Greece Threatens Wall Street Jobs in Third Trading Plunge

[blindpig]

Greece Threatens Wall Street Jobs in Third Trading Plunge

Wall Street bankers and traders, given hope by a market rebound in the first quarter, are now seeing earnings and paychecks threatened by turmoil in Greece in what is becoming an annual cycle.

For a third consecutive year, revenue from investment banking and trading at U.S. firms may fall at least 30 percent from the first quarter, Richard Ramsden, a Goldman Sachs Group Inc. (GS) analyst, said in a note last week. Greece, which gave English the word “cycle,” has been the main reason each year that the second quarter soured after a promising first three months.

Deal volume has dropped and equity and credit markets have fallen on concern that Greece may abandon the euro and the European sovereign-debt crisis will spread to nations including Spain. Those economic issues cut profit, bonuses and jobs at Wall Street firms in last year’s second half and threaten to do the same in 2012.

“It’s going to be a tough summer at least, and it does feel like the last couple years all over again,” said David Konrad, an analyst at KBW Inc. in New York. “The bank valuations seem unfairly discounted, but investors are looking at this year and saying, ‘I’m not going to fall for this again.’”

Stiffer Rules

Greece is compounding the impact of stiffer capital rules and trading restrictions for banks imposed after 2008’s credit crisis. Those measures already were fueling concern that the industry may be locked in a long-term slump. Combined trading and investment-banking revenue at the five biggest Wall Street banks -- JPMorgan Chase & Co. (JPM), Goldman Sachs, Bank of America Corp. (BAC), Citigroup Inc. (C) and Morgan Stanley -- is likely to drop from a year earlier for the seventh time in eight quarters, according to analysts surveyed by Bloomberg.

The five banks generated about $33 billion from those businesses in the first three months of the year, excluding accounting charges. That was led by $20 billion from fixed- income trading.

Revenue from trading typically peaks in the first quarter in part because corporations raise more debt at the beginning of the year, stoking fixed-income operations, said Roger Freeman, an analyst at Barclays Plc.

Still, a normal seasonal decline for fixed-income trading revenue in the second quarter is 15 percent, while this year probably will be 30 percent to 40 percent, Goldman Sachs’s Ramsden said. Last year, the second-quarter drop for U.S. firms was about 31 percent, while in 2010 it was more than 40 percent.

‘Deja Vu’

Those declines were followed by weak third and fourth quarters that featured investment-banking and trading revenues more than 40 percent off the first-quarter pace. The chances of that trend recurring this year look “increasingly likely,” Kian Abouhossein, an analyst at New York-based JPMorgan, wrote in a note last month.

“Deja vu all over again?” Matt Burnell, a Wells Fargo & Co. analyst, wrote in a June 6 report as he cut profit estimates for the five banks by an average 30 percent. “After a relatively upbeat start to 2012, it now appears that this will be the third consecutive year of a spring/summer swoon.”

Continue at link

http://www.bloomberg.com/news/2012-0...ng-plunge.html

So it's all Greece's fault, just another 'bad actor' putting a stick in the wheel of the magnificent machine of Capitalism. The functionaries and hustlers must suffer a downgrade in the quality of their bubbly, who knows what other horrors, cause those Greeks don't understand that A Deal is a Deal. This and onerous regulation has caused disquiet among the investor tribe and when the sharks aren't hungry the remoras don't eat either. It has nothing to do with the super abundance of capital, nothing to do with market strangling austerity, nothing to do with the inherent contradictions of capitalism. It's those Greeks.

(I'd like to note that Bloomberg has fielded a pretty damn aggravating check on cut&paste, congratulations, assholes.)

[anaxarchos]

So it's all Greece's fault, just another 'bad actor' putting a stick in the wheel of the magnificent machine of Capitalism. The functionaries and hustlers must suffer a downgrade in the quality of their bubbly, who knows what other horrors, cause those Greeks don't understand that A Deal is a Deal. This and onerous regulation has caused disquiet among the investor tribe and when the sharks aren't hungry the remoras don't eat either. It has nothing to do with the super abundance of capital, nothing to do with market strangling austerity, nothing to do with the inherent contradictions of capitalism. It's those Greeks.

(I'd like to note that Bloomberg has fielded a pretty damn aggravating check on cut&paste, congratulations, assholes.)

Obviously, nobody has explained to you that the most fundamental Human Right is the enforcement of contracts. That is even more important than uniform tariffs and strictures against money shaving. The Greeks knew what they were doing (actually, they didn't but we knew it for them). Nobody held a gun to their head (well, it was a small gun). Now they have to PAY.

'Course the same people who demand this are also the ones who insist on jettisoning pensions (which are also a contract), and labor contracts (obviously, ditto), and the other stuff which disappears with a wave of the hand...

...but, that is very different. Who cares about contracts when national debts are too high?

Wait...