Wall Street recovers quickly -- unlike the rest of the nation
This won’t be solace to anyone suffering through a job loss, pay cut or general economic uncertainty: Wall Street is rebounding quickly from the Great Recession, with fewer job cuts and higher year-end bonuses than expected just a few months ago.
A report this morning from the New York state comptroller’s office makes official what already was becoming apparent -- that the denizens of the financial industry are faring relatively well from the financial collapse that emanated from Wall Street’s shores.
The city’s four largest investment banks -- Goldman Sachs Group, JPMorgan Chase & Co., Morgan Stanley and Merrill Lynch (now part of Bank of America Corp.) -- have earned $22.6 billion so far this year versus a loss of $40.3 billion in 2008, according to the report.
Wall Street has shed 28,300 jobs -- or 15% of its November 2007 peak -- and could lose up to 35,000 jobs, according to the report. But that’s far less than the 47,000 projected five months ago. And the new worst-case scenario also might be too bleak; the industry actually tacked on 3,600 jobs in September.
Several factors are helping Wall Street, including the demise of several firms, which gives pricing power to survivors. Low interest rates also are a boon given that Wall Street borrows heavily to finance its operations.
“The national economy is slowly improving, but Wall Street has recovered much faster than anyone had envisioned,” the report said. “Profitability is on track to exceed 2006 levels, which was a banner year for the industry.”
The same can’t be said for the rest of us.
-- Walter Hamilton
Photo: The New York Stock Exchange. Credit: Stan Honda / AFP / Getty Images