Why don’t we hear about the real financial sector scandals, which are exorbitant fees and costs that cause a continuous wealth transfer from individuals to the financial services industry?
This article follows a recent article entitled “The Financial Services Industry is Still the Largest S&P 500 Sector – Even after the Collapse of its Stock Value.” The prior article discussed how the market capitalization of the financial services industry grew for thirty years to become the largest segment of the Standard and Poors 500 composite index. Even after the stock values of many of its largest companies collapsed significantly over the past several quarters, the financial industry still remains the largest segment of the S&P500 index.
The S&P 500 Fact Sheet for the end of Q2 2007 on the Standard & Poors website indicated that the financial services industry represented 20.77% of index market capitalization in mid-2007. The next four largest sectors in order of percentage market capitalization were:
1) Info Tech at 15.45%, 2) Health Care at 11.67%, 3) Industrials at 11.43%, and 4) Energy at 10.79%.
For years, we have often heard concerns about the Technology, Health Care, Industrial, and Energy sectors
The media has extensively and broadly covered these four sectors and focused on certain negative concerns along with positive developments, including:
1) Info Tech sector — the growth, market bubble, and crash of the information technology sector with all its increasing technological marvels and productivity contributions to the world economy;
2) Health Care sector — the continually escalating costs of the U.S. health care system, the aging of the population and attendant medical costs, the growing crisis of millions of uninsured and under insured people, and the huge unfunded future obligations of Medicare and other government health programs;
3) Industrials sector — the continuing migration of industry manufacturing overseas with outsourcing, dramatic job losses, and huge balance-of trade-deficits; and
4) Energy sector — the escalating price of gasoline and other fuels, the negative impact of energy costs on consumer spending and economic growth, and record after record of energy company profits.
Meanwhile, the financial services sector has grown to be almost twice the value of the Energy sector in terms of S&P500 market capitalization. Yet, we have not heard widespread media clamor about escalating financial services costs and profits.
The media rarely focuses on the exorbitant financial costs assessed by the financial services industry – particularly [...]