Exactly how bad are things on Wall Street right now? I would like to open this thread for discussions from people that are interested in sharing firsthand experiences, hearsay, or other relevant or intriguing information. Hopefully we can keep this thread honest and candid, and prevent contamination from bad data points I’ll start: - WSJ article cites that layoffs as high as 20% are predicted as the downturn continues; some executive search firms are getting about 100 resumes a day, of which only a handful will eventually convert into jobs. (http://online.wsj.com/article_print/SB120519564156525807.html) - Hiring freeze at many sell-side firms is still in effect. Bonuses for junior ER folks at most of the major banks, with the exception of GS, were generally mixed. People I’ve talked to would like to move to good buy-side firms since they don’t think the sell-side environment will improve much in the near-term, but the only problem is, there’s really nowhere to go right now. Evidently, this bodes equally badly for people that are trying to get into the sell-side. - As bad as the credit crisis has been, there’s still some deal flow in the middle markets and below. Lenders don’t want to put out for businesses that aren’t generating reliable cash flows or have meaningful working capital or capex, but it is still possible to get financing for companies in the middle-market space from what I’ve seen. Only problem is, even though there’ve been sellers, it hasn’t been particularly easy to find deals that are thoroughly convincing, and the companies that seem pretty impressive are at pretty rich valuations that would require a meaningful equity commitment. While it’s not impossible to identify potential buyout candidates at feasible valuation levels in the mid market, it’s gotten quite a bit harder.
Also, feel free to share any positive impressions of the current capital markets that you may have.
I work in Low-Income Housing Tax Credits that require Wall Street-type syndication and big investors like GE and Countrywide. Typically, tax credits sell at a discount of about 3 to 5 cents on the dollar. However, they’re currently selling at a discount of about 15 cents on the dollar, according to our sources. Basically, syndicators like MMA Financial and Prudential, among others, are hurting pretty hardcore from the subprime mess and have massively increased their underwriting standards and are much more risk averse. In addition, big investors, like Countrywide and GE, have had profit slips and are no longer in need of as many tax credits. But, my firm’s revenues are up about 3% over last year. When you’re the best (I take no credit for it obviously) and when you super specialize, often times downturns don’t affect you.
I wouldn’t know about “Wall Street” specifically although I’m sure they’ve got their share of problems. First, a lot of them got busted by an guy who doesn’t know that it’s illegal to transport hookers across state lines. Second, US Treasuries are now, technically, more likely to default than German bunds. Lastly, you’ve got a Fed stepping in to save a couple of people use to pulling down $10,000,000 a year at the expense of the entire US Economy…i.e. inflation. But George W. Bush and Hank Paulson maintain that things are “fine”. Willy
I work at LEH Equity Research. About 15% were cut yesterday. A few more were cut today, and word is that more will be cut tomorrow. I’m still employed. The other BB firms on the street will also follow with job cuts. If you want a job in this industry, head overseas.
Been lucky so far, no layoff announcement yet. However, during our private conversation, lot of guys are willing to take pay-cut just to stay on. Hiring? Forget about it.
European market is slowing but still a lot, A LOT better than in the US. Every fund manager we talk to in the US is begging for business right now. I like it! Let the deals come…
even though lehmans cuts were firmwide i heard they cut 1/3 to 2/3 of their lev fin group as well. if true (and combined with the credit suisse financial sponsors rumor) this would indicate to me that people in these groups are going to be cut across the street as the credit market contracts. as far as i know gs, jp and all the other big players have yet to downsize these groups so that is most likely coming unless things improve dramatically. i work in rate derivatives trading and while things in spread product had seemed to be somewhat normalizing a few weeks ago, the past week has been a disaster. spreads on everything have blown out to historic wides (swaps, mortgage pass throughs, etc). yesterdays fed announcement helped a lot. in talking with my old banking buddies, deal pipeline has slowed a lot so banking revenues are going to down across the street. combine that with the coming write downs in lev loans and further deterioration in the mortgage market, things are certainly far from good.
high yield side is pretty bad (excluding yesterday). I work at buyside shop and we already lost 5 sell side traders we deal with with the last month. Problem is lack of liquidity so traders aren’t doing much.
Hey pimp, what sector do you cover if you don’t mind me asking. We lost two of our sales reps at sell side shops and others saying their colleagues are leaving as well…
i think whenever there are major research cuts, there’ll also be cuts to the sales and trading side. a lot of these folks are supported by research (or vice versa), and when you end up trimming the industry or sector experts, there’s not much of a point or need for these salespeople to stick around (at least from a firm’s perspective).
SS equity sales guys are going down fast. The guys 4 BoA who cover us closed their whole office.
Is BO typically subject to stress during periods of financial turbulunce?
^ probably subject to stress by getting beat up and abused by the trading desks
drs Wrote: ------------------------------------------------------- > ^ probably subject to stress by getting beat up > and abused by the trading desks LOL.
Good thing I work at a family office…
so bad Bear Stearns, one of the oldest and most prestigous banks on Wall Street is a 1/3 less valuable than it was last Friday
not good news from the buy-side. PIMCO and BlackRock have a Hiring freeze policy right now