The bonfire of the bankers has only just begun: 40% of City and Wall Street jobs could go

[dkf]

The bonfire of the bankers has only just begun
The ex-JP Morgan headhunter is delighted to be up for Woman of the Year. But there's trouble ahead – 40% of City and Wall Street jobs could go, she says

Margareta Pagano meets Mary Caroline Tillman
Sunday, 16 October 2011

We meet in a small, unremarkable room at Egon's London office, overlooking Piccadilly. Tillman's manner is warm and friendly as she chats freely about how damaging the financial crash has been to the reputation of bankers, and how they must change their ways. So it's shocking when she casually lets slip that the industry is about to go through a bloodbath far worse than any predictions made so far, and which will lead to thousands and thousands of bankers and traders losing their jobs. According to Tillman, between 30 and 40 per cent of all bankers could be axed over the next 18 to 24 months; most of them from the City and Wall Street.

We know the cut-backs are going to be bad, but Tillman's prognosis is by far the worst I've heard from an insider. "The Masters of the Universe are facing a really tough time," she says. "The shake-out is only just beginning after the crash. There is a big consolidation still to come, which means there will be far fewer banks; a 40 per cent cut in jobs will be the 'new normal'. This is because of the tougher regulatory environment."

She adds that banks are already withdrawing from many activities because of the fall in deal flow as the cost of capital goes up. At the same time, access to capital is getting harder. "There will be takeovers and down-sizing as firms look to move into areas where they can make money. It's ... back to basics; plain vanilla, because the red-clawed banking of the bull market isn't there any more. You can see it already – commercial banks are going to go back to old-fashioned lending."

So her big question is, what will firms such as Morgan Stanley and Goldman Sachs do next? "The deal flow is drying up, there is less of an appetite for risk so they are going to have to look for new income – in areas like wealth management, multi-product lines – and diversify into asset management and more solid areas. It's going to be interesting to watch."

http://www.independent.co.uk/news/business/analysis-and-features/the-bonfire-of-the-bankers-has-only-just-begun-2371191.html

[MrModerate]

1. I'm heartbroken for the poor souls who are going to lose their cushy jobs . . .

*SOLELY* because they wrecked the world's economy.

It's also distressing that "deal flow" in completely insane, unsafe, useless, and destructive "products" has dropped off *SOLELY* because the victims have wised up and won't buy them anymore (or no longer have money to buy anything with).

Oh, the humanity!

[hack89]

11. Think how much tax revenue NY city will lose

don't forget that NY city imposes a City income tax to tap into those Wall Street income - a year from now you will suffer real heart break when schools and social services for the poor are cut.

[louis-t]

13. Or 'lose'.

[hack89]

15. That too. nt

[louis-t]

16. Giggety.

[WinkyDink]

34. Sorry; saving multi-millionaires' jobs is a poor excuse of a threat.

[hack89]

41. It is not a threat, just simple math

there will be less tax revenue for the city - for schools, for public services

[MrModerate]

49. Quite true. But strained budgets in NYC as a result of a wrecked world economy . . .

Needs to be looked at in light of the suffering across the entire globe as a result their imprudence.

Now you and I know that the bosses who authorized and benefited obscenely from these stupid deals will not be punished — the world doesn't work like that — so there's no joy here.

But neither should we shed a tear over the "working stiffs" who are likely going to be laid off and have to forego their million-dollar salaries and yearly Lexus upgrades.

[hack89]

53. Can we shed a tear for the guy who sells or fixes his Lexus?

the waitstaff at his favorite restaurant? His dog groomed? People spending money is how the service economy works - so while these wealthy people are getting their just desserts please don't gloss over the collateral damage to many working stuffs.

[MrModerate]

56. Sadly, the examples you cite are only part of the collateral damage . . .

Being experienced all over the world. With more to come. For years.

[Speck Tater]

12. They still have a plan...

[Bonhomme Richard]

2. "areas like wealth management" Is their only hope....

feeding on themselves? Good luck with that.

[Ikonoklast]

31. They'll all be Bernie Madoffs, stealing from the 1% to maintain their lifestyles.

Love to see them turn on each other, like Money Vampires sucking each other dry.

[FarCenter]

3. The two pillars of the UK economy are financial services and North Sea oil

North Sea oil fields are running dry and the UK is becoming a net importer, rather than an exporter.

The City of London has functioned to collect excess funds from countries running surpluses and lending them to countries running deficits. If the countries in deficit don't pay back their loans, London in going to have its knees broken by the countries that want their money back.

[leftstreet]

4. They can draw unemployment comp like everyone else n/t

[dkf]

5. One wonders who will be left with a job to pay the taxes.

[leftstreet]

6. Military contractors seem to be doing well. They can pay n/t

[dkf]

10. Then they need to overturn the trigger.

[glinda]

7. no jobs + no taxes = NO Government.

[Brigid]

8. Banksters and traders standing in umenployment lines!

We can dream, can't we? :evilgrin:

[hack89]

9. This could be a financial disaster for NY city

they impose a City personal income tax - losing that many high paying jobs has to have a huge revenue impact. Look for more school, police and social service cuts.

[leftstreet]

14. A lot of cities have been devastated by job losses

It's sad

[hack89]

17. But few cities have a city income tax

so they are particularly dependent on high earners.

[girl gone mad]

19. Those high paying jobs drive up the cost of everything..

housing, rent, food, transportation, etc.

This sector needs to be reined in since it's fundamentally parasitic. The dollars that aren't being skimmed off of the top by big finance will remain in the productive sectors.

[hack89]

22. So public employee salaries will go down now?

Think what tax money pays for. Think what happens when there is less tax revenue.

[girl gone mad]

27. NYC should never have become so dependent on Wall Street's coffers.

Solutions will need to be sought. Allowing what should be a small segment of the economy to grow to such outsized proportions was a mistake.

[hack89]

29. So the bankers should keep more of their money?

What do you think "tax the rich" means other than putting your fiscal health on the backs of a very small group of people?

[girl gone mad]

32. Everyone should keep more of their money right now..

but bankers should take a smaller cut of everyone else's money.

I'm for the elimination of the payroll tax, among others. I don't believe we need to raise taxes. Letting people keep more of their own money through federal tax reductions would help cities like NY which are facing these tough budget issues.

If New York City proposes a reasonable budget and still has shortfalls, federal revenue sharing programs could provide relief until the economy recovers.

Out of control finance is what led to this crisis. Wall Street was the engine for the creation of too much private debt. Now we are deleveraging from that debt. Federal spending can help ease us out of the crisis. Starting the debt creation engine back up merely to save NYC salaries would be foolish, not to mention that it would fail.

[JDPriestly]

75. You oppose Social Security, Girl Gone Mad?

You really are mad. Do you have parents? Do you want to share your home with them? Do you want to feed them? How much do you think that will cost you per year?

[FarCenter]

23. What are the productive sectors in New York City?

New York City is a center of consumption, not a center of production.

[HowHasItComeToThis]

25. ..

http://www.ritholtz.com/blog/2011/10/the-greatest-ows-protest-sign-ever/

[FarCenter]

20. For each banker job that goes away, there is one or more lower scale jobs that also go

Basically, people will have to move out of the city as the number of jobs goes down.

[dkf]

30. Good luck to any OWSer in NYC who is looking for a job.

Now they will have to compete with all the MBAs about to be set loose.

[WinkyDink]

35. The "Thank Goodness There Are Millionaires Who Give Jobs to Yacht-Builders" argument.

[JDPriestly]

76. You mean like what happened in Detroit?

Where was your concern when this was happening to the rest of the US?

Why should we feel sorry for New York?

New Yorkers didn't even notice what was going on in small towns and cities across the country. What fools!

[WinkyDink]

38. How many ways can you find to say this? It is a disingenuous argument.

[JDPriestly]

74. Welcome to Main Street, USA. 'Bout time the robber bankers of New York

get a taste of the bitter brew the rest of the country has been drinking for a long time.

Maybe once New Yorkers feel the misery, we can unite as a nation to do something positive about our plight and end the excesses and dishonesty in the financial sector.

[LiberalFighter]

18. Those aren't real jobs.

They just create events that allow speculators to mooch off of the losers.

[avaistheone1]

21. TRUE.

K&R

:kick:

[hack89]

24. But the income tax revenue they provide to the city is real

real money that won't be there for real teachers, real public employees, real libraries, real social services.

[WinkyDink]

37. NONE of whom you list can afford to LIVE in Manhattan. Get real with your sympathy.

[badtoworse]

51. Maybe not Manhattan, but Queens and Brooklyn are part of the City too. - nt

[hack89]

54. How many boroughs does NY city have? nt

[badtoworse]

57. Five

Manhattan, Queens, Brooklyn, Richmond (Staten Island) and the Bronx.

[hack89]

58. I know - rhetorical question. nt

[JDPriestly]

44. That is very New-York-centric.

Cities like LA have already lost of lot of revenue due to loss of taxes on Main Street businesses in areas outside the wealthiest enclaves.

[hack89]

50. If "tax the wealthy" is a real solution to our fiscal problems

you better make sure you have enough wealthy to tax. My only point.

[JDPriestly]

60. If the wealth were more fairly apportioned in our population,

then the taxes could also be apportioned differently. The only reason we need to raise the taxes of the wealthy is because they have a wildly disproportionate amount of the money. They are virtually the only people in a position to pay higher taxes.

The middle class is mostly broke. Most of the highest paid in the middle class can manage to save a tiny bit each month after they support their families and pay all their bills, but they don't really have much discretionary money for things like vacations. Buying a different used car is a huge investment for middle class families.

Paying higher taxes is just out of the question for most Americans.

Wealthy people like Warren Buffet, John McCain or John Kerry and many, many other Americans with similar wealth can afford higher taxes and still live decently. Their lower level employees are already taxed to the max.

[hack89]

64. People like Warren Buffet and John McCain have wealth not necessarily high income

we don't tax wealth.

The Wall Streets jobs that are disappearing are for high income earners - not wealthy people who do not need an regular income to survive. These are people that will no longer be paying income tax.

[JDPriestly]

66. If we raised the tax on capital gains and on money that is inherited,

we would have a more just system.

[hack89]

69. People would simply invest in things that do not produce capital gains.

The wealthy will find that combination of investments that will maximize their net return. Not all of those investments are taxed - municipal bonds come immediately to mind. All you might end up doing is removing capital from the economy and reducing revenue to the treasury.

[JDPriestly]

70. Maybe municipal bonds should be taxed.

Inheritances over a certain amount should be taxed. It is shameful that money passes from one generation to the next, that ownership of things like municipal bonds passes from one generation to the next, without the payment some sort of transfer tax.

[hack89]

71. Which shifts the burden back to taxpayers

as cities have to pay more to borrow money - there were sound fiscal and social reasons to make municipal bonds tax free.

Inheritances are taxed - 35% of any amount over $5 million.

[JDPriestly]

72. Death and taxes -- the two inevitables in life.

Somebody has to pay the taxes. The question is how do you fairly apportion the tax burden. teache

If you place the tax burden on the poor and the lower middle class history teaches that you get dire poverty and eventually revolution.

Those who have discretionary income have to admit to their relative prosperity. acknowledge where it comes from really and step up to the plate. They have to pay much higher taxes.

The alternative is that the unemployed and the low-wage, (often part-time) workers will be unable to pay for really basic things -- like heat, food for their children, even sewer fees -- and the American living standard will drop to that of a poor country like Bangla Desh.

Some years ago, I visited a lovely town in the mountains of Mexico. While on a walk, I noticed an awful stench. I looked down a few feet from my path and saw open sewers. The town I was visiting was, by the way, a resort town. You only found the open sewers if you adventured beyond the tourist enclaves.

Do you think Americans should live like that?

Do you know what the costs to the health of all from that sort of living standard is?

Do you know what causes, for example, cholera? Giardia?

You can only tax the poor and the middle class to a certain extent. Right now, they are paying what they can and still survive. In fact, many of them are without work and the rest cannot pay their debts. Should we just wait until the system breaks down and then bail out our banks again?

Who would pay if the banks failed again? You can only squeeze the middle class and the poor so much.

The rich are paying a lower share of taxes than they have paid in the past -- back when our country was prosperous.

We must find a way to let them know that it's America -- Love it enough to pay high taxes -- or Leave it and live somewhere with open sewers and cholera. Take your pick.

[KamaAina]

26. "This is because of the tougher regulatory environment."

In other words, it's because someone is actually making them play by the rules! Oh, the horror! :nopity:

[wickerwoman]

45. I noticed that too

and thought what "tougher regulatory environment"? Honestly. They're still trading all the crap they did before.

If people are losing jobs, it's because their companies have been engaging in fraud for the better part of a decade and the house of cards is about to collapse under its own weight, not because governments have actually stepped up and regulated them.

[ProSense]

28. Well,

"40% of City and Wall Street jobs could go"

...Banks/Wall Street could save those jobs. Simply pay the overpaid arrogant, greedy, predator fucks less. Instead of giving the 27-year-old a half a million dollars, job sharing could create two jobs paying a quarter of a million dollars. Then the city can go back to hiring teachers and other public servants, and creating jobs that help, not hurt the rest of the economy.

It's hard to believe that people are trying to argue about loss of jobs in the financial sector after the banks devastated the economy, resulting in the loss of more than 8 million jobs.

The crisis and the jobs losses should be a signal that it's time to transition from the kind of activities that brought the economy to the brink.

[JDPriestly]

43. Job-sharing would be the best way to deal with unemployment

across the nation.

But employers may be hesitant to do it because of the cost of benefits like health insurance and company contributions to pension funds which have to be paid in part or whole by the employer for each employee.

I don't know that this would be a problem for the employers with regard to brokers and high-level employees, but job-sharing of the lower-level jobs might be unpopular because of the benefits costs.

[JDPriestly]

77. 40% of Wall Street workers would be available to do productive work.

Maybe some of those gifted mathematicians would become engineers or biologists or real economists. Maybe a few of them would become enlightened and realize that a life of giving, not just taking, can be very rewarding.

I think that it would be great if the brightest and best in our nation switched from shifting imaginary money from one account, from one "investment" or gamble to the next and applied their talents to productive work.

Who knows, the fruits from their efforts might actually trickle down and make us a better America?

This news makes me feel more optimistic than I have felt since the first weeks after Obama's inauguration.

[WinkyDink]

33. I'm sure they all have very significant savings.

[Dawson Leery]

36. What did banks do after Harding/Coolidge and before Reagan?

[JDPriestly]

78. They went broke until the Roosevelt administration imposed reasonable rules

and discipline on them. Obama goofed when he appointed Summers, Geithner and Bernanke. They did not understand the obvious gravity of the situation and failed to take the strong measures that were needed. Too bad. We will all suffer even more than we are because of that overoptimistic appraisal of our economy in 2009-2010.

Google Pecora Investigation or Pecora Report and you will find out. It is too complicated to explain in a post on DU.

[WinkyDink]

39. Interesting defenses of multi-millionaire bankers on this thread.

[flamingdem]

40. happened in 1989

after the mini crash

real estate was slammed in nyc and elsewhere ... not good for recovery

[L0oniX]

42. Fucking bleeding heart Wallstreet casino operators.

[PETRUS]

46. So short-sighted pursuit of power and money

...led the bankers to wreck their own houses. We already knew this. And it shouldn't have come as a surprise.

[inna]

47. expropriate already! hostage-taking parasites have got to go; they overstayed their welcome

and outlived their time in history. afaic.

[Sen. Walter Sobchak]

48. I work in finance and as far as I can tell....

There is a whole lot of people out there doing a whole lot of nothing. Last year we closed a financing deal for the construction of a resort. We and our client were always outnumbered 3:1 if not more and after dealing with these clowns for more than a year I still couldn't tell you what more than half a dozen of them actually did. I nearly lost it one day as we waited for two people who were late before beginning a meeting and demanded the assembled explain what the fuck the two absent women actually did and why their presence was required.

My personal favorite was an "analyst" who as far as I could tell was making six figures to read technology message boards all day from which he would make embarrassingly uninformed predictions.

[badtoworse]

52. Interesting observation

I recently started working for one of the large investment banks as an adviser. I've got 28 years of experience in the electric power business and will help them evaluate potential investments in the power sector. It's not clear to me what value all of the "transaction" people bring to the table.

I find the banking business to be very different than the power business and I'm not sure I like it. They are taking good care of me, so I'll likely stick around for awhile.

[B2G]

55. Yay! Because everyone who works for a bank

is a millionaire!

:sarcasm:

[workinclasszero]

59. For they sow the wind, and they shall reap the whirlwind. Hosea 8:7

Hey former heartless greedy sharks of wall street. Now you get to see and understand and live like the 99% do in this capitalist paradise nightmare.

Cmon down to the closest occupy site. We wont turn you away. Your bellies might be empty but maybe your souls will recover.

[JVS]

61. Fuck em. I didn't see them crying for everyone else.

[Vidar]

62. Excellent, when the rich "masters of the universe" start losing their

parasitical jobs, maybe the assault on social security and unemployment insurance will lose some steam.

[Prometheus Bound]

63. Maybe they can try to get real jobs that help the economy instead of being leaches on the economy.

[BREMPRO]

65. as it should be.. the financial sector is outsized and bloated= no more CDS bonanzas

and derivative manufacturing...we need to shift the focus on business and green industrial production away from short term dealmaking and commodities and currency trading.. ie gambling.. to long term re-establishment of a solid diversified economic base in this country. this is good news.. let those folks actually make something.. instead of stealing the country's wealth.

[Tsiyu]

67. Let's pass out bootstraps all around

Jayzuss, the banks are still making record profits, still paying CEOs profane bonuses, and I should cry them a river?

They caused this mess, they can join in the ranks of the poverty-ridden. But the sad thing is, one bloated CEO's bonus could be used to employ many people. They chose this insane disparity in income dispersal, so they get to reap what the hell they sowed.

To those who whine: "But there go your tax revenues." According to some of the same moaners, we shouldn't expect them to pay little people's taxes. Their contributions won't save us, say these types.

Why bring up tax revenue now? They said higher taxes for banker types would "cost jobs." So nobody raised taxes and they: LOST JOBS ANYWAY.

[JustAnotherGen]

68. So now

More than ever we need the brick and mortar infrastructure projects the President outlined in his jobs action plan. These folks won't be eligible and most likely won't have the skills and qualifications to do those jobs. But of we can put our construction workers back to work - well at least keep the unemployment rate flat.


Is the insiders analysis a threat? Let's assume it is. But we need to have an approach that puts others back to work toute suite so the unemployment rate remains flat. We put cement pourers, pavers, welders, etc etc back to work, they'll keep the people that lose money due to the finance sectors mass layoffs in business.

[RagAss]

73. Turning on the errand boys. I love it !