HER NEXT GIG
CHEERS!
IPO INTERRUPTUS JOB ON THE LINE?
■ Citigroup’s Krawcheck may soon leave the troubled bank
■ After Blackstone, little interest in private equity
■ Bear’s CEO may be next Wall Street executive to depart
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■ Best places to get an Apple martini
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businessnow
WEDNESDAY DEC. 5, 2007
Volume 1 / Issue 1
THE MARKETS YESTERDAY
DJIA S&P 500 Nasdaq Russell 2000 Nikkei Euro. stocks Treasuries Crude oil Dollar vs. Euro
12,799 -1.62% 1,417 -1-59% 2,562 -1.33% 755 -1.20% 14,889
0.34%
355.78 -0.20% 1 4/32
- 1/16
$98.18
$4.34
$.675 -0.20%
TODAY ■ The Labor Department announces jobless claims. Some 250,000 Americans are expected to file for benefits. 2:30 ET
■ General Electric releases Q3 earnings. Net may jump 20% to 60 cents per share. 7:30 ET ■ The Bureau of Labor Statistics is expected to report a 0.4% rise in inflation. 4:00 ET
Wall Street payouts head for 3-year low ‘09 will be ‘a massacre’ By Peter Pae Business Now Staff Writer
he mortgage crisis will hit the city’s financial workers where it hurts next month, when investment banks hand out bonus checks that will be the lowest since 2004. The average payout expected— of almost $104,000—is about twice what the average New York city household makes in a year. But it is well off the high of $137,000 set in 2006. The worst is yet to come. With mortgage-related write-offs continuing into the first half of next year, bankers may be looking at a whopping 60% cut in their bonus
T
checks come Christmas 2008, analysts said. “From the perspective of these guys, it’s going to be a massacre,” said executive recruiter Alan Johnson. Profit at American Airlines, the nation's largest carrier, jumped more than tenfold to $175 million in the third quarter while Delta Air Lines, the thirdlargest, said net income quadrupled to $220 million compared with the year-earlier period. Profit would have been higher if not for rising fuel costs. The results elated investors but fueled anger among consumer groups.
Lehman bucks trend By Peter Pae Business Now Staff Writer
Call it luck or call it foresight, but Lehman Brothers Holdings may be about to bypass some bigger investment banks in stature. The firm’s announcement yesterday of a 7 percent increase in fourthquarter profit showed it has avoided the mortgage underwriting excesses that have traumatized most of its peers.
Analysts credited Lehman chief Richard Fuld for keeping his firm focused on trading and merger advice. “Pound for pound, Fuld is outperforming Blankfein,” said Credit Suisse analyst Susan Katzke, referring to Goldman Sachs CEO Lloyd Blankfein. Lehman shares jumped $7 to $69.45 after the firm released its results, which included a 16% rise in quarterly revenue, to $15.3 billion.
Less to go around $137K
Average bonuses paid by Wall Street banks
$113K
$104K
$92K $72K
$42K
‘03
04
‘05
‘06
‘07
‘08
Source: NYC Comptroller (for 2003-2006), Johnson Associates (for estimates)
■ THE ECONOMY
Fed trims forecast for 2008 By Tony Carter Business Now Staff Writer
CEO Fuld says profits may rise another 30% next year
The Federal Reserve yesterday lowered its forecast for the economy in 2008, saying gross domestic product could grow by as little as 1.6%. That is sharply lower than the minimum 2.5% growth rate the Fed was forecasting this summer, and raised hope among investors for a late-year
interest-rate cut. The results elated investors but fueled anger among consumer groups. "I'm aghast there isn't more public outcry over this," said Kate Hanni, president of the Coalition for an Airline Passengers' Bill of Rights, a consumer advocacy group based in Napa Valley. "They're making money hand over fist at the expense of passengers."