Two Giants Emerge From Wall Street Ruins ( Goldman Sachs and JP Morgan Chase)

New York Times ^ | 7/18/2009 | GRAHAM BOWLEY

[SeekAndFind]

A new order is emerging on Wall Street after the worst crisis since the Great Depression — one in which just a couple of victors are starting to tower over the handful of financial titans that used to dominate the industry.

On Thursday, JPMorgan Chase became the latest big bank to announce stellar second-quarter earnings. Its $2.7 billion profit, after record gains for Goldman Sachs, underscores how the government’s effort to halt a collapse has also set the stage for a narrowing concentration of financial power.

“One theme here is that Goldman Sachs and JPMorgan really have emerged as the winners, as the last of the survivors,” said Robert Reich, a professor at the University of California, Berkeley, who was secretary of labor in the Clinton administration.

Both banks now stand astride post-bailout Wall Street, having benefited from billions of dollars in taxpayer support and cheap government financing to climb over banks that continue to struggle. They are capitalizing on the turmoil in financial markets and their rivals’ weakness to pull in billions in trading profits.

For the most part, the worst of the financial crisis seems to be over. Yet other large banks, including Citigroup and Bank of America, are still struggling to return to health. Both are expected to report a more profitable quarter on Friday, but a spate of management changes and looming losses from credit cards and commercial real estate have thwarted a stronger recovery.

And then there are the legions of regional and small banks that are falling in greater numbers across the country. While many have racked up large losses, they stand to bleed more red ink if the recession wears on. Fifty-three have failed this year, and the Federal Deposit Insurance Corporation is girding for scores to follow.

[gwilhelm56]

Two Giants created in part (or in whole) by the Interference of the Federal Government.

How long before same said Government comes AFTER these two GIANTS for being ... MONOPOLIES!!!

I just can’t wait for the Fireworks.!!!

[mewzilla]

“One theme here is that Goldman Sachs and JPMorgan really have emerged as the winners, as the last of the survivors,” said Robert Reich, a professor at the University of California, Berkeley, who was secretary of labor in the Clinton administration.

Snort. Guess it depends on your definition of winning.

From this link...

Okay, This Time Matt Taibbi Nails Goldman And The Bailout

“So what’s wrong with Goldman posting $3.44 billion in second-quarter profits, what’s wrong with the company so far earmarking $11.4 billion in compensation for its employees? What’s wrong is that this is not free-market earnings but an almost pure state subsidy.”

[rellimpank]

—there is no better investment for a really large financial institution than the purchase of politicians—

[cripplecreek]

Interestingly enough. ACORN spokesman Scott Levinson is listed as a lobbyist for JP Morgan.

[OldMissileer]

Are not these “profits” actually the TARP and other bailout money they have just socked away and not used to invest as planned by our illustrious congresscritters?

[Ulysse]

I understand why OBAMAOmet seems to appreciate PUTIN’s Russia...

[silverleaf]

excellent tagline

[EverOnward]

Goldman Sachs supported Obama early on in his political career — just payback time. Morgan Chase must be in bed with Obama too?

[SpaceBar]

A must-read article making the rounds...

The Great American Bubble Machine

From tech stocks to high gas prices, Goldman Sachs has engineered every major
market manipulation since the Great Depression - and they're about to do it again

MATT TAIBBI

[dennisw]

bttt