Wall Street just doesn't get it. Earlier this month, Obama flagged levying a new tax on financial institutions' transactions, something that would have to be applauded given the crippling size of the US federal deficit. Without that, you can bet it will grow to $10 trillion over the next decade. And it's perfectly given the way the over-leveraged US banks came close to destroying the global economy
But sorry is the hardest word to say on Wall Street. The Financial Times reports that some investment banks are planning a legal challenge with arguments that the tax might be unconstitutional by singling out the big banks.
At the same time over in England, we have reports that Goldman Sachs bankers are defying political pressure by delivering themselves pay rises of a whopping 81%. Citigroup, Bank of America and Morgan Stanley aren't far behind.
As David Weidner from MarketWatch says, the bankers have gambled and lost. They bought trouble on themselves by defying Obama who, when he was newly elected, urged them not to block regulations and enrich themselves. Now they only have themselves to blame.
Weidner says: "Greed on Wall Street is showing itself to be an uncontrollable urge. Had Wall Street shown some restraint, it likely would have avoided the clampdown coming its way and bought itself time until the populist anger blew over. If bonuses had been halved and profits sacrificed for the sake of increased lending or more forgiving terms, big banks and brokerages would have a stronger case if Obama and lawmakers chose to come after them."
Perhaps it's not a battle they can win. But it will be protracted and ugly. The banks don't know any better.
no comment untill now