Barclay’s announced its profits doubled! The world is alarmed! Nothing about this alarms me…. Think about the market share Barclay’s picked up when they took over Lehman, buying out the company at a bargain price. Think about the money made as the world population increased their savings in the past 12 months, while Barclay’s gets money at some of the lowest rates in history…..  it all translates to PROFIT.

The reality is: we live in a profit-driven world. While everyone talks about their disbelief at the unemployment rates, doesn’t the system we live in drives this mechanism? Politicians on the LEFT and the RIGHT point fingers, talk lots, but none of them address the realities. When recession hits, most companies turn to firing staff as it is one of the largest operating costs. They consolidate responsibilities, they merge and fire more staff…..all designed to go to the bottom line. When the bottom line improves, so do stock prices, dividends, salaries and bonuses. The theory is that when things improve, companies hire more people. But what if these companies become accustomed to their new efficiencies AND increased profits? Do they hire again?  Can we have low unemplyment AND fast recovering markets. Its either one or the other in my humble opinion, and the system we have in place actually rewards staffing cuts. We live in a world judged by quarterly results.

So how does this affect the luxury real estate market in Manhattan? Well, the top earners have very low unemployment…. And now they will receive large bonuses and salaries. Possibly larger than pre-great-recession times.These salaries and bonuses are TAXED heavily…..which fuels State and Federal coffers thereby reducing the need to cut government jobs further. The rich spend LOTS: this translates to more jobs at the retail level (hopefully). Spending generates lots of sales tax revenue. More money for the high end real estate market means more transfer taxes, stabilized pricing, lower inventory, etc. We see this increased activity every day now.

So when Barclays posts a doubled profit, who really benefits?