Malinvestment Staff Not Needed: JPMorgan to Layoff 10% of Perpetrators

JPMorgan is due to layoff about 3,000 folks from the investment banking business. Will they take a page from Citi and layoff more than expected when the announcement comes surfaces?



Reportedly this company will also freeze salaries for people who Obama considers rich, in the 60k range and higher. Loss of a high paying job or a frozen salary will both put a damper on the consumption scene of New York. The city will also be impacted in reduced tax collection, so expect to begin to see expanded cost cutting measures by the city.



Investment banking was the place to be for a short time. Where else could a person go to their desk and underperform their job meanwhile collect on high 6 and into 7 figures for salary plus bonus? These jobs are now gone and there's going to be no need for them to come back in the next economical upswing. Wonder what field many of those who came under the gun will move into?



In short, their job skill consisted of following a formula set forwards by the creative Ranieri which involved packaging up trash with several neighbors trash and marketing it as a bond. Meanwhile convincing some governments and financial institutes to invest in the bond and selling insurance against defaults on the bond that they could not cover and finding another insurer without enough money to cover the bond and dumb enough to underestimate risk on the bond and making an arbitrage spread.



Related:

Rainy Days: Ranieri Co-founded Bank Franklin Bank Saves No More Pennies

Lost Golden Boys: Goldman Sachs to cut 10%

Finance sector layoffs? Predictable as the sun rise.