In Private, Wall St. Bankers Dismiss Protesters as Unsophisticated
Spencer Platt/Getty Images
by NELSON D. SCHWARTZ and ERIC DASH, The New York Times, October 14, 2011
Publicly, bankers say they understand the anger at Wall Street — but believe they are misunderstood by the protesters camped on their doorstep.
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Spencer Platt/Getty Images
A police officer guarded the Wall Street bull amid the continuing demonstrations in New York.
Lucas Jackson/Reuters
“Anybody who dismisses them publicly is putting a bull's-eye on their back,” said one hedge fund manager of the protesters.
But when they speak privately, it is often a different story.
“Most people view it as a ragtag group looking for sex, drugs and rock ’n’ roll,” said one top hedge fund manager.
“It’s not a middle-class uprising,” adds another veteran bank executive. “It’s fringe groups. It’s people who have the time to do this.”
As the Occupy Wall Street demonstrations have grown and spread to other cities, an open question is: Do the bankers get it? Their different worldview speaks volumes about the wide chasms that have opened over who is to blame for the continuing economic malaise and what is best for the country.
Some on Wall Street viewed the protesters with disdain, and a degree of caution, as hundreds marched through the financial district on Friday. Others say they feel their pain, but are befuddled about what they are supposed to do to ease it. A few even feel personally attacked, and say the Occupy Wall Street protesters who have been in Zuccotti Park for weeks are just bitter about their own economic fate and looking for an easy target. If anything, they say, people should show some gratitude.
“Who do you think pays the taxes?” said one longtime money manager. “Financial services are one of the last things we do in this country and do it well. Let’s embrace it. If you want to keep having jobs outsourced, keep attacking financial services. This is just disgruntled people.”
He added that he was disappointed that members of Congress from New York, especially Senator Charles E. Schumer and Senator Kirsten Gillibrand, had not come out swinging for an industry that donates heavily to their campaigns. “They need to understand who their constituency is,” he said.
Generally, bankers dismiss the protesters as gullible and unsophisticated. Not many are willing to say this out loud, for fear of drawing public ire — or the masses to their doorsteps.
“Anybody who dismisses them publicly is putting a bull’s-eye on their back,” the hedge fund manager said.
John Paulson, the hedge fund titan who made billions in the financial crisis by betting against the subprime mortgage market, has been the exception. His Upper East Side home was picketed by demonstrators earlier this week, but Mr. Paulson offered a full-throated defense of the Street, even going so far as to defend the tiny sliver of top earners attacked by the Occupy Wall Street protesters — whose signs refer to themselves as “the other 99 percent.”
“The top 1 percent of New Yorkers pay over 40 percent of all income taxes, providing huge benefits to everyone in our city and state,” he said in a statement. “Paulson & Company and its employees have paid hundreds of millions in New York City and New York State taxes in recent years and have created over 100 high-paying jobs in New York City since its formation.”
The messages coming from the protesters are by no means in accord. They have myriad grievances, though many see Wall Street as the most powerful symbol of the income inequality and “economic injustice” they are railing against. There is ample indignation over banks being bailed out while their customers are being foreclosed upon, and over banks handing out hefty bonus checks and severance packages so soon after the crisis erupted.
Similarly, executives keep getting generous payouts when they leave. Just last week, Bank of America disclosed it was paying a total of $11 million in severance to two executives forced out in a management reshuffle, Sallie Krawcheck and Joe Price, even as the company said it would begin laying off roughly 30,000 employees over the next few years.
“Wall Street continues to underestimate the degree of anger among citizens and voters,” said Douglas J. Elliott, a former investment banker who is now a fellow at the Brookings Institution. For the most part, bankers say that they see the protests as a reaction to the high unemployment and slow growth that has plagued the American economy since the recession and the financial crisis of 2008. Despite all the placards and chants plainly indicating otherwise, some bankers suggest that deep down, the protesters are not really all that mad at them.
“I don’t think we see ourselves as the target,” said Steve Bartlett, president of the Financial Services Roundtable, which represents the nation’s biggest banks and insurers in Washington. “I think they’re protesting about the economy. What’s lost is that the financial services sector has to be well capitalized and well financed for the economy to recover.”
Jamie Dimon, the chief executive of JPMorgan Chase & Company, typifies the conflicting messages coming from Wall Street. In a conference call with reporters after third-quarter earnings were announced Thursday, he struck a sympathetic note. “I do vaguely remember the First Amendment that it is legal to demonstrate and it is completely fine,” he said. “You should listen and not just have a knee-jerk reaction.”
But in a later conference call with analysts, Mr. Dimon’s remarks were more offhand when asked about the protests and the negative perception of his industry. “Most of our clients like us,” he said. Besides, changing the industry’s image now is a tall order, he told the analysts, before adding, “If you have any great ideas on the phone you guys can write them up and send them to me. We’ll take them into consideration.” Without a coherent message, the crowds will ultimately thin out, Wall Street types insist — especially when the weather turns colder. They see the protesters as an entertaining sideshow, little more than flash mobs of slackers, seeking to lock arms with Kanye West or get a whiff of the antiestablishment politics that defined their parents’ generation.
“There is a view that it will be a lot of sound and fury signifying nothing,” said one financial industry official.
Most bankers were far more concerned this week about the business impact of the new Volcker Rule restrictions on speculative trading than they were about the demonstrations, this official added.
A smaller group of bank executives are taking the protests more seriously. They see them as a sign of the growing economic divide in this country — and are even monitoring the latest developments on Twitter. While peaceful so far, the demonstrations at Bank of America, Chase and Wells Fargo branches from San Francisco to Peoria are eerily similar to those routinely seen at Citibank outposts in Athens, Hong Kong, and in other overseas markets. Some believe it could be years before the swarms of protesters end their marches on bank branches.
A few outspoken members of the financial industry have broken ranks with their more skeptical brethren to say they understand a bit of the outrage of the Occupy Wall Street crowd.
“When I tell people I went down to research the protests, they’re shocked, they literally laugh,” said Michael Mayo, a veteran bank analyst at Crédit Agricole Securities. “It’s just not a location they frequent.”
Citigroup’s chief executive, Vikram S. Pandit, even said he would be happy to talk with the protesters any time they wanted to drop by. Mr. Pandit, onstage Wednesday at a Fortune magazine conference, said that the protesters’ “sentiments were completely understandable.”
“I would also corroborate that trust has been broken between financial institutions and the citizens of the U.S., and that it’s Wall Street’s job to reach out to Main Street and rebuild that trust,” Mr. Pandit said. The protesters should hold Citi and others “accountable for practicing responsible finance,” he said, “and keep asking us about how we’re doing.”
“Most people view it as a ragtag group looking for sex, drugs and rock ’n’ roll,” said one top hedge fund manager.
“It’s not a middle-class uprising,” adds another veteran bank executive. “It’s fringe groups. It’s people who have the time to do this.”
As the Occupy Wall Street demonstrations have grown and spread to other cities, an open question is: Do the bankers get it? Their different worldview speaks volumes about the wide chasms that have opened over who is to blame for the continuing economic malaise and what is best for the country.
Some on Wall Street viewed the protesters with disdain, and a degree of caution, as hundreds marched through the financial district on Friday. Others say they feel their pain, but are befuddled about what they are supposed to do to ease it. A few even feel personally attacked, and say the Occupy Wall Street protesters who have been in Zuccotti Park for weeks are just bitter about their own economic fate and looking for an easy target. If anything, they say, people should show some gratitude.
“Who do you think pays the taxes?” said one longtime money manager. “Financial services are one of the last things we do in this country and do it well. Let’s embrace it. If you want to keep having jobs outsourced, keep attacking financial services. This is just disgruntled people.”
He added that he was disappointed that members of Congress from New York, especially Senator Charles E. Schumer and Senator Kirsten Gillibrand, had not come out swinging for an industry that donates heavily to their campaigns. “They need to understand who their constituency is,” he said.
Generally, bankers dismiss the protesters as gullible and unsophisticated. Not many are willing to say this out loud, for fear of drawing public ire — or the masses to their doorsteps.
“Anybody who dismisses them publicly is putting a bull’s-eye on their back,” the hedge fund manager said.
John Paulson, the hedge fund titan who made billions in the financial crisis by betting against the subprime mortgage market, has been the exception. His Upper East Side home was picketed by demonstrators earlier this week, but Mr. Paulson offered a full-throated defense of the Street, even going so far as to defend the tiny sliver of top earners attacked by the Occupy Wall Street protesters — whose signs refer to themselves as “the other 99 percent.”
“The top 1 percent of New Yorkers pay over 40 percent of all income taxes, providing huge benefits to everyone in our city and state,” he said in a statement. “Paulson & Company and its employees have paid hundreds of millions in New York City and New York State taxes in recent years and have created over 100 high-paying jobs in New York City since its formation.”
The messages coming from the protesters are by no means in accord. They have myriad grievances, though many see Wall Street as the most powerful symbol of the income inequality and “economic injustice” they are railing against. There is ample indignation over banks being bailed out while their customers are being foreclosed upon, and over banks handing out hefty bonus checks and severance packages so soon after the crisis erupted.
Similarly, executives keep getting generous payouts when they leave. Just last week, Bank of America disclosed it was paying a total of $11 million in severance to two executives forced out in a management reshuffle, Sallie Krawcheck and Joe Price, even as the company said it would begin laying off roughly 30,000 employees over the next few years.
“Wall Street continues to underestimate the degree of anger among citizens and voters,” said Douglas J. Elliott, a former investment banker who is now a fellow at the Brookings Institution. For the most part, bankers say that they see the protests as a reaction to the high unemployment and slow growth that has plagued the American economy since the recession and the financial crisis of 2008. Despite all the placards and chants plainly indicating otherwise, some bankers suggest that deep down, the protesters are not really all that mad at them.
“I don’t think we see ourselves as the target,” said Steve Bartlett, president of the Financial Services Roundtable, which represents the nation’s biggest banks and insurers in Washington. “I think they’re protesting about the economy. What’s lost is that the financial services sector has to be well capitalized and well financed for the economy to recover.”
Jamie Dimon, the chief executive of JPMorgan Chase & Company, typifies the conflicting messages coming from Wall Street. In a conference call with reporters after third-quarter earnings were announced Thursday, he struck a sympathetic note. “I do vaguely remember the First Amendment that it is legal to demonstrate and it is completely fine,” he said. “You should listen and not just have a knee-jerk reaction.”
But in a later conference call with analysts, Mr. Dimon’s remarks were more offhand when asked about the protests and the negative perception of his industry. “Most of our clients like us,” he said. Besides, changing the industry’s image now is a tall order, he told the analysts, before adding, “If you have any great ideas on the phone you guys can write them up and send them to me. We’ll take them into consideration.” Without a coherent message, the crowds will ultimately thin out, Wall Street types insist — especially when the weather turns colder. They see the protesters as an entertaining sideshow, little more than flash mobs of slackers, seeking to lock arms with Kanye West or get a whiff of the antiestablishment politics that defined their parents’ generation.
“There is a view that it will be a lot of sound and fury signifying nothing,” said one financial industry official.
Most bankers were far more concerned this week about the business impact of the new Volcker Rule restrictions on speculative trading than they were about the demonstrations, this official added.
A smaller group of bank executives are taking the protests more seriously. They see them as a sign of the growing economic divide in this country — and are even monitoring the latest developments on Twitter. While peaceful so far, the demonstrations at Bank of America, Chase and Wells Fargo branches from San Francisco to Peoria are eerily similar to those routinely seen at Citibank outposts in Athens, Hong Kong, and in other overseas markets. Some believe it could be years before the swarms of protesters end their marches on bank branches.
A few outspoken members of the financial industry have broken ranks with their more skeptical brethren to say they understand a bit of the outrage of the Occupy Wall Street crowd.
“When I tell people I went down to research the protests, they’re shocked, they literally laugh,” said Michael Mayo, a veteran bank analyst at Crédit Agricole Securities. “It’s just not a location they frequent.”
Citigroup’s chief executive, Vikram S. Pandit, even said he would be happy to talk with the protesters any time they wanted to drop by. Mr. Pandit, onstage Wednesday at a Fortune magazine conference, said that the protesters’ “sentiments were completely understandable.”
“I would also corroborate that trust has been broken between financial institutions and the citizens of the U.S., and that it’s Wall Street’s job to reach out to Main Street and rebuild that trust,” Mr. Pandit said. The protesters should hold Citi and others “accountable for practicing responsible finance,” he said, “and keep asking us about how we’re doing.”
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