Greed is still good, and lunch is still for wimps, but technological and social change have toned down Wall Street's macho posturing
"What's your number?" The question hangs in the air as Wall Street's finest wait for this year's bonus cheques to clear. It means: how many millions do you want in your bank account before you walk away? $10m, $50m, $100m?
"When things get slow or it's close to bonus time, someone will say 'What's your number?' What would it take for you to retire?" says former Deutsche Bank trader Andrew Lewin. "You hear all kinds of figures. I heard $1bn once."
Credit crunch postmortems may blame Wall Street's turbocharged pay culture for fanning the flames of risk, but the annual mega-payouts are still the axis "the street" turns on.
This month Goldman Sachs, JP Morgan and Morgan Stanley announced bonus pots of $16bn, $15.3bn and $10bn respectively, pointing to average payouts of between $233,000 and $430,000 per employee. The extent of the 2010 bonanza will become clearer next month with the publication of data from New York's tax department. Despite calls for restraint in 2009, payouts jumped 17% to $20.3bn, with the average taxable bonus $123,850.
Lewin worked as a trader of CDOs (collateralised debt obligations, the toxic financial instruments at the heart of the crisis) on the now-infamous desk run by Greg Lippmann, whose bet against the housing bubble raked in almost $2bn for Deutsche Bank in 2007. Lewin, who now runs a company offering "financial crisis" tours of Wall Street, says if you pitch too low a number, colleagues might scent failure: Lippmann extracted a higher bonus after complaining that the bank's initial offer of $50m was too low.
But how many hours do you have to put in to bag a bonus cheque with, worst-case scenario, six zeros? Lewin says he routinely worked from 7am to 11pm: "We ate breakfast, lunch and dinner at our desks. I saw guys a few years out of college taking ulcer pills. It's not like that everywhere; it depends on who is leading the desk. Our desk worked a lot of hours."
The Wall Street films present New York's financial hub as a sexy and dangerous men's club, and gave us pop culture's most famous banker in Gordon Gekko. When he got out of prison in Wall Street: Money Never Sleeps last year, nothing much had changed bar the fashion ? his hair is unslicked and some of the "suits" have been replaced by baseball caps and chinos. But even Gekko appeared taken aback by casino capitalism: "I once said greed is good ... now it appears to be legal."
Gekko also coined "lunch is for wimps" but it would seem working on Wall Street requires more than the ability to skip meals. Thomas Belesis, chief executive of New York brokerage John Thomas Financial, says only 20% of those who join its training programme are offered jobs at the end.
One of the most important skills, he says, is using the phone. This sounds strange until he adds that he has three: two BlackBerrys (US and global) plus a personal mobile he likes to call the "batphone". "Phones are a big part of our everyday lives: we need to know if someone can handle making between 500 and 700 calls a day. A big part of the job is prospecting."
Belesis, who helped the film-makers create the fictional Wall Street, appears to regard the relaxing of the dress code as one of the causes of the crisis, and enforces strict rules at his firm. "Like the New York Yankees, we have a no-facial-hair policy," he says. "A manicurist comes into the office, as does a shoeshine person, to make sure everyone's shoes are spit shiny." Belesis's own custom-made Italian leather shoes are twinkling away under the strong office lights.
Tales of macho posturing on the trading floor are the stuff of legend. At Deutsche Bank Lippmann is said to have passed out T-shirts emblazoned with "I am short your house", and to have crunched cups of ice at his desk because he was a "trading machine that might overheat".
Belesis, who says he has seen people drink Tabasco sauce to win a bet, adds: "There are two types of people: those who fold under pressure and those who focus. The people who can't handle stress won't be here for long."
Others, however, say technological and social progress has chipped away at Wall Street's macho image. Laurie Berke, senior consultant at Tabb Group, a capital markets advisory and research firm, says: "There was a time when Wall Street was very clubby and male-dominated, but our culture and laws have changed that. When I started my career in the early 1980s there were no women on the trading floor. They were all in sales, marketing and back-office roles, but that has changed now."
Berke, who had a successful 25-year career as a trader, says computerised trading tools have transformed the job, but success is still down to individual talent and personality. The attraction for driven individuals is that you can still be "measured every day on your ability to be of value to your employer".
But she adds: "The old adage still stands. You're only ever as good as your last trade, and if you stay away from your seat too long, someone else will be sitting in it when you come back."
Source: http://www.guardian.co.uk/business/2011/jan/30/wall-street-culture
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