The share prices of Goldman Sachs and Morgan Stanley, Dow Jones Newswires notes, have nearly doubled since Jan. 1.
Major stock indexes all gained more than 7% in July.
Financial regulation reform, at least for now, has run into rough waters on Capitol Hill.
The New York Times front page reports on the characteristics of the Wall Street creature called the guaranteed bonus.
It all leads one to wonder if last fall’s proclamations about the end of Wall Street as we know it were just that, proclamations. Equities trading and Wall Street writ large (meaning the global securities industry) have shown tremendous resilience. Indeed, it is not completely far fetched to say that part of the stocks rally is perhaps based on the fact people are just psychologically tired of the bear market and the still-weak economy. They are seizing on most anything to drive a different attitude.
Looked at objectively, for instance, the economy still LOST a quarter million jobs last month. Lost, not gained. Still, Friday’s employment report was a rallying cry.
There are more pitfalls ahead. Stocks may return somewhat to earth considering corporate earnings are still mainly based on cost cutting, not revenue gains, and that likely will be the case for a while.
Still, there’s a reasonable case to be made that if the bottom has indeed been reached in the U.S. economy and equity markets, then structural and regulatory changes for the globe’s securities industry may be less pronounced than previously expected.