After writing the previous post, I saw this in today’s Wall Street Journal:
Wall Street’s profit undertow: drugs and anxiety
By Tim McLaughlin 1 hour, 31 minutes ago
NEW YORK (Reuters) – Wall Street’s push for record profits is ruining careers, tearing apart families and keeping drug dealers busy, mental health experts say.
While record bonuses make some Wall Street bankers feel invincible, others become emotional wrecks from pressure to perform and some hit rock bottom, experts say.
Harris Stratyner, a psychologist at Caron’s New York Recovery Center, said some executives he treats are experimenting with cocaine, opiate-based drugs, Ecstasy and marijuana, as well as abusing alcohol.
“It’s like they’re chasing a dream. Even when they make tremendous profits, they’re still worried,” he said.
Alden Cass, a clinical psychologist who counsels Wall Streeters with drug addictions, said drug abuse and high anxiety are undercurrents to the current boom.
“When things are really good, they feel invulnerable,” Cass said. “That can lead to adultery, substance abuse, problems with the law.”
When it comes to profits, things are really good.
Six of the largest U.S. investment banks — Goldman Sachs, Lehman Brothers, Citigroup, JPMorgan & Chase Co., Morgan Stanley and Bear Stearns — combined for $17.6 billion in first-quarter profit this year. That’s after shelling out $28.8 billion for pay and benefits, financial statements show.
Those profit and pay figures are more than double those seen in the first quarter of 2000, the last days before the dot-com bubble burst. New York’s comptroller estimates Wall Street’s 2006 bonuses will generate $1.6 billion in state tax revenue.
COCAINE AND HILLBILLY HEROIN
“To my knowledge, we have not seen an uptick in drug use,” Morgan Stanley spokeswoman Jean Marie McFadden said.
The other five firms declined comment or did not return telephone calls.
But Cass said opiate abuse among his clients is rising and they openly talk about being hooked on prescription drugs like OxyContin, known as hillbilly heroin.
“That’s what has changed from previous booms on Wall Street,” he said.
Cass and Stratyner said their clients sometimes conceal their habits by taking prescription drugs they get for back surgery or sports-related injuries. The Internet has also expanded the black market for drugs.
Wall Street professionals in their 20s use Ritalin and Adderall, prescription drugs used to treat attention-deficit disorder and hyperactivity, to enhance their performance as they grind out 100-hour weeks, Cass said.
Big bonuses and the need to blow off steam have helped invigorate demand for cocaine in Manhattan, according to two junior bankers who did not want to be named.
Juan Rodriguez, convicted of selling drugs to investment bankers and other professionals, said his clients never complained about the price of cocaine, even as it escalated.
“My customers were all business individuals,” Rodriguez said, citing Morgan Stanley bankers as among his clients.
Morgan Stanley said the company has a strong policy against substance abuse and uses random drug testing.
PASSING THE TEST
One hiring manager at a major New York bank said new staff must take a urine test, which is typical for the industry. But he said new hires can choose when to schedule the test during a 45-day period before their start date.
“Our drug test is not so much a test of whether you actually take drugs as it is an intelligence test to see if you can figure out how long it takes to get traces of the drug out of your system,” said the manager, who asked not to be named.
The hiring manager said his employer also had a policy of random drug tests for employees but that in several years he had never encountered anyone subjected to such a test.
Drugs are not the only reason for executive meltdowns.
Overwhelming pressure and anxiety to meet profit goals undid star trader David Becker as he rose the Citigroup ladder.
Nine months after becoming global commodities chief, Becker found himself on the fast track to prison. The largest U.S. bank discovered in 2004 that Becker and others conspired to overstate profits by $20 million.
Becker, 41, pleaded guilty and is serving a 15-month sentence in federal prison. He declined to comment.
Before he committed his crime, he sought psychiatric help to deal with the pressure of balancing family and career, court papers show.
A metaphor for his life was a painting he owned depicting a man being pulled by all four limbs, Becker’s psychiatrist, Dr. Barbara Deutsch, wrote to the judge in the case.
“He felt enormous pressure to make the group’s budget at all costs,” Deutsch wrote. “He felt identified with this tortured man.”