Friday, Dec 14, 2007
Disappointing City bonuses this year
ThisIsMoney: Bonus blow looms for Goldman rivals
things that will "disappoint" the property cheerleaders here in London: (a) far less bonus money (10%, 20% less?) that means even less (minus 30% 40%?) into the housing market. (b) most hardly hit will be the average performers, hoping that they read the signal and start looking for other "pastures"; these average performers form the bulk of the tenants in large areas of west london (c) there will be layoffs, US banks in particular. FYI i am also posting the bullish December headlines from previous 2 years... dare to compare
Posted by confused76 @ 11:06 AM (613 views) Add Comment
11 Comments
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1. confused76 said...
When you go from +16% growth in the previous 2 years to MINUS 10% or 20% this year, it is a CRASH
2006:
http://news.bbc.co.uk/1/hi/business/6098162.stm
http://www.thisismoney.co.uk/news/article.html?in_article_id=411903&in_page_id=2
http://www.guardian.co.uk/business/2006/aug/17/executivesalaries.executivepay1
2005/2006:
http://news.bbc.co.uk/1/hi/business/4604346.stm
City bonuses fuel property boom
http://www.thisismoney.co.uk/mortgages/article.html?in_article_id=404151&in_page_id=8
2. disillusioned said...
...but they are still getting bonuses though! I'm not convinced that the city people are going to suffer as much as we all think this year.
3. Reader said...
What do these people have to do in order NOT to get a bonus?
4. wdbeast said...
Although there are going to be lower bonuses this year, the %diff is not all that relevant to the housing market.
The City is already forecasting approx -7% prices for property next year, the City boys may be many things, but they are not thick!
They will not invest their bonuses in property this year at all.(IMHO)
5. hpwatcher said...
I guess they will do as well as they usually do...those that actually have jobs
6. Guiriduro said...
Well, the US banks are laying off, and the others are generally paying less to the vast majority of average staff in exchange for being able to pay big bonuses to the few star performers (which grab the headlines), I'd still say the market - except right at the top - is going to drop considerably.
7. confused76 said...
% changes are FAR more important than absolute levels
think about ... why is everybody fighting about GDP growth and house price INFLATION, and not GDP and house price absolute levels
CIty money into property this year will be halved
8. wdbeast said...
C76, Do you not think it could be less than 50%, I just can't see intelligent City traders investing in a falling market at all.
Or is there still sufficient positive sentiment in London for them to buy?
9. confused76 said...
it could be 100% less, but I doubt it
already 30% less will prompt a price crash
the effect will be compounded by the foreign investors put off by the faltering housing market and declining pound
10. techieman said...
Theres a bit of snobbery involved around these parts (yes sorry i do work in the city), so yes there will be a few or the boys who "invest"in 'ouses. But generally they wont be buying more property. As wdbeast says they aint stupid. You can hear some stories about how they traded down or out of their non home property portfolio before things are gonna get bad. Remember whatever you think alot of them have inside knowledge about sub-prime a fair while before the "public" do.
11. confused76 said...
techie...
I agree, but won't tell you where I work.
the best information to trade around housing in london is with the head hunters / recruitment agencies. They know the hiring & firing plans of the city banks, base salaries and bonus levels. they can anticipate housing market sentiment with a 12 month lead (which is worth a lot!!)
my negative comments on the direction of the market are based on information from recruitment agencies.