Bonus Times Are Back For I-Bankers, But Few Willing To Spend Openly

Bonus Times Are Back For I-Bankers, But Few Willing To Spend Openly:

"Bonus Times Are Back For I-Bankers, But Few Willing To Spend Openly"

With the furor over investment bankers and their ‘ill-gotten’ bonuses covering the front page of every major newspaper last year, the bankers kept their wallets firmly shut out of panic and fear of the mobs likely to descend on them should they flash their money around.
But with the recent return of good times in the economy, bonuses are back in even greater numbers this year. The Wall Street set is slowly shaking off its reluctance to spend. However, consumption levels are likely to stay low, as public sentiment is yet to change drastically. More than in past years, this year’s bonus numbers are stirring deep resentment in a nation staggering under 10 percent unemployment.
However, a small group of people are hopeful due to the bonuses being distributed – the purveyors of high end luxury items like real estate and premium automobile marquees. At the heart of Wall Street’s anticipated splurge is pent-up demand after a year dominated by fears of a new depression, retailers and cultural observers say. “For whatever reason, people feel the need to reward themselves for doing something good even if that just means surviving,” said Alexandra Lebenthal, an investment manager and creator of a fictional column about financial high jinks.
At the same time, investment bankers have no intention of felling the wrath of a fed-up populace that blames them for the current bad times. As recently as January 13, the chief executives of the top four banks in the US took a public haranguing in hearings from Congressional leaders, and feelings are not likely to die down just yet. As such, banking bosses are telling their employees to be very careful while spending their money. Ostentatious displays of wealth are to be avoided and to keep them ‘below the radar’ if possible. Real estate in the form of holiday homes, college funds for their kids and investments are seen as good bets, while jewelry, flashy cars and fashion shopping are a definite no-no.
At the same time, however, luxury merchants predict it will take at least five years to return to 2007 spending levels. One reason is that some bankers are getting restricted stock that they won’t be able to sell for years, instead of cash. This is another way that austerity is being imposed by employers on their minions, fearing public opinion. For example, banks that received government injections of funds are not allowed to show their wealth, while private hedge funds that received no such assistance are less reluctant to show off, as they are not indebted to the public for bailing them out of troubled waters.
Even as the Obama administration seeks to change course and pursue the banking community for the current slump, an agenda put aside last year to chase the President’s more ambitious healthcare reforms, people are still angry at the investment banking community for the economic situation. After all, the unemployment rate is still hovering at 10 per cent and job creation is not happening, though the manufacturing sector has bounced back with higher production figures. Ostentatious displays of wealth, which were once considered the right of investment bankers, are now seen as dangerous, though how long this feeling is maintained by the bankers remains to be seen.