Wall Street Pay Seen Dropping Broadly This Year

If someone made $12 million last year and $10 million this year, that's down. Is it a bid deal? Not really.

Isn't State Street a Boston firm?

Pay-per-head down, # of heads down, mood among bankers down...

That is a VERY big deal.

I think the medium and high end see further price compression and the rental market gets stronger.

> Barclays Capital, the securities unit of Barclays Plc, is preparing to eliminate hundreds of jobs in the next two months following a decline in investment banking revenue, according to three people familiar with the matter. A spokesman for Barclays in London declined to comment.

uf, kind of tired to read this type of "layoffs cause of declined IB revenue". didn't see many layoffs really materialized. remember meredith whitney saying that wall street will fire 80k... what was she smoking?

"remember meredith whitney saying that wall street will fire 80k... what was she smoking?"

You are a giant idiot. She said 80k GLOBALLY over 18 months. In Septemeber. That gives her until MARCH 2012 to be wrong, you fricking moron.

How many people on "wall street" do you think make 10mm-12mm a year? Very few. Only group heads, star traders, and long time vice chairmen, and many of those only in good years. That's a very small percentage of the workforce.

Yes, State Street is a Boston firm.

Oh, and Buy now or be priced out forever. Or something.

jason, you need to take your meds LMAO

State Street is all over the world:

http://www.statestreet.com/wps/portal/internet/corporate/home/aboutstatestreet/corporateoverview/officelocations/officelocationsdetail/!ut/p/c4/04_SB8K8xLLM9MSSzPy8xBz9CP0os3i_0CADCydDRwN3Q0tzA89gRxMPF0tXQ3c_U_1I_ShzhLx_mKslUN7Q1S_YzMXQwNdMPwRkYlBqOtA0v8TcVP1Iv9Ryhcj8omz94NS8-NBg_YLsxCQLR0VFANcAz38!/

Its main competitor is Bank of New York Mellon, which is based in...

Mellon.

Its primary business is money management and securities custodianship - it works with hedge funds and banks and other financial institutions all over the world. It's a wholesale operation, that gives you a very good barometer of what's happening in the world of finance: it has no branches, no retail operations at all, doesn't originate mortgages, etc. It's a good proxy for the whole industry.

even rick santelli is saying the healing has begun...we've been this mess for over 3 years...sooner or later the sun is gonna come out.

"State Street is all over the world:"

Yes, but its HQ is based in Boston, and the writer of the article you posted is based in Boston, so I think it's fair to assume most of the cuts will be there.

"Its main competitor is Bank of New York Mellon, which is based in...
Mellon."

Nice. Where is Mellon, exactly?

You are very good at one thing, bjw: missing the point. The point is that State Street services other financial firms, so if their business is down, so is that of other financial firms. That's why I posted the two articles together.

Read about what State Street's business is, and you might be able to figure it out.

marco, you're right: eventually it will end. Today, however, the stock market is cheering the ECB's announcement that they're going to do their own QEII, buying up the bonds of its member countries. That's not a good sign, it's a bad one.

Eventually it will end, but probably not for years. This is a structural readjustment in the economy.

"You are very good at one thing, bjw: missing the point. The point is that State Street services other financial firms, so if their business is down, so is that of other financial firms. That's why I posted the two articles together."

Steve, you're excellent at being stubborn. I never disputed the point that Wall St compensation may be decreasing this year - I merely answered vicdoty's question about State Street being a Boston firm. Of course you got all defensive at that. And it's a highly tangential article to be posting when talking about Wall St compensation on a NYC real estate board. There must be dozens of better articles to post in conjunction. As to your point that financial firms work with each other and therefore affect each other's business - if that's your criteria, you can post anything and claim a link. But frankly, that's a bit dumb and way too hard of a sell on your part. Still waiting for you to answer to my question in that other thread of yours, btw...

Its main competitor is Bank of New York Mellon, which is based in...
Mellon."

Nice. Where is Mellon, exactly?

Haha - I've been to paradise but i've never been to Mellon.

"And it's a highly tangential article to be posting when talking about Wall St compensation on a NYC real estate board."

HAHAHAHA! All the talk about bonuses & Wall Street pay driving up the price of real estate during the boom, and now when wages are falling, it's "highly tangential."

Wow. Denial is more than a river, that's for sure.

And - I'm waiting for you to point out the apartment that I can rent or buy for the same out-of-pocket carrying cost, so I can answer. If it's in Riverdale, I'll rent. If it's in Brooklyn, I'll rent. If it's in Manhattan, I have to see it first.

stocks are up because of adp first and coordinated central bank actions second. seems like the powers that be kicked the can far enough down the road thats things started to get better..

"HAHAHAHA! All the talk about bonuses & Wall Street pay driving up the price of real estate during the boom, and now when wages are falling, it's "highly tangential.""

Stop twisting my words, Estevao. Incomes and real estate prices are obviously correlated. I'm not debating or denying that. I'm questioning the inclusion of an article about job cuts in Boston when discussing compensation on Wall St, let alone real estate in New York City.

"And - I'm waiting for you to point out the apartment that I can rent or buy for the same out-of-pocket carrying cost, so I can answer."

That's not the point - it's an entirely theoretical question, meaning there's no need for a physical example. It is merely to gauge your preferences and to try to put a dollar amount on them. Nothing more or less. But you keep evading. Sad.

"About 400 [out of 1,400] positions will be eliminated in Massachusetts..."

Is it safe to assume that some of the remaining 1000 cuts would be from NYC?

Sunday, good catch, though the article says they don't know where the others will be. They have a lot of offices, including a whole mess abroad, so I think it's a fair guess that Boston will be hit hardest by this.

For years "Wall Street will save us". Now its "Wall Street doesn't matter". Sure.

Did the Irish Carpenters come back?

As usual, steve's conclusions are flawed. State Street has big cash management and securities lending businesses. Revenues are down in those areas because of low interest rates. This has nothing to do with less client business in its custody operations.

"Now its "Wall Street doesn't matter"."

Sorry, who said that one? Get your facts straight.

wtf are you talking about lic?--sec lend is used nearly exclusively for leverage by ny ib's and money center banks--it's how the street borrows the massive holdings of the biggest asset managers--speaks directly of a decline in business on the street-

youre such a dope---you trip over yourself over and over as you try obsessively to debunk steve--state st is a huge bank with serious servicing and clearing businesses--st st is sucking wind and you want to say this speaks well of ny realestate?

and the econ #'s have, in fact, been somewhat hopeful of recent, incl adp this am---there is a small chance econ may be getting legs, but they are legs bought with credi......again.....we shall see

"Sorry, who said that one?"

You did: "And it's a highly tangential article to be posting when talking about Wall St compensation on a NYC real estate board."

And I told you, it will depend on the specific property: that particular question I can't answer theoretically. Sometimes I'd buy, sometimes I'd rent.

LICC: "State Street has big cash management and securities lending businesses. Revenues are down in those areas because of low interest rates"

HAHAHAHA! Tell us what State Street's "cash management" people do, LICC.

And tell us how the "securities lending" business is hurt by low interest rates.

HAHAHAHA!

Man, I don't always agree with steve, but he's got some folks dead to rights here. Time for them to give up the argument.

"You did: "And it's a highly tangential article to be posting when talking about Wall St compensation on a NYC real estate board.""

Steve, explain to me how that even remotely equates to "Wall Street doesn't matter." Your posts are a complete joke.

"And I told you, it will depend on the specific property: that particular question I can't answer theoretically. Sometimes I'd buy, sometimes I'd rent."

Steve, again, the question assumes that you will live in this property NO MATTER WHAT. The choice is not which property, but whether you will buy or rent. You make this much more difficult than it needs to be.

somewhereelse: "Did the Irish Carpenters come back?"

Uhhh.....

"Irish heading to America once again."
"New arrivals are flooding in to the United States"

"In the Celtic Tiger years it slowed to a trickle, but now in the bad times, emigration from Ireland is once again picking up rapidly.

That’s the word from Irish organizations like the Emerald Isle Immigration Center in Queens and the Aisling Irish Center in Yonkers."

http://www.irishcentral.com/news/Irish-heading-to-America-once-again-111106284.html

"explain to me how that even remotely equates to "Wall Street doesn't matter."

Hmm. If "highly tangential" doesn't mean "doesn't matter," what does it mean?

Remember, when you assume you ass*u*me.

You assume wrong: even if I have to live in this property NO MATTER WHAT, whether I buy it or rent it will depend on what property it is. As I said, I would NEVER buy in the Bronx no matter what. I might buy in Manhattan or I might not; I might buy in West Hollywood or I might not.

You make it unnecessarily difficult by insisting that I can answer a question that I repeatedly say I can't.

So - pony up. Show me the property.

WB - adp data are okay, not great, nowhere near what is necessary, and in any case highly inaccurate over time. Ditto Challenger Grey, which came out with just the opposite conclusion.

Today on Wall Street is all about the ECB buying bonds, and short covering. Usually the first move after a central bank move is a head-fake: see Fed's QEII announcement, up 190 points in a day, then right back down again.

When economies are being kept alive by massive inflows of liquidity that nobody is spending, that's no reason to be hopeful. I'd be hopeful if this would happen without the inflows of liquidity.

Which only cause asset bubbles.

pulaski, priceless.

"Hmm. If "highly tangential" doesn't mean "doesn't matter," what does it mean?"

It means the second article you posted is highly tangential to the topic mentioned in your thread title, as well as to the discussion on NYC real estate. Nothing more or less. Or did you miss the part where I explicitly said that swe's statement was completely off? Basic reading.

"You assume wrong: even if I have to live in this property NO MATTER WHAT, whether I buy it or rent it will depend on what property it is. As I said, I would NEVER buy in the Bronx no matter what. I might buy in Manhattan or I might not; I might buy in West Hollywood or I might not."

And again, I said that you WANT to live in this property and that you do indeed love it. I'm assuming of course that you're a rational consumer and will not buy or rent a place that you don't want. You're just evading again. So pony up, and answer.

http://therealdeal.com/newyork/articles/breaking-down-the-bonus-bounce

Breaking down the bonus bounce
A look at how Wall Street pay correlates with NYC apartment sales
December 01, 2010 07:00AM
By Sarah Ryley

Turns out the connection between Wall Street bonuses and real estate sales isn't just broker lore -- it's real.

The Real Deal tracked the year-over-year percent change in Wall Street bonuses and Manhattan condo and co-op transactions going back to 1993, using data provided by the city comptroller and appraiser Jonathan Miller, respectively.

Besides the volatile period between 1998 and 2005, the leaps and plunges in annual transactions were in lockstep with the bonuses showered on Wall Street at the beginning of that year.

For example, at the start of this year bonuses shot up 39.5 percent to $25.4 billion. Meanwhile, the number of co-ops and condos sold in Manhattan is on track to increase a near-exact 39.3 percent to 10,353 by the end of the year.

Given this correlation, transactions will likely drop at least nominally at the beginning of 2011, as "the amount of funds set aside for compensation, including bonuses, has declined during 2010 as revenues and profits have trended downward," said state Comptroller Thomas DiNapoli in a report issued last month. "There's only so many sales you can push with greater compensation."

Miller also noted that with the post-Lehman trend of more bonus compensation given in the form of restricted stock or options, as opposed to cash, "its impact on sales activity will likely be less pronounced in the future."

He added: "When you consider that bonus compensation is somewhere in the neighborhood of half of total compensation, that's a significant factor in determining whether people are going to run out and buy after they get a bonus."

Plus, as firms continue to cut staff, the pool of employees divvying up that coveted cash will be smaller.

But the upcoming bonus numbers are nothing to panic over. DiNapoli said this year is still on track to be Wall Street's fourth-most profitable ever in absolute dollars, and the number of transactions this year was the second highest in two decades.

Real estate players said the correlation is due to the sheer percentage of prospective buyers in the city who are affected by the fortunes of Wall Street -- an estimated one out of every seven jobs directly or indirectly -- and the fact that real estate is again being looked at as a secure investment.

Prudential Douglas Elliman executive vice president Frances Katzen, who estimates that 40 percent of her buyers are investors, mostly from the financial industry, said "people who are not comfortable with the volatility in the stock market are going to want to put [their bonuses] into property at this time."

Prices in many buildings have fallen sufficiently to make buying and renting out an apartment profitable over a 10-year period, given that the buyer has a sizable down payment, Katzen said.

"We are now seeing that the one-bedroom or studio investors are guys who work in finance who want to do something with their money," she said.

The same holds true for the top tier of the Manhattan real estate market. Katzen said one of her clients is a foreign financier looking to spend some $15 million in cash on an apartment. And Gary Malin, president of Citi Habitats, said his firm just sold a $3.1 million penthouse at Chelsea's Prima to someone who works on Wall Street.

"Eighty percent of the people who looked at that penthouse work on Wall Street," said Malin. Overall, he said, financiers account for more than a quarter of his clients.

I think we need Riversider to chime in just about now to discuss how his MBS hedge is being serviced by State Street, and how banks don't create money, and how REAL money is made in exploding stars.

And maybe LICC can tell us how low interest rates affect securities lending when, in theory, the lower the interest rate the more lending they should be doing, because the threshold for making money on short sales goes down so people should be selling short.

But they're not, because the market is up today.

So what's wrong with this picture, LICCdope?

HAHAHAHA!

i remain a skeptic that we, and now europe, can print/boorow our ways out of this mess--and agree that much of what we can read on the economy remains pretty dire; but i respect that the astounding can happen, whether in real ways (doubtful) or via minipulation and new ways to hide skeletons

State street's issues are rather isolated, as its due to the low-interest rate environment, nothing else. THAT however is GOOD for virtually all other banks and I-banks.

> Uhhh.....
> "Irish heading to America once again."

Pulaski, you missed the joke.... its an old one, yet still amusing.

When many folks on this board were trying to claim that the Europeans would be saving Manhattan - of course, it seems the other way around now - there was one article that came out profiling the buyers... including an Irish carpenter.

And, they weren't immigrants...

"Pulaski, you missed the joke.... its an old one, yet still amusing."

I think he was playing along with you actually, which is what made it funny. The article was a good find nonetheless - I'm a bit surprised, but given what's happening over on the Emerald Isle of late, I probably shouldn't be.

"State street's issues are rather isolated, as its due to the low-interest rate environment, nothing else."

Hmm. So the Barclay's announcement is immaterial, and what is happening to State Street isn't happening to other custodial banks?

Doubtful.

WB, I think that flooding the market with liquidity will help palliate the problem, and make it not as bad as it might be. Fiscal stimulus is much more effective empirically, but that's out now with Republicans. I think what you're seeing is a short-lived euphoria that the government is doing something, but all indications are that, on a historical basis (using Shiller's method of the 10-year p/e moving average) stocks are vastly overpriced, and it's clear that employment isn't budging: a few thousand here and a few thousand there won't do anything.

We're looking at medium-term structural unemployment, which is going to keep growth under 2%. That's better than the negative that might have occurred without Fed action, but it's not good enough. Employee productivity is increasing meaning that no one is hiring; the real unemployment rate is closer to 17%. The economy cannot grow if there are no jobs. Banks are improving their earnings by clearing reserves; companies are keeping the bottom line up but running short on the top line. The stock market should be around 8,500, not 11,500, based on fundamentals.

I think that all professionals agree with that, and are just trading the "Don't fight the Fed" trade. But that won't last forever.

The only thing that seems to be working in favor of bank shareholders is them getting to fire people, and pay the rest less.

Here's an excellent chart of the problem:

http://www.bloomberg.com/news/2010-08-03/shiller-s-p-e-ratio-too-high-for-subpar-economy-chart-of-the-day.html

And this was in August - when stocks were 20% cheaper.

There's a disconnect somewhere: banks are letting people go because of low trading volumes, unemployment is stuck at near record highs.

I blame the Chinese.

Shiller's analysis was a large part of my confidence in buying SSOs (the ones up over 200%) when some folks were running for cover. I thank him each time I take some profits.

lol, i bought also on march 2009, what a beauty! long for opportunities like those but happy to be inactive while Bernanke tries to give us another bubble... watching the paint dry is sometimes the best course of action.

I would thank Bernake more than anybody else, swe, and take my profits now. The last time the Fed did this, once the bubble was deflated we wound up with the flash crash of May.

Stocks up 2% one day, down 2% the next make me worried. Just as up 20% in 2 months, or down 20% in two months, would do.

Wild movements with little volume is also not a good sign. Gold rising with stocks and oil is not a good sign. It's a sign that somebody has a lot of cash somewhere, and no clue what to do with it.

bjw is right, steve's comments are a joke.

steve, how many times are you going to make a total fool of yourself?

State Street runs cash management and takes a fee on the assets. Assets in that business are down because of the low interest rate environment. This does not evidence anything about State Street clients regarding the entire financial industry.

Keep dropping comments about things which you are clueless steve, you seem to like doing that.

> I would thank Bernake more than anybody else, swe, and take my profits now

Steve, not listening to you has made me a ton of money... the 200% exists because I did the opposite of what you said, including screams to sell all the way up!

swe, I don't invest the way you do. You've been up 200% and down, just like me & everybody else. My point is it's your lucky time.

I'm up on some investments right now, down on others. The ones I'm up on I'll sell when the prices is right; the ones I'm down on I'll just hold. Sometimes the hold is a few months, sometimes a few weeks, sometimes a few days.

LICC: "Assets in that business are down because of the low interest rate environment."

Can you tell us why assets in that business are down because of the low interest rates? Because - master bond trader that you are - when interest rates go down the price of bonds goes up, bond trading should be a very good business right now, nay?

And because securities are lent for short sales, there should be lots of them with low interest rates, nay?

"takes a fee on the assets" ... "Assets in that business are down" ... "This does not evidence anything" ... "regarding the entire financial industry."

Hmm. Let's see. State Street manages assets that are down in value; the assets they manage are for the financial industry; but the fact that the assets of the financial industry are down does not evidence anything about the financial industry.

THAT'S THE MOST SENSICAL THING YOU'VE EVER SAID, LICC!

What a dope.

"Sometimes the hold is a few months, sometimes a few weeks, sometimes a few days."

Surefire way to carve into any profits with all the short term cap gains and transaction fees (I know you claim they're free, but if true, I'm guessing it's a short term offer - I doubt you have enough assets to negotiate completely free trading, especially with the frequency you seem to operate). And still no answer to my question. Hilarious.

"Wall Street Pay - Size, Structure and Significance for Shareowners"

"( ) in the tradition of unintended consequences for compensation regulations, while incentives were
capped, salaries, which were not capped, ballooned. Wells Fargo, Citigroup and Bank of America exploited a loophole in ARRA to increase salaries by several hundred percent (salary hikes at Morgan Stanley, JPMorgan and Goldman Sachs were more moderate). In most cases, these salary increases were paid in the form of stock, which became known as salary stock. At Citigroup, salaries rose to between $3,333,333 and $5,333,333 for three named officers. At Bank of America, salaries rose to between $6 million and $9.9 million for four officers. And at Wells Fargo, salaries rose more than 500 percent, to between $3,339,156 and $5,600,000, for four officers, including CEO John Stumpf. The number
of shares paid as salary stock was generally calculated using the fair market value of the stock on the grant date or pay date for the relevant pay period. Such shares vested immediately."

http://www.cii.org/UserFiles/file/CII%20White%20Paper%20-%20Wall%20Street%20Pay%20FINAL%20Nov%202010.pdf

Ergo: Wall Street will always find a loop hole.

steve, you talk a lot for someone who knows nothing.

Do you have any idea at all how a money market fund works? Any inkling? Obviously not.

They hold short term paper. Mostly, they are fun for income and stable asset value. In this interest rate environment, assets in money funds are not down because of decreased asset values. They are down because clients move their assets to other types of investments.

steve the buffoon strikes again.

typo- Mostly, they are run for income and stable asset value. . . .

> swe, I don't invest the way you do. You've been up 200% and down, just like me & everybody else. My
> point is it's your lucky time.

You're confused again. I'm not day trading; these were long-erterm buys I made. This is one step beyond S&P funds. My "swings" you complain about are 180% to 200% up.

These aren't risky bets that lose all their gains in a day. If that was the case, I'd be expecting even bigger returns.

Trying to compare this to your day trading on specific issues is nutty. My risk is so, so, SO much lower (as are my fees).

"And still no answer to my question. Hilarious."

Show me the apartments....

"Long-term buys" in SSO? Or is SSO something other than what the trading symbol stands for.

"Do you have any idea at all how a money market fund works?"

Yes, in fact, I do. Yes they hold short-term paper.

And you have NO CLUE what you're talking about:

Money Market Assets Top $2.8 Trillion In Week

http://blogs.barrons.com/focusonfunds/2010/11/24/money-market-assets-top-28-trillion-in-week/

Dope.

Right from the article steve cited:

"That’s notable since investors had spent much of the first part of 2010 taking money out of their money market funds."

steve the clown strikes again!!

"Show me the apartments...."

I just hope you never have to translate the phrase "hypothetical situation" in any of your work. You'd be utterly clueless.

You're right, LICC - they HAD spent much of the first part of 2010 taking money out of their money market funds.

Now they're PUTTING MONEY BACK INTO THEIR MONEY MARKET FUNDS.

So the banks should be HIRING, right?

It's no wonder you're called LICCdope!

elsewhere, you always appear, long and leveraged, when the market is rocking--im amazed youve never lightened up in the huge downtrades that have happened at times during the period ive read your posts--i mean, if you are as you say, youve done well, but i worry that, if we face another nasty secular bear dip, you may not have the discipline to stop out before your face gets torn clear off

Sure steve, investors put $15 billion back out of $2.8 TRILLION.

steve the fool continues . . .

You know, WB, I was thinking the same thing about SWE: whenever the market hits 11,000 we get the Eddie Wilson chime-in.

SSO is 2x the S&P 500, which is up about 25% in the past 2 months. Meaning that that 200% was down 50% at the end of August.

Silent then, wasn't he?

I don't think SSO has the discipline to ride out the 40% - 50% swings that are normal when dealing with long or short ETF's. I've ridden some of these things down to the point where they had to split to keep a share value, and still wound up making 50% - 60% on the original investment. It takes discipline, to be sure, that E.W. I don't think has.

You should only be in SSO with play money, Eddie - not money you need to live on.

LICCdope: your ignorance is preceded only by...your ignorance. Multiply 15 billion by 52 weeks and let me know how your extrapolation works.

I don't think SSO = I don't think Eddie Wilson

15 billion times 52 weeks is . . . irrelevant. Like most of steve's comments. This is steve again trying to distort the discussion to hide the fact that he is idiotically wrong, again.

It is beyond counting now the amount of times steve has been made the fool.

"It is beyond counting now the amount of times steve has been made the fool"

Right. Zero. Can't count to it.

Sorry, LICCdope. Remember, you've invested what little money you have in Sinking Real Estate, or should I say Stinking Real Estate, aka The Love Canal, or should I say the Newtown Creek.

steve, if it makes you happy to ignore all the arguments you have lost and all the times it has been pointed out that your comments are dumb, inaccurate and illogical, hey knock yourself out.

steve criticizes another neighborhood from his rental in a dumpy building in the Theater District. HA!

Reading the Citi note on State Street...its a 5% reduction over 13 months. Typical employee turnover plus a hiring freeze would be enough for such a small cut over such a long time, and buy-outs would make it less potentially painful. Not so extreme as you would think.

LICC living... nuff said.

"if it makes you happy to ignore all the arguments you have lost and all the times it has been pointed out that your comments are dumb, inaccurate and illogical, hey knock yourself out."

I've been trying to identify them, LICCdope - couldn't do it. All I find from you are neofascist posts from Fox Gnus and The New York Post and the like about why Obama is a socialist, despite the fact that the most socialist states in the country are the Red States.

If you're arguing about how much more expensive it is to buy than to rent in Manhattan, I don't know why you bother as you can't afford to live here, and instead have chosen to live in a slum.

It amazes me that no matter what happens, you claim victory and walk away. Did you get that from Richard Nixon, perchance?

> "It is beyond counting now the amount of times steve has been made the fool"

> Right. Zero. Can't count to it.

You must be joking.

Of course, LICC saying it to Steve is pretty funny, too.

steve, you are the laughinstock of streeteasy. The amazing thing is that you can't seem to realize it.

> SSO is 2x the S&P 500, which is up about 25% in the past 2 months. Meaning that that 200% was down 50% at the
> end of August.

So, your argument was I was only up 150% on those? Really, that's your killer? ROTFL.

Of course, you're ignoring where I said I was buying more at the dips, right here. They aren't up 200%, but I sold a good chunk of 'em.

How quickly you forget (or just make things up) steve. It was on SteveF's 9800 thread, remember. Said I was buying more.

> Silent then, wasn't he?

Not really. Now you're just making things up.

> I don't think SSO has the discipline to ride out the 40% - 50% swings that are normal when dealing with long or
> short ETF's.

Yes, steve has the discipline for his money losers, but noone else does.

Thats it.

He's made bad call after bad call... so now his rant is "no one followed through but me".

suuure steve, whatever you need to help you sleep.

> You should only be in SSO with play money, Eddie - not money you need to live on.

Steve, you shouldn't be giving anyone investing advice.
But of course its not the money I need to eat.

But its sure going to be a whole lot of play.

I'm still laughing about how Steve is claiming I was silent.

Thanks for the chuckle, Steve.

"you are the laughinstock of streeteasy"

If you're laughing at me, LICCdope, then I am pleased.

Okay, Eddie, we all believe you: the best analysts in the country are right only about 60% of the time, at most and not consistently. The best traders are right about 51% of the time. Following chartists is about as accurate as throwing darts in the dark at random stock symbols.

Yet magically - Eddie Wilson is ALWAYS RIGHT!

Dude - if you're so great, why ain't you working for George Soros?

Please.

Back to actual facts. This bit from KBW today explains how non-JP Morgan type financial firms might loose money in an ultra-low rate environment:

"...Notably, many of the members of the KSX depend on interest-rate sensitive revenue streams depressed due to the ultra-low rate environment. Many firms are “under-earning”, such as the custodial bank STT, brokerage and retail firms such as AMTD and SCHW, as well as IBKR relative to what they could if we were in a period of “normal” interest rates, all else equal. These firms typically hold significant client cash, and/or significant cash flows through their systems, which in turn is reinvested to generate spread income. For instance as STT acts as custodian and/or administrator for $20 trillion in assets as of 3Q10, this produces significant frictional cash in the form of interest and principal pay-downs, dividends, cash tender offers, etc. that are left on their balance sheet as short-term deposits and reinvested in longer-term securities. We would at least partially attribute the underperformance of the index year to date to the rate sensitivity of many of the index’s constituents..."

That's entirely possible, jason - but it's not the main business of State Street. What I think most affects them is low transaction volume; they route those transactions through their own desk and take the spread. If there aren't a lot of transactions, there isn't a lot of money.

The flip side of your argument is that State Street funds their lending activities at very low rates; their spread is somewhat lower, but their cost of funds is about $0.

There is a monetarist argument that ultra-low interest rates are counterproductive, because the spread is so low that banks would rather just park the money in treasuries at 0 risk. This theory has never been tested empirically that I know of, because rates have never been this low for this long. But it makes intuitive sense, which is why - and I hate to admit this - I'm with Riversider on this: I think too much QE is counterproductive, and it may even be dangerous by spurring asset bubbles. And I think with treasuries so low in yield (high in price), and gold and stocks going up at the same time tends to support that view.

Fiscal stimulus is more expensive, but it can be more targeted and more effective, as well. Monetary policy is a rather blunt instrument for micromanaging the economy.

I work for a large financial services company. Copensation will be down 10-15%. And yes, trading volumes are down too. I am amazed that some of my couterprts in business think their comp will be up on a 10-20% decline is revenue. If the the tread was begun with the view to determine whether wall street comp will be helpful to real estate prices, then the answer is a `no`. People will make less, job outlook sucks and despite some $12m earners (of whom there are very few), there will be less money to spend on the real estate, especialllly at the high end.

In my opinion, units that would go for north of 3,000K will become orphans. Nobody will want to tie up funds in such a place nor pay the high carrying costs. What you say has truth. I believe it will promote more conservatism in real estate(that is buying what you need, not what you want)

jrazz, completely agree. me thinks the nyc re diehards have been trained to hope for that $12MM bonus banker to save their silly azzes in the SPRING 2011 season..... hahahahhhahhahaaaaaaaaaaa....... I'm gonna peeeee, it's like a kid on a wait list to Harvard, telling ppl they plan on going to Harvard! better deposit that city college spot.

Riversider, what will happen when the $3MM+ units are priced like your studio co-op at the peak bubble? Ya think your studio ain't taking a hit everyday? I gotta peeeeeee.... man I'm running out of peeeeee...

Squeal like a pig for me, squeal!

12 million and 2 million dollar condos react very differently and do not go up or down point for point.

OH riversider, if I was in the market for a $2MM plus unit and could go up to $6MM, and if in the last 3 yrs I found that the $12MM unit has dropped by 50% to $6MM, what would a sane normal not riverside COOP vested ninny expect to pay for the $2MM unit?

Well this non-ninny, would expect the $2MM to have dropped by a like amount, to $1MM.

squeal like a pig for me, squeal!