Whitney really does her homework (one of the few on the Street that does) before throwing out numbers like this, so you have to think she is probably right in the ball park as to what is going to happen. Most of these guys (and some gals) that will be laid off will never be able to earn elsewhere the money they earned on the Street. Does this finally break the Manhattan real estate market?
Note also Whitney's comment on the Fed buying paper held by the investment banks. She is spot on. That is where Wall Street "trading profits" came from last year. I have been pounding home this point. The trading profits were really gifts from the government. Now that those programs are winding down those "profits" are no longer coming down the scam tunnel.
My, she's all dolled up for radio. Forgot her bowtie, though, I guess.
ReplyDeleteMan, when I first clicked this post and saw the freeze frame of her in the studio, I got really excited and thought it was an Elizabeth Warren rap-attack response! Oh well, still pretty good even without the boom-chicka-boom-chicka.
Taylor,
ReplyDeleteYou are representative of the Internet. You are an idiot.
I don't feel too sorry for these parasites. They are making their money from a corrupt monetary system that enriches them and the politicians that endorse it.
ReplyDeleteOf course, they teach lots of monetary stupidity at even top MBA schools. Maybe that will change at some point thanks to revelations like this one.
Good riddance to this corrupt and bloated business model anyway...it was way larger then it ever should have gotten due to the fed inflated economic bubble anyway.
ReplyDeleteOf course she's right. Two administrations claimed that the mega banks were to big to fail. So they printed a bunch of money and gave it to them to make them solvent again. With this solvency came keeping the employees, paychecks and bonuses in place that had existed previously. But beyond preserving superficial appearances this exercise did nothing to correct the problems that created the failures in the first place. Only extend them. Furthermore it was a temporary manipulation that ran completely counter to how markets act for all time. So in reality Whitney is no prophet. She is not "predicting" anything. She is just restating what was obviously about to happen 2 years ago. This is why printing money to attempt to cheat a natural market correction was a fantastic economic blunder. Bush and Obama only delayed the inevitable, while simultaneously creating false investor confidence and unnecessary inflation. Both of these things will serve only to lead to an even greater catastrophe when the market inevitably corrects. At which point it will correct not only for the sins of the housing bubble, but for the ill-advised stimulus response to it.
ReplyDeleteThe US is operating at a deficit that is 120% of GDP. Every new dollar that is printed to save banks only inflates this debt, in turn hurting the dollar and leaving the banks' situation unchanged. It will not be possible to save both the dollar and the bankers. Either the banks fail or banks AND the dollar fail. Those are the only two possible realities. Kudos to Whitney for being one of the few public voices addressing this reality, but it's not rocket science or prophecy. It's just common sense that is embarrassingly UNcommon among the so-called expert economists...
"Taylor,
ReplyDeleteYou are representative of the Internet. You are an idiot."
Wow. Rattled somebody's cage.
The empire is already broke.
ReplyDelete80,000 jobs on Wall Street gone?! Wow! If this comes to pass, I can't see many Americans shedding tears---probably the opposite. Whitney is among the few (e.g. Peter Schiff, Gerald Celente, Marc Faber) who gives blunt assessments.
ReplyDeleteThe hand out from the Government/FED to its retail and middlemen counterparts (banks) allowed them to totally escape any correction and forced 100% of the loss on Main Street. A Main Street that had no part in the planning and very little of the profit while the crap game round played out. Through these same minions we will now see seizure and starvation pushed by flush bankers as they collect up all the remaining pieces from the shattered former middle class. While all discuss the federal gov. aspect they overlook the local and state gov. aspect that not only enabled the bankers for local execution of their schemes, but now wrecks attempts at rebuild by the survivors.
ReplyDeleteI can see a crazy number of layoffs here on Wall Street. I mean every month we are getting hundreds of thousands of layoffs, and now that all this stimulus is drying up, and the government is going to have to turn it's attention to other problems, like the currency wars, currency devaluation etc, then it's bound to happen...
ReplyDelete