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New York Sees Quick Rebound on Wall Street

posted Nov 19, 2009, 8:44 PM by Stacey Riggs   [ updated Nov 19, 2009, 8:51 PM by Yale ReiSoleil ]
The New York Times -- Wall Street is rebounding from the financial crisis and has returned to profitability faster than many expected, according to a report released on Tuesday by the New York State comptroller’s office.

The report noted that the four largest investment firms in New York City — Goldman Sachs, Merrill Lynch, Morgan Stanley and JPMorgan Chase Investment Bank — earned $22.5 billion in the first nine months of this year, in contrast to losses of more than $40.3 billion last year, primarily at Merrill.

“Wall Street remains the engine that drives New York’s economy,” the state comptroller, Thomas P. DiNapoli, said in a statement. “It’s encouraging that the industry is recovering faster than forecast.”

Mr. DiNapoli did add a caveat about efforts in Washington to restrain executive pay. “No one can predict the impact of compensation reform, which could restrict cash bonuses,” he said. “Because of that uncertainty, New York can’t rely on tax revenues from Wall Street to save the day.”

Mr. DiNapoli’s report noted that the total bonus pool on Wall Street could be higher than last year, but that compensation restrictions by federal regulators appeared likely to limit the amount paid in cash, rather than stock.

The report also said that despite fallout from the financial crisis, total job losses on Wall Street were not likely to exceed 35,000 jobs. It noted that employment in the securities industry had fallen by 28,400 jobs since October 2007, although the sector added about 3,600 jobs in September of this year.

And it said that Wall Street employment accounted for 24 percent of all salaries and wages in New York City, although the securities industry provided less than 5 percent of all jobs in the city.
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