As the nation's political leaders continue their dangerous game of chicken over the debt ceiling, pink slips are being handed out everywhere from Wall Street to Main Street. Goldman Sachs, whose quarterly earnings were dragged down by sagging fixed income revenues, is reportedly gearing up to lay off 1,000 employees - much broader cuts than their annual sacking of weaker performers.
Meanwhile State Street, the world's third-largest institutional investor posted a higher quarterly profit, but will also slash 850 information technology jobs as a way to cut costs. And market observers believe the axe will fall on hundreds of employees at Bank of America, Morgan Stanley and Credit Suisse with profits on the wane.
The retail sector will also feel a bit a high-profile pain. Even though global outplacement consulting firm Challenger, Gray & Christmas Inc. said that layoffs over the first half of 2011 fell 12 percent from a year-earlier, bankrupt bookseller Borders is sharpening the blades as it prepares to liquidate. The retailer employs some 10,700 people across the country, so the impact of its demise will undoubtedly be felt nationwide.
And it's just another dose of bad news for a beleaguered public that's battered every day by reports about whether or not the U.S. will default on its debt, continuing malaise in the job market, and growing concern that the country is actually in the midst of a double dip recession without realizing it.
Though President Obama recently said he's not worried there'll be a double-dip recession, some pretty qualified people disagree with him – like prominent Yale economist Robert Shiller, who warns that the U.S. economy may be at a tipping point. Shiller is especially concerned about the recent uptick in unemployment because any further increase could indicate another recession. "Whether we call it a double-dip or not, I think there is a risk," he said in a June 9 article by Leah Schnurr of Reuters.As the Senior Editor of Advanced Trading, Justin Grant plays a key role in steering the magazine's coverage of the latest issues affecting the buy-side trading community. Since joining Advanced Trading in 2010, Grant's news analysis has touched on everything from the latest ... View Full Bio
To New York University economist Nouriel Roubini, there's more than just a risk. He asserted last summer that a double-dip recession was already underway, citing signs such as ballooning budget deficits, rising unemployment, falling home prices, and greater loan losses in the banking industry.