Wednesday, October 12, 2011

The Poor Traders of Wall Street.

A story:
Did no one but herself notice the poor on the streets of London? she wondered. And again she felt that uncomfortable feeling of isolation as she assumed she was probably the only person in society who did notice. Geoffrey, dear Geoffrey, did have some idea. He had told her that only the other day, the Duke of Devonshire had been visiting a bazaar with his agent and had stopped at a stall displaying wooden napkin rings and the duke had asked his agent what they were for.

"Napkin rings," said the agent. "Middle-class people keep them on the table to put their table napkins in between meals."

Said the astounded duke, "Do you mean that people actually wrap up their napkins and use them again for another meal?"
"Certainly," said the agent.

The duke gasped as he looked at the stall, "Good God!" he exclaimed. "I never knew such poverty existed."

I have read the same story about an English king.

Another story:
Bankers aren’t optimistic about those gains. Options Group’s Karp said he met last month over tea at the Gramercy Park Hotel in New York with a trader who made $500,000 last year at one of the six largest U.S. banks.
The trader, a 27-year-old Ivy League graduate, complained that he has worked harder this year and will be paid less. The headhunter told him to stay put and collect his bonus.
“This is very demoralizing to people,” Karp said. “Especially young guys who have gone to college and wanted to come onto the Street, having dreams of becoming millionaires.”
This (via Eschaton) looks to be a true story and not part of a novel. At least it is reported in a respectable newspaper.

There's much I could write about the article which contained that pearl about How To Become Demoralized, including sharp commentary on this:
That isn’t diminishing lobbying efforts to soften rules mandated by the Dodd-Frank Act, which would reduce risk, curtail proprietary trading and force more transparency in the $601 trillion derivatives market. Large financial institutions have been “exceedingly aggressive at trying to roll back reform” and have largely succeeded, said Greenlight Capital Inc. President David Einhorn, 42, who bet against Lehman Brothers Holdings Inc. in the months before that firm’s collapse.
But I'm going to restrain myself to just stating that if these efforts have been largely successful then we little people are f***ed.

It's all pretty startling, to realize how blind people are how they come across to us, the little people, how insular these high-fliers truly are and how unaware they seem to be of the rest of the world. Just one final example, suitable for a feminist blog:
Uncertainty didn’t stop some on Wall Street from profiting during the U.S. housing collapse, when Deutsche Bank AG trader Greg Lippmann helped create and profited from a multibillion- dollar market in subprime-based derivatives. He said Wall Street will have fewer exotic products to sell and trade, drawing an analogy to the popular no-reservations restaurant Torrisi Italian Specialties.
“No choosing, great food, low price, no pizzazz,” said Lippmann, co-founder of New York hedge fund LibreMax Capital LLC. “A couple of years ago, the hottest place to go would be someplace that they just spent $5 million decorating and they’ve got three or four models answering the phones. People want stripped-down now.”