this doesn't mean squat.
2) All the friends of friends comments who are saying they are getting 0 bonus... if this is true that means someone or a lot of other ppl are doing pretty well... no? That's a couple headcount dragging down that "lower" total compensation number.

In summary, please don't listen to a bunch of non finance people commenting on finance bonuses because clearly the people who know are not posting here.

Flame away, but now its out there. Don't believe everything you read on this site/forum especially.