Even as the Dow has reached a record 18,000 plus, banks like Goldman Sachs and JP Morgan have announced disappointing earnings. Sure, the “global” economy is feeling the effects of China’s woes, but in the past innovations from banks would smooth out those bumps.
Instead, Goldman and JP Morgan — not to mention Morgan Stanley and Citigroup — are announcing layoffs and flat to lower bonuses for this year after a lousy 2015. These job cuts often don’t begin with the fat cats, but those lower down on the food chain — people who take the subway to work and the ferry back home to Staten Island.
While no one is shedding tears for some trader who can’t afford another Maserati because his bonus got axed, when the rich get paid less, they normally spend less — which means less money for the average folk who work at places that cater to the rich, like restaurants or car dealerships.