Monday was the last day of Iris Chau’s 11-year career at JPMorgan Chase and she says there’s a lot she’ll miss about the job, including her colleagues, her paycheck and her role managing a technical support team. But one thing she won’t miss about JPMorgan : telling people that she works there.
“For a long time, it was kind of glamorous and I had friends who’d ask me ‘Can you get me a job there?’ ” says Ms. Chau, 35, who was part of a recent round of layoffs at the firm’s Manhattan headquarters. A few weeks ago, she mentioned her work to a photographer she’d met through a friend. “And he looks at me and says, ‘Oh, you’re one of them.’ ”
Nobody in the investment banking world is expecting pity, or even a sympathetic ear, these days. But while the rest of the country fumes over the billions spent on government bailouts and year-end bonuses, the financial industry is focused on its new role as national pariah and its own lengthy list of anxieties.
There are the endless round of corporate implosions to sweat. There is the widespread sense of being unfairly singled out for vilification in a crisis that a host of players helped create — among them homeowners, who were only too happy to feast on the bounty that Wall Street helped cater in the flush years.
On top of all that, there is a lot of wincing about the profession’s catastrophic loss of cultural cachet. Wall Street has become a target of populist rage, raw material for talk-show tirades, the occasional street protest and a lot of punch lines.
A recent political cartoon in The Record, a newspaper in Hackensack, N.J., shows rats fleeing a sinking ship, labeled “Wall Street,” with treasure chests held aloft tagged “CEO” and “Bonus.” There are “I Hate Investment Banking” T-shirts for sale online. Last week on “The Daily Show,” Jon Stewart rolled a clip of John A. Thain, Merrill Lynch’s chief executive, defending bonuses as a way to keep “your best people.”
“You don’t have ‘best people’!” Mr. Stewart shouted. “You lost $27 billion! Do you live in Bizarro World?”
All of this has taken a toll on the few industry veterans willing to discuss the subject.
“I’d almost rather say I’m a pornographer,” said a retired Wall Street executive who, for self-evident reasons, asked not to be identified. “At least that’s a business that people understand.”
Financiers tell their not-for-attribution account of the mortgage crisis like this: Americans undersaved and overspent for decades, relying on rising property values to bankroll their lifestyles. But nobody on Wall Street forced United States homeowners to take out loans on houses they couldn’t afford, or refinance mortgages to spend money on cars they shouldn’t have bought.
The esoteric securities underneath the current mess are, to the people who invented and marketed them, analogous to pharmaceutical drugs. Used correctly, they can enhance your life. Abused, they are lethal.
Of course, mistakes were made on Wall Street, says Emanuel Pleitez, a 26-year-old former Goldman Sachs employee who resigned from his job a few months ago to run for Congress in his hometown, Los Angeles. But to a great extent, he says, those mistakes were born of misplaced trust.
“Look, you can talk about collateralized debt obligations all day long,” he said, referring to a type of asset-backed security that has turned famously toxic. “But there were ratings agencies that were supposed to tell us how risky these securities were. We essentially closed our eyes and said, ‘O.K., you say this is rated triple-A, fine, I believe you.’ ” In hindsight, he said, “Everyone should have been more skeptical.”
You hear a lot about the failure of regulators, too. But it’s difficult to find anyone in the financial trenches who thinks the problem is Wall Street itself. Difficult, but not impossible.
“People say ‘Well, the Fed is to blame because there was all this loose money,’ ” said Luis E. Rinaldini, a former partner at the investment banking firm Lazard Frères, now at the merchant bank Groton Partners. “But guys who run banks are paid to be cautious when there’s loose money around.”
“I mean, if you had a bus driver who went 100 miles an hour on an icy road, you’d think he was crazy,” he adds. “But if his boss said, ‘It’s our policy to drive faster as the roads get icier,’ you wouldn’t be surprised if the boss ended up in jail.”
By historical standards, this is not Wall Street’s worst bout of infamy, though it might come pretty close. Last week, President Obama branded Wall Street bankers “shameful” for giving themselves nearly $20 billion in bonuses, even though the average bonus, $112,000, was down by 36.7 percent from the prior year.
That criticism isn’t quite the buggy whippings that Franklin Delano Roosevelt routinely gave “unscrupulous money changers.” And the recent rallies in front of the New York Stock Exchange — with chants of “You bought it, you broke it” — are downright peaceful compared to the 1920 bombing of J.P. Morgan’s offices, which killed more than 30 people.
Still, if your business card bears the name of an investment bank — or did before you were laid off — odds are good you’ve endured some very awkward moments of late. Stephen Chen, a former vice president in equity research at Bear Stearns, heard a lot of sarcastic comments when he went home to the Bronx for Christmas, where his family of 36 gather each year. When the story of another bank closing was broadcast on a TV, a cousin muttered, “Good riddance.”
“A lot of my family are small-businessmen who own restaurants and Laundromats,” Mr. Chen said. “They just see Wall Street as overpaid and they don’t have a very clear idea of what it does. I try to explain that there’s this intimate connection between Main Street and Wall Street, that banks were created to provide liquidity for small businesses, so they can expand.” His relatives listen, but seem unconvinced, Mr. Chen said. “It’s kind of tiring having the same conversation over and over again.”
The irony is that despite public perceptions, the outcry over Wall Street greed is happening just as the firms are getting stingy. At JPMorgan, Ms. Chau said, management clamped down on office supplies to the point where employees now need to ask a secretary for the key to the supply room for pens.
At the San Francisco branch of Goldman Sachs, the days of free soy milk and Diet Cokes are over, and one day, the water cooler was wheeled right out of the office. “Word went around pretty quickly,” says Mr. Pleitez. “Bring your own water.”
And for all the talk about taxpayer-financed bonuses, a lot of junior and midlevel executives have been told that they shouldn’t expect anything but their salaries this year. In a business where your bonus is often five times your base pay, that’s devastating news. And we’re talking about a line of work in which virtually all satisfaction is paycheck-dependent.
“Fact is that this is a terrible way to make a living — except for the money,” Ken Miller, a former vice chairman at Credit Suisse First Boston and now a private investor, said. “The lifestyle is terrible — the hours, the sucking up. These guys must feel like they’re the victims of a capricious god.”
That’s especially galling to the many in investment banks who had nothing to do with the mortgage end of their company’s business. Maria Anguiano, who works in Barclays’ municipal finance department, has yet to hear if she is getting a bonus this year, but she thinks she deserves one, given the millions her department earned.
“If you just take your base home, the question becomes, why not just work at a nonprofit from 8 to 4 instead of a bank where you’re expected to work weekends and every night till 10 or 11?” she said.
Ms. Anguiano isn’t the only one asking that question. As money and prestige drain out of Wall Street, and as layoffs mount, other careers are starting to seem more appealing. Mr. Chen has helped start a retail company, GreenSoul Shoes, that sells sandals made by Cambodian villagers out of discarded rubber tires. He calls it a for-profit business with a social mission. Ms. Chau, a friend, is going to be joining him soon.
To some longtimers in the industry, this reordering of priorities is overdue. Robert J. Birnbaum, the former president of the New York Stock Exchange, sees an upside to Wall Street’s diminished reputation.
“It’s taken a hit, but so what?” he said. “We don’t need all the bright people going to Wall Street, chasing money. There’s a lot of things bright people can do. Like find a cure for cancer.”