So, is the Wall Street party back on? The world seems to be a bit conflicted on this issue. A recent headline in the New York Times read "Wallets Out, Wall St. Dares to Indulge." It was full of anecdotes about how the good times are back--replete with over-the-top parties and increased activity at art houses. "When it comes to personal indulgences, there are signs that the wallets are beginning to open up," notes the Times.
A recent headline in the Wall Street Journal, however, suggests there is actually some restraint still being shown: "This is Belt-Tightening on Wall Street: Brown Bag Lunch on the Private Jet." The article notes that more Wall Streeters are flying commercial flights to expensive vacation spots, spending less on Bentleys and other big-ticket items, and taking fewer chartered yachts.
It's hard to spill many tears over this sort of belt-tightening. Why it almost makes one pine for pre-Bush era tax rates on the those making more than $1 million a year. But media snapshots are always easy to misunderstand.
The people who are spending like it is 2007 are those that fared well in the bonus season, a hit-or-miss proposition this year depending on your particular circumstances.
Certain hedge fund employees no doubt fared well, as did some M&A guys. In general, it was a tough year for traders. As for specific firms, the pool will likely end up flat or down at most of the premier Wall Street firms, like Goldman Sachs and Morgan Stanley. At the latter, the company has gone out of its way, via the media, to let employees understand that bonuses will come down.
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