Tuesday, January 21, 2014

How Wall Street Won the War (And What Happens Next)

Richard Eskow
Campaign For America's Future
Have you heard? Goldman Sachs is “a shell of its former self.”

Fortunately for its executives, this “shell” earned $8.91 billion in 2013, just a few short years after its leaders mismanaged it into the ground as its bankers committed serial fraud.

There’s no reason to believe that the column that described Goldman as a “shell” was written by Wall Street lobbyists. But it probably didn’t make them unhappy, either. That column, entitled “How Washington beat Wall Street,” also asserted that “Washington went to war against big Wall Street banks hoping to blow up the kind of high-risk, high-reward strategies that helped spark the financial crisis.”

Politico chief economic correspondent Ben White concludes that “Washington won in a blowout.”
In this version of recent history, populist and reform-minded political leaders turned the “swashbuckling” wolves of Wall Street (there are other, more apt adjectives) into whimpering puppies … and may soon make them an endangered species.

Is White right? He writes that Morgan Stanley, “Goldman’s one-time bitter rival in the swashbuckling world of high-risk trading, is transforming into a staid money management firm …” But a recent headline from Bloomberg News reads: “Morgan Stanley Tops Estimates on Record Brokerage Earnings.” Bloomberg reports that Morgan Stanley “reported profit that beat analysts’ estimates as equity-trading revenue increased and earnings from wealth management climbed to a record.”

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