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Main Street's Boycott Of Capital Markets Succeeding: Barclays First Casualty, To Fire Hundreds Due To Plunge In Market Activity
For the longest time it was consensus thought that only Wall Street could fuck Main Street. The ride is now turning. After what the FT reports was a 16% decline in fixed income, currencies and commodities trading
revenues for Q2, coupled with advisory revenues down 17%, the bank is now "planning to cut up to several hundred employees following a sharp fall in market activity in the second quarter. Sources close to the bank say that the job losses, which could be announced as early as Wednesday, will be spread across BarCap’s sales and trading staff as well as its back office support functions." Too bad the SEC has not, and will not realize that its only function is to restore the faith of the retail investors in the credibility of the capital markets. Yes, the same retail investor who both on margin and in total has always been the primary driver of stocks. Alas that has not happened and tens of thousands of Wall Streets will soon feel the wrath of Main Street as the boycott of stocks by the broader population comes to fruition, allowing the former "strategists" to experience just how real the difference between the U-3 and U-6 rate is first hand.
News of the cuts is likely to alarm the City as well as Wall Street, where BarCap has a sizeable presence following its acquisition of the US operations of Lehman Brothers at the height of the financial crisis.
It is also likely to raise questions about BarCap’s aggressive expansion in recent years under the leadership of Bob Diamond.
The investment bank generated more than 80 per cent of Barclays’ pre-tax profits in the first half of the year, in spite of a slowdown in activity amid volatile markets and fears of a sovereign debt crisis in Europe.
Without clear signs of a pick-up in client activity, several analysts have flagged concerns about BarCap’s escalating cost base.
BarCap has added almost 4,000 staff since last June – bringing its total headcount to 25,500 – in its drive to join the ranks of the world’s leading investment banks.
That growth, however, has come at a price, with first-half salary and bonus costs across the Barclays group running at nearly £5bn, £1bn higher than the same period in 2009. Most of that growth is attributable to BarCap.
BarCap sources say that, in spite of the cuts, the bank still plans to finish 2010 with a higher headcount than at the end of 2009
And while Barclays may be the first to experience what a complete lockout of retail participation in stocks means, it certainly won't bet the last.
Headhunters that specialise in financial services have warned that unless there is a substantial pick-up in corporate activity in the coming weeks, many more banks will be looking to trim costs by cutting staff.
Just as several recent campaigns have tried valiantly to get Americans to withdraw their deposits from TBTF banks (an,d unfortunately, have not succeeded...at least not yet), so an ever increasing disclosure into the true criminality of Wall Street's practices has eroded virtually all the credibility of American capital markets, which incidentally was never deserved to begin with.
We can only hope that as headcounts are eliminated in the tens of thousands, and as NY (and other) city income tax revenues plummet, that more and more people will require that the SEC finally do its work, and regain some semblance of control over stock (and other OTC product) trading. Because, as Zero Hedge discloses day after day, the current jungle is a marketplace only fit for algorithms and primary dealers. And as Barclays has now learned the hard way, neither pay the bills at the end of the day. In the meantime, if nothing changes, we will continue exposing the travesty of US markets day after day, as ever more ill-gotten credibility is destroyed, until the point at which none is left will be the singularity in which Wall Street finally consumes itself.
Whether it is by soft, or hard reset, the change is coming.
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I don't get it - why would anyone NOT want to be part of this market?
It's hard to feel sorry for folks that made money off an industry that can no longer sustain itself..
NBC nightly news this evening (the parent of CNBS) - a total of 15 seconds on the economy/fed a full 23 minutes into the broadcast -
Don't feel too sorry for the masses. They're voluntarily ignorant. Even in our corrupt economy basic laws of supply and demand work, if people demand more hard hitting news, they'd probably get it (at the expense of their network masters).
agreed...the information is out there and freedom isn't free, except that it doesn't cost money but time & a sharp knife to cut the bullshit.
I'm curious why I don't hear (or see) any talk in the press or here about credit unions. I've been out of equities since the first of the year. Own primarily GNMA bonds (you don't hear much about these either).
As the TBTF banks (and the not TBTF's too) have dropped CD rates below 1% in many cases for 1 year money I started looking for a safe place to park cash. I'm opening an account at a large credit union. I get a better rate than banks will pay, I'm insured through NCUA and I can at least hope that the credit union will lend the money to a human being rather than just purchase treasuries. Hey, it's my way to stimulate the economy!
M.R.
Same here. Credit unions are good.
I think it is the start of quantitative firing 2.0. The financials led us into the shit hole and they willlead us back in again. One clear sign was the productivity numbers. This tells me that the slowing economy has caught up with the first round of layoffs, which was fast and massive. Business knows that lowering the payroll and reducing wages is the number one way to prop up your quarterly numbers. They also know that the spike in orders have ceased. It won't take them long to pull the trigger on quantitative firing 2.0.
LEH, I mean, er, meh.
Now serving repo #105.
There is a campaign from huffington post called move your money. they have a program that will allow you to find a health regional/local bank
I know Thursday is Withdrawal Day and I plan to participate, but I was at my other bank (business account) and took out $500. Took about 15 minutes. They acted like they were printing the cash in the back room. Everybody put Thursday on your calendar.
Had the same experience when I cashed out my money market. They were like...wait...your giving me one piece of paper and we're giving you multiple pieces of paper...I'll need my manager to open the safe...I said OK, I'll wait...LOL.
I ended up with a bunch of twenty's to boot.
Printing ehhh?...more like digitized BS.
Wire 50,000 dollars anytime and it will hit your other account end of day ready to go.
But try to cash 1000 dollars or more in 20's slows them down very much.
I dont take 50's or 100's because it slows me down when I try to buy something.
wouldnt closing your acct at TBTF work even better?
Couldn't wait till Thursday to take my jumbo CD. First I discussed rates on a new CD, then money market, then told they can't negotiate CD rates anymore, then manager wanders in and says they can negotiate a better rate at longer term. Next thing I know I'm in an office talking about Treasuries and other 'stuff'. Made sure I took another cup of their coffee on the way out with my check.
"Made sure I took another cup of their coffee on the way out with my check."
I can't wait to walk out with the cookies - tray and all.
hahah, thanks for that visual.
Just a crafty way to help the regionals recapitalize. They are as much or more underwater as BOA is.
Reminds me of the antiques world: they do a lot of selling amongst themselves, but there needs to be retail customers at the end of the chain. They can't scalp each other and all get rich.
That reminds me of the two farmers selling a pig to each other, back and forth, for a 5% higher price each time. Then one day one farmer butchers the pig and the other says, "Why'd you go do that? We were getting rich off that pig."
That reminds me of the guy who is in an antique shop and sees a rare bowl being used as a water bowl for a cat. To pry the bowl loose, he says he needs a cat and would like to buy it. The dealer reluctantly parts with the cat for $100. As the guy walks out the door he says, "BTW-I could use a water bowl; could I take that one?" The dealer says, "Are you kidding? I've sold twenty cats this week with that bowl."
Moral of the stories: there ain't any, but they're cute.
Good to see the pinched nerve hasn't effected your sense of humor.
ALL financial operations are based on the real economy. The real economy is shrinking due to the process of rationalizing the debt overhang. Main St is not borrowing because they are being denied credit AND because the economic slope is negative. Financials will shrink in tandem.
Local and State government operating budgets, retirement funds, insurance pools, markets in general will eventually overshoot to the down side as the economy finally finds its bottom and plateaus there for quite a while.
"Its the economy, stupid."
Have they killed the Golden Goose...?
No doubt, Barclays will probably gap up tomorrow.
I posted this last friday so forgive me if this is a repeat.
Interesting front page headline on the FT
“Barclays warns on break up of banks”
It states its executives are delivering thinly veiled threats so that they can maintain their investment business under their saving utility cushion.
Asked whether Barclays would move in the event of breakup Mr Varley was quoted
“We have planned carefully”
My observation : Now that banks are showing their teeth in Public will the anti – monetarist wing of the Tory party draw blood or are they a prisoner of their past actions or inactions.
Now may the time for the UK to use force against the city malcontents but maybe it is far too late for that
These "hundreds" would they be redundancies from the lehman buyout?
If so they aren't really being let go due to market conditions but rather a "normal" process after a buyout.
lmfao ! at unemployed banksters...the shoe is on the other foot...im loving it..lmfao lmfao lmfao
/ES -6?
Uhm...market didn't get the FED printing memo?
more people will require that the SEC finally do its work
what are you talking about? they protected bernie madoff for ten years. doesn't that prove they doin' their job?
Breaking News:
Tim Geithner is a phucking lug nut and Ben Bernanke is just a plain ole' phucking nutcase.
Thought I would just drop by to add some intelligent thoughts.
The spx is gonna go down hard and fast......
deadhead
Please drop by more often. Your comments have sadly been missed for quite a few months now.
H E A D
damn, i luv 2 give..................^_^ ;))
That's nice to know. Thanks for sharing.
Come to think of it, whatever happened to Velobabe?
was thinking the same thing.
She found a better plastic surgeon and was able to achieve bi lateral symmetry of her breasts. This in turn cured her need for an exhibitionism fetish which found its roots in her subconscious and conscious fear and insecurity over her asymmetrical breasts.
Next case.
you know how else my parents punished me for lying. they made me wear really really ugly saddle shoes, when i was a freshmen. and didn't make my older sister who has the worst feet ever. they said they didn't want me to develop bad feet or some shit. looking back today, i know it was a way to break my spirit. do you think it worked, just askin' all my imaginary friends here on ZH?
another "dear diary" post, eh.
all 'bout you babe, all 'bout you.
I prefer:
Cheesedick Timmay and Bankster Bitch Bennie...
or
The Cue Ball and Wanker Tim...
yeehaa...good to see an old name (face) again.
dh, have u seen ralph's latest. if not, as a new york taxpayer, you might wanna take a look:
http://www.counterpunch.org/nader08062010.html
Houston....We have a problem
That EUR/USD will give ya some back lash boy. DOW futures down close to -80
I also think the retail consumer has had their come-to-Jesus moment and, although they will fall off the wagon occasionally, I think they will be shaking those carnal thoughts (not to mix an alcohol metaphor with the Shakers.)
Fucking AAAAAA, i have been taking so much shit from those I have tried to share . Even my girlfriend hates me.... But as long as I can feed her dog steak I am still in...... No pun intended
Dr. J
But as long as I can feed her dog steak I am still in......
late nights, and the mind starts to wonder.
NEXT STEP--DEBTS NO MORE
http://williambanzai7.blogspot.com/2010/08/raven-debts-no-more.html
Asia is down over 2% at the mo... gold steady...Nic Lenior, where fart thou
Ouch!
http://finviz.com/futures_charts.ashx?t=NKD&p=m5
Here's the end game:
Open bid on Gold............meaning I'll give any fiat I have for any Gold you have...no limit.
We have to actually see the Gold of course.
Anyone holding large amounts of USD or Euro's will be the parties.....
Thank you>>>
"dont worry we'll fix this with QEQE" - fed chairman Tim "TurboTax" Geithner, year 2049
RE-GOOGLING WALL STREET
http://williambanzai7.blogspot.com/2010/08/re-googling-wall-street_1362....
"The investment bank [sic] generated more than 80 per cent of Barclays’ pre-tax profits in the first half of the year, in spite of a slowdown in activity amid volatile markets."
Right, because you could never make money from increased volatility. Has there been an outbreak of Puppethead virus at the FT? Pneumatic summer intern? What?!
Today I put some of my money that was sitting in the bank in an emerging markets bond fund. If they don't want to make any money, fine.
Price signals are the only means of enabling each economic decision maker to communicate tacit knowledge or dispersed knowledge to each other, in order to solve the economic calculation problem.
No price signals = misallocation of resources = destruction of capital = lower standard of living. See Soviet Union, ca. 1917-1989.
But economic shaman Bermonkey can magically pull it off, what with all that fancy book learnin'. Toolbag.
Alright... Tyler Goes Full Mayhem Revolutionary!
With "fuck the power structure" manifesto...
Where do I sign up?
"Mayday, mayday, mayday, this is Capitalist Air 1-0-1, we’ve lost all leverage control and we are in a big huge plunge…we’re going down...attempting to jetisson some passengers and crew, I mean balast...m-u-s-t, s-a-v-e, t-o, b-i-g, t-o, f-a-i-l!!!"
*cracking sound of static*
(Sarcasm still not on)
One more step along the path that leads us to the day that the entire stock market is nothing more than Apple IIe's running algorithms developed by mental patients with crayons. Personally...I fail to see any sort of problem with dumping jobs that shouldn't have existed in the first place. Cheers to the further ruination of this stupid fucking economy, and the assholes who operate it.
"Cheers to the further ruination of this stupid fucking economy, and the assholes who operate it."
mental patients with crayons.
Capitalist Air 1-0-1...can you make it to the Hudson?
i come to ZH and see ads for RINO Linda "McRINO" McMahon. i turn on the TV and all i see is RINOs winning left (wing) and right.
here comes ze deluge boys better grab yer umbrellas...
"Negative VilliageIdiot Tower, we won't...we're [all] going down along Wall Street...request Fed crash team immediately!...send out Ben's SAR choppers, spread out the TARP!!!"
...he's not gonna' make it to the hudson.
VillageIdiot Tower - nice touch.
"Spread out the fuckin TARP for me or I'll crash this piece of shit on Congress...YES, that's a fuckin threat - get Ben off the fuckin porn sites and start laying down a blanket of cash!"
hilarious - the "slip 'n' slide" TARP visual is brilliant.
"And there's a dozen other 'Too Biggers' comin in right behind me"...."Expect to see Goldman Sachs jump for no good reason; the smell of cash is like blood in the water for those sharks."
It's a start.... hopefully becoming a trend.
DECEPTION
http://williambanzai7.blogspot.com/2010/08/deception.html
Ahhhh, yes, the other battle royal that will happen in congress (not that BHC's haven't been lobbying hard already to do away with CU's). However, as BHC's raise fees enough to push out consumers to CU's. Well, dont think banks will sit idly by and see revenue walk out the door. If the Fed cant force you to spend and CNBC cant get you to buy stock, banks "will" at least force you to have an account with them. The BHC's push against CU's will be bigger than ever now.
I give it 2 years and we see some big slam down of CU's in congress, with some God forsaken bill, written with ink drawn from a cesspool, called campaign finance. Not even the likes of Liz warren will be able to stop it. Although, to some degree its a mute point, as allot of CU activities/clearing has to be done through a major Bank anyway. Im guessing those costs to CU's will be going higher in the future.
They (BofA, Citi, Wells, you know the lot) will stop the ever widening CU customer base; and their geographical areas of reach, one way or another. They have been campaigning against it for quiet a few years already. FinReg just made that push harder.
So, enjoy your CU now, cause my guess is they will be legislated out of competitiveness in the not to distant future.
Now, back to our regularly scheduled program “As Credit Derivatives Churn”, followed by the game show, “600 Trillion dollar OTC pyramid”.
That is all......
So, will they join the unemployed and ask for benefits?
Bullish! In order to fool the Quant Spider Bots (QSB's) , I would please ask everyone to put the word Bullish! into the the first word of every comment they make on every blog.
Inefficiency is the same things as leadership... LOL!
http://www.dilbert.com/2010-08-03/
Barclays tried to grow their empire at the wrong time...
I don't think Wall Street letting people go during bad markets is exactly new....
S&P futures down 16 right now as Wall Street throws another hissy fit, goes to a corner and sucks it's thumb.
The fathers of America smile knowingly as they get up from the table loosening their belt...
fat finger oops
baby boomers are pulling money out of risk assets..but investment (sell side) houses say keep a big % there ..you are going to live a long time and need growth..LOL after 08 all the growth turned into losses that the BB can never recover..the x gen kids are into debt and have nothing to invest..wall st better understand main st needs growth in income before wall st sees a dime... howd all that off shoring of our economy work out for ya GS??
These are the guys who said they were sharks, and would take the jobs of regular folks; teachers, etc. They boasted of their ability not to piss until the market closed. Well, boyz, they are laying off teachers too, and you can piss all over yourselves for all we care.
Land sharks are not scary.
I hope someone makes a video tape of the last true investor trying to exit the market while thousands of HFT algos chase his every move. It will probably be funnier than an episode of the Three Stooges.
I’ll offer a ten lot at $20. What? Ten thousand shares suddenly offered just behind me at $20.01 and the bid falls back to $18. Alright, I’ll hit it. What the f**k. Where did the bid go, and who just traded 5,000 shares at $16.50? Shit, now the bids at $14. Alright you SOB’s I’ll buy 10 shares at $14.01 then. Crap, who just traded three lots of 5,000 shares each at $16, $20, and $22? This is impossible. Maybe I’ll just donate my shares to charity and take an itemized deduction. God knows I don’t need anymore capital losses. It’s going to take me five generations to write off the ones I have now.
+1