Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

Corporate gatekeepers and big tech monopolists are making it more difficult than ever for independent media to survive. Please chip in today.

JPMorgan Chase CEO Jamie Dimon attends a policy forum with President Donald Trump in the State Dining Room at the White House February 3, 2017 in Washington, D.C.

JPMorgan Chase CEO Jamie Dimon attends a policy forum with President Donald Trump in the State Dining Room at the White House February 3, 2017 in Washington, D.C. (Photo: Chip Somodevilla/Getty Images)

As Economic Suffering Grips Regular Americans, Wall Street Behemoths Ready Feast of Stock Buybacks

"We're going to be aggressively buying back, and consistently," said Morgan Stanley chief executive James Gorman.

Andrea Germanos

For millions of regular Americans, the end of 2020 was marked by economic distress, with millions suffering pandemic-triggered job losses—and thus the loss of their employer-tied health insurance—still waiting on robust economic relief from federal lawmakers, and facing a weak social safety net.

For the nation's biggest banks, however, the year closed out with reason for celebration, and they're looking to take advantage of the banner year with a feast of stock buybacks.

As Axios reported Friday,

Banks cashed in on the white-hot IPO market, record debt issuance, and sky-high trading volume—all of which played out as economic peril softened the consumer side of their businesses.

The big picture: Financial results show that banks, which rake in money as middlemen, made a killing thanks to unprecedented action by the Federal Reserve—which caused a rush of activity in financial markets, pushed a slew of companies to issue debt, and led to a flood of others to go public for the first time.

Earnings were particularly sweet for banking behemoths including JPMorgan Chase, Goldman Sachs, and Morgan Stanley.

Reporting from Bloomberg on Tuesday gave a picture of the final quarter:

As the banner year for markets came to a close, JPMorgan Chase & Co. posted record profit in the fourth quarter, helped by a 20% increase in revenue from trading, a business where it already ranked No. 1 heading into the turmoil. At rival Goldman Sachs Group Inc., second only to JPMorgan in dealmaking, a flurry of transactions helped send its quarterly profit soaring 135%.

The results—from JPMorgan on Friday and Goldman on Tuesday—mirrored trends in many corners of industry and society during the shocks set off by Covid-19: The strong got stronger.

"Big banks' Wall Street business is booming," as the New York Times put it Friday. The banks signaled they may take advantage of that windfall by buying back shares—a practice the Fed last month allowed to resume last month and which critics say simply rewards wealthy shareholders but are essentially "manipulation of the stock market." From the Times:

What do banks plan to do with all that cash? "We have so much capital, we cannot use it," Jamie Dimon of JPMorgan told investors. The bank's cash pile has doubled over the past year, to more than $500 billion.

It's a similar story at other banks, and now that they've been cleared by regulators to resume share buybacks, "we're going to be aggressively buying back, and consistently," said James Gorman, Morgan Stanley's chief executive.

The reporting came as a new regulatory filing revealed that Dimon, a billionaire, was rewarded in 2020 with the same compensation as in 2019—$31.5 million.

"In determining Mr. Dimon's compensation, the independent members of the board took into account thefirm's strong performance in 2020 and over the long term, across four broad dimensions: Business Results; Risk, Controls, and Conduct; Client/Customer/Stakeholder; and Teamwork & Leadership," the company said.

At a conference call earlier this month, Dimon referenced the nation's growing wealth divide.

"We believe that inequality is a real problem," said Dimon, adding that "40% of Americans make $15 an hour or less."

Dimon also pointed to the fact with the new Biden administration, "there will be a new set of regulators," whom he expected would "be tougher" than those in the Trump administration.

President Joe Biden, according to reporting Friday, is considering naming former Obama Treasury Department official Michael Barr as the nation's top bank cop.

As head the Office of the Comptroller of the Currency, Barr would have the power to regulate banks like JPMorgan Chase.

Progressive groups like People's Action, however, have urged Biden to instead tap Mehrsa Baradaran, who teaches at the University of California at Irvine Law School and is an expert on the racial wealth gap. Bree Carlson, deputy director of People's Action, said in a statement Friday of Barr that "it's hard to imagine a worse pick," citing his ties to Wall Street and Silicon Valley corporations as reasons for his disqualification.

"President Biden must prove to voters that the government cares about all of us, not just wealthy elites," said Carlson. "If Biden truly wants to 'Build Back Better,' he needs to lock the revolving door and ensure no one with ties to the financial industry is in charge of regulating it."


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

Scientists to BlackRock Vice Chairman: New Fossil Fuel Development 'Incompatible' With 1.5°C

"The only responsible course of action is to do everything in our power to stop fossil fuel expansion and further emissions."

Jessica Corbett ·


Goldman Prize Awarded to Activists Who Showed Nature's 'Amazing Capability to Regenerate'

"While the many challenges before us can feel daunting, and at times make us lose faith, these seven leaders give us a reason for hope and remind us what can be accomplished in the face of adversity."

Julia Conley ·


Faith Leaders Call for Federal Election Monitors in Georgia to Protect Black Voters

"It is imperative that our election this November is monitored to preserve ballot integrity and ensure ballot security."

Brett Wilkins ·


'Inaction Is Bought': Here Are the Receipts on NRA's Purchase of GOP

"The issue is money in politics," said Nina Turner after the nation's latest mass killing of students and teachers. Right-wing lawmakers are "allowing children to die because of the gun lobby."

Kenny Stancil ·


'This Is on You!' Beto Interrupts Abbott Press Conference on Texas Massacre

Democratic gubernatorial candidate Beto O'Rourke accused Texas' GOP leaders of "doing nothing and offering us nothing" in the wake of the massacre at Robb Elementary School.

Jake Johnson ·

Common Dreams Logo