Why the US needs a depression
Great Marketwatch article setting straight a few home truths on the state of the US economy. Point number 5 stands out – if the banks, who have among other things during this credit crunch severely diluted the value of a share in their listed stock, are to regain anything like their EPS ratios from recent history, how are they going to do it without the fancy derivatives structures that got them the fat profits in the first place?
The stuffy old brokerage businesses are going to have enough on their plate defending market share against low margin DMA platforms. Will banks in their current form ever be as profitable again?