File this under "Credit where credit is due." While Occupy Wall Street may be a stale punchline to some on Wall Street, the real power players in high finance are no longer laughing. In an interview with the Financial Times, Morgan Stanley CEO James Gorman says that the pay that bankers receive is excessive and board members are losing their patience.
In a classic case of an English newspaper rewriting another publication's story - running it through the typewriter, as they say - The Telegraph regurgitates:
"As a shareholder, I'm sort of sympathetic to the shareholder view that the industry is still overpaid."
"That's a classic Wall Street case of 'Heads I win; tails you lose," he said. "The current Wall Street management is a little tougher-minded about that and shareholders are certainly tougher minded."
Wall Street knows that they have a serious image problem. After nearly driving the entire US economy into the ditch - and nearly taking the world economy with it - the major banks and investment houses received bailouts to save them from financial ruin. In a boneheaded move, the CEOs continued to pay their top traders - and themselves - bonuses to keep them around. "If we don't pay them, they'll start hedge funds," was their cry. Cue outraged headlines, indignant pols and pundits and a pair of movements that were long brewing: a Tea Party for the right and Occupy Wall Street for the left.
Gorman's observations would be keen if they weren't four years too late. For an industry that relies on super-fast networks, instant analytics, and algorithms to execute trades in the blink of an eye, the rate at which they realized that they were hated can be described in one word: glacial. Iraqi soldiers who threw down their weapons and gave up to CIA drones and crews from CNN in the first Gulf War had a better sense of their situation than the men who run today's investment firms.
In the coming weeks, the banks will release their third quarter results and we'll see how the mild recovery is playing on the street. ABC News reports that JPMorgan Chase and Wells Fargo will be the first with their earnings releases next Friday, October 12.