Just got back from a vacation and the news that hits one between the eyes is that of another impending bubble - the DOW crosses 10,000. Most of Wall Street is rejoicing while the truth is out in the open - mortgage professionals expect that foreclosure rates will keep rising, unemployment rate is creeping up to 10% as the recession plunges more and more Americans towards poverty.
I am not sure what it means anymore when the DOW climbs up to 10000. Maybe it is time for us to think that gauging a nations mood by the value of a purported leading market indicator is a false barometer.
In light of depressing news that surrounds foreclosure, unemployment and poverty, JP Morgan reports a profit of $ 3.6 billion (yes, that is 'billion') and Goldman Sachs reports profits of $ 3.2 billion. Meanwhile, these very banks were on the government dole barely a year back. Talk about irony.
Of course, here is the kicker: Just one year from the much discussed “death of Wall Street,” major U.S. banks and securities firms are set to pay their employees about $140 billion this year, according to a study by the Wall Street Journal.
For those of you who are brave enough to click through, here is a chart from the WSJ of projected employee compensations at major U.S. banking entities...
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