Charles Gasparino is making sense…
And Wall Street should fess up about something else: Firms are making money not because they’re good at what they do, but because they have been given so many subsidies that it’s impossible not to make money.
Goldman Sachs is now a commercial bank, as is Morgan Stanley, which means both firms are protected by the Fed as Too Big To Fail. And because of that designation, they can borrow cheaply to finance their risk taking even though they don’t hold substantial customer deposits and it’s unclear that they ever will. Meanwhile, the bailouts that saved Bank of America and Citigroup have allowed their revenues to flow right to the bonus pool.
