<B>Slump in Trading Threatens a Wall Street Profit Engine
Industry Could Post 11th Trading Decline in 16 Quarters</B>
By SAABIRA CHAUDHURI and JULIE STEINBERG CONNECT
Jan. 6, 2014 7:52 p.m. ET
THE WALL STREET JOURNAL
The trading boom that helped reshape global investment banks over the past decade is sputtering, raising fears that one of Wall Street's biggest profit engines is in peril.
Executives have warned that lackluster markets could lead to year-over-year declines in fixed-income, commodities and currency trading revenue when banks begin reporting fourth-quarter results next week. That would mark the fourth consecutive drop and the 11th in the past 16 quarters.
The slump has gone on so long that some observers are beginning to question whether it is part of an ordinary down cycle or a more permanent shift.
"I think it is worrying," said Oppenheimer analyst Chris Kotowski, who expected trading revenue to have hit bottom and stabilized by now. "You can't turn around a fundamental trendâ¦if that's what this is."
The declines have prompted waves of job cuts and departures. In the first half of 2013, there were 19,554 FICC traders at the 10 largest global investment banks, down from 25,257 in the first half of 2008.
Since 2009, however, trading has been slowly fading, prompting bankers to worry whether the glory years will ever come back.
http://online.wsj.com/news/articles/SB10001424052702304887104579304950089683862
So is volume coming back anytime soon? The institutions seem pessimistic.
Industry Could Post 11th Trading Decline in 16 Quarters</B>
By SAABIRA CHAUDHURI and JULIE STEINBERG CONNECT
Jan. 6, 2014 7:52 p.m. ET
THE WALL STREET JOURNAL
The trading boom that helped reshape global investment banks over the past decade is sputtering, raising fears that one of Wall Street's biggest profit engines is in peril.
Executives have warned that lackluster markets could lead to year-over-year declines in fixed-income, commodities and currency trading revenue when banks begin reporting fourth-quarter results next week. That would mark the fourth consecutive drop and the 11th in the past 16 quarters.
The slump has gone on so long that some observers are beginning to question whether it is part of an ordinary down cycle or a more permanent shift.
"I think it is worrying," said Oppenheimer analyst Chris Kotowski, who expected trading revenue to have hit bottom and stabilized by now. "You can't turn around a fundamental trendâ¦if that's what this is."
The declines have prompted waves of job cuts and departures. In the first half of 2013, there were 19,554 FICC traders at the 10 largest global investment banks, down from 25,257 in the first half of 2008.
Since 2009, however, trading has been slowly fading, prompting bankers to worry whether the glory years will ever come back.
http://online.wsj.com/news/articles/SB10001424052702304887104579304950089683862
So is volume coming back anytime soon? The institutions seem pessimistic.
