Wall Street is a shadow of its former self, and not just because of the financial trauma in late-2008. Technology has long been reducing the relevance of big-city financial centers. Much of what passed as standard operating behavior among previous generations of bankers and money managers working in the financial canyons of New York, London and other cities can now be accomplished in the hinterlands, and probably at a lower cost. But if the writing has been on the wall for some time, it may be accelerating with today’s news that the SEC has charged Goldman Sachs with a rather large fraud in regards to its dealings with the subprime mortgage market. (Goldman denies the charges and claims the government’s case is unfounded.)
Daily Archives: April 16, 2010
A RECOVERY IN HOUSING?
With each new data point, it’s clear that the economy is no longer contracting. The signs have been bubbling for months, and today’s update on new housing starts and building permits offers another round of statistical support. But while it’s tempting to conclude that the economy’s poised for a robust, sustained run of growth, that’s still premature. As we’ve been discussing for much of the past year, the time gap between the end of economic contraction and economic growth is likely to be longer this time. In turn, that means that the recovery is vulernable to a fresh bout of weakness once the initial bounce fades. That’s not fate, of course, but neither is it far beyond the pale of possibilities, given the breadth and depth of the Great Recession’s lingering complications.