Someone must have been very good this year.
Wall Street’s biggest banks, rebounding after a government bailout, are set to complete their best two years in investment banking and trading, buoyed by 2010 results likely to be the second-highest ever.
The five largest U.S. firms by investment-banking and trading revenue -- Goldman Sachs Group, JPMorgan Chase, Bank of America Corp, Citigroup and Morgan Stanley -- will likely have a better fourth quarter than the previous two periods [...]
The surge has come after the five banks took a combined $135 billion from the Treasury Department’s Troubled Asset Relief Program and borrowed billions more from the Federal Reserve’s emergency-lending facilities in late 2008 and early 2009 [...] Since then, the firms have benefited from low interest rates and the Fed’s purchases of fixed-income securities.
"This is a once-in-a-lifetime opportunity for most of these banks, and I think they’ve recognized it as that," said Charles Geisst, a finance professor at Manhattan College [...] "The profits they’re making now will allow them to replenish their capital and take care of the other things they need to do."
Ca-Ching!
[Link to intro quote]
Wall Street Sees Record Revenue in ’09-10 Recovery From Bailout
By Michael J. Moore, Bloomberg - Dec 12, 2010
Yes, 2010 was a near record year for Wall Street profits. They are recovering quite well -- Thank you very much Americans.
Yet all was not "sugar and light" for them this year ... they did see the "hammer come down" in terms of New Legislation from congress afterall ...
They have to totally re-vamp the way they Do Business, right? ... what's that? ... They really don't?
Uh oh!
U.S. Congress Passes Wall Street Regulation Bill
Bloomberg, Businessweek.com --July 15, 2010
Measured against Wall Street excesses that nearly toppled the global financial system two years ago, some analysts saw the bill as tinkering at the edges of banking practices rather than forcing fundamental changes to the industry.
"There is little in this legislation that will fundamentally change the way that Wall Street does business," said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. "There is probably no economist who believes that this bill will end the risks of too-big-to-fail financial institutions. The six largest banks will still enjoy the enormous implicit subsidy that results from the expectation that the federal government will bail them out in the event of a crisis."
[...]
Most Senate Republicans voted against the measure, saying it doesn’t go far enough to prevent future taxpayer-funded bailouts of Wall Street firms and creates an unnecessary new bureaucracy in the consumer bureau.
Wow when you got Gophers saying that the 'Clamp Down' on Wall Street doesn't go far enough ... it kind of makes you wonder.
Maybe Wall Street made out like Bandits again, with this watered-down legislation?
... especially when you consider -- What MIGHT have happened to them ...
What SHOULD HAVE happened -- if there were any {Economic} Justice in the world.
My One-Man Deficit Commission Challenges Obama's Blue Ribbon Cat Food Commission Chairs
Miles Mogulescu, huffingtonpost.com -- Dec 5, 2010
[Point] 3. A Financial Transactions Tax.
The idea is simple. If you charge a very small tax on a very large volume of transactions, you can raise a ton of revenue with minimal impact on those transactions. As economist Dean Baker has pointed out, a 0.25% tax on buying or selling a stock would be $25 on a $10,000 stock purchase, which would make little difference to someone intending to hold the stock for any period of time. [...]
Yet a modest tax, too small for most investors to even notice, could add $100 billion per year--$1 Trillion over 10 years--to Federal revenues. [with a 'T' dollars]
It would have the added advantage of discouraging the kinds of speculation that helped cause the financial meltdown. Speculators who buy and sell by the minute and hour to earn pennies per transaction multiple times would be discouraged. Complex derivatives would be taxed numerous times in the chain of transactions, reducing the amount of profit from creating so much complexity that almost no one can understand or regulate the transactions.
Sounds simple enough -- Tax the churning, frothing, creative/destructive-finance machine, where it lives -- at the Transaction level. Make Wall Street gamblers think twice, before placing that next Million Dollar Wager.
It could bring some Sanity and Stability to the Markets. It could turn the Stock Markets BACK into something that would Help the Economy, instead of simply Exploit it, for short-term profits.
Who could be against such an idea ? Oh I dunno ... How many Lobbyists are there on K-Street ?
Taxing Wall Street to Fund Jobs and Recovery on Main Street
by Tony Wikrent, economicpopulist.org, 12/15/2009
Support is now growing for such a Financial Transactions Tax (FTT), to help fund jobs and economic recovery programs in the next few years, and to help reduce fiscal deficits in the outlying years.
[...]
Just last week [Dec 2009] Congressman Peter DeFazio (D-OR) introduced an FTT bill in the U.S. House of Representatives that he and 21 co-sponsors call the "Let Wall Street Pay for the Restoration of Main Street Act".
At a press conference announcing the bill, Rep. DeFazio was joined by Senator Tom Harkin (D-IA) who said he planned to introduce the legislation in the Senate.
The Oregonian quoted DeFazio at the news conference:
"The American taxpayers bailed out Wall Street during a crisis brought on by reckless speculation in the financial markets," DeFazio said. "This legislation will force Wall Street to do their part and put people displaced by that crisis back to work."
[...]
Last week, as President Obama convened a White House jobs forum that included many supporters of an FTT, including [Dean] Baker and Paul Krugman, Baker's CEPR [Center for Economic and Policy Research] announced that more than 200 prominent economists had signed a letter (pdf) supporting a financial transactions tax.
December 3, 2009
An Open Letter from Economists in Support of Financial Transaction Taxes
To Whom It May Concern:
A modest set of financial transaction taxes could raise a substantial amount of needed revenue while having little impact on trades that have a positive economic impact.
The cost of trading financial assets has plummeted over the last three decades as a result of computerization. This has led to an enormous explosion in trading volume, with most trades having little economic or social value and redistributing disproportionate resources to the financial sector. A set of modest financial transactions taxes, which would just raise trading costs back to the level of two or three decades ago, would have very limited impact on trades that have real economic value.
[...]
Apparently no one is all that "concerned" ...
U.S. Treasury Secretary Timothy Geithner on Saturday firmly opposed a proposal by UK Prime Minister Gordon Brown for a global tax on financial transactions. "That’s not something we’re prepared to support," Geithner said, speaking after meetings of Group of 20 finance ministers [...]
Of course that was in 2009, when the economy was still 'teetering on brink' ... surely Govt Watchdogs have had enough time, to figure out how to reign in the Wild West atmosphere on Wall Street, since then, without shutting them down, eh?
Don't bet on it. Their serious actions, this year, seem more like 'coddling', instead of 'reigning in' to me ...
Debate reopens over equity trades
By Telis Demos, FinancialTimes, in New York -- Dec 20, 2010
The SEC and the regulated exchanges like NYSE, Nasdaq and BATS have since launched test programmes to ban stub quotes, have added market-wide "circuit breakers" to slow down gyrations by halting trading in many stocks and exchange-traded funds when prices jump, and have limited direct access to markets by high-speed traders.
Yet the focus on the flash crash has generated concerns that the bigger debate about modern-day trading is not being tackled. At a recent Senate hearing, Mary Schapiro, SEC chair, along with Gary Gensler, head of the Commodity Futures Trading Commission, which regulates futures, were scolded by senators for taking several months to put out a post-crash report, and not yet formulating a broad plan to prevent future crashes.
"Our regulators are riding the equivalent of mopeds ... chasing traders whose cars are going 100 miles per hour,"
said Carl Levin, US senator from Michigan, at the hearing.
[Diarist note: that reminds me of something Rachel said, about the pace of Regulators.]
In response, Ms Schapiro said that her agency was struggling with a crushing workload, including writing rules created by the Dodd-Frank financial regulatory reform bill, and addressing a spate of insider trading cases. She said 400 additional staff were needed.
Sounds like one serious JOBS Program is needed there, eh folks?
Are there any Wall Street Sheriffs out there, who would like to do their Civic Duty, to reign in the casino chaos? To make Wall Street, begin to pay their fair share again, to help the Real Economy grow?
Bueller, Bueller, Anybody?
I guess not. Check! another one up in the column, for a very GREEN Christmas for Wall Street ... and many happy returns, going forward.
So in addition to toothless, nearly non-existence, Mo-pedaling Oversight --
What else, did Wall Street get for Christmas?
What's this ... a CUT in Bonuses ... Why it must be a Xmas Miracle! (for us Main Streeters.)
Wall Street Sees Record Revenue in ’09-10 Recovery From Bailout
By Michael J. Moore, Bloomberg - Dec 12, 2010
Cutting Bonuses
Those challenges may lead banks to cut bonuses as they seek to reduce costs and boost profitability amid lagging stock prices. Overall pay for investment-banking and trading employees at Wall Street firms will be down 22 percent to 28 percent from 2009 [...]
Goldman Sachs’s compensation expenses in the first nine months were 21 percent less than a year earlier, while the pay pools at JPMorgan’s and Morgan Stanley’s investment banks were down 10 percent and 8 percent. Morgan Stanley has told some employees to expect investment-banking bonuses to decline 10 percent to 30 percent [...]
Woo hoo! Let them share in the pain they created.
What's that? ... A 10% Cut in Xmas Trimmings, is not all that much when you consider, what they were expecting to get in the first place:
It's a Wall Street bonus bonanza
By Greg Farrell, USA TODAY -- 12/20/2006
Wall Street firms are expected to pay out a record $23.9 billion in bonuses this year [2006]
[...] the average bonus is expected to top $137,000.
Year Total [Bonus] Average [Bonus]
2006 $23.9 Billion $137,580
2005 $20.5 Billion $119,390
2004 $18.6 Billion $113,450
2003 $15.8 Billion $99,930
[...]
Source: N.Y. State Comptroller; USA TODAY research
So in other words, the Average Wall Streeter makes more in their ANNUAL Xmas Bonus Checks than the Average American Worker makes in about 3 years of monotonous toil.
SO Boo-F'n-Hoo for Wall Street -- and their 10 to 30% cuts in Bonuses this year -- What will they DO? How will they ever survive?
[70% of $140,000 is still a cool $98,000 -- not too shabby to find in the Stocking.]
Oh wait, turns out those Bonus Cuts aren't as bad as they seem -- since they are AVERAGES ... and there are fewer folks on Wall Street too, for them to divvy up the Booty to ...
Banning Big Wall Street Bonus Favored by 70% of Americans in National Poll
By Catherine Dodge - Dec 12, 2010
While the cash bonus pool for 2010 will probably be smaller, the average bonus may be bigger because after job losses the money will be divided among fewer employees, the report said.
The fewer Wizards on Wall Street, the more spoils of {class} war to parcel out to the Wizards' Apprentices, I guess ... those still standing.
Say WHAT does Wall Street actually DO to earn all that Green ?
well that's a topic for another dairy ... but here a little preview:
Robot Traders of the NYSE
60 Minutes, Overtime Staff -- Oct 10, 2010
http://www.cbsnews.com/...
Steve Kroft: I don't think I've ever run into to a story, where so many people involved with something so big, don't want to talk to you -- won't let you in. Won't give you somebody to interview. Won't give you a statement.
Right now, the thing with High Frequency Trading -- this is sort an extension of the idea, or belief, on the part of some people that they can Master Markets, using Mathematics -- using Computers, to calculate the odds.
That is what happened with Derivatives, what happened with Credit Default Swaps, and to a certain extent that is what is going on right now with High Frequency Trading.
SOOOO in other words: THEY actually DO ... VERY Little.
Very Little to Help the Economy, that their bloodsucking, money-grubbing, GREEN-Meanie Bonus Checks, are quite dependent on. Thank you very much.
The Casino Economy would cease to function, without your unwitting cooperation.
SOOO Merry Xmas, America! ... from your 'pals' on Wall Street.
They trust you will keep looking the other way, workers and non-workers alike. Afterall, that does seem to be the {New} American Way.
And most of all Americans, they trust that with the new Pro-Business Congress, you just gave them this Holiday Season [lol who saw that one coming] that
"No One will be able to say NO to Wall Street demands, again, for a very, very, long time ..."
Isn't Multi-National Capitalism wonderful?