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Sweaty hands tearing open brown envelopes, the contents of which bring either intense joy or painful, brain-numbing disappointment. That's what it's like when the City of London's finest get the first glimpse of their bonus payments at the beginning of each year. But 2008 will be different.
Ever since the Americans blasted their way into Baghdad in 2003, the world economy has enjoyed a four-year boom that has brought untold riches to thousands of bankers, brokers and traders who have cashed in on markets that have soared to levels not seen since the bursting of the dotcom bubble in 2000.
What has changed this year is that people who would normally have received fat or even modest bonuses will no longer do so - because they have been fired as a consequence of the US sub-prime mortgage debacle.
Instead of ordering a dozen or so crates of fine wine from Corney and Barrow, moving to an even more expensive house, or shelling out for a new Porsche, hundreds of workers in the old City - the British capital's financial district - are at home looking for work after their bosses at UBS, Merrill Lynch, Citigroup and Bear Stearns wielded the axe.
The banks have been hit by the seizing-up of debt markets, with institutions refusing to lend to each other because of fears that they risk exposure to loans in the US, where people with poor credit histories have been defaulting on their mortgages in alarming numbers.
Recruitment agencies say that if you work in the Square Mile and are still holding on to your job in leveraged finance, credit derivatives or mortgage-backed securities, then the pickings this year could be meagre, to say the least.
"When the going gets tough, the investment banks get brutal," says one financial services headhunter.
"If you are in work, but don't get a bonus, that's City shorthand for 'find another job, and soon'."
Even in the good years, a miserable bonus is a sign that your employer may be trying to tell you something. But as the worst of the credit crunch is probably far from over, the lack of a meaningful bonus will be taken as an ominous sign - a warning that your head is on the block as the banks gear up to cut more staff.
According to the Centre for Economic and Business Research, around 6500 financial services jobs could be lost in the UK in 2008. The CEBR predicts that bonuses will fall by an average of 16 per cent to a total of £7.4 billion ($19 billion) from last year's record of £8.8 billion. The payouts face a similar drop in 2008, taking them back to the lowest level since 2003.
Everything is relative, of course, because even half-good bankers receive basic pay of around £100,000 a year - the sort of salary that most people can only dream of. But it is the bonus that ratchets up the pay to £1 million for thousands of them.
Leading lights at Goldman Sachs, Morgan Stanley and JP Morgan can expect 10 times that figure, while in the hedge fund industry, a few will scoop at least £50 million apiece.
City high-fliers must be kept sweet to prevent them from defecting to rivals, especially in areas that have been doing well - mergers and acquisitions activity, for instance, is expected to surpass last year with the value of deals hitting a record £1.5 trillion.
"The banks have to be careful they don't alienate their most talented individuals or they will drive them into the arms of competitors who will drum up extra business as a result," says Sarah Butcher of jobs website Efinancialcareers.com.
She adds: "Big-name bankers or traders have valuable contacts books and reputations that mean something to chief executives of multinationals, who are preparing takeovers or want to raise billions on the capital markets but want to do it via the offices of advisers or specialists who they know and trust."
Even the credit crunch is producing winners. A Californian hedge fund made a 1000 per cent return this year by betting against US sub-prime home loans, making it one of the world's best-performing funds. Lahde Capital, set up in Santa Monica by Andrew Lahde is among a group of funds that spotted the problems in advance. The decision to use derivatives to "short", or bet against, the debt-market value of sub-prime US home loans appears to have become the most profitable single trade of all time, making well over £10 billion.
In Britain, Odey Asset Management, headed by Crispin Odey, who is married to Nichola Pease, boss of JO Hambro Asset Management, is rumoured to be among UK hedge funds that have done well.
"The credit crisis is affecting different areas of the financial services industry unevenly," says Harry Pilkington of recruitment specialist Armstrong International. His firm estimates that bonuses will be cut by between 10 per cent and 15 per cent this year, but that "the top people will be looked after". Still, if the banks are losing money, which they are, most people will have to make do with less.
"People are more reluctant to hire if they expect the economy to take a dive, so the effect will be to deflate remuneration," says Butcher. Last year, high-flying bankers found themselves with bonuses that were 70 per cent cash and the rest in stock.
This time, those figures will be reversed, with more of the package accounted for by shares - the value of which can go down as well as up.
The biggest impact of City job losses and reduced bonuses is likely to be felt on the property market in London and the southeast, with implications for the wider economy. Analysts say that in recent years up to 60 per cent of City bonuses have been ploughed into property, especially buy-to-let.
Butcher says: "If people lose their jobs or get little or no bonus, it will be tempting to cash in those buy-to-let properties, perhaps triggering significant falls in residential property prices."
London has thrived as a global centre for financial services with the result that the UK is more vulnerable to what happens in financial markets than elsewhere. Manufacturing accounts for just 15 per cent of UK GDP, but financial services contribute nearly double that.
Nick Barnes at upmarket London estate agent Knight Frank says that demand for properties valued at £1 million to £3 million (the sector most favoured by recipients of City bonuses) is softening.
"Colleagues say there has been a fall-off in the number of inquiries," he says - but he doesn't believe there will be a property crash. At the top end - properties selling at £5 million to £10 million - prices are rising, thanks to demand from cash-rich foreign buyers from Asia and the Middle East.
Barnes says: "I think there will be a fall-off in the number of transactions, but I can't see prices coming down."
- Observer