Exuberance made a comeback this year at Josh Koplewicz’s annual Halloween party. More than 1,000 people packed into a 557-square-metre space at the Good Units nightclub in Manhattan, a substantially larger crowd than in the past several years. The open bar was sponsored by Russian Standard vodka, and Koplewicz, an investment analyst at Goldman Sachs, was able to snag a big headliner: hip-hop star Lil’ Kim, who performed dressed in a black cat costume.
The scene was more extravagant in September, at a 50th birthday party in Hong Kong for Brian Brille, the head of Bank of America Asia Pacific. Brille, who is well known on the New York social scene, wore a gray Hugh Hefner-esque jacket. Women dressed like Playmates, with feather boas and satin ears, danced behind a pink silk screen.
Two years after the onset of the financial crisis, the stock market is recovering and Wall Street’s moneyed elite are breathing easier again. And this means in some cases they are spending again – at times cautiously but sometimes with a familiar swagger.
It’s true that firms scaled back the corporate excesses, like fancy retreats and private jets, for which they were vilified as a brutal recession gripped the country. Many of those constraints remain, like flying commercial on business trips or more limited private car service for employees.
But when it comes to personal indulgences, there are signs that the wallets are beginning to open up. Traders and executives say that jobs seem much more secure. Businesses whose fortunes ebb and flow with the financial markets are thriving again.
“Wall Street is back spending as much if not more than before,” said New York cosmetic surgeon Dr. Francesca J. Fusco, whose business is booming again after a difficult few years.
Compensation on Wall Street this year will not be much higher than in 2009 and may even be lower. So the change in attitude appears more a matter of confidence and security than income.
“The mood is absolutely better, much better than even a year ago, says David M. Gildea, a health care trader at the Wall Street firm Cowen and Co.
Gildea was a trader at Bear Stearns before it was sold to JPMorgan Chase at a fire sale price. He then moved to another big firm, which went through a similar near-death experience.
In 2008, even on a good trading day, he said, traders like himself were reluctant to even go out for a drink after work, uncertain if they were going to keep their jobs.
Now, Gildea said, people were stepping out more and firms like Cowen were more optimistic about the future.
“Are we back to where we were? Absolutely not,” he said. “Many people in our industry have learned to live more responsibly, but there is a definite buzz on the Street that hasn’t been there in some time.”
J.T. Cacciabaudo, head of equity trading and sales trading at regional brokerage firm Sterne Agee agrees, saying while there is some concern in the market about the fourth quarter and how it will end, optimism about the longer term “has come back” and firms like his are in growth mode.
“Going into the third quarter, there was chatter about layoffs and most of that didn’t come to fruition because firms seems more optimistic about 2011 than the past two years,” he said.
In the years leading up to the credit crisis some executives became famous for their expenditures, like L. Dennis Kozlowski, the ex-chief executive of Tyco International, whose $6,000 shower curtain became a symbol of unnecessary extravagance.
Some of that excess remains.
Most expenditures, however, are for more mainstream indulgences.
Marc B. Porter, a senior executive at Christie’s, says Wall Street workers for whom the auction market was recently seen as “out of range” are pouring back in. This resurgence of activity, he says, has followed the recovery of different economies, be it Hong Kong or the United States.
In recent months, Deborah Killoran, a client of Fusco’s, has been more willing to open the purse strings for cosmetic surgery. In November she was scheduled for an ulthera, a nonsurgical face-lift that costs $3,000 and upward.
Killoran, who runs a Brooklyn-based insurance company, says that over the past two years she cut her annual spending on cosmetic surgery in half, to about $3,000. She is now spending at pre-2008 levels.
“I have to meet a lot of people, and this is part of investing in myself,” she said.
For a restaurant like Porter House, a pickup in business means a customer may spend an extra $8 for the Prime Cowboy Rib Steak rather than the Prime New York Strip Steak and eat out twice a month, instead of just once every four weeks. Lomonaco, the chef, says bookings for private rooms have increased.
“At some point, firms want to reward their people, and they seem more willing to do so this year,” he said.