http://finance.yahoo.com/banking-budgeting/article/113037/market-boom-real-story-marketwatch?mod=bb-budgeting
If Wall Street is supposedly doing so great,why are investment firms planning for layoffs?
With rioting and chaos on the streets of Greece going on, its Parliament passed an austerity bill.
The financial headlines for today are:
1) Stocks rise as Greece nears debt solution-From the AP
Stocks closed higher for the third day in a row Wednesday after Greece cleared a hurdle toward getting more emergency loans. Financial stocks rose after Bank of America reached a settlement with investors over failed mortgage securities.
Greek lawmakers passed an austerity bill that brought the country closer to getting a financial backstop it needs to avoid defaulting on its debt. A default by Greece would shock global markets and freeze lending to other heavily indebted European countries.
The $17 billion relief package from international lenders does not eliminate the possibility that Greece will default, but it does buy Greece and other European countries more time to repair their budgets.
"The hope is that through the passage of time and slow improvement of finances, markets will become a little more forgiving," said Wasif Latif, a vice president at USAA Investment Management.
The Dow Jones industrial average rose 72.73 points, or 0.6 percent, to close at 12,261.42 Wednesday. The Standard & Poor's 500 index rose 10.74, or 0.8 percent, to 1,307.41. The Nasdaq composite rose 11.18, or 0.4 percent, to 2,740.49.
Financial companies in the S&P 500 rose 2.1 percent after Bank of America Corp. reached an $8.5 billion settlement with investors over claims it sold them bad loans. The investors said Bank of America violated agreements with them by selling them low-quality mortgage-backed securities that lost value when the housing market collapsed. Much of the losses stem from BofA's 2008 purchase of the troubled lender Countrywide.
Bank stocks also got a lift from news that the Federal Reserve plans to limit the fees banks can charge retailers for swiping debit cards to 21 cents. That's higher than the 12 cents the Fed first proposed.
2) Wall Street Wielding the Ax - From The Wall Street Journal
The trading slump on Wall Street has battered profits and is about to cost some people their jobs.
Credit Suisse Group AG started laying off investment-banking employees Tuesday, and the cost-cutting push could claim 400 to 600 jobs, according to people familiar with the situation.
This month, Barclays PLC has eliminated 100 jobs in its investment bank, including some stock-trading employees. The latest cuts are on top of 600 layoffs in January, a person familiar with the situation said.
And at Goldman Sachs Group Inc., the annual survival-of-the-fittest culling of 5% of the securities firm's employees won't be enough in 2011, according to someone familiar with the New York company's plans.
Deeper cutbacks will be made throughout Goldman, this person said, especially in the U.S. Goldman still plans to add more employees in Singapore, Brazil and India.
"Banks are chopping a lot of wood, both deadwood and live wood," said Michael Karp, managing partner at executive-search and consulting firm Options Group.
The cutbacks are coming largely because of sluggish revenue growth on Wall Street's trading desks.
Regulators have clamped down on trading strategies that once generated huge profits but then backfired with staggering losses during the financial crisis.
Meanwhile, bread-and-butter trading clients from hedge-fund managers to mom-and-pop investors are doing less buying and selling, depriving firms of commissions and fees.
"There's definitely apprehension," said Roger Freeman, an analyst with Barclays Capital. On a recent visit with Goldman, Mr. Freeman discussed with executives how some hedge funds with small trading gains preferred to lock in those gains from earlier this year rather than risk losing them on new trades.
3) Greek parliament passes key austerity bill- From the AP
Greece's lawmakers approved a key austerity bill Wednesday, paving the way for the country to get its next vital bailout loans that will prevent it from defaulting on its debts next month.
The unpopular euro28 billion ($40 billion) five-year package of spending cuts and tax hikes was backed by a majority of the 300-member parliament Wednesday, including Socialist deputy Alexandros Athanassiadis, who had previously vowed to vote against. A conservative deputy broke ranks with her party's line to also vote in favor, bolstering the government's majority of five seats in the 300-member parliament.
Another bill detailing measures to implement the measures goes for a vote Thursday.
The European Union and International Monetary Fund have demanded both bills pass before they approve the release of a euro12 billion loan installment from last year's rescue package.
Greece has been relying on the euro110 billion ($157 billion) bailout loans for the past year, and without the next installment it faces becoming the first eurozone country to default next month.
The vote took place as clashes between police and protesters broke out outside Parliament, with the booms of stun grenades and tear gas resonating across the square outside the building.
In the run-up to the vote, violence engulfed the square outside. Riot police fired volleys of tear gas at swarms of young men who were hurling rocks and other debris as well as setting fire to trash containers.
Police with truncheons occasionally charged the demonstrators, but pulled back just as quickly.
Police stun grenades boomed and flashed, often drawing jeers and boos from the crowds.
Most of the anti-government protesters who marched to the square stayed clear of the fighting, but they vented their anger at the political establishment with chants and insults.
Quote of the Day from Dave Ramsey.com:
Again and again, the impossible problem is solved when we see that the problem is only a tough decision waiting to be made. — Robert Schuller
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