Is Wall Street on Crack With Its Wave of Hiring?

Despite widespread fears of a "double dip" recession, Wall Street is hiring again in droves, a sign that the financial industry anticipates a strong economic recovery. According to The New York Times, New York securities firms have added 2,000 new jobs since February, underscoring the tremendous recovery of the financial sector since the crash in 2008 and the subsequent bailout of faltering banks. Rae Rosen, a regional economist at the Federal Reserve Bank of New York told The Times, "Wall Street typically hires in anticipation of the recovery, and there is a sense that the economy has bottomed out and is slowly improving."

But this hiring comes at the same time as many indications that the recovery may be faltering. "Double dip" has become the word du jour, with everyone from economists to investors speculating about whether the economy might lose steam and dip back into a recession. The job market outside of Wall Street is still weak, having shed 125,000 non-farm jobs in June. Housing data, while temporarily boosted in the spring by government tax credits, has slowed again. The threat of a double dip last week sent investors rushing to money markets, and a recent poll indicated that many think a double dip is imminent.
Liberal economists like Paul Krugman and Nouriel Roubini have also been very vocal in their prophesies of economic woes. Nobel laureate and Big Think expert Krugman says that the recent warming of the economy does not herald a full recovery, noting that both previous depressions in American history included periods of growth. "We are now, I fear, in the early stages of a third depression," he wrote in his Times column, calling for a second government stimulus package. NYU professor Nouriel Roubini—known as Dr. Doom for having predicted the 2008 crisis—doesn't expect another dip immediately, but he worries about another bubble. Unless robust financial reforms are made, he predicts there is a "high likelihood" that we will face another crash in 2 or 3 years
A financial regulatory reform bill is currently on the floor of the Senate, having already passed the House, and it is been touted as the most sweeping financial reform since the Great Depression. But Wall Street opposes this reform, having lobbied hard against many of the provisions included in the bill. Yet some stringent reforms remain, like regulations on derivatives trading. Final passage of the bill has been delayed by the death of Senator Byrd of West Virginia, but Democrats expect it will be signed into law within weeks. 
So why is Wall Street so bullish? 
Related Articles
Playlists
Keep reading Show less

Five foods that increase your psychological well-being

These five main food groups are important for your brain's health and likely to boost the production of feel-good chemicals.

Mind & Brain

We all know eating “healthy” food is good for our physical health and can decrease our risk of developing diabetes, cancer, obesity and heart disease. What is not as well known is that eating healthy food is also good for our mental health and can decrease our risk of depression and anxiety.

Keep reading Show less

For the 99%, the lines are getting blurry

Infographics show the classes and anxieties in the supposedly classless U.S. economy.

What is the middle class now, anyway? (JEWEL SAMAD/AFP/Getty Images)
Politics & Current Affairs

For those of us who follow politics, we’re used to commentators referring to the President’s low approval rating as a surprise given the U.S.'s “booming” economy. This seeming disconnect, however, should really prompt us to reconsider the measurements by which we assess the health of an economy. With a robust U.S. stock market and GDP and low unemployment figures, it’s easy to see why some think all is well. But looking at real U.S. wages, which have remained stagnant—and have, thus, in effect gone down given rising costs from inflation—a very different picture emerges. For the 1%, the economy is booming. For the rest of us, it’s hard to even know where we stand. A recent study by Porch (a home-improvement company) of blue-collar vs. white-collar workers shows how traditional categories are becoming less distinct—the study references "new-collar" workers, who require technical certifications but not college degrees. And a set of recent infographics from CreditLoan capturing the thoughts of America’s middle class as defined by the Pew Research Center shows how confused we are.

Keep reading Show less