By Pam Martens and Russ Martens: February 18, 2020 ~
HSBC has become the latest bank with a big Wall Street footprint to announce job cuts. After announcing that its 2019 profits fell by about a third, it said it would cut 35,000 jobs over the next three years. Some of the job cuts are expected to fall within its investment banking business in the U.S.
The HSBC news comes amid a steady drumbeat of similar news on Wall Street. In July of last year, another European bank with heavy derivative ties to Wall Street, Deutsche Bank, confirmed plans to cut 18,000 jobs. In the same month, Bloomberg News reported that Citigroup would be cutting hundreds of trading jobs. Then in September Commerzbank announced it would trim 4300 jobs. That news was followed by CNN reporting in December that Morgan Stanley would cut 1500 jobs.
This is by no means an exhaustive list, but you get the picture. So here’s a quick IQ test. Find the two words in this sentence that don’t sound logical. “The situation is so bad on Wall Street that major trading houses are announcing big job cuts, the Fed is conducting a new bailout program by making hundreds of billions of dollars in cheap repo loans each week to the Wall Street trading houses, and the stock market is regularly setting new highs.” If you selected the words “new highs” you win the rational thinker award.
Indeed, in a rational world, big Wall Street job cuts and the need for massive bailout money from the Fed would not correlate with a stock market regularly setting new highs. But Wall Street no longer exists in a rational universe. It exists in an alternative universe where Wall Street banks are allowed to put out a buy recommendation on a company and then trade its stock in their own Dark Pools; where trillions of dollars of risky stock derivatives are held by the country’s largest federally-insured bank; where initial public offerings of deeply indebted companies that have never made a dime of profits are hustled for listing on the nation’s stock exchanges; and where Wall Street is allowed by the U.S. Supreme Court to run a private justice system which draws an opaque curtain around the kinds of charges aggrieved investors are making against these Wall Street banks.
As we have stated previously, this is not so much a stock market as it is an institutionalized wealth transfer system moving money from the pockets of the 99 percent to the 1 percent who have concocted this market structure.
Millions of Americans are grappling with how to put food on their table while paying their 17 percent interest rate on their credit cards from these same Wall Street banks that are being provided loans from the New York Fed daily at 1.60 percent.