Wall St. Bonuses: So Much Money, Too Few Ferraris

[Herman Munster]

http://www.nytimes.com/2006/12/25/business/25bonus.html?hp&ex=1167022800&en=82faaae0ce5765bb&ei=5094&partner=homepage

In recent weeks, immense riches have been rained upon the top bankers and traders. After a year of record profits, investment houses like Goldman Sachs, Lehman Brothers and Morgan Stanley are awarding bonuses as high as $60 million. And a select group of hedge fund managers and private equity executives may be taking home even more. That is serious money. And the serious luxury goods markets are feeling the impact.

Miller Motorcars, in Greenwich, Conn., is fielding more requests for the $250,000 Ferrari 599 GTB Fiorano than it can possibly fill. One real estate broker laments a dearth of listings for two clients trying to spend $20 million on Manhattan properties. Financiers already comfortably settled in multimillion-dollar apartments and town houses are buying $5 million apartments for their children. Vacation homes, usually bought and sold in the spring, are now hot this winter, including ones in private resorts like the Yellowstone Club in Montana near Yellowstone National Park.

“Last year, everybody bought Ducatis,” said one investment banker, referring to the Italian motorcycle. “This year it’s vacations. I’m on my way to St. Barts,” he said, en route to the airport. Like most bankers, he spoke on the condition that he not be identified, because he was not authorized to talk to a reporter by his company. The 2006 bonus gold rush has re-energized some luxury markets. The Manhattan real estate market, for example, had softened; sales of apartments fell 17 percent in the third quarter this year compared with a year ago, according to the Corcoran Group.

Then came bonus day. Last week, Michele Kleier, president of Gumley Haft Kleier, received a call from a hedge fund manager in his late 30s. He had spent $6 million on an apartment two years ago and, with his bonus, wanted to upgrade. His new price range? “Not more than $20 million.” Ed Petrie, a broker at Sotheby’s in East Hampton, N.Y., is now fielding two bids for $8 million to $10 million properties in exclusive Georgica Pond — properties that have been on the market since the spring. “The fall was relatively slow and then suddenly, with news on bonuses, there has been quite a bit of activity,” he said.

[The Backlash Cometh]

1. Why are we spending even one dollar in this pyramid group?

One hundred years from now, people will look back at as and wonder if the fact that we continued to invest money into Wall Street, was an indication that America had managed to institutionalize stupid.

Well, maybe they'll just use it as evidence that our culture was gullible enough to walk into the Iraq War.

[mahatmakanejeeves]

2. "Last year, everybody bought Ducatis,"

said one investment banker, referring to the Italian motorcycle.
*****

Next year they'll be going for ten cents on the dollar, after they're no longer the current manifestation of conspicuous consumption.

I remember reading in the WaPo about a fellow who was a dotcom millionaire at AOL by the age of twenty-five. He bought a Ducati and promptly wrecked it. Then he bought another but had second thoughts about actually driving it.

[shireen]

3. it's horribly obscene to hear that kind of talk

there are homeless on the streets, millions without health insurance, so many people going to bed hungry ... these people make me sick.

[The Backlash Cometh]

5. You know what will change everything?

If we analyze the long-term effects of these bonuses. LONG-TERM, imagine the concept. Just how well do these companies do over the long-term to benefit the average investor, compared to how much they shell out for short-term positive results, if they're positive at all?

Then let's compare it to how successful the Great Society was at improving American lives. Which one, do you suppose, was a better way of helping Americans move up the ladder with the least amount of stress?

[NashVegas]

6. No Kidding

Johnson gets savaged for so many reasons, and some of them are justified. Trying to help lift people out of poverty sure isn't.

[proud2BlibKansan]

Me too

They are selfish fools.

[nadinbrzezinski]

4. JP Morgan is quietly nodding

the robber barons ARE BACK!

[goddess40]

7. Almost twice the Dept. of Education's budget

I read that some where, if I find it I'll note the source.

[TahitiNut]

8. Funny how they don't invest it - and buy goods made by foreign workers.

Sure do love that 'patriotic' spirit and sense of scrifice. :puke: