Too Drunk To ...k

Too drunk to work - that's apparently the consequence of 24 hour drinking in the City these days.

London-based bankers are now able to party until the early hours due to the relaxation in the drinking laws - and, as many do so during the week, some staff are getting in rather the worse for wear (if they get in at all).

The signs that City workers are again drinking to excess is not a good one. Bar and restaurants are now packed in both the City and Canary Wharf at lunchtimes and after work, as City staff have got cash to spend and are confident about the future. But does this actually signal that the good times are on the way out ? It seems that, historically, by the time employees who work in the financial markets are prepared to push the boat out and party, their prospects are already on the wane.

And there are other signs too that the good times may be about to come to an end. Forget for a moment the recent fall (and rebound) in equity values and the worries about sub-prime lending, but focus instead on anecdotal evidence. In addition to boozing bankers letting their guards down, we have new building developments going up everywhere - and, just as new builds near completion (as they are now), we always seem to be close to an economic crash.

And recruiters (at least those capable of telling the truth) will advise that things have been tougher so far this year. Despite the press hype, the mood in the City recruitment market is cautious - and not overly-optimistic about its prospects for the rest of the year. A recent survey from Manpower has revealed that businesses are currently hiring at a slower rate than 2006. The demand for temporary staff, however, is on the up - again a sign that all might not be well, as firms don't have the confidence or budget to make permanent hires.

All eyes were on Goldman Tuesday, to see if the Wall Street firm would deliver in its fiscal first-quarter. And deliver it did - profits were up 29% to a record $3.14bn. $6.6bn is said to have been set aside for staff compensation already (up 15% on 2006). But Goldman's fiscal first-quarter runs to the end of February, and concerns about a downturn have been resurfacing since then. And not everyone can deliver like Goldman, which brings home a lot of its profits from risking its own capital in investments and trading.

So, although it's too early to tell where we're heading in 2007, the smart folks are already beginning to be wary. It's not feeling great out there at the moment - unless you've had one too many!

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