The big banks have missed internal targets for trading revenues in bonds, currencies and stocks. This has been happening in the majority of asset classes and across most exchanges and its only getting worse as disappointing corporate earnings reports come out. The problem is there just isn’t much volume being traded and the banks had gotten accustomed to taking a little slice of everything on big volume.
The big Wall Street banks are poised to slump badly. They’ve been living on trading profits, making billions to fuel their bonuses and covering even more billions in losses on loans. But July sucked at the trading desk and if August and September aren’t better it going to be “brother can you spare a dime or a trillion?”
In theory the Financial Reform law that was just passed allows for an orderly dismemberment of these zombie banks. Packed in barrels and shipped to a remote Army base for storage (wait, that’s the plot of scary B movie) In reality this whole mess is far scarier than any drive-in movie and could end civilization if it gets out of hand.