In this month's New York Magazine, the cover article details and brings to the light the growing "Rage of the Rich" as it describes the "Wail of the 1%." (Read the full article HERE) These are the stories that I hear from my clients and the people that they work with. There is a growing unrest at the top of the food chain. The shift they are beginning to feel both politically and financially has their nerves on edge and is revealing a new awareness to their surroundings and the new world we are living in. With the financial services industry reeling from the bombshells of Lehman and Bear Sterns, from credit defaults and junk mortgage pools, and even their trusted advisors are changing firms like it is going out of style. Everything is new and nothing is for sure. It is going to be in these uncertain times that massive amounts of new wealth will be created just as significant old wealth disappears. Those who adapt survive.
Some of the excerpts from the article that I felt were key points:
"Everyone on Wall Street is prepared to lose money. Bankers have expressions for disastrous losses: ....Chernobyl, blowing up … But no one was prepared to lose money this way. This felt like getting mugged."
"In a witch hunt, the witches have feelings, too. As populist rage has erupted around the country, stoked by canny politicians, an opposite rage has built on Wall Street and other arenas where the wealthy hold sway. Its expression is more furtive and it’s often mixed with a kind of sublimated shame, but it can be every bit as vitriolic. "AIG pissed some people off, and now you’re gonna screw everyone on Wall Street?” rails a laid-off JPMorgan vice-president."
"“I’m not giving to charity this year!” one hedge-fund analyst shouts into the phone, when I ask about Obama’s planned tax increases. “When people ask me for money, I tell them, ‘If you want me to give you money, send a letter to my senator asking for my taxes to be lowered.’ I feel so much less generous right now. If I have to adopt twenty poor families, I want a thank-you note and an update on their lives. At least Sally Struthers gives you an update.”"
"(There is a) belief shared on Wall Street but which few have dared to articulate until now: Those who select careers in finance play an exceptional role in our society. They distribute capital to where it’s most effective, and by some Ayn Rand–ian logic, the virtue of efficient markets distributing capital to where it is most needed justifies extreme salaries—these are the wages of the meritocracy. They see themselves as the fighter pilots of capitalism."
"“There’s this perception that the people on the Street were making money for nothing,” says a mortgage-investment banker. “You have a political and media class who make the mortgage originators and bankers out to be the villains. But are they? They were doing what Congress wanted them to do. Is the guy who lied on his mortgage application the victim here? This whole narrative that the downtrodden were the victims and the money guys were the perpetrators really doesn’t stand up to rational challenge.”"
"It should come as no surprise that being a banker—indeed, simply being rich—is going to be a lot less fun under an Obama administration."
"“All the rich people I know took George Bush for granted,” says an analyst at a midtown hedge fund. “I’m a Democrat, but I agree with Rush Limbaugh on a lot of this stuff,” rails the wife of a former AIG executive."
“You can’t live in New York and have kids and send them to school on $75,000,” he continues. “And you have the Obama administration suggesting that. That was a very populist thing that Obama said. He’s being disingenuous. He knows that you can’t live in New York on $75,000.”
"“The smart people are going to make money in good times and bad times,” one investment adviser tells me. “They’ll figure out how to game the system,” says the former Bear Stearns managing director. “You may get a new set of players. This may be a movement back to partnerships and boutique firms. This could be their moment.”"