More financial "pain" coming to a NYC club near you.
As everyone knows, the last two weeks have been puncuated by a bloodletting in the markets. Stocks had run up greatly this year, with the Dow even edging close to 13,000 at one point. Further, while the Dow has jumped up and down a bit during the year, price support for it seemed firmly entrenched at a floor of 12,000. This was all good news, particularly since the markets opened at 11,577 on January 3rd.
Right now, the Dow is sitting at well under 11,000. While this could change quickly given the current volatility, right now a lot of people, including professional money managers, have lost a ton of paper wealth. Also, confidence in market stability is now gone as the notion of price support at 12,000 has now evaporated.
This will hit people who work for asset managers particularly hard. Not only will management fees be lower during the next billing cycle than they have been for most of the year, but those who have been counting on performance fees (where the real gravy is in this industry) are now facing the real possiblity that none will be collected for 2011, particularly given the current economic outlook.
I strongly suspect that those dancers who normally cater to Wall Street types are going to see a drop off in attendance and/or spending as these guys adjust to the new reality for this year. I used NYC in the title, but obviously this affects clubs in a lot of areas, including other cities with heavy financial industry involvement as well as the various suburbs to NYC and other cities.
Re: More financial "pain" coming to a NYC club near you.
^^^ this isn't speculative either ! Wall St. Banks and Brokerages have already announced that massive 'layoffs' are in the pipeline. Morgan Stanley made the announcement well before the recent stock market 'swoon' ... see ... and many more are likely to follow.
There is also a major element of 'lost tax revenue'. As investors take losses on their stock shares, those losses can be used to offset income taxes due on winning investments and/or ordinary income. Thus the state of NY will find its total tax revenues dropping like a rock. NY's classic response to this situation will be to ( again ) increase state income tax and cap gains tax rates. When THIS happens, it will 'pick the pocket' of virtually every strip club customer throughout the state who ISN'T a losing investor !!!
Re: More financial "pain" coming to a NYC club near you.
I see the drop off already.
In the last few months a couple of my long time clients who work in finance have "broken up" with me because their companies aren't giving them bonuses anymore. One even gave me a "severance pay" because he felt so bad. One of my clients was recently laid off! Another made it clear that I either be his sugar girlfriend or he's walking.
After reading the paper, I thought, "well, there goes the rest of my client base!" lol.
Re: More financial "pain" coming to a NYC club near you.