Wall Street in New York City

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Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or signifying New York-based financial interests. It is the home of the New York Stock Exchange, the world's largest stock exchange by market capitalization of its listed companies. Several other major exchanges have or had headquarters in the Wall Street area, including NASDAQ, the New York Mercantile Exchange, the New York Board of Trade, and the former American Stock Exchange. Anchored by Wall Street, New York City is one of the world's principal financial centers.

History

Early years

There are varying accounts about how the Dutch-named "de Waal Straat" got its name. A generally accepted version is that the name of the street name was derived from an earthen wall on the northern boundary of the New Amsterdam settlement, perhaps to protect against English colonial encroachment or incursions by native Americans. A conflicting explanation is that Wall Street was named after Walloons -- possibly a Dutch abbreviation for Walloon being Waal. Among the first settlers that embarked on the ship "Nieu Nederlandt" in 1624 were 30 Walloon families.

In the 1640s, basic picket and plank fences denoted plots and residences in the colony. Later, on behalf of the Dutch West India Company, Peter Stuyvesant, using both African slaves and white colonists, collaborated with the city government in the construction of a more substantial fortification, a strengthened 12 ft wall. In 1685 surveyors laid out Wall Street along the lines of the original stockade. The wall started at Pearl Street, which was the shoreline at that time, crossing the Indian path Broadway and ending at the other shoreline (today's Trinity Place), where it took a turn south and ran along the shore until it ended at the old fort. In these early days, local merchants and traders would gather at disparate spots to buy and sell shares and bonds, and over time divided themselves into two classes—auctioneers and dealers.

Nineteenth century

In the first few decades, both residences and businesses occupied the area, but increasingly business predominated. "There are old stories of people's houses being surrounded by the clamor of business and trade and the owners complaining that they can't get anything done," according to a historian named Burrows.

Historian Charles R. Geisst suggested that there has constantly been a "tug-of-war" between business interests on Wall Street and authorities in Washington, D.C.. Generally during the 19th century Wall Street developed its own "unique personality and institutions" with little outside interference. When the average "peaks and troughs" went up consistently, he deemed it a bull market condition; if averages dropped, it was a bear market. At other times, city and state officials have taken steps through tax incentives to encourage financial firms to continue to do business in the city.

In the late 19th and early 20th centuries, the corporate culture of New York was a primary center for the construction of skyscrapers, and was rivaled only by Chicago on the American continent. There were also residential sections, such as the Bowling Green section between Broadway and the Hudson river, and between Vesey Street and the Battery. The Bowling Green area was described as "Wall Street's back yard" with poor people, high infant mortality rates, and the "worst housing conditions in the city." As a result of the construction, looking at New York City from the east, one can see two distinct clumps of tall buildings—the financial district on the left, and the taller midtown district on the right. The geology of Manhattan is well-suited for tall buildings, with a solid mass of bedrock underneath Manhattan providing a firm foundation for tall buildings. Skyscrapers are expensive to build, but when there is a "short supply of land" in a "desirable location", then building upwards makes sound financial sense. A post office was built at 60 Wall Street in 1905. During the World War I years, occasionally there were fund-raising efforts for projects such as the National Guard.

On September 16, 1920, close to the corner of Wall and Broad Street, the busiest corner of the financial district and across the offices of the Morgan Bank, a powerful bomb exploded. It killed 38 and seriously injured 143 people. The perpetrators were never identified or apprehended. The explosion did, however, help fuel the Red Scare that was underway at the time. A report from the New York Times:

The area was subjected to numerous threats; one bomb threat in 1921 led to detectives sealing off the area to "prevent a repetition of the Wall Street bomb explosion."

Regulation

In October 1929, a celebrated Yale economist named Irving Fisher reassured worried investors that their "money was safe" on Wall Street. A few days later, stock values plummeted. The stock market crash of 1929 ushered in the Great Depression in which a quarter of working people were unemployed, with soup kitchens, mass foreclosures of farms, and falling prices. The growing national economy and prosperity led to a recovery during the sixties, with some down years during the early seventies in the aftermath of the Vietnam War. Trading volumes climbed; in 1967, according to Time Magazine, volume hit 7.5 million shares a day which caused a "traffic jam" of paper with "batteries of clerks" working overtime to "clear transactions and update customer accounts."

In 1973, the financial community posted a collective loss of $245 million, which spurred temporary help from the government. Reforms happened; the SEC eliminated fixed commissions which forced "brokers to compete freely with one another for investors' business." In 1976, banks were allowed to buy and sell stocks, which provided more competition for stockbrokers.

In 1987, the stock market plunged Ironically, it was the same year that Oliver Stone's movie Wall Street appeared. In 1995, city authorities offered the Lower Manhattan Revitalization Plan which offered incentives to convert commercial properties to residential use. In 1998, the NYSE and the city struck a $900 million deal which kept the NYSE from moving across the river to Jersey City; the deal was described as the "largest in city history to prevent a corporation from leaving town". A competitor to the NYSE, NASDAQ, moved its headquarters from Washington to New York.

Twenty-first century

In the first year of the new century, the Big Board, as some termed the NYSE, was described as the world's "largest and most prestigious stock market." But when the World Trade Center was destroyed on September 11th, it left an architectural void as new developments since the 1970s had played off the complex aesthetically. The attacks "crippled" the communications network. The attack hastened a trend towards financial firms moving to midtown and contributed to the loss of business on Wall Street, due to temporary-to-permanent relocation to New Jersey and further decentralization with establishments transferred to cities like Chicago, Denver, and Boston.

After September 11, the financial services industry went through a downturn with a sizable drop in year-end bonuses of $6.5 billion, according to one estimate from a state comptroller's office.

Wall Street itself and the Financial District as a whole are crowded with highrises. Further, the loss of the World Trade Center has spurred development on a scale that hadn't been seen in decades. In 2006, Goldman Sachs began building a tower near the former Trade Center site.

The Guardian reporter Andrew Clark described the years of 2006 to 2010 as "tumultous" in which the heartland of America is "mired in gloom" with high unemployment around 9.6%, with average house prices falling from $230,000 in 2006 to $183,000, and foreboding increases in the national debt to $13.4 trillion, but that despite the setbacks, the American economy was once more "bouncing back." What had happened during these heady years? Clark wrote:

{{cquote|But the picture is too nuanced simply to dump all the responsibility on financiers. Most Wall Street banks didn't actually go around the US hawking dodgy mortgages; they bought and packaged loans from on-the-ground firms such as Countrywide Financial and New Century Financial, both of which hit a financial wall in the crisis. Foolishly and recklessly, the banks didn't look at these loans adequately, relying on flawed credit-rating agencies such as Standard & Poor's and Moody's, which blithely certified toxic mortgage-backed securities as solid... A few of those on Wall Street, including maverick hedge fund manager John Paulson and the top brass at Goldman Sachs, spotted what was going on and ruthlessly gambled on a crash. They made a fortune but turned into the crisis's pantomime villains. Most, though, got burned – the banks are still gradually running down portfolios of non-core loans worth $800bn. -- The Guardian reporter Andrew Clark, 2010. It bolstered U.S. banks and allowed Wall Street firms to borrow "directly from the Fed." At the same time, the investment community was worried about proposed legal reforms, including the Wall Street Reform and Consumer Protection Act which dealt with matters such as credit card rates and lending requirements. The NYSE closed two of its trading floors in a move towards transforming itself into an electronic exchange.

Buildings: Physical layout

Wall Street's architecture is generally rooted in the Gilded Age, though there are also some art deco influences in the neighborhood. The layout of streets doesn't have the rectangular grid pattern typical of midtown Manhattan, but small streets "barely wide enough for a single lane of traffic are bordered on both sides by some of the tallest buildings in the city", according to one description, which creates "breathtaking artificial canyons" offering spectacular views in some instances. One report divided lower Manhattan into three basic districts: One of the most iconic representations of the market prosperity is the Charging Bull sculpture, by Arturo Di Modica. Representing the bull market economy, the sculpture was originally placed in front of the New York Stock Exchange, and subsequently moved to its current location in Bowling Green.

Wall Street's culture is often criticized as being rigid. This is a decades-old stereotype stemming from the Wall Street establishment's protection of its interests, and the link to the WASP establishment. More recent criticism has centered on structural problems and lack of a desire to change well-established habits. Wall Street's establishment resists government oversight and regulation. At the same time, New York City has a reputation as a very bureaucratic city, which makes entry into the neighborhood difficult or even impossible for middle class entrepreneurs.


Several well known Wall Street individuals include John Meriwether, John Briggs, Michael Bloomberg, and Warren Buffett (All affiliated at one time or another with the firm Salomon Brothers), as well as Bernie Madoff, and numerous others.

Many talented financiers and bankers worked for Wasserstein Perella & Co. during the 1980s.

The now defunct investment bank of Donaldson, Lufkin & Jenrette had numerous talented people working there including people such as William Donaldson who served in the Nixon administration, as well as Ken Moelis, Bennett Goodman, Herald "Hal" Ritch, Joel Cohen, Safra A. Catz who became president of Oracle Corporation, Tom Dean, Larry Schloss, Michael Connelly, and others.

Wall Street as a financial center

Wall Street in the New York economy

Finance professor Charles R. Geisst wrote that the exchange has become "inextricably intertwined into New York's economy". A falloff in Wall Street's economy could have "wrenching effects on the local and regional economies". Another estimate (in 2006) was that the financial services industry makes up 9% of the city's work force and 31% of the tax base. An additional estimate (2007) from Steve Malanga of the Manhattan Institute was that the securities industry accounts for 4.7 percent of the jobs in New York City but 20.7 percent of its wages, and he estimated there were 175,000 securities-industries jobs in New York (both Wall Street area and midtown) paying an average of $350,000 annually.

The seven largest Wall Street firms in the first decade of the 21st century were Bear Stearns, JPMorgan Chase, Citigroup Incorporated, Goldman Sachs, Morgan Stanley, Merrill Lynch and Lehman Brothers. But there were signs that Manhattan property prices were rebounding with price rises of 9% annually in 2010, and bonuses were being paid once more, with average bonuses over $124,000 in 2010. But as technology progressed, in the middle and later decades of the 20th century, computers and telecommunications replaced paper notifications, meaning that the close proximity requirement could be bypassed in more situations. But there has been a change towards greater residential use of the area, pushed forwards by technological changes and shifting market conditions. The general pattern is for several hundred thousand workers to commute into the area during the day, sometimes by sharing a taxicab from other parts of the city as well as from New Jersey and Long Island, and then leave at night. In 1970, only 833 people lived "south of Chambers Street"; by 1990; 13,782 people were residents with the addition of areas such as Battery Park City

According to one description in 1996, "The area dies at night ... It needs a neighborhood, a community." In 1996, a fifth of buildings and warehouses were empty, and many were converted to living areas. There were reports that the number of residents increased by 60% during the 1990s to about 25,000 By 2001, there were more signs of dogwalkers at night and a 24-hour neighborhood, although the general pattern of crowds during the working hours and emptiness at night was still apparent. Some streets have been designated as pedestrian–only with vehicular traffic prohibited at some times. By 2010, the residential population had increased to 24,400 residents with crime statistics showing no murders in 2010. Tour guides highlight places such as Trinity Church, the Federal Reserve gold vaults 80 feet below street level (worth $100 billion), and the NYSE. A Scoundrels of Wall Street Tour is a walking historical tour which includes a museum visit and discussion of various financiers "who were adept at finding ways around finance laws or loopholes through them". Occasionally artists make impromptu performances; for example, in 2010, a troupe of 22 dancers "contort their bodies and cram themselves into the nooks and crannies of the Financial District in Bodies in Urban Spaces" choreographed by Willi Donner. One chief attraction, the Federal Reserve Building in lower Manhattan, paid $750,000 to open a visitors' gallery in 1997. The New York Stock Exchange and the American Stock Exchange also spent money in the late 1990s to upgrade facilities for visitors. During the mortgage mess from 2007–2010, Wall Street financing was blamed as one of the causes, although most commentators blame an interplay of factors. The U.S. government with the Troubled Asset Relief Program bailed out the banks and financial backers with billions of taxpayer dollars, but the bailout was often criticized as politically motivated, When large firms such as Enron, WorldCom and Global Crossing were found guilty of fraud, Wall Street was often blamed, Interest groups seeking favor with Washington lawmakers, such as car dealers, have often sought to portray their interests as allied with Main Street rather than Wall Street, although analyst Peter Overby on National Public Radio suggested that car dealers have written over $250 billion in consumer loans and have real ties with Wall Street. When the United States Treasury bailed out large financial firms, to ostensibly halt a downward spiral in the nation's economy, there was tremendous negative political fallout, particularly when reports came out that monies supposed to be used to ease credit restrictions were being used to pay bonuses to highly-paid employees. Analyst William D. Cohan argued that it was "obscene" how Wall Street reaped "massive profits and bonuses in 2009" after being saved by "trillions of dollars of American taxpayers' treasure" despite Wall Street's "greed and irresponsible risk-taking." Washington Post reporter Suzanne McGee called for Wall Street to make a sort of public apology to the nation, and expressed dismay that people such as Goldman Sachs chief executive Lloyd Blankfein hadn't expressed contrition despite being sued by the SEC in 2009. McGee wrote that "Bankers aren't the sole culprits, but their too-glib denials of responsibility and the occasional vague and waffling expression of regret don't go far enough to deflect anger." A reporter repeated other lines from the film:

{{cquote|I’m talking about liquid. Rich enough to have your own jet. Rich enough not to waste time. Fifty, a hundred million dollars, Buddy. A player. -- lines from the script of Wall Street

Wall Street in popular culture

  • Herman Melville's classic short story Bartleby, the Scrivener is subtitled A Story of Wall Street and provides an excellent portrayal of a kind and wealthy lawyer's struggle to reason with that which is unreasonable as he is pushed beyond his comfort zone to "feel" something real for humanity.
  • In William Faulkner's novel The Sound and the Fury, Jason Compson hits on other perceptions of Wall Street: after finding some of his stocks are doing poorly, he blames "the Jews."
  • The film Die Hard with a Vengeance has a plot involving thieves breaking into the Federal Reserve Bank of New York and stealing most of the gold bullion stored underground by driving dump trucks through a nearby Wall Street subway station.
  • Many events of Tom Wolfe's Bonfire of the Vanities center on Wall Street and its culture.
  • On January 26, 2000, the band Rage Against The Machine filmed the music video for "Sleep Now in the Fire" on Wall Street, which was directed by Michael Moore. The band at one point stormed the Stock Exchange, causing the doors of the Exchange to be closed early (2:52 P.M.). Trading on the Exchange floor, however, continued uninterrupted.
  • The 1987 film Wall Street and its 2010 exemplify many popular conceptions of Wall Street, being a tale of shady corporate dealings and insider trading.
  • "Wallstreet Kingdom" is a controversial fashion brand promoting capitalism and bonuses on Wall Street.
  • In the film National Treasure a clue to finding the Templar Treasure leads the main characters to Wall Street's Trinity Church.
  • TNA Wrestler Robert Roode is billed from "Wall Street in Manhattan, New York."
  • Bret Easton Ellis's novel American Psycho follows the day-to-day life of Wall Street investment banker and serial killer Patrick Bateman.
  • In the video game Grand Theft Auto IV in the fictional Liberty City Wall Street is a district dubbed The Exchange.
  • Battles 2011 album Gloss Drop contains a song titled "Wall Street."
  • In the video game ', in 2016, soldiers are sent to destroy an invader's radar jamming installation on top of the New York Stock Exchange.

Competitors to Wall Street

See Financial centre

Transportation

Wall Street being historically a commuter destination, much transportation infrastructure has been developed to serve it. Today, Pier 11 at the foot of the street is a busy terminal for New York Waterway and other ferries. The New York City Subway has three stations under Wall Street:

  • Wall Street (IRT Broadway – Seventh Avenue Line) at William Street ( trains)
  • Wall Street (IRT Lexington Avenue Line) at Broadway ( trains)
  • Broad Street (BMT Nassau Street Line) at Broad Street ( trains)

Motor traffic, particularly during working hours, is often congested but driving late at night and on weekends can be easier. The roads are not arranged according to midtown's distinctive rectangular grid pattern with staggered lights, but have small often one-lane roads with numerous stoplights and stop signs. A highway runs along the East River and the Downtown Manhattan Heliport serves Wall Street.

See also

  • Wall Street Historic District (New York, New York)
  • Global settlement (2002)
  • Economy of New York City
  • Hard Hat Riot
  • Bay Street
  • City of London
  • List of financial districts
  • Occupy Wall Street

Further reading

  • Atwood, Albert W. and Erickson, Erling A. "Morgan, John Pierpont, (Apr. 17, 1837 – March 31, 1913)," in Dictionary of American Biography, Volume 7 (1934)
  • Carosso, Vincent P. The Morgans: Private International Bankers, 1854–1913. Harvard U. Press, 1987. 888 pp. 
  • Carosso, Vincent P. Investment Banking in America: A History Harvard University Press (1970)
  • Chernow, Ron. The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance, (2001)
  • Fraser, Steve. Every Man a Speculator: A History of Wall Street in American Life HarperCollins (2005)
  • Geisst, Charles R. Wall Street: A History from Its Beginnings to the Fall of Enron. Oxford University Press. 2004. online edition
  • Moody, John. The Masters of Capital: A Chronicle of Wall Street Yale University Press, (1921) online edition
  • Morris, Charles R. The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy (2005)
  • Perkins, Edwin J. Wall Street to Main Street: Charles Merrill and Middle-class Investors (1999)
  • Sobel, Robert. The Big Board: A History of the New York Stock Market (1962)
  • Sobel, Robert. The Great Bull Market: Wall Street in the 1920s (1968)
  • Sobel, Robert. Inside Wall Street: Continuity & Change in the Financial District (1977)
  • Strouse, Jean. Morgan: American Financier. Random House, 1999. 796 pp. 

External links




Source en.wikipedia.org/wiki/Wall_Street