The Financial Times reports today (log-in required) that Wall Street banks “are bracing for a slump in trading profits.” As we said a few weeks ago, second-quarter profits for banks like Goldman weren’t great. July wasn’t much better, even slower than normal summer seasons.
A few more months of quiet trading, and Mayor Bloomberg won’t be able to count on yet another unexpected multi-billion-dollar surplus from record financial-industry profits to close next year’s $3.3 billion deficit.
The good news is that commercial and consumer banking are doing better as mortgage and credit-card defaults slow. That’s nice for the national economy, but small comfort to New York City, which needs banks to reap huge trading profits year in and year out to keep the budget bubble going.
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