Burn Notice

2009 is shaping up to be a record year for Wall Street profits. And anyone still surprised or shocked at this simply hasn't been paying attention to the Obama administration's economic team.

In a report released Tuesday by Thomas P. DiNapoli, the comptroller of New York State, Wall Street profits in 2009 are on track to exceed the record set three years ago, at the height of the credit bubble. The report noted that the four largest investment firms in Manhattan — Goldman Sachs , Merrill Lynch, Morgan Stanley and the investment banking arm of JPMorgan Chase — earned $22.5 billion in the first nine months, in contrast to losses of more than $40.3 billion in 2008, primarily at Merrill.

“The national economy is slowly improving, but Wall Street has recovered much faster than anyone had envisioned,” Mr. DiNapoli said in a statement.

(More after the jump...)

Net revenue at the four firms, which excludes interest expenses, reached a high of $57.7 billion in the second quarter, Mr. DiNapoli said. Though total revenue has been higher in previous quarters, the banks benefited from a sharp decline in interest payments, $5 billion in the second quarter from a high of $76.3 billion in the last quarter of 2007.

Fueling the gains were extraordinary profits from the firms’ own securities trading accounts as they borrowed at near-zero interest rates and put the money to work in the securities markets. Member firms on the New York Stock Exchange earned a record $35.7 billion for their broker-dealer operations in the first six months, $8.9 billion more that the previous high in 2000, the state comptroller said.

In turn, the profits are contributing to a resurgence of bonuses on Wall Street. Six of the top American bank holding companies set aside $112 billion for salaries and bonuses, including deferred payments, in the first nine months, Mr. DiNapoli reported. The six banks are Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo.

If the profits continue, bonuses at the six banks could exceed the $162 billion paid 2007 — the year before the financial crisis hit stock markets. Though compensation has rebounded at the four largest banks, Merrill Lynch, now part of Bank of America, and Morgan Stanley reported a decline in overall compensation.

So, after losing trillions of dollars in 2008 and being given trillions of dollars as a reward for it, Wall Street banks are back making hundreds of billions of dollars in profit while the rest of the economy is dying. That's great.

Tim Geithner certainly did his job, didn't he? Helicopter Ben Bernanke, too. And the good news is 2010 should be even better for Wall Street's titans as rates will continue to be low and banks now know they can safely play the casino with taxpayer funds.

Will they user those funds to pay back taxpayers or hire more workers? Naah. That wouldn't be...profitable.

Mission accomplished, Obama economic team! Millions more Americans are jobless, but Wall Street is making record numbers again! The recovery should be juuuuuust around the corner...

You can't blame Obama for dealing with his real constituents, however. I don't.