Saving the big banks but destroying banking
There have been no obituaries. No eulogies. No burial services. But this quarter marks the death of traditional bank at the big money center banks. Oh, I know we’ve seen amazing earnings reports from the likes of Goldman Sachs (GS) and JPMorgan Chase (JPM) this...Washington isn't ready to let Bank of America and Citigroup out of the woodshed just yet
Shares of Bank of America (BAC) are under pressure today—down about 5.5% as I write this at 1 p.m.—on a Wall Street Journal report that the bank may have to raise billions more in capital before it can pay back taxpayer bailout funds. Here’s the problem. Before the...Break up the banks!
Finally someone with real power in the current financial world has stated the obvious: The world’s big banks need to be broken up into utilities that do what you and I think of as banking and speculative trading companies that take risky bets on the markets with...Congress writes strong new regulations for banks–and then exempts everybody but my grandma
Maybe it’s a seasonal thing. We carve pumpkins at Halloween. We carve turkeys at Thanksgiving. So why shouldn’t Congress carve out its own legislation in mid-October. You may not be familiar with the term “carve out.” I wasn’t until this...Will bad commercial real estate loans set off Banking Crisis II?
It’s going to be an interesting earnings season for bank stocks. The U.S. Federal Reserve has recently been out banging the pots about a new banking crisis, one in the $3.4 trillion market for commercial real-estate debt, that in size, at least, ranks up there with...Poor things: It looks like the banks are going to be forced to eat a truck load of government debt.
It’s a neat (partial) solution. Governments around the developed world have been issuing billions–make that trillions–in new debt in order to pay for the bail out of the global financial system. The worry, of course, is that at some point the world...Where's the money? Despite the Fed, the money supply is falling
We’ve got a little problem in the economy. Tiny really. Nothing to worry about. Just that money supply is falling and that could endanger the entire economic recovery. The Federal government and the Federal Reserve are pumping money into the economy as fast as they...And now for some good news on banks–well, sort of.
During the financial panic stage of the global financial crisis, banks wrote down some $1 trillion in securities. Much of this came as banks took losses on thin to trade or never traded securities. What President George W. Bush’s Treasury branded...Could Europe's banks be in even worse shape than ours?
Hard as it is to believe, it looks likely: European banks are in deeper trouble than those in the U.S. and they’ve done less to clean up their balance sheets than their U.S. counterparts. At the end of this week, the finance ministers of the European Union...Credit card defaults move up again in August
Credit card portfolios at the country’s major banks showed a rising tide of defaults in August. That pretty much wiped out the hope the July’s numbers, which showed a glimmer of improvement marked any bottom in bad loans for the sector. Consumers. whose...Leave home without it: JPMorgan Chase targets American Express
If you’ve wondered what JPMorgan Chase (JPM), one of the winners in the banking crisis, is going to do to savage more damaged competitors, wonder a little less. On September 14, the bank announced it is going after American Express (AXP) and its highly...Corus signals the next wave of bank failures
Here we go again. On Friday, September 11, regulators seized Corus Bank of Chicago. It’s the biggest bank failure to date with its roots in the commercial real estate and construction loan market. And it marks the start of the long-feared next stage of the...Home prices could fall by another 25%, says Meredith Whitney, but stock market shrugs
The stock market doesn’t hear what it doesn’t want to hear. On September 10, influential financial sector analyst Meredith Whitney of Meredith Whitney Advisory Group told CNBC that U.S. home prices could fall by yet another 25%. The stock market barely blinked before...What do the Paris sewers, my lost luggage, and the end of Moorish Spain have in common?
Henry David Thoreau had a talent that I’ve never mastered. He could stand in his bean field at Walden Pond, bend over putting his head down near his knees, and see the world not just upside-down but differently. He could actually see things from a new intellectual...Want banks? Have you looked north, lately?
Looking for another way to invest the Canadian Loonie, which I called the world’s greatest currency, in my August 6 post? (See “The world’s greatest currency? The Canadian Loonie gets my vote. And soon some of my money”...Update HSBC (HBC)
One half of HSBC’s (HBC) business is performing beautifully. Unfortunately, it’s not the part that I most want to own. On August 3, HSBC reported second quarter earnings that showed that its investment banking and trading had doubled its pre-tax profit for...Danger to banks from commercial mortgages still climbing
Delinquency rates for commercial mortgage-backed securities (CMBS)–that is commercial mortgage loans backed by office buildings, retail stores, hotels, and apartment buildings–that have been packaged into securities and then sold to investors–rose to...Don't begrudge the banks their overdraft fees. Poor things, it's all that's keeping them afloat
I’m actually not kidding. Without overdraft fees, 45% of banks and credit unions wouldn’t have made money in 2008, according to research from Moeb Services. No wonder banks are jacking up their fees as fast as they can. This is the first recession since...Jobless numbers tomorrow–and on them hangs the trend in this market
The U.S. Bureau of Labor Statistics releases the July payroll and unemployment numbers tomorrow before the stock market opens. It’s a chance to give some badly needed new life to the “We can see the turn in the economy coming” optimism that has...Default isn't just for subprime mortgages anymore
The rate of default among home owners with prime mortgages is soaring. These are supposed to be the safest mortgages, the ones that went only to borrowers with the best credit scores, remember. And that’s a huge problem for a banking system that was almost...The next banking crisis: Commercial mortgages
Heard enough bad news about failing residential mortgages to last you a couple of lifetimes? Tired of headlines about huge losses at Citigroup and Bank of America? Cheer up. The subprime, alt-A, and prime home mortgage meltdowns are about to be blown off the front...The banking "recovery" is less than it seems from earnings
We’ve got half a banking recovery. That’s not at all the same as being halfway through a banking recovery. What the second quarter results from Goldman Sachs (GS), JP Morgan Chase (JPM), Citigroup (C), and Bank of America (BAC) tell us is that profits from the...Jim’s Daily Email Alerts:
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