WEEKEND EDITION

Occupied Or Not, Wall Street Is Sagging

| October 11, 2011 9:52 AM

The banks may have been bailed out — as Occupy Wall Street protesters are fond of chanting — but they are projected to earn lower profits, lose more jobs and dole out fewer sky-high bonuses for the remaining months of 2011, State Comptroller Tom DiNapoli says in a report out today.

A less-profitable Wall Street could mean trouble for the city and state’s fragile economies, which rely disproportionately on strong revenue from the financial sector. Tax collections from Wall Street are predicted to fall this year and may drop even more in 2012, the comptroller is predicting. And declining financial employment is likely to have ripple effects in the larger workforce, where one job lost on Wall Street results in almost two jobs lost in other industries in New York.

Bank bailouts have fueled the fire of the Occupy Wall Street movement, which is now entering its fourth week, but a new report anticipates lower profit margins. MetroFocus/Sam Lewis

The report comes out at a time when anti-Wall Street protesters in New York and around the country are gaining momentum, a fact DiNapoli said is understandable given the market crash in 2008 and the economic recession that followed. But the comptroller also stressed that Wall Street needs to perform well in order for the state’s economy to improve, and while he sympathizes with the protesters, he also advocates for a healthy financial sector too.

“The high-risk, high-reward behavior, now we’re seeing the negative side of that,” DiNapoli told City Hall. “But I’d rather have a more stable, consistent level of profitability.”

Profits on Wall Street are projected to drop by a third from the previous year, barely reaching $18 billion by the end of 2011, DiNapoli says. Profits totaled $27.6 billion in 2010, which was $33.8 billion less than the record set in 2009, still the second-best year on record. Although profits spiked during the first half of 2011, expenses grew even faster.

Even though the banks rebounded in the second half of 2010, the comptroller is not anticipating a similar bounce this year after the release of advance reports of poor third-quarter performance at several major firms.

Likewise, the financial sector could lose nearly 10,000 more jobs by the end of 2012, in addition to 4,100 cutbacks already recorded this year. That could bring total job losses on Wall Street to 32,000 since January 2008.

Read the full post at The Capitol.

  • Johanna B.

    Who would of thunk it?
    When US debt is/was rising in 2009, after a horrific financial crash comparable to 1929, that Wall Str. would haul in the 2nd. all time historical profit of $61.4 Bil. Why? Because “We the people bailed them out of their own self made mess.”

    All this while upwards of 30 million people were losing their jobs, healthcare, homes & any hope of livelihood. All this while small businesses were rejected by almost every bank for any assistance to expand or keep their businesses running & that’s just the the tip of the iceberg.
    “Occupy Wall Street” should be praised & supported by all of us, because they’re doing what every single person in this country has been thinking should be done. As “Tom Friedman/NYT” said in recent interview w/Charlie Rose, “What this country probably needs is a new 3rd. party to break grid lock in Wash, DC.” Obviously that same thought is reverberating throughout the nation.
    Who’s helping Main Str? We are…Main Str. again must help itself, as the gov’t for the people & by the people seems to be helping only themselves & their brand recognition.
    I leave you w/this thought, if you take the 33% of college grads who can’t find jobs, throw out the the entire Congress & Senate, and install these 33% college grads, I bet you’d see some action to change this country for better & restore respect for the US both here & abroad.

  • andrew

    Ban US Corporations and companies who are shipping jobs to oversea. Create jobs in here (USA) , not in oversea. Minimum wage is $ 10 per hour and home rent is $ 400 for 2 people , $500 for 3 people . Tax is 30% for rich people who are making between $ 300000 and 1 million per year . Tax is 40 % for rich people who are making over 1 million per year. Tax is only 5 % for people who are making under $ 50000 per year.

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