Wall Street

Wall Street: A Street of Financial Legends

Wall Street is more than just a street in New York City; it’s the heart of America’s financial pulse. Imagine if every heartbeat symbolized a trade, and each thump resonated with the rhythm of global finance. That’s what Wall Street represents – the constant, ever-evolving heartbeat of money.

The Historical Echoes

Originally known as Het Cingel during the 17th century, this street was part of New Amsterdam and featured an actual city wall from 1653 to 1699. The term ‘Wall Street’ has since become synonymous with the US financial markets. But what if we told you that beneath its modern facade lies a history as rich and complex as any ancient civilization? Could it be that every stone on Wall Street tells a story of trade, power, and change?

From Slavery to Stocks

The area served as a slave market from 1711 to 1762. Can you imagine the contrast between the bustling financial exchanges today and the dark history that once defined this space? The New York Stock Exchange was formalized in 1792 through the Buttonwood Agreement, marking the beginning of Wall Street’s transformation into a hub of commerce. How did these two worlds coexist for so long before one finally triumphed over the other?

The Rise and Fall of an Era

During the Civil War, New York emerged as the nation’s banking center, connecting ‘Old World capital and New World ambition.’ P. Morgan created giant trusts, and Standard Oil moved to New York City. The economy shifted from agriculture to industrial to financial, making New York a leading financial capital. Charles Dow began tracking stocks in 1884, creating the Dow Jones average. The Wall Street Journal was established in 1896, expanding to 30 stocks by 2000.

During the early 20th century, Wall Street experienced its heyday with J.P. Morgan’s headquarters at 23 Wall Street being a hub of financial activity. The street faced challenges from government authorities and was hit by a bomb explosion in 1920 that killed 38 people and injured many more. The Assay Office suffered severe damage, as if an invisible force had overturned it. Can you picture the chaos and destruction that unfolded on this once-peaceful street?

The Great Depression and Beyond

In September 1929, the stock market peaked, but by October 3, it began to decline. Stock values plummeted on October 24, leading to the Great Depression. During this era, development in the Financial District stagnated, and Wall Street ‘paid a heavy price.’ The government reduced margin requirements during the New Deal years and after World War II, making it easier for investors to buy stocks on credit. This led to increased trading volumes and a recovery in the 1960s.

However, the financial community faced a collective loss of $245 million in 1973. Reforms were instituted in the stock market in the 1970s and 1980s, eliminating fixed commissions and allowing for electronic trading. This led to lower prices and increased participation by more people. The Reagan years saw a push for de-regulation, which had an impact on various industries.

The Modern Era

The economy experienced upward growth during this period, but also spawned a drug culture in the financial sector, with cocaine use becoming widespread among successful young executives. In 1987, the stock market plunged, and the surrounding area lost 100,000 jobs. The NYSE later struck a deal to stay in the Financial District.

After the World Trade Center attacks in 2001, the NYSE re-opened on September 17, but the financial services industry went through a downturn. To guard against vehicular bombings, authorities built concrete barriers with bollards, which were designed by Rogers Marvel to be both functional and aesthetically pleasing. Its bronze surfaces echo the grand doorways of Wall Street’s temples of commerce, allowing pedestrians to pass while cars cannot.

Landmarks and Modernity

The older skyscrapers on Wall Street often had elaborate facades, a feature not commonly seen in corporate architecture today. Landmarks include Federal Hall National Memorial (26 Wall Street), built 1833-1842; 55 Wall Street, erected 1836-1841 as Merchants Exchange and later the United States Custom House and National City Bank Building; 14 Wall Street, built 1910-1912 with a 7-story stepped pyramid; originally the Bankers Trust Company Building; 23 Wall Street, built 1914 as the ‘House of Morgan’ and served as J. P. Morgan & Co.’s headquarters; 48 Wall Street, built 1927-1929 as the Bank of New York & Trust Company Building; 40 Wall Street, built 1929-1930 as the Bank of Manhattan Company Building; later became the Trump Building; 1 Wall Street, built 1929-1931 and previously known as the Irving Trust Company Building and Bank of New York Building; 75 Wall Street, built 1987 as Barclays’ US headquarters and converted in 2006-2009 into a mixed-use building; 60 Wall Street, built 1988 as J. P. Morgan & Co.’s headquarters and currently Deutsche Bank’s US headquarters.

The New York Stock Exchange Building at the corner of Broad Street is a key anchor for the area and houses the world’s largest stock exchange. The city authorities have recognized its importance and offered tax incentives to keep it in the Financial District. Plans to rebuild were delayed due to the September 11 attacks, but the exchange still occupies the same site.

The Economic Impact

The New York Stock Exchange has become ‘inextricably intertwined into New York’s economy.’ Wall Street pay is a significant part of the city’s economy, and a falloff in the stock market’s economy could have severe effects on the local and regional economies. The financial services industry employs close to 200,000 persons and accounts for 22 percent of the city’s revenue.

The seven largest Wall Street firms were Bear Stearns, JPMorgan Chase, Citigroup, Goldman Sachs, Morgan Stanley, Merrill Lynch, and Lehman Brothers. During the recession, many of these firms went out of business or were bought up by other financial firms. The exchange is a large technology hub, requiring 3,500 kilowatts of electricity, 8,000 phone circuits, and 200 miles of fiber-optic cable.

The Future

The decline in Wall Street’s economy in 2008 resulted in $18 billion less in taxable income, affecting the city’s tax revenue. Estimates vary about the number and quality of financial jobs in the city, but it is clear that the financial services industry has a significant impact on New York City’s economy. The US government, including Merrill Lynch, was bought by Bank of America after a series of failures on Wall Street leading to restructuring and change.

The financial industry provides significant income and tax revenue for New York City and state, with a downturn having huge repercussions. Despite this, Manhattan property prices rebounded in 2010 and bonuses were paid again. The requirement that brokerage firms be based near Wall Street was relaxed as technology replaced paper notifications, allowing firms to move to Midtown Manhattan. Many firms, including Morgan Stanley and J. P. Morgan Chase, have moved north from Wall Street, but the New York Stock Exchange Building remains a key magnet.

After expanding into New Jersey in the 1980s, Wall Street activities have had significant economic impacts on the state, with employment wages paid totaling $18.5 billion in 2009 and contributing to 8.4% of the state’s GDP. A substantial amount of securities traded in the United States are executed in New Jersey, with its data centers and workforce playing a crucial role in the U.S. equity market for major stock exchanges.

Globalization and Controversy

New York City is no longer considered the epicenter of the financial industry, as global markets have become increasingly integrated and capital pools are forming overseas. Alternative trading platforms like BATS, based in Kansas City, have gained significant shares of the market despite having only two salespeople in New York City.

The term ‘Wall Street’ has become synonymous with financial interests and power politics in America, representing both economic power and controversy. Its role has been a source of criticism throughout the nation’s history, particularly during times of economic crisis. The US government’s bailout of banks and financial institutions through the Troubled Asset Relief Program was criticized as being politically motivated and favoring large Wall Street firms over smaller community development banks.

Analysts and journalists pointed out that this bailout came at the expense of taxpayers and ignored issues such as fraud, robbery, and crime on Wall Street. Many blamed the resulting regulations, such as Sarbanes-Oxley, for dampening business climate and creating an overly burdensome environment for businesses. The use of bailout funds to pay bonuses to executives was also widely criticized.

In contrast, some figures in the financial industry, including Goldman Sachs’ Richard Ramsden, were unapologetic about their role in the financial crisis and believed that risk-taking was vital to economic growth. Others felt unfairly targeted by politicians and the public, leading to a sense of resentment and frustration among those on Wall Street.

Wall Street firms have contributed to projects such as Habitat for Humanity and food programs in Haiti. The street has been portrayed in popular culture through works like Herman Melville’s ‘Bartleby, the Scrivener’ and Tom Wolfe’s novel The Bonfire of the Vanities. The film Wall Street (1987) and its sequel exemplify many conceptions of Wall Street as a center of shady corporate dealings.

Wall Street is associated with famous people such as Ray Dalio and Bernie Madoff, who are known for their investment strategies or scandals. Transportation infrastructure has been developed to serve Wall Street, including subway stations, water taxi terminals, and bus routes.

As we look towards the future of Wall Street, it’s clear that this street will continue to evolve, adapting to new challenges and opportunities. Will it remain a symbol of financial power or transform into something entirely different? Only time will tell, but one thing is certain – Wall Street will always be at the heart of America’s economic story.