LeoGlossary: Wall Street
A term used to summarize the financial industry and the firms within it.
This is located in Lower Manhattan in New York City which extends 8 blocks. It is the world's principle financial center. *Wall Street is home to the New York Stock Exchange (NYSE) which is the largest by volume in the world. The Federal Reserve Bank of New York is also there. This is the most powerful of all the Federal Reserve Banks.
Many commercial banks and insurance companies have a presence on Wall Street. Due to being the epicenter of financial activity, many other exchanges are located close by. The New York Mercantile Exchange and other commodity futures exchanges, and the American Stock Exchange are in downtown Manhattan.
A Financial Symbol
Wall Street is a symbol of financial and economic power. This captures the imagination of people throughout the world. Many view it as a source of trade, capitalism, and financial innovation. So of the richest people in history accumulated their wealth from through the markets.
There is also a negative side to this. Wall Street is also blamed for excess along with economic turmoil. Due to the image many have regarding participants on Wall Street, whenever there is an economic shock, rightly or wrongly, Wall Street is often blamed. This was the case with the subprime mortgage crisis.
The situation was further magnified when the Federal Reserve along with US Treasury stepped in to "bailout" Wall Street. There were a variety of programs put together such as the Troubled Asset Relief Program (TARP) which helped out the banks.
It is a situation that is not helped out considering the fraud that occurs on a regular basis. Bernie Madoff became a symbol of criminal greed when he was arrested and, ultimately, convicted of running a $60 billion Ponzi Scheme. There is a long history of fraud and other illegal acts tied to Wall Street. Over time, people such as Ivan Boesky, Michael Milken, and Raj Rajaratnam became media sensations.
The collapse of companies such as Enron, Worldcom, and Global Crossing did not have anything to do with Wall Street directly as they were headquartered (and operated) elsewhere. However, the wiping out of the stock stemmed from the greed that became symbolic throughout Wall Street.
In spite of the negative viewpoint many carry, it is something that captures the attention of the masses. In American culture, Wall Street was a hot topic for Hollywood. The film by the same name by Oliver Stone became a global sensation. Today, 35 years later, people still repeat the lines. One of the main characters, Gordon Gecko, played by Michael Douglas, epitomized the era of the 1980s. Unfortunately, when it comes to the financial world, the same is true for every other decade.
Financial And Economic Impact
Scams, fraud, and Ponzi schemes aside, Wall Street does provide a vital role in the global economy and the world's financial system.
The debt and capital markets are crucial for economic expansion. Companies all over the world look to the financial services sector to funding of different ventures. Everything from the building of factories to the penetrating of new markets is financed by Wall Street.
Risk is also managed by the use of derivatives. While this can blow up companies periodically, while also providing systemic risk, they do offer a way to limit downside impacts if catastrophic conditions arise.
We also see trillions being invested in pension funds, 401K, and other personal wealth building programs. The products that Wall Street creates end up as collateral on the Eurodollar market, the single source for 90% of the global funding. Investment banks play a powerful role in the global economy for a reason.
When it comes to jobs, the financial industry not only has some strong numbers, they are also highly paid. Unlike sectors such as retail which has a lot of low paying jobs, people working in finance have incomes greater than the norm. This ultimately feeds a lot of money into the real economy. This is shown by the real estate prices in and around New York City. It is some of the most expensive in the world because the incomes are there.
The impact of on the New York City vary. Here are just a couple:
the financial services industry which had a $70 billion profit became 22 percent of the city's revenue 
the financial services industry in 2006 makes up 9% of the city's work force and 31% of the tax base 
In 2007 the securities industry accounts for 4.7 percent of the jobs in New York City but 20.7 percent of its wages, and there were 175,000 securities-industries jobs in New York (both Wall Street area and midtown) paying an average of $350,000 annually  Between 1995 and 2005, the sector grew at an annual rate of about 6.6% annually, a respectable rate, but that other financial centers were growing faster  Wall Street provided a fourth of all personal income earned in the city, and 10% of New York City's tax revenue 
The city's securities industry, enumerating 163,400 jobs in August 2013, continues to form the largest segment of the city's financial sector and an important economic engine, accounting in 2012 for 5 percent of private sector jobs in New York City, 8.5 percent (US$3.8 billion) of the city's tax revenue, and 22 percent of the city's total wages, including an average salary of US$360,700 
This is a situation that is reflected throughout the tri-state area.
Wall Street also has seen other cities vying to take the title. Over the last 25 years, the financial districts of many other cities grew in size. One is Miami which is being called "Wall Street 2.0". Many firms decided to locate to South Florida in response to the high tax rates. Technology allows for companies to operate remotely.
Hedge funds are some of the larger entities to move. Probably the best known Wall Street figure to head south was Carl Icahn.
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