I've worked for enough big companies to know what kind of throw-downs corporate Christmas parties can be: lavish affairs that spare no expense, with enough food and alcohol to make Henry VIII blush and enough wild behavior to fuel water-cooler gossip for the entire next year. And while I've never attended a Wall Street holiday party, I can only imagine it's all this and more. Or rather, it used to be.
Things are tough all over
The New York Times is reporting that Wall Street isn't throwing the sort of holiday bashes it used to, and the parties being held now are typically paid for by department heads and the like out of their own pockets.
Morgan Stanley (NYSE: MS) and Credit Suisse (NYSE: CS) are two prominent banks not holding company-sponsored holiday parties this year. Bank of America's (NYSE; BAC) investment banking unit, along with Citibank (NYSE: C) and Deutsche Bank (NYSE: DB), are also eschewing company-sponsored shindigs, though they are allowing party expenses to be charged against individual department accounts.
The times they are a-changing
Apparently, this phenomenon isn't entirely new. Ostentatious displays of wealth on Wall Street have been on the decline, or outright banned, since the financial crash. One of the reasons is that there's just a lot less Wall Street wealth to go around now. Many of the country's big banks are still struggling to find their financial footing post crash. As such, with budgets being cut and payrolls slashed, there's simply less money to chuck around.
But there's also the very real perception problem Wall Street still has on Main Street. Main Street probably never looked with excessive kindness on the Street even before the crash, but afterwards even less so, to say the least. Witness Occupy Wall Street. That nationwide mini-uprising is the kind of thing we're used to seeing in Spain or Greece but not here in the U.S., and I think it made people at the top of the Wall Street heap step back and consider where something like that might eventually lead if not paid attention to.
From an investor's perspective, this is all good news. This is your money, remember. Money not spent on lavish bashes is money that can be paid out in dividends or lent out to make the bank more profitable. Dodd-Frank is doing its share to change the culture on Wall Street, but so is good old-fashioned frugality and public pressure.
