Ten years and a whole different world ago, Goldman Sachs held its annual holiday party at the Javits Center, where Bette Midler took the stage and cracked jokes at then-CEO Hank Paulson’s expense. This year, despite rallying markets and a general uptick in Wall Street’s mood, Goldman has canceled its firmwide holiday party for the third year in a row and recently gave its employees strictures for throwing their own, if they must: no gatherings of more than fifteen employees and “nothing conspicuous,” according to an analyst who received the Grinchy memo. Citigroup, Bank of America, Morgan Stanley, and J.P. Morgan have nixed their parties again as well. “We hosted three big holiday parties last year for banks, huge banks,” says Steven Greenberg, the owner of rooftop lounge 230 Fifth. “This year, we had zero. Nobody even called.”
So it goes in this, the latest of the recurring disruptions to the Wall Street status hierarchy in the post-crisis era. Proprietary traders were rock stars for the windfall profits they brought in; now the financial-reform law has made them liabilities. Public scrutiny is forcing many big investment banks to curtail year-end compensation (Morgan Stanley is reportedly planning a 10 to 25 percent bonus cut for some employees this year); boutique firms can, and are, paying out the bigger bucks. The sector’s holiday-party planning is influenced by the same grand forces. Which is why, as bulge-bracket bankers are compelled to practice restraint, their peers elsewhere in the financial sector are feeling free to cut loose. Private-equity firm the Blackstone Group, never shackled by tarp, held an ostentatious bash at the Met, complete with a giant cake topped with landmarks from the cities it operates in around the globe. Even firms further down the totem pole are stepping out this season. The party for Houlihan Lokey, a little-known firm with an unglamorous specialty in debt restructuring, was a 1,600-guest affair at the swank Cipriani ballroom downtown. TD Ameritrade, an online discount brokerage, threw its holiday party in an 11,000-square-foot penthouse apartment atop the Mandarin Oriental hotel.
All but the least self-aware bankers seem to understand why holiday gaiety would be uncouth while Main Street struggles with crushing unemployment. “Would I like to have a blowout holiday party? Sure,” said a second-year Bank of America analyst, whose group organized a round of Secret Santa as a replacement. “But media coverage post-tarp is completely ridiculous. Even if we pay for it ourselves, the next day’s headline would be ‘Bank of America Spends Taxpayer Money on Crazy Holiday Party.’ ” Still, the new rules chafe. One Goldman director, learning his division’s holiday party was being held in the firm’s cafeteria, asked Goldman to cut him a check for the per-person amount budgeted for his group of traders, so that he could take them out for a respectable dinner instead. A third-year analyst from a different Goldman division whispered to me, only semi-jokingly, “I almost wish I worked at a law firm.”
The group most affected by all this is up-and-coming analysts, for whom a night of mingling with their superiors—rare in the stratified and impersonal world of finance—was kind of a big deal. Kiki Chen, a former analyst who now works at an advertising agency, remembered the excited anticipation leading up to her old firm’s holiday parties, when she might get to talk to her boss’s boss about his hobbies or bond with her co-workers over something other than Excel shortcuts. Downsizing the parties ended that sense of freewheeling possibility, as downsizing tends to do. “My last year, we had a buffet dinner and went to Fiddlesticks afterward,” says Chen. “It was really sad.”