I dream of living in ... a World Without Dictators! I'm a Libertarian Paternalist in Slovakia - Freedom with Responsibility - 10% of income into your own Pension; Tax Loans for education, health, housing; now supporting Employment Maximizing Companies!

Too Many Big Banks

I'm sure that there are too many Big Banks, and too many bankers, and the financial industry is facing its own massive downsizing.

Please ask how much paper value has disappeared?
I doubt there will be a consensus, but a good data point is the Lehman windup, at about 20 cents per dollar nominal.  So a derivative market of $100 tr might only be worth $20 tr -- who will eat the lost $80 tr?  All the Big Banks.

THAT paper wealth is gone, and the need for finance sector jobs to slice, dice, sell, insure, rate ... and even analyze and write about the paper wealth.  All gone.
Even if they get 'bailed out' to allow the few top fat cats to stay fat, the finance sector is hosed.

There is a lack of need for finance jobs, just like the lack of need for new house construction.

(via Megan)

Posted by: TomGrey at 11/26/08 00:12 | link | comments
economics

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