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Sancho Panza

50,000 Wall Street Jobs Cut In 2014

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NY Post 19/1/15

'There’s blood on the Street.

In a wild swing of the ax that has shocked many pundits, Wall Street’s biggest banks have slashed nearly 50,000 jobs, and bonuses and expense money are being cut as profit opportunities dry up.

And there’s no easy way out, analysts say, because the Fed’s quantitative easing that once rescued the financial system with trillions of cheap dollars is — at least for now — history.

But while some analysts were unnerved by the carnage announced by banks last week during their earnings calls, the warning signs were there before — from lower trading and commodities revenues to currency risks and long-term interest rates that have trended lower.

The fourth quarter saw thousands more workers fired. Total reductions for 2014 were about 20,000 at Brian Moynihan’s Bank of America; 10,000 at Citigroup led by Michael Corbat; and 10,000 at Jaime Dimon’s JP Morgan. Morgan Stanley reports on Tuesday.

Many job losses were already flagged — attributed, for example, to a decline in servicing of delinquent loans as banks cleared troubled mortgages. But analysts also see brutal cost-cutting.

“Look, I think head count in the banking industry is likely to decline,” said CLSA investment group bank analyst Mike Mayo. “And if this environment remains, headcount would get significantly reduced.”

By Mayo’s calculations, bank revenues are the weakest in eight decades, a shocking throwback to the Great Depression.

And the carnage is ongoing as global growth slows and commodity prices and currency movement roil the markets.

“I think there have been heavy potential and paper losses at this point. Clearly, nobody bet properly on oil — nobody thought it was going to be below 50 a barrel,” said Tim Quast, president of market analytics firm ModernIR.

Even mighty Goldman Sachs didn’t escape last week’s destruction. Although the firm reported fourth-quarter earnings a tad better than forecast on Friday, that came from painful expense-shearing as revenues, hurt by a plunge in bond trading, posted a nauseating double-digit decline. Declines in bond activity also rocked JPMorgan, Citigroup and Bank of America.'

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I've never understood why they need so many employees. Is it just strength in numbers?

Surely the future (present) of trading is a few scientists watching super-computers trade with each other?

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I've never understood why they need so many employees. Is it just strength in numbers?

I've never understood why we need so many unproductive "agent" type people in the world.

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I've never understood why we need so many unproductive "agent" type people in the world.

They're courtiers. There to ensure the 1% can avoid any personal contact with the serfs.

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Surely the future (present) of trading is a few scientists watching super-computers trade with each other?

No the future is Super computers building and watching over other super-computers that trade. Humans won't come into it at all.

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It's a Keynesian flatland. Not even the Squidsters can cut the coin like they used to.

http://www.businessweek.com/articles/2015-01-16/goldman-traders-are-making-way-less-than-they-used-to#r=rss

Goldman Traders Are Making Way Less Than They Used To
By Akane Otani and Joe Weisenthal

January 16, 2015

The glory days may be over for Wall Street traders. Goldman Sachs just reported its lowest annual trading revenue since 2005. The bank made $1.16 billion from trading the fixed-income, currency, and commodity (FICC) markets in 2014—a 31 percent decline from a year earlier.

While Goldman Chief Executive Officer Lloyd Blankfein is staying positive about the future, analysts detect a change on the horizon—one where stricter financial regulations and a slow economic recovery will make it difficult for banks to make as much money from trading as they did pre-financial crisis. Here’s what Goldman’s news means for you.

So Goldman isn’t making as much money trading. Who cares? Aren’t they still really rich, anyway?

Goldman did manage to beat analysts’ estimates, posting $7.69 billion in revenue in the fourth quarter of 2014, but it’s been suffering a decline in its FICC revenue—which has traditionally been a bright spot for the bank—for several years now. That means it’s had to run its business with less money, and therefore pay its employees out of a smaller pool of money over time.

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Edited by zugzwang

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