Pretax profits from New York State’s securities industry totaled $27.6 billion during the six months of this year, an 82-percent rise above those of the same period in 2019 and the biggest six-month gain since 2009, according to a 22 October report from New York state comptroller Thomas DiNapoli.
The industry’s profits for all of 2019 were $28.1 billion.
The soaring profit was due to the U.S. Federal Reserve’s flood of cheap money into markets to stabilize the economy during the economic shutdown, resulting in a bull market, DiNapoli said in a statement accompanying the report.
The sizzling market drove investment houses’ underwriting revenues to $17.3 billion for the period, DiNapoli’s report said.
The boom is good news for New York City’s and the state’s governments, which rely on taxes from the industry for 6 and 18 percent of their revenues, respectively.
Through 2021, the state is forecasting a $30-billion budget hole, and the City expects a $9-billion shortfall.
“The connection through Wall Street and Main Street is through the [state and city] budget,” Maria Doulas, Vice President of the nonpartisan Citizens Budget Commission, told the WSJ.
Despite record-level profits, analysts expect Wall Street firms to cut about 7,300 jobs this year or about 45 percent of those gained since 2013. The cuts are driven by the need to cut costs to create efficiencies and the ongoing adoption of technologies, observers report.
Industry employment peaked in 2000, just before the dot-com bubble burst, with about 201,000 workers, according to the Wall Street Journal.
TRENDPOST: Clearly, as continually noted, there is no relationship between Wall Street and Main Street. We have reported in detail how the very rich keep getting much richer, while the middle class keeps shrinking and the poor get poorer.
This wealth gap will spark “Off With Their Heads 2.0” movements across the globe as the world sinks deeper into the “Greatest Depression.”
