Juggling Dynamite

Extremely interesting historical perspective in this discussion; worth a listen.

David McWilliams (The History of Money: A Story of Humanity) is a journalist, writer, and economist. David joins the Armchair Expert to discuss having an unusually calm Irish family upbringing, being practically prescribed to study economics, and the impact that his father being screwed by the system had on him as a kid. David and Dax talk about his early, life-changing realization that no one actually has control over the economy, why economics should be seen as a form of communication about the world, and how the human advent of fire helps us to understand money. David explains the idea that the technology of trading money was an alternative to war, how money amplifies the trust necessary to function in complex societies, and why the reason that money is weird is because we are weird. Here is a direct video link.

Trading-driven investment bank profits are thriving even as consumer sentiment and labour markets remain weak. See Capital markets, wealth drive earnings for Canada’s big banks:

Canada’s big banks exceeded expectations for the 2025 fiscal year as capital markets and wealth management carried results.

But economic uncertainty loomed over results. Adverse trade policy and a cooling labor market were hot topics, and there are risks of consumer credit stress: The Bank of Canada estimates that about 60% of outstanding mortgages will renew in 2025 or 2026.

Also, see Goldman Sachs and Morgan Stanley see double-digit profit jumps amid surging stock market. Goldman Sachs reported a 12% increase in fourth-quarter profit to $4.6 billion, fueled by a surge in investment-banking fees and equities trading. Morgan Stanley followed with an 18% profit jump to $4.4 billion, as their investment-banking fees climbed 47%. Trading and capital-markets engines are generating record cash flows amid the largest wave of employee headcount reductions in the banking sector in more than a decade.

Investment sales firms reinforce a powerful feedback loop in which their elevated profits inspire high valuations and animal spirits, thereby promoting the very trading and dealmaking that generate their profits.

In short, financial firms enrich themselves on activity, regardless of how buyers fare.

The house rakes it in until it implodes, and then they look to the government for bailouts.  Unfortunately, individual players (aka investors) have no such assurances and must manage their capital risk carefully.