You Might Be Unemployed, But Don’t Worry… Wall Street Is Making a Killing

As we get into the earnings season for the second quarter, we’re finding out which companies are going broke, like Brooks Brothers, and which ones need bailouts to survive, like airlines. But there’s one group that is happy as a pig in, well, you get the idea.

Stock and bond trading firms are having a field day and racked up big revenue last quarter, even if their overall profits took a hit because of loan loss reserves.

The huge swings in the markets since early March have given investment banks like JPMorgan Chase, which posted a 77% jump in revenue last quarter, a big boost. Citigroup posted a 48% jump in quarterly revenue.  Both reports were much better than analysts expected.

The banks are trying to play down their good fortune, especially at a time when much of the country is miserable.

JPMorgan Chase CEO Jamie Dimon said:

“Assume it is going to fall in half.  We don’t assume we have these unbelievable trading results going forward.”

Up next will be Goldman Sachs and Morgan Stanley, which will report earnings later this week.

But it’s not all fun and games. On the lending side of the business, JPMorgan, Citigroup, and Wells Fargo collectively recognized 28% billion in loan losses, which reflect the painful side of the economy.

The worst part is knowing that much of the Wall Street gains came courtesy of the Fed printing $3 trillion and using it to buy bonds. As the keeper of the currency, the Fed used taxpayer money to help the stock market levitate, which made bankers richer than they already were.

Add Comment

Leave a Reply


Your email address will not be published. Required fields are marked *

*

Do NOT follow this link or you will be banned from the site!