Professor Elam

Wall Street would like you to believe they know what they are doing.  A glance at bank and brokerage stock prices suggests otherwise. Since I started following the industry in 1973 it has always been so.  Wall Street piles on workers on the way up only to discard them as prices fall.  The oil industry did the same thing in the 1970s and 1980s, slashing any and everyone in 1986 and again in 1998. Now anyone who remembers those days will not work in the oil  industry. And so they are relegated to newbies coming out of college or millenials with no particular education at all, or memory. Forbes details the latest round of cuts. I suspect that one if the data were readily available, could graph employment on Wall Street as a leading indicator of the next stock market top.  A first derivative, a rate of change like Moving average convergence divergence, would tip us off.  However I doubt we will see those oracles of Wall Street develop an indicator based on their own false optimism.

HIring an employee should pattern the same way Warren Buffet buys stock in a company. Okay, if the overall market fell 25% after you bought, would you still want to own it?  Most companie slash employment when their business declines. The better move would be to only hire employees when there was a definite long term plan.  Manufacturing companies now use temps for that reason. But for longer term employees, most firms see employees as liabilities. Until we can establish human capital as an asset, it will always be this way.