Guess who won the post-crisis recovery? Guess who still rules the US economy and runs American capitalism, despite everything we have and haven’t learned over the years. Guess who is once again disproportionately represented in the US financial markets…
Banks, brokers and insurance companies make up 16.8 percent of the S&P 500, almost double the level from 2009 and closing in on technology companies at 17.6 percent, according to data compiled by Bloomberg. Bank of America Corp. and Morgan Stanley are helping lead gains in the index this month after profits topped analyst estimates. Intel Corp. (INTC) and Microsoft Corp. are among the worst after earnings trailed forecasts.
For bulls, the change signals banks will lead the economy even after the Federal Reserve begins to reduce stimulus. Bears say S&P 500 profits would be down this quarter if not for banks. They note that the last time financials were the biggest industry was in 2008 and the consequences were disastrous.
Large financial institutions are, once again, the undisputed champions. Creators of nothing, they extract rents from every inch of the economy and essentially decidee which laws will be written, who will be elected and what regulations, if any, they’ll allow to stand in their way.
America’s banks are now more Too Big To Fail than ever before.
“Your revolution is over, Mr. Lebowski. Condolences! The bums lost.”