World Wall Streets
The Great Recession has shattered New York City’s financial district, which is projected to lose 46,000 jobs and up to $70 billion by 2010. But how have the world’s other Wall Streets fared?
Canary Wharf, London
Stats: The world’s second-biggest financial center has lost 20,000 jobs and suffered $110 billion in write-downs since the start of 2008.
Sign of the times: In the go-go years of the real estate bubble, Britain’s financial sector doubled, growing to nearly 11 percent of GDP. But today, rentals are down 20 percent and indignities abound: During protests against the spring G-20 summit, an angry mob threw eggs and burned bankers in effigy. One restaurant near Citibank’s former European headquarters introduced a "pay-what-you-want" meal. And the long-term outlook isn’t good: British banks are still laboring to shed an estimated $200 billion in toxic assets.
Stats: The Asian rival of London and New York has shed more than 5,000 jobs since 2008.
Sign of the times: At the height of the boom in 2007, Japan held 15 percent of global financial wealth, while representing just 8 percent of global GDP. But the "Lehman shokku" and its aftereffects have crippled Tokyo’s financial industry. The vacancy rate has tripled in prime business areas. One watering hole in Goldman Sachs’s Tokyo headquarters building has started holding "pink slip" networking parties for fired bankers. Japan’s banking business is migrating toward China at an ever increasing rate.
Dubai International Financial Centre
Stats: The central stock index plummeted more than 70 percent in 2008.
Sign of the times: Flush with oil wealth-and enjoying scant tax rates and a laissez-faire business climate-Dubai’s investors increased their holdings by at least $1 trillion in the 2000s. Now the party’s over. Banks like Morgan Stanley have fired up to 20 percent of their local staffs. As of April, foreigners were canceling their visas at a rate of 1,500 per day. Malls, shops, restaurants, and clubs stand half-full. The only thing keeping Dubai afloat right now is bailout money from its more responsible neighbor, Abu Dhabi.
Stats: The stock market has fallen 30 percent since last summer, and Deutsche Bank posted its first loss since World War II.
Sign of the times: Most banks and financial firms in Germany avoided the creatively structured products and banking culture that led to ruin in the United States and Britain. The country has stringent mortgage policies, a strong social safety net, and the lowest homeownership rate in Europe. Nevertheless, the mood has been sour among Frankfurt’s 80,000 bankers. They’ve faced protests from pesky teenage anarchists, and "white-collar fight clubs"-boxing classes for bankers-have cropped up at local gyms.
Financial District, Hong Kong
Stats: The stock market in Hong Kong lost nearly half its value in 2008.
Sign of the times: Ultimately, Hong Kong stands to benefit from other cities’ woes; it required banks to keep an ample capital cushion, and banking business is migrating there. In the meantime, though, the economy is contracting, and banks have shed at least 1,000 jobs and canceled parties and perks (no more $20,000-a-month housing stipends). One bank’s corporate suite at the famed Hong Kong Sevens, an annual champagne-soaked rugby tournament, actually charged for drinks this year.