A sober Wall St. talks about the market over drinks
By Julie Shapiro
In the midst of the greatest financial crisis of the decade, the 79th anniversary of 1929’s Black Thursday passed with little fanfare Downtown last Friday.
A bailout protest timed to coincide with the anniversary drew fewer than 100 protestors and a sparse crowd of curious tourists to Federal Hall. The protestors waved signs decrying capitalism and urging a bailout of people, not banks. Suited bankers rushed past the protest without seeming to see it, their mouths pinched, their eyes drilling straight ahead, ignoring the interview requests of TV cameramen.
But I was curious about what those Wall Streeters had to say about the downturn, the 1929 anniversary and the bailout protest, so I caught up with some of them at the places I thought they’d be most likely to talk: bars. It was happy hour on a Friday afternoon, the end of a difficult week that capped a series of such weeks, and many were willing to talk to me, though none gave me their full names. They were mostly pessimistic, perhaps because the Dow had closed down 312 points to 8,378.95 that afternoon, but they all said the current crisis hasn’t reached the proportions of the Great Depression.
At the Stone St. Tavern, on a block that fills with the Wall St. crowd after 5 p.m., a 38-year-old financial salesman from Standard & Poor’s was sitting alone at the bar.
“I hope everything works out,” he said doubtfully.
The salesman, who lives on Long Island, said the current slowdown is not the same as the stock market crash of 1929, “But it’s bad.”
The reason the problems have spread so far beyond Wall St. is because everyone was encouraged to put money into the stock market rather than in banks, since the stock market generally offered a better return, he said. But over the last 20 years, people would have been better off just keeping their money in banks, or even, the salesman said, under their mattresses.
The salesman seemed to grow drearier as he answered my questions, so I tried to perk him up by saying that at least people aren’t jumping out of windows.
“Not yet,” he said.
I decided to leave him on his barstool and head over to Harry’s Cafe at Pearl and Hanover Sts., a longtime hangout for Wall St. workers.
At the bar, two micro-capital investment bankers unwinding after a long week sounded just as discouraged as the Standard & Poor’s salesman.
“I don’t think we’ve felt the effects yet of what this is going to do to us long term,” said one of the bankers, a dark-haired man in his 20s who lives on Long Island. “There aren’t people on the street starving. It hasn’t reached rock bottom.”
His co-worker, a graying Upper East Sider, had nothing but impatience for the bailout protestors on Wall St., who held signs reading “Capitalism is the problem, Socialism is the solution.”
“Those people don’t know what they’re talking about,” said the banker, who was in his 40s. “The bailout was not ideal, but it was necessary. It helped a little.”
As for whether the bailout would be enough to pull us through, he said only, “Time will tell.”
The banker then added the upcoming election could make things worse, because a new president’s new appointments won’t have the same experience as those who are in charge now. I guessed that he supported McCain, and he looked over his shoulder nervously before confirming, “I’m not popular in New York.”
A little farther down the bar, a trio wearing more casual clothes had smiles on their faces, and it turned out they had good reason to celebrate: They were not bankers, and one of them was retiring that day with his livelihood intact and moving to North Carolina.
All three worked in international marine insurance Downtown, and while no job is safe from the ripple effect of Wall St., they were feeling pretty good about their prospects.
“Wall St. guys have cars and airplanes,” said Anthony, 59, from Long Island. “We have one car, maybe two. Now they don’t have anything, but we still have a job. It’s not very glamorous, but slow and steady we’re still here.”
His co-worker Harry, 45, from Westchester, described the pain of the financial crisis as “not losing a leg, but it’s like 8 million mosquitoes biting you every day.”
Over at a nearby table, Dirk and Oren had more of an outsiders’ viewpoint. The 40-something former Wall Streeters had left the high pressure of New York for the Silicon Valley before the downturn, and the economy there is still strong. They returned to New York last week to revisit their old haunts in what they called their “Wall St. meltdown trip.”
The two, well into their bar-hopping jaunt, jokingly speculated that financial crashes always happen in October because people are depressed about the coming winter but the pair soon turned serious, if not entirely sober.
Dirk, now a banker for the French BNP Paribas, said he had recently lost $60,000 in savings in the stock market.
“I’m angry,” he said. “We’re trying to find people who are angry about this.”
He wasn’t impressed by Friday’s bailout protest, organized by the International Action Center, because he said that without the bailout, the picture would be much grimmer.
After he’d made his point, Dirk walked off toward the bar in search of a Stella beer. While he was gone, his friend Oren, an investor for a high-tech company, told me the financial downturn wasn’t the panic-worthy event the media was making it out to be.
“For a generation that’s not been through a serious recession, it feels scary,” Oren said. “But this is nothing like the Great Depression.”
Instead of having three SUV’s in the garage, Americans may have to content themselves with just one, and it may be a few years old, Oren said. But that’s more of a lifestyle adjustment than a national crisis.
“Americans need to get used to living within their means,” he said.
And then he joined his friend in finishing the round of drinks.