More on Wall Street bonuses

So, the Manhattan real estate price link to Wall Street bonuses makes the latter important. The linked article talks primarily about the Long Island economy's dependence, but adds information about the bonuses.

Companies that have announced layoffs so far include Lehman Brothers, which cut 2,500 mortgage jobs nationally; Citicorp, which eliminated 1,600 New York City positions last spring; and Bear Stearns, which has shed about 900 jobs in its mortgage unit as well as in other areas including stock trading.

In addition to warning about job losses, [New York State Comptroller Thomas] DiNapoli said Wall Street bonuses probably will be smaller this year because third-quarter profits of the seven biggest financial firms based in New York City dropped nearly 65 percent from the year-earlier period. He said the decline might be "modest," however, because earnings for the first half of the year were strong, and bonuses usually drop at a slower rate than profits.

The article usefully points out that the average bonus has only doubled over the course of the bubble, so a 50 % drop might be all we see. However , we had a rather stronger economy in 1997 -- without fake real estate equity making everything go, Wall Street (and, you know, Americans) may be in a world of hurt.

Thanks to the Housing Bubble Blog for the link.