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Shanghai, Mumbai, Dubai, or Goodbye to US Financial Gurus

October 26, 2008

Amid Economic Crisis, Middle East Financial Hubs Faring Well

Americans Seeking Employment May Find More Obstacles Than Their Counterparts

Europeans in investment banking and other financial fields already have been flocking to the oil-flush Persian Gulf for months, propelled by the hope that emerging economies of the East will ride out any global recession better than New York or London. In a phrase often cited by British brokers and bankers,  “it’s Shanghai, Mumbai, Dubai, or goodbye.”

Overcoming a long-held wariness by many Americans about living in the Middle East, growing numbers of U.S. investment bankers and other financial professionals are at least mulling moving their careers here, having lost their jobs or fearing they might. But Americans hoping to make the East their refuge in the global financial storm will find a few more obstacles than their job-seeking European peers, executives and recruiters warn: Many here are unhappy with U.S. financial and foreign policies, and dubious about what’s still regarded as Americans’ brasher way of doing business.

One problem for Wall Street denizens hoping to relocate in the East is the broad perception that bad lending decisions by American bankers started the global financial crisis.

“Ooh, yes, that’s not a good bit to have on your resume, is it?” Briton James Gaubert said, wincing sympathetically, as he hurried on his own job hunt through the high glass hallways of the Dubai International Financial Center.

“So, you’ve managed to screw up your banks, and now you’ve come to screw up ours?” a Saudi investment executive in white robe and white-flecked beard said of the attitude toward job-seeking Americans.

Politically, the U.S. military presence in Iraq means many here no longer view Americans as kindly as they did in the 1990s, some financial executives said.

“Let’s just say that blue passport doesn’t get you any favors anymore,” one longtime American banker in Dubai said.

… as financial crises build, growing numbers of Americans are overcoming that reluctance, and sending resumes to Dubai, Riyadh, and other Middle East hubs, headhunters and financial executives said.

“A lot of people are realizing that their jobs are in jeopardy or their jobs are gone,” and that “this now the time to make a move where things are   happening,”  David Johnson of the British-based Whitehead-Mann Partnership recruiting firm, said.  [more]

American Financial Executives find themselves in a very awkward position.  The bloody finger of accusation and threat points directly at them.  They are not suffering in the same way the rest of us are.  While we are stressed about our jobs, homes, groceries and fuel, these executives are stressed that their image, privilege and holdings have dropped.  Perhaps some of them feel guilt, perhaps some are angry that the finger points directly at them alone, when reality shows the cause is really systemic to how American Democracy and Capitalism has devolved into Kleptocracy.

Rich-Poor Gap Widens in Europe, North America

Dan Hamilton: The Paris-based Organization for Economic Cooperation and Development (OECD) released a study Tuesday showing clearly that the gap between rich and poor is widening in Europe and North America. The report, which covers developments spanning 20 years in 30 countries, contains some interesting nuggets:

• The U.S. has the greatest inequality in the OECD after Mexico and Turkey — and the gap has grown rapidly since 2000. The richest 10 percent of Americans earn an average of $93,000 (highest in the OECD) – whereas the poorest 10 percent of Americans earn an average of $5,800 (about 20 percent lower than the OECD average).
• Since 2000, income inequality has grown fastest in Germany, although Germany’s gap remains below the OECD average.
• British inequalities have been falling since 2000, but the rich-poor gap there is still wider than in three-fourths of OECD countries.
• The rise in inequality is generally due to the rich improving their incomes relative both to low- and middle-income people.
• Older people are much less likely to be poor than in the past. Poverty has shifted from pensioners to young adults and families with children.

The report is likely to fuel popular resentment on both sides of the Atlantic about what is widely perceived to be the essential unfairness of this month’s rapid, massive bank bailouts engineered by governments in response to the financial crisis.

Income inequality and poverty rising in most OECD countries

The gap between rich and poor has grown in more than three-quarters of OECD countries over the past two decades, according to a new OECD report.

OECD’s Growing Unequal? finds that the economic growth of recent decades has benefitted the rich more than the poor. In some countries, such as Canada, Finland, Germany, Italy, Norway and the United States, the gap also increased between the rich and the middle-class. 

Perhaps this is what those Financial Gurus are running from.  The rich, middle, and poor gap has widened because the middle has shrunk. Caught as the ‘fall guys’, these well dressed, neatly groomed privileged and resourceful money magicians must resort to plan ‘B’.  They have visions of living princely lives in Dubai, they’ve seen some of their collegues hit the jackpot in the Middle East.  So, why not them, too?  Some middle class Americans are applying for or renewing their own passports for an escape to Mexico or Canada.  The same drive is at work.  The American Dream has evaporated.  The American Expat population is growing.  Some Americans will even find themselves in the unfamiliar role of  dreaded “Illegals“.  The shoe is now on the other foot.  Americans are fleeing for financial security and medical care. Some of the countries most attractive to these American evacuees could even be called ‘socialist’.  Those ‘special’ Republican Kleptocrats will have America to themselves … those who could not afford to flee will remain as their ‘vassals.  Most Americans hesitate to see who will become our next president.  One candidate will inspire Americans to stay and fight to rebuild America … the other candidate will inspire those same Americans to flee.

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One Comment
  1. January 10, 2009 6:28 am

    At the time of financial crises we need to come together united and try to solve the problems which are responsible for such a hazard. We need to overcome it. It is meant to bring calm to the population and markets and display government strength and stability.

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