Good Evening Bitter Renters: I Hvae Some More Bad News for You

Hey Genius......keep fooling yourself that increasing the base pay of the few gansters left on the street will save manhattaqn RE.

Alpine -- If you're not careful, I'll suggest we start to ignore you like SteveF :)

Of course the banks are going to increase base pay -- if that is a good or a bad thing is open to debate -- but certainly the base salaries on the street have remained stagnant for the last 5 years -- Associate 120k, VP 140k, MD 175k -- so increasing base salaries looks to me as a long overdue measure.

now, will that have any effect on NYC real estate -- not so sure on that.

Or instead of raising base salaries, you could LOWER them and tell everyone that if they don't like it, there are plenty of unemployed people who will take their jobs in a second. That's what I would do if I was a CEO. Why should I RAISE salaries when there is chronic unemployment?

Don't even get me started...on you Wall Street master geniuses...
I think all your names should be printed on the front page of the New York Times, then
LET THE NEW AMERICAN REVOLUTION BEGIN.....OFF WITH THEIR HEADS!!!

Wow - populist rage finds its way onto another board dedicated to a completely unrelated topic. I work for a bank, but am not a "Wall Street Genius" or whatever other moniker du jour you clowns come up with. I build technology systems, and have done the same for state governments, accountancy firms, and various other industries. Am I to be sacrificed to the Gods of fairness and equality? Sure, why not, collateral damage...

Just remember that 99% of the people working at these firms had NOTHING to do with the decisions that sank them and dinged the economy. I am as mad as anyone at the dolts at AIG, but realize that 99% of them had nothing to do with these issues either - most try to earn an honest living and work in profit centers.

So sure, jump on the bandwagon and bash "Wall Street", but the people that created this mess, and those that are profiting from it as we blog, neither live nor work anywhere near Wall Street. It's like invading Iraq to wipe terrorism off the global map - right fight, wrong target.

A handful of people made really bad bets - those people and those that oversaw them have overwhelmingly been released. Anyone left is trying to pick up the pieces and move on. Give them a chance to do that.

yea Im sure all the new bank holding companies, who got access to TARP funds, are in perfect financial shape to raise everyone's salary, regardless of what type of performance they may provide in this new world.

Hey, UD. I sold my TBT last week after Ben mad his announcement...wound up losing just a little. However, my OIH, GDX and BHI went through the roof, so I sold them. I also sold positions I had in UYG, WFC and C. I still held onto my FAS and BAC (Yes, after originally buying at 27, riding it down to 9 I bought back in at 5...I am a glutton for punishment I guess).
I still have all of my long positions that I bought way back, accept for FCX which I sold for a profit. Other than that, I am down 40% in my long positions...so much for market timing.
Anyway, I think gold is getting ready to pop. Starting about a month ago I stopped with adding to long positions and have been looking more short-term, so far it is working. What's up with you.

OTNYC
Did not mean you in my comment, sorry.
I get tired of hearing about "brokers" from the clowns who has even a tiny bit to do with the collapse of our economy and the mortgage market.
I know what you say is true. My brother was a computer guy from a bank.
In my work I used to work with the Investment Bankers.....I do know what a greedy bunch they are.
(for the most part...there were one or two exceptions.)

" I build technology systems, and have done the same for state governments, accountancy firms, and various other industries. Am I to be sacrificed to the Gods of fairness and equality? Sure, why not, collateral damage..."

Dude, you build "technology systems." Why on earth should you get a million dollar bonus? If you don't, you aren't a target for the populist rage (which is bigger than a lot here realize; that's they Congress is moving on these kneejerk bills - they're afraid for THEIR jobs).

"A handful of people made really bad bets - those people and those that oversaw them have overwhelmingly been released. "

I'd love to see an analysis of this. Only a few people were speculating with these securities that blew up, playing with derivatives? Since those were the ways to make money, big money really quickly, I wonder if it's only a "handful" that were involved. Let's say I'll skeptical that this was the case unless I see evidence otherwise.

Besides, GM workers, ALL of them, will suffer for the management's stupidity over the years. They never got a single million dollar bonus (hell, they are castigated for having too many benefits like health care!). When a company is sinking and wrecked, why should ANY employee figure they can make out with those incredible payouts?

Wall Street is like a bunch of spoiled kids whose family fortunes went south, and can't understand why they can't have that new horse anymore.

Alpine, why are you becoming the new steveF & spunky?

My guess is companies won't increase base pay. Commissions are not included in the cap. For those who are rainmakers (and value destroyers too - just as we're seeing today), they'll go to a commission stucture. Frankly, that's kind of what the bonus stucture is. If you bring in $550M to a company 10% in commissions to you is equal to...lot's of money. If you lose money, then you get paid $0.

For folks in operations, bonuses will remain. They never made the big bonus $$ anyway.

Thoughts?

"Brokerage" -- very courageous of you to anonymously call for identification and acts of violence against Wall Street employees -- especially considering your moniker.

i am a bitter renter - waaah - i wish I had bought a condo at $1200 psf last year, when I know I can get it for half that in a couple of years from now
i'm also bitter that I have the flexibility to move to a different city should NY jobs get further impacted

i am soooo bitter and sad .. waaah

He is right but in a different way.
All these 'fatcats' lost their arms already (DOW halfed) now this 90% tax cuts them their leggs of.
I feel sorry for them but I am an ALL CASH BUYER in 2010/11

Please, the 90% tax is not worth the paper it is written on. They will just raise their base salaries to avoid the tax. Anyone wo thinks it is going to have a menaingful impact on the RE market is delusional.

Base salaries may rise somewhat but they will not come close to replacing bonuses because the companies cannot afford to turn bonuses into certain expenses.

What a second...this is your best? You're framing bad news for finance as not as bad for real estate as real estate bears might hope. Is this what real estate bulls are reduced to? Do you not see how ridiculous a premise this thread is? Do you think all the $500k-$1mm bankers from 2004-2007 are now going to get $500k-$1mm bonuses? Finance employment, pay and real estate lending are on their knees.

Honestly you are the biggest dope I have ever read on this board. Yes banks on the verge on bankruptcy are going to ha ha ha laugh there way around this by locking in gigantic base salaries for their employees. Why do you think this comp structure exists in the first place? In a time of max uncertainty banks are going to triple their base compensation scheme? Seriously, dude, are you on medication? I want some of what you're on.

Rhino86, pull the trigger. I clicked on this post just so I could hit ignore on alpine and the "Bitter Renter" series. What an annoying twerp.

Click.

alpine, i believe the bill taxes total comp, not just bonuses.

This may be just the beginning...

Drudge: Obama will call for increased oversight of 'executive pay at all banks, Wall Street firms and possibly other companies' as part of sweeping plan to 'overhaul financial regulation', NY TIMES reporting Sunday, newsroom sources tell DRUDGE... Developing...

Alpine - you're seriously overstretching here.

Regardless of whether this law passes, as a result of Thain/AIG's idiocy there will be no political will to support Wall Street for quite some time - think years. This will manifest itself in all sorts of new laws and regulations, tax and otherwise. Setting aside the fact that permissible leverage levels will be much lower for the rest of our lifetimes, there will be tightening restrictions/reforms and tax laws that will keep a lid (relatively speaking) on effective Wall Street take-home pay for some time.

On top of that, fees for investment banking services will drop. Based on the decline in deal volume and the oversupply of bankers and myriad new boutiques, I think there will be ample pressure on fees over the next few years as well.

I heard banks are offering $500k base salaries to everyone who has made $500k in total comp annually in the last three years in order to hold Manhattan real estate right here at 75c on the peak dollar.

OTNYC,

Your attitude is symptomatic of the sense of entitlement that pervades Wall Street. You believe that if another part of your firm blows up, it's not your problem: you should still get 50% of what you bring in, or whatever you normally deserve. Never mind the special role the bank plays in your ability to put on risk that enables your high pay, and never mind the role the government plays in socializing your bank's losses that enable it to put on risk. You didn't have anything to do with it in your little corner of the bank, so you should continue to be paid very handsomely. Even if your bank is effectively bankrupt, saved only by the fact that the government cannot let you default because of the ensuing economic Armageddon, you still deserve to be paid more than $250K as a non-high-level employee because it has nothing to do with you. You can't bite your lip, say "So what, I'll take home my piddling $250K, but I'll get to play again in a year or two once we've come out of effective bankruptcy through the good graces of the American taxpayer who has subsidized my pay all these years by allowing my institution to take these assymetric risks.". No, it has nothing to do with you because you did your job.

I obviously don't know you, and that characterization of "you" is probably overly harsh, and I understand that having money that was paid that you were counting on get swiped out of your hands is unpleasant and seems unfair. However, you should take some time to understand the comp backlash and how you are part of it: money is being taken out of the taxpayers hands, money which was not added to when times were good, and is being used to pay employees more than $250K. I know that doesn't seem like a ridiculously large amount of money to you, but I suggest you get on the V train to Queens, take a look around at the people living their life on a healthy $50K a year, and show some humility and appreciation for you continuing to be paid $250K a year from a bankrupt company being propped up by them.

Do note, I work in finance; imagine how non-finance people feel. There will be plenty of cases of unfairness (e.g., if you work for GS who never wanted the money, has been wanting to pay it back, but may fall under the law even if it pays it back tomorrow), but if you work for some shop who had people with huge bad bet who have been "released", take a step back to understand what the outrage is about and how you fit in.

No

Don't count out how resourceful and innovative the markets and its players can be. Many people were saying similar things after the dot com bust, which, while much less severe than this crisis, still impacted the economy in a significant fashion and spawned regulation likes Sarbanes-Oxley. When the housing market ultimately bottoms out, credit starts flowing and the economy eventually begins to recover, even though it may be a ways off, people will be eager to make money and financial innovation and the related cash flow will return. Government, regulators, businesses, investors and the general population will all be convinced that the ills have been addressed and we'll be on our way back to euphoria.

Grunty no salesperson brings in $550mm...and what traders bring in, they risk firm capital to bring in...and when they lose firm capital, there is no way to take back what they've earned in prior years... That's the problem.

Wow, is it just me, or is it now PAINFULLY clear - from threads like this one "bitter renters" and the one on "looser renters" that we have officially moved to a time of bubble buyers and brokers being the bitter ones?

This whole post premise is absurd. Alpine is poking fun that something bearish for real estate really isn't THAT bearish. Now that's debating from a position of strength. Its also a position of insanity to think banks can afford to make people whole on their bonuses through their base salaries. We're down 25% since Lehman Brothers... finance will likely never be the same... banks are much tougher lenders. 1990s buyers are happy and it seems like they'll be ok.....2001-2002 buyers are somewhat secure....and the rest are full of shit.

Well, this is the new MO of those proven (painfully) wrong.

After months and months of "market won't decline, you are an idiot" it became "ok, market will decline, just not that much, you are an idiot"

Then came the 20% decline data, and now the co-op 28% decline data.

So, what do these folks have left to save face?

"oh yeah, but it didn't decline 99%, you are an idiot".

This is for the most part classic strawman, with extra stupidity thrown in.

Folks who denied the decline are now smacked in the face with it, so they're trying anything they can to save face. Most have just gotten bitter. Many have gotten bitter and tried to focus on outrageous (and often fake) predictions so they can be "right" relative to someone else.

Pretty pathetic in my book.

These are the folks who

inonada - Excellent post. Everyone should go and read it. It's spot on!!

To add some color on the "brain drain" theory, I have this to offer:

I’m a CPA and MBA from Columbia Business School with extensive derivatives experience who would gladly (and could effectively) do the job of any of those individuals at any bank or AIG for a fraction of their compensation.

And by the way - I’m not alone. There are literally thousands of highly qualified, employed and unemployed individuals who would happily line up to do those jobs for reasonable compensation.

The argument of a “brain drain” has no merit whatsoever. Having once been a part of the “bonus fraternity” at Goldman Sachs, Bear Stearns, and a hedge fund, I can tell you first hand that while there are a few very smart individuals carrying the weight of the team, the majority are unremarkable at best. It’s more about nepotism and politics than anything else.

The government - as owners of AIG and other institutions - should post help wanted ads with minimum requirements, and watch as a flood of highly qualified resumes comes pouring in. Mine will be one of them!

Wall Street has long been the home of overpaid middle managers. There are absolutely some smart folk, but its more the place where not making waves moves you up. I've seen lots of folks who were essentially too good leave.

And, once they started hiring at 3rd/4th tier schools (I saw bulge bracket bankers from SUNY Albany and Fordham MBA), the "we have the best people" claims became a lot harder to make.