Uh oh... they're gassing the canaries (Wall Street layoffs)

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NarwhalPunter
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby NarwhalPunter » Wed Jun 22, 2011 8:19 pm

Ummmm, so I'm the one referenced in the snarky post regarding a lot of the layoffs being due to Dodd Frank. This is absolutely true.

Dodd Frank limits the proprietary trading for the wirehouses and I-banks. When you do this, there is no longer the need to keep a huge staff of bond and equity traders around (see Morgan Stanley layoffs cited above- this is the direct result of these restrictions on in-house trading). A lot of the people who run the high frequency trading black box algorithms are also on the outs because of this. Less leverage = you fire some traders.

The next link cites to layoffs in the Wealth Management wing of UBS. Once again, not huge news. UBS and all of the major brokerages are moving to a model intended to squeeze all FAs producing under $500k in annual revenue to maximize profits and devour the marketshare left up for grabs by the implosion of Lehman and Bear Stearns. The smaller brokers will in turn flee for private brokerages like LPL and Edward Jones. It's the new business model and people have talking about it for years. Back in 2009 and 2010, places like Smith Barney, Merrill Lynch, Wachovia, and others all gave the financial advisors in the bottom quartile a massive pay cut on their commission rates (we're talking going from 33-38% rates down to 25%). This resulted in mass defections and people saw the writing on the wall that these brokers would be downsized in the near future. Now it is happening.

The real red flag will be when these companies implement an across the board hiring freeze like they did in 2008, some even before Lehman Brothers. This is not the case right now.
Last edited by NarwhalPunter on Wed Jun 22, 2011 8:33 pm, edited 1 time in total.

Aston2412
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby Aston2412 » Wed Jun 22, 2011 8:22 pm

Greece defaulting probably isn't in the books. There's been a lot of speculation of the "will they/won't they" kind. Some people are even talking about Greece going back to the drachma. See here's the thing, the EU knows that if Greece defaults, they're fooked - so they're going to heavily incentivize paying those debts back.

Try to remember it was just a few years ago when people were hailing the Euro as the new global currency. Europe isn't going to let it's shining beacon of commerce go down without a fight (even if the mutli-national system of managing that currency has problems inherent in its nature).

seriouslyinformative
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby seriouslyinformative » Wed Jun 22, 2011 8:24 pm

Yeah I don't see a Greek default either, though I do want to see a flight to US treasuries and to the Dollar. Both would make a Euro trip far more economically palatable...

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BruceWayne
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby BruceWayne » Wed Jun 22, 2011 8:38 pm

.....
Last edited by BruceWayne on Sat Jun 25, 2011 11:01 am, edited 1 time in total.

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nealric
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby nealric » Wed Jun 22, 2011 8:39 pm

I work at a big firm. The structured finance and capital markets people are very busy.

This thread is stupid.

And USAO's can DEFINITELY get you into biglaw. As a matter of fact, you'd have a much higher shot at becoming a partner than someone who came straight out of law school.


Sure, but it's much more likely to be the reverse. I don't know of a single person at my firm that started out in public interest. I would also question your assertion that a former USAO is more likely to make partner. The timeline would be sticky. USAO doesn't hire right out of law school- most people have at least 3-4 years of experience there. Add to that a few years at the USAO, and you are getting too senior to lateral into biglaw as an associate. But you don't have any clients as a USAO, so it would be unlikely to go straight in as a partner. I'm not saying it's impossible to make partner in biglaw from the USAOs, but it would be a very uncommon thing to do.
Last edited by nealric on Wed Jun 22, 2011 8:43 pm, edited 1 time in total.

NarwhalPunter
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby NarwhalPunter » Wed Jun 22, 2011 8:43 pm

nealric wrote:I work at a big firm. The structured finance and capital markets people are very busy.

This thread is stupid.


That's not nearly as fun as sounding the panic alarm though.

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thesealocust
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby thesealocust » Wed Jun 22, 2011 8:46 pm

Thanks NarwhalPunter, that context helps a lot.

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BruceWayne
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby BruceWayne » Wed Jun 22, 2011 8:49 pm

....
Last edited by BruceWayne on Sat Jun 25, 2011 11:03 am, edited 1 time in total.

seriouslyinformative
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby seriouslyinformative » Wed Jun 22, 2011 8:51 pm

I still fail to comprehend why people continue to address BruceWayne as a serious poster on this board.

shoeshine
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby shoeshine » Wed Jun 22, 2011 8:52 pm

NarwhalPunter wrote:Dodd Frank limits the proprietary trading for the wirehouses and I-banks. When you do this, there is no longer the need to keep a huge staff of bond and equity traders around (see Morgan Stanley layoffs cited above- this is the direct result of these restrictions on in-house trading). A lot of the people who run the high frequency trading black box algorithms are also on the outs because of this. Less leverage = you fire some traders.

The next link cites to layoffs in the Wealth Management wing of UBS. Once again, not huge news. UBS and all of the major brokerages are moving to a model intended to squeeze all FAs producing under $500k in annual revenue to maximize profits and devour the marketshare left up for grabs by the implosion of Lehman and Bear Stearns. The smaller brokers will in turn flee for private brokerages like LPL and Edward Jones. It's the new business model and people have talking about it for years. Back in 2009 and 2010, places like Smith Barney, Merrill Lynch, Wachovia, and others all gave the financial advisors in the bottom quartile a massive pay cut on their commission rates (we're talking going from 33-38% rates down to 25%). This resulted in mass defections and people saw the writing on the wall that these brokers would be downsized in the near future. Now it is happening.

The real red flag will be when these companies implement an across the board hiring freeze like they did in 2008, some even before Lehman Brothers. This is not the case right now.


This. It is 100% Frank-Dodd related.

My current(and soon to be former) company has been staggering layoffs because of the new in-house trading regs. I am not on that side of things but it seems like they are trying to shift those people to other departments. The internal emails we get about it are vague but I definitely think they are trying to minimize the casualties from Frank-Dodd. They have given us all talking points about Frank-Dodd and specifically which provisions are affecting our "restructuring". However, we are a major Wall Street player and we are not making the news because of our layoffs yet.

I can't see how this would directly affect the law market. Trust me when I will say they will find other ways to make up for those revenue streams.

Edit: BTW, I love the title of this thread. LOL

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Grizz
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby Grizz » Wed Jun 22, 2011 8:59 pm

seriouslyinformative wrote:I still fail to comprehend why people continue to address BruceWayne as a serious poster on this board.


He's fairly right about the above in this instance.

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Borhas
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby Borhas » Wed Jun 22, 2011 8:59 pm

thesealocust wrote:Large banks laid people off yesterday and today. Goldman laid people off earlier in the spring and there is supposedly more to come.

reuters wrote:Challenger, Gray & Christmas, an employment consulting firm, said the financial sector has outlined 21 percent more job cuts so far this year than it did in 2010.


I'm actually haven't looked at or thought about this kind of data, so I couldn't tell you off the cuff the extent to which this is normal or the extent to which this matches the wall street layoffs that preceded law firm trimming.

For those of you who are new to the legal sector, it's only relatively recently that we've emerged from massive layoffs at law firms. Leaving aside the biggest events, I remember sometime in the spring of my 1L year (so like March 2010) when we realized it had been a week since layoffs were reported on ATL, which seemed like a long time.

Anybody have more insight into what this might mean for law firm hiring?


awesome, now maybe those people can start working

hopefully it means the finance sector can become more efficient and thus lead to more business for lawyers

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BruceWayne
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby BruceWayne » Wed Jun 22, 2011 10:14 pm

...
Last edited by BruceWayne on Sat Jun 25, 2011 11:03 am, edited 1 time in total.

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rayiner
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby rayiner » Wed Jun 22, 2011 10:17 pm

Desert Fox wrote:If firms were going to outsource their attorneys they could start right now by hiring TTT grads. You don't think Skadden could find 200 people willing to take 40,000 dollars a year for 2000 billable hours?

Firm's aren't stupid. They make their money overcharging for associates work.


QFT.

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rayiner
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby rayiner » Wed Jun 22, 2011 10:23 pm

nealric wrote:I work at a big firm. The structured finance and capital markets people are very busy.

This thread is stupid.

And USAO's can DEFINITELY get you into biglaw. As a matter of fact, you'd have a much higher shot at becoming a partner than someone who came straight out of law school.


Sure, but it's much more likely to be the reverse. I don't know of a single person at my firm that started out in public interest. I would also question your assertion that a former USAO is more likely to make partner. The timeline would be sticky. USAO doesn't hire right out of law school- most people have at least 3-4 years of experience there. Add to that a few years at the USAO, and you are getting too senior to lateral into biglaw as an associate. But you don't have any clients as a USAO, so it would be unlikely to go straight in as a partner. I'm not saying it's impossible to make partner in biglaw from the USAOs, but it would be a very uncommon thing to do.


I think this thread is useful. I learned useful things like about our exposure to Greece via foreign banks.

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Julio_El_Chavo
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby Julio_El_Chavo » Wed Jun 22, 2011 10:49 pm

thesealocust wrote:Large banks laid people off yesterday and today. Goldman laid people off earlier in the spring and there is supposedly more to come.

reuters wrote:Challenger, Gray & Christmas, an employment consulting firm, said the financial sector has outlined 21 percent more job cuts so far this year than it did in 2010.


I'm actually haven't looked at or thought about this kind of data, so I couldn't tell you off the cuff the extent to which this is normal or the extent to which this matches the wall street layoffs that preceded law firm trimming.

For those of you who are new to the legal sector, it's only relatively recently that we've emerged from massive layoffs at law firms. Leaving aside the biggest events, I remember sometime in the spring of my 1L year (so like March 2010) when we realized it had been a week since layoffs were reported on ATL, which seemed like a long time.

Anybody have more insight into what this might mean for law firm hiring?


It seems like the corporate guys should be worried about this because their practice is directly related to the vicissitudes of the financial sector. Litigation would also be affected, of course, but only indirectly as companies have less money to sue people.

Renzo
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby Renzo » Wed Jun 22, 2011 10:51 pm

Effect:
seriouslyinformative wrote:I still fail to comprehend why people continue to address BruceWayne as a serious poster on this board.



Cause:
BruceWayne wrote:I still fail to comprehend why there's an endless supply of new morons that post on this board.

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98234872348
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby 98234872348 » Wed Jun 22, 2011 10:55 pm

.
Last edited by 98234872348 on Sat Aug 20, 2011 12:55 am, edited 1 time in total.

BlueDiamond
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby BlueDiamond » Wed Jun 22, 2011 11:25 pm

seriouslyinformative wrote:Mostly slowdown because of the sovereign debt crisis abroad. Luckily, our banks aren't too exposed to a default, though our exposure is still in the billions. However, many foreign banks are leveraged on Greek debt, especially French banks. A Greek default could repeat a death spiral for banks abroad whose shockwaves will be felt here. Some analysts compare it to the collapse of Lehman Brothers. I'm not sure it'll be that bad.

If Greece does default, I feel like the end of the Euro is in order. If Greece doesn't default (and I don't think they will), we'll be fine.


if this happens does that mean we are on top again?!? U......S......A U....S....A U..S..A USA! USA! USA!

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Borhas
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby Borhas » Thu Jun 23, 2011 1:10 am

Europe can afford to bail out Greece (probably won't do much good)... what people should be worried about are Spain and Italy... hopefully EU will kick out Greece, and try to minimize as much of a shock to the rest of the system. F'n Greeks...

seriouslyinformative
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby seriouslyinformative » Thu Jun 23, 2011 6:55 am

Litigation would also be affected, of course, but only indirectly as companies have less money to sue people.


Yes and no. Companies have built up massive war-chests in the recession. Rather than use them on dividends, they are spending their money on M&A and litigation.

seriouslyinformative
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby seriouslyinformative » Thu Jun 23, 2011 6:56 am

Borhas wrote:Europe can afford to bail out Greece (probably won't do much good)... what people should be worried about are Spain and Italy... hopefully EU will kick out Greece, and try to minimize as much of a shock to the rest of the system. F'n Greeks...


http://www.businessinsider.com/greek-re ... eek-debt-1

seriouslyinformative
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby seriouslyinformative » Thu Jun 23, 2011 6:57 am

BlueDiamond wrote:
seriouslyinformative wrote:Mostly slowdown because of the sovereign debt crisis abroad. Luckily, our banks aren't too exposed to a default, though our exposure is still in the billions. However, many foreign banks are leveraged on Greek debt, especially French banks. A Greek default could repeat a death spiral for banks abroad whose shockwaves will be felt here. Some analysts compare it to the collapse of Lehman Brothers. I'm not sure it'll be that bad.

If Greece does default, I feel like the end of the Euro is in order. If Greece doesn't default (and I don't think they will), we'll be fine.


if this happens does that mean we are on top again?!? U......S......A U....S....A U..S..A USA! USA! USA!


Just wait for the China bubble to pop.

The only real threat to US global dominance is India... if they can get their act together.

areyouinsane
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby areyouinsane » Thu Jun 23, 2011 7:55 am

Bottom line is that there is/was no US "recovery." Unemployment if measured by honest, Great Depression era metrics would be north of 20%. Housing prices are still in freefall, state governments are broke and fiscal train wrecks, and Bernake yesterday said he is "clueless" why we've not come out of this yet. The few new jobs being created are mostly at freakin' Mickey D's.

Rather than allow the big banks and such to simply crash and burn in 2008 (as they deserved to), Bernake keeps pumping Fed $$$ into these "zombies." It's like giving a guy with stomach cancer a pack of Rolaids. QE made everyone feel better for a bit, but now it's worn off/over and things are right back in the crapper.

There will never be a housing recovery in our lifetimes because most people coming out of undergrad (much less law school) already owe a mortgage-sized debt in student loans. Debt that is never dischargable in bankruptcy, mind you. With no jobs (or crap jobs in retail/fast food) this toxic debt will essentially wipe out an entire generation of prospective homeowners. Our manufacturing base is utterly decimated thanks to NAFTA and outsourcing, construction is in the toilet b/c we overbuilt too many condos/strip malls/McMansion the past decade, and gas prices will likely soar into the stratosphere over the next 5 years as we've passed Peak Oil. Greece is simply the opening act in a great global finance meltdown that will drive living standards down to levels few expect or are even remotely prepared for.

This is a country who's best days are behind it.

09042014
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Re: Uh oh... they're gassing the canaries (Wall Street layoffs)

Postby 09042014 » Thu Jun 23, 2011 10:30 am

areyouinsane wrote:Bottom line is that there is/was no US "recovery." Unemployment if measured by honest, Great Depression era metrics would be north of 20%. Housing prices are still in freefall, state governments are broke and fiscal train wrecks, and Bernake yesterday said he is "clueless" why we've not come out of this yet. The few new jobs being created are mostly at freakin' Mickey D's.

Rather than allow the big banks and such to simply crash and burn in 2008 (as they deserved to), Bernake keeps pumping Fed $$$ into these "zombies." It's like giving a guy with stomach cancer a pack of Rolaids. QE made everyone feel better for a bit, but now it's worn off/over and things are right back in the crapper.

There will never be a housing recovery in our lifetimes because most people coming out of undergrad (much less law school) already owe a mortgage-sized debt in student loans. Debt that is never dischargable in bankruptcy, mind you. With no jobs (or crap jobs in retail/fast food) this toxic debt will essentially wipe out an entire generation of prospective homeowners. Our manufacturing base is utterly decimated thanks to NAFTA and outsourcing, construction is in the toilet b/c we overbuilt too many condos/strip malls/McMansion the past decade, and gas prices will likely soar into the stratosphere over the next 5 years as we've passed Peak Oil. Greece is simply the opening act in a great global finance meltdown that will drive living standards down to levels few expect or are even remotely prepared for.

This is a country who's best days are behind it.


Blaming this on the bailout doesn't make sense. The banks aren't causing the general economy to stagnate. Banking shouldn't be leading growth in the economy.

Student loan debt is irreverent as well. Just because it pwns law grads lives, doesn't mean it's a big deal.

The free trade is a huge reason why unemployment is high. And high unemployment is causing people to be more conservative with spending.

The US needs a new growth industry. Building a bunch of shitty homes and finance won't cut it.




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