We had a chance to parse state Comptroller Thomas DiNapoli’s report (PDF) on Wall Street’s 2007 performance. Contrary to some earlier media coverage, the report looks mild in its pessimism, preferring a sort of not-too-hot-not-too-cold assessment of the Street’s performance and its chances for a prosperous new year. (A release summarizing the report can be read here.)
The report concludes that although the 2007 bonus pool will be smaller than last year’s record level, the decline may be modest given the strong performance of the large securities firms during the first half of the year and because bonuses tend to decline at a slower rate than profits. Some firms and some employees, such as those working in mortgage related areas, will experience large declines, while others, such as those working in investment banking, may receive even larger bonuses than last year. The outcome will ultimately depend on performance during the fourth quarter.
We’re still in the fourth quarter, of course, so sit tight, and know that things will likely not get all that bad.