Wall Street was swarming with camera-toting, fanny-pack-sporting tourists last Friday afternoon, but few of them dared venture past the doorman standing sentry outside the pristinely intimidating Hermes boutique on Broad Street.
Inside, a woman from Abu Dhabi, wearing a black abaya accented by a diamond-encrusted, Chanel wristwatch and an oversized, patent-leather bag emblazoned with the interlocking C’s logo, browsed the selection of branded watches while her four young daughters, dressed in matching jeans and pink plaid shirts, jockeyed for a spot on the Hermes rocking horse. She had never been to New York City before, she said, so decided to join her husband on one of his many business trips here to do a little shopping. After visiting just two high-end Midtown department stores, she authoritatively declared the shopping in Manhattan “the best in the world.”
It’s tempting to imbue the scene with symbolism: a wealthy Gulf tourist enjoying a mid-afternoon shopping spree at one of the handful of recently opened luxury boutiques around Wall Street birthed, so to speak, by the boom. With American financial markets in turmoil and more and more investors looking to the Middle-East for capital, lately it seems like international consumers and their cash are the only things keeping the U.S. economy afloat.
The Tiffany’s branch on Wall Street was empty on Friday save for a few window-shoppers; Thomas Pink had one customer who looked like an out-of-towner; and not a single person was perusing the cars on the floor of the BMW dealership. But, to be fair, foot traffic is bound to be light until bonus season this winter.
Despite the grim conclusions one might deduce from media reports on the economy, the mood of the more than dozen Wall Street brokers, investment bankers, and traders we spoke with over the course of two days ran the gamut from upbeat to cautiously optimistic to outright fatalistic. That being said, so many people declined to be interviewed for this story–even without their name or firm mentioned–that it felt as if the entire Financial District was under a collective gag order.
One suited smoker outside 48 Wall Street would not comment, but suggested I “write about how we are sick of talking about it.”
“When the market’s down, our mood is up,” one cheerful broker in a green-striped Oxford shirt and matching polka-dotted tie said outside 14 Wall Street on Monday afternoon.
“Listen, if you’re not diversified, you’re mood sucks right now,” a fellow-trader interrupted. “But fortunately we can make money when the market is up and down.
“It’s only the scared money that’s stressed right now,” he said, referring to small-time investors or “pikers” who lend too much credence to media reports. (A “piker” is an individual investor who will liquidate a position when the market goes down, the brokers explained, and referred me to the film Boiler Room for a complete explanation.)
“You get a lot of panic from investors, but whenever there’s a downturn there’s always a rebound so I’d say the outlook is bullish,” the green-striped broker said. “I bet it rebounds in the first quarter of 2009.”
“No, I say fourth quarter of this year,” his co-worker countered.
“At the absolute earliest,” the other broker said, rolling his eyes slightly.
Another suited man in a fuchsia shirt, matching striped tie, and flashy aviator sunglasses strode up and interrupted their bickering to bum a cigarette. “There’s obviously a lot of tension in the economy,” he said. “If you’re client don’t have money and he’s a piker, he’s not going to take advantage of the blood in the street. A piker takes their money out when things get bad, but what they really should do is buy more.”
So is all the ominous talk is just fear-mongering?
“Look, maybe [floor traders] are making $400,000 this month, not $500,000, but if this was 1970, half the people we see wouldn’t be out here buying stuff,” he said, panning his hand expansively across the crowd in front of 14 Wall.
Bullish forecasts aside, it’s not hard to find signs of a bearish economy.
The outdoor lunch spots lining Stone Street behind the Goldman Sachs headquarters were crowded with banker types at lunch hour on Monday, but were not as packed as in past summers, a regular informed us.
“This is empty compared to what it’s usually like,” a man sitting outside of Brouwers told me. “Usually you can’t get a table,” he said, gesturing to at least a dozen empty tables. “You know, some people are on vacation, but the rest are cutting back.”
Nearby, three wet-behind-the-ears first-year analysts were eating sandwiches on a bench near their new office building. Though they only started two weeks ago, the tension at the firm is palpable, one of them said: “You can definitely feel it. It’s like people are walking on egg shells.”
An even bigger indicator is the number of recent college graduates who had job offers with firms revoked before they even began, he said.
“I feel really lucky,” his colleague said. “One of my friends got a job offer at Bear, and you can guess what happened with that.”
Artist Geoffrey Raymond has chronicled the prevailing pessimism on Wall Street for the past year by inviting the public to sign his portraits of maligned moguls like Rupert Murdoch and fallen corporate titans like former Bear Stearns chief Jimmy Cayne. He usually sells the paintings on eBay, but made an exception for the wife of a former Bear Stearns executive who bought “The Annotated Bear” from him right off the street to console her husband after he was laid off.
On Friday, Mr. Raymond was camped across from the New York Stock Exchange next to his latest painting of Federal Reserve Chairman Ben Bernake, offering passersby sharpies to scrawl messages on the canvas. He characterized the mood on Wall Street lately as “uncertainty tinged with desperation.”
“Overall it feels like things are trending bad,” he said. “If you’re a short seller you may be having a great year, but you’re still not optimistic,” Mr. Raymond said as he handed a marker to a pedestrian.
“Nothing too raunchy and stay off the face,” he warned, “I know it’s tempting, man.”
The man wrote “Good Luck,” next to less-polite messages like “Worse than Greenspan.”
Though no one painted an entirely sunny picture of the U.S. economy, most people said the media had blown the magnitude of the financial crisis way out of proportion.
“It really depends on who you talk to,” a twenty-something banker in jeans, a tucked-in Oxford and Rainbow flip-flops, standing outside 48 Wall Street on Friday, said of the Financial District’s mood. “The exchange guys and traders who work on the floors are not happy lately. In general, the over-the-counter guys have a much bleaker outlook.
“But upstairs the commodities guys are doing great. It’s been the same way all year. The media is making way too much of the whole thing.”
He and his even younger-looking, red-headed smoking buddy—also wearing a pair of preppy Rainbows, with shorts, a Brooks Brother’s polo and thick-framed, hipster glasses—sounded like they fall into the happy camp. When asked why they were dressed so causally, the red-head replied: “because we have the best job in the world.”
A block away, another group of casually-dressed guys in their early twenties agreed that the situation was not as bad as the media portrays it. One of them is preparing to move to a better position with a technology investment firm up the street.
“I’d say [the media coverage] is based on some reality, some paranoia, and some crowd hysteria,” a 22-year-old, first-year debt market analyst, wearing jeans and a striped polo, said. “It all just depends on the sector you work in.”
Mergers, investment banking and private equity have fared the worst, he said, but technology is rallying. Indeed, the most dire outlook of all came from one young private equity analyst.
“I think a number of people are wondering if this is going to be a severe recession or a depression,” he said. “People are pessimistic and the only thing that is holding the financial system together at this point is the government, which has taken extreme measures to curb the magnitude of the crisis.”