Why the big Wall Street banks are hurting

[rpannier]

It’s not the protesters drumming in Zuccotti Park or the chants of “shame” keeping them up at night at their Manhattan homes. It’s a business model built to churn out easy money in a bubble that’s sounding an alarm.

Wall Street is struggling with market forces that keep dragging its bubble machine back to the ground.

snip

Without easy money, Wall Street’s apparatus for mining easy cash have gone quiet. Goldman Sachs Group (GS +0.46%) lost money trading 21 days during the most recent quarter, the most since 2008. The firm even owned up to $100 million in losses on a single day.
Much of this is due to the evaporation of the huge spreads in fixed income that traders generally take advantage of. Treasurys and corporate and municipal bond spreads have narrowed to a sliver. This has hurt the so-called shadow bankers as well. Witness the 5.5% decline for the Hedge Fund Research Index in the third quarter.

snip

Without an asset to inflate, Wall Street is bracing for a prolonged grind. The industry has shed more than 30,000 jobs. Bonuses are expected to decline 20% to 30% for those who still hold their jobs. Investors have seen bank stocks fall 27% since February, as measured by the KBW Philadelphia Bank Index, and brokerages tumble more than 30%, according to the Amex Securities Broker/Dealer Index.

link:
http://money.msn.com/stock-broker-guided/latest.aspx?post=d4c5d791-e23f-4f72-80eb-22625ffb40c9&_nwpt=1?

on note:
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[moondust]

1. "Peak Exploitation"

:)

[rpannier]

2. These three words were the most telling for me

Without easy money,

Yep. They're running out of people they can rip off. Now what?

The article had this bit of heresy
Ultimately, Wall Street could survive if bankers and investors could accept moderate growth.

OMFG!!! Moderate growth. Less money?!!! Smaller bonuses!!!

[no_hypocrisy]

10. It's inevitable that "easy money" would dry up. Then the money taken from the 99%.

Now bankers on Wall Street can only steal from each other.

[Kaleko]

16. There's a horrific beauty in seeing financial parasites run out of hosts

to gorge themselves on and being forced to turn upon each other in a final act of cannibalism.

[robinlynne]

3. I love your note!

[roguevalley]

4. (violin) music to my ears :0) Thank you for explaining this stuff, sweetness

[Lugnut]

5. They killed the Golden Goose.

Cry me a f'n river. :nopity:

[defendandprotect]

8. The 99% BAILED OUT the 1% -- !!! And still they want more and more ... !!

[Gabi Hayes]

14. truer words were absolutely never spoken....nor sung:

George Bush's Theme Song:

Some folks inherit
star spangled eyes,
Ooh, they send you down to war.
And when you ask them,
"How much should we give?"
They only answer "More! More! More!"



http://www.youtube.com/watch?v=rbNnvPBokNs

[Tsiyu]

6. The workers in those banks and tradin' huts ain't seen nothin'yet

There will be wailing and gnashing of teeth when "austerity pink slips" start getting handed out in reams to those who today only party with the 1%.

They'll be nobodies then, unemployed, overleveraged, and more than a few will be joining OWS when they can't get into the best partays anymore.


:nopity:

[Kaleko]

18. Part of the next phase in the Occupy movement:

put tens of thousands of ex-traders to work on something fruitful and promising.

What that could be is anybody's guess, but I'm sure we'll come up with something.

[defendandprotect]

7. K/R =-- People create economies -- financial institutions manipulate them -- !!

We don't need them --

And recalling the bail outs, they sure need us!!

[Supply Side Jesus]

9. HOLY FUCKING SHIT, YOU KNOW WHAT THIS MEANS!?!?!

THEY'LL ACTUALLY HAVE TO *GASP* WORK!!!!!!

[cyglet]

11. Oh no, no more obscene profits

whatever will they do?

[lunatica]

12. Poor guys! Now they can join the 99% wid their sob story

My heart breaks for them.

[Hydra]

13. There were shades of this even during the planned crash

Bear, Lehman and others got cannibalized because these predator banks need something substantial to prey on. In lack of poor little lost sheep, the smaller wolf will do.

I like the fact that they've stolen nearly everything though. Firstly, they're getting itchy fingers and are looking at each other. Secondly, the usual game of "Look at the welfare queen!" seems to have run its course. When everyone looks around and notices that only the thieves have anything, it's a little hard to make an excuse that will stick.

:evilgrin:

[Kaleko]

19. It's a game of "who's the last one standing?"

in a bankrupt world.

Shock and awe, baby.

[fascisthunter]

15. fuck them... how about we the people take all their assets

and ship their pathetic asses to a third world country to fend for themselves?

[meow2u3]

17. Short answer: They brought it upon themselves

My hemmorrhoids bleed for Wall Street.

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