"No man can become rich without himself enriching others"
Andrew Carnegie



Friday, July 20, 2012

Wall Street Seeks Patience After Worst 1st Half Since '08

Henry Paulson responds to President George W. ...
announced his resignation. White House photo by Shealah Craighead. (Photo credit: Wikipedia)
WALL STREET’S five biggest banks reported the worst start to a year since 2008. They’re still asking investors to be patient. JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc. (C), Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) had combined first-half revenue of $161 billion, down 4.5 percent from 2011 and the lowest since $135 billion four years ago. The firms blamed the decline on low interest rates and a drop in trading and deal-making driven by concerns about European government finances and slowing growth in the U.S. and China. Most of the banks have failed since 2009 to earn a return that exceeds their cost of capital, said Roy Smith, a finance professor at New York University’s Stern School of Business and a former Goldman Sachs partner. The impact of new capital requirements and legislation such as the 2010 Dodd-Frank Act is having a more profound effect on profitability than managements seem willing to acknowledge, he said.
“I’ve been wondering how long this has to go on before people started to take it seriously,” Smith said in a telephone interview. “This is a long time for this to continue, and it’s just getting worse.” ... Continue to read.
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