Wall Street’s Profit Engines Slow Down
by Nelson D. Schwartz - September 19th, 2010 - The New York Times
After an unusually sharp slowdown in trading this summer, analysts are rethinking their profit forecasts for 2010.
The activities at the heart of what Wall Street does — selling and trading stocks and bonds, and advising on mergers — are running at levels well below where they were at this point last year, said Meredith Whitney, a bank analyst who was among the first to warn of the subprime mortgage disaster and its impact on big banks.
“What’s happened in the third quarter is that after a very slow summer, people expected things to come back,” said Ms. Whitney. “But they haven’t, and the inactivity is really squeezing everyone.”
The downward slide on Wall Street parallels a similar shift in the broader economy, which has slowed considerably since showing signs of a nascent recovery this spring. And if banks come under pressure, all but the safest borrowers may struggle to get loans.
Even the strongest economy in the world cannot withstand a determined effort by it's primary leader, the President of the United States, to "redistribute wealth" and destroy free enterprise.
General Motors and Chrysler are now owned by the UAW, after secured bond holders were illegally stripped of their rights. The government bureaucrats who tell these companies what to do are demanding the least cost effective cars, electric, be the focus of all future efforts.
Our money system has remained under a sustained assault from the Federal Reserve system to devalue our currency and force people to spend. This has discouraged investors from spending money on anything but hard assets that will withstand the coming inflation. The last thing you do in such an environment is hire people that government will not allow you to fire.
The natural cycle of recovery has been undercut by sustained government wasting of tax dollars on useless welfare programs, including sending billions overseas at a time when America itself needs the funds.
Such a sustained program has always generated third world failure. The same program destroyed Argentina. It was rapidly doing the same to England until Margaret Thatcher stepped in and changed course. Carter was well on his way to destroying America the last time this idiocy was tried here. We are looking at a serious and prolonged challenge to restore our economy, and Barack Obama still does not get it.
I am surprised that Wall Street is surprised. Wall Street gave 74% of their campaign contributions to Barack Obama and the Democrats in the last election cycle. They are still giving 66% of their money to pro-socialism Democrats. Do you really think they do not know what they are getting? I guarantee George Soros is not surprised... nor disappointed either. Corporate socialism is his goal.
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