Yes, that was an actual sentence spoken — or more specifically “groused” — by an anonymous Wall Street executive concerned for his “personal safety,” though not enough to be dissuaded from attending or talking to a reporter at yesterday’s Wall Street Journal ‘Future Of Finance’ Conference, where the future sounded like it had gone back in time and purchased a hundred billion dollars worth of extra credit protection, which is to say suspiciously like Finance Past.
It looks like Wall Street, no doubt emboldened by the recent 20% runup in the S&P 500, the fourteen bucks in matching leverage the government is offering them for every dollar they invest in toxic/”legacy” assets and the prospect of better-than-awful numbers at Citigroup and Credit Suisse, got its hubris back along with its proverbial groove. In the six months since it nearly triggered global financial Armageddon, the investment banking community has seemed, if not quite chastened, at least somewhat subdued amidst the nation’s ever-heightening awareness that their industry engineered the ever-intensifying economic morass. But not anymore!
This morning the New York Times ran as an op-ed the resignation letter of one Jake DeSantis, a securities trader and executive vice president at AIG’s infamous financial products division and recipient of one of those million dollar bonuses ($742,006.40 after taxes.) That’s right: he’s keeping it. And don’t ask him if he feels guilty about it because he will tell you: NO.
I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.’s or the federal government’s budget.
In other words, Jake DeSantis is proud of his work and all his colleagues who earned their bonuses fair and square despite a “dysfunctional environment” and incessant calls from head hunters — which is why he absolutely cannot run the risk that his bonus might just line the pocket of another Jake DeSantis.
The same sort of nonsensical non-logic runs throughout the profile of Tim Geithner in this week’s New York magazine, in which banker after banker anonymously pillories the Obama economic team for abuses ranging from not answering the phone to requesting confidence and patience to changing course occasionally to “smoking crack.” Of Geithner himself, whose very nomination for the post Obama considered to be a rather robust offer of an olive branch to the Street, a “name-brand Democratic banker” explains: “They don’t get it. Geithner was a $500,000-a-year guy. He was the regulator. People knew him, liked him fine, but he was never a member of the club.”
A Geithner ally in Washington elaborates:
A lot of the pushback he’s getting from Wall Street is about their lack of self-awareness about how the world has changed…They feel marginalized and put-upon by the administration’s rhetoric about the greedy bankers…They see their taxes going up and their compensation going down. And what they don’t do is go to the New York Times and say, ‘My feelings are hurt. I don’t like what the new president is saying about our character and our competence.’ What they say is, ‘These guys are incompetent, we need a real policy, the Treasury secretary has got an unsteady hand–he’s not up to the job.’ They’re thinking one thing and saying something quite different.”
Mercifully for the president, for now, many are preoccupied thinking about how to make serious cash again. As Goldman Sachs president Gary Cohn told yesterday’s assembled at that Future of Finance: “Wall Street is not over. Wall Street is alive and well.”
In other words, Wall Street to Washington: We’re back.