Friday, July 22, 2011
Wall St prepares for 2nd half of the Bush Depression.
Facing the prospect of either a default or a needlessly cruel austerity or potentially both, Wall St. in battening down the hatches and disposing of all the expenables before the storm hits.
Layoffs have returned to Wall Street as investment banks bemoaning economic malaise and disappointing revenues are moving to pare their payrolls, by far their largest expense.I guess the layoffs will give the Banksters some sense of certainty in the marketplace.
Goldman Sachs and Morgan Stanley have announced plans to eliminate hundreds of employees, UBS and Credit Suisse are reportedly preparing to cut thousands of jobs and Barclays Capital has already imposed two rounds of layoffs this year.
But as banks again resort to pink slips, they appear inclined to spare the most generously compensated executives -- the people who enjoyed the biggest gains from the bubble in mortgage-related investments that savaged the economy -- while instead dismissing less-expensive employees.
"Wall Street is a cutthroat business. That's how the capital market system works," said Sung Won Sohn, a former Wells Fargo chief economist who is now a finance professor at California State University Channel Islands. "The more seasoned, experienced, higher-paid people have a lot more connections and contacts. That is very, very valuable. Whereas junior, younger people are more replaceable."
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