First the good news. All three of the banks reporting this week (JPMorgan Chase, Bank of America and Citigroup) beat analysts’ expectations, for what that is worth. And all saw a clear improvement in their loan books, with non-performing loans and charge-offs (of loans viewed as no-hopers) both falling””at JPMorgan, for instance, by 3% and 28% respectively compared with the previous quarter. This has allowed the banks to release some of their loan-loss provisions, the reserves they set aside to cover soured credit.
This looks like more than just a flash in the pan. Citigroup’s net loan losses have now fallen for four straight quarters. That said on a conference call with journalists its chief financial officer, John Gerspach, was considerably more optimistic about emerging markets than America, where mortgage losses could remain stubbornly high. Brian Moynihan, BofA’s chief executive, said loan quality is improving faster than he had expected.
And the bad news? Demand for loans remains slack. Bankers are becoming “very worried” about asset growth in the medium to long term, says one consultant.
Worse, their securities and investment-banking businesses are no longer making money hand over fist, as they did in the first quarter and for much of last year…
I work at one of the banks mentioned.
Although I personally had nothing to do with the mess my company was in, I have been treated worse than a pedophile by President Obama and a vast wide swath of the American public. I no longer openly admit to being a member of the profession I’ve chosen. The hundreds of RESPONSIBLE clients I have helped to realize their dreams and financial goals over the years nobody cares to know about or understand.
Everyone is looking for someone except themselves to blame for wanting that huge house they knew damn well they could not afford; that family vacation to the Cozumel thrown on the credit card; that loan for the Lexus they knew damn well they couldn’t afford. Couples with two or three homes. 5 bedroom, 6 bathroom McMansions on Adjustable Rate Mortgages (who in their right mind would put their home on a credit-card like loan?).
I’m a low-level manager in Operations for one of those “big to fail banks”. We have laid off 100,000 employees in the last two years. I haven’t had a salary increase in three years, and since bonuses at the top were cut by that jackass in the White House, bonuses all the way to the bottom have been cut to zero too. I’m thankful to have a job. In this economy, I’m grateful to have survived the 5 rounds of lay-offs.
Congress put a gun to the heads of Freddie and Fannie years ago Thank you Barney Frank, Thank you Chris Dodd) to force them to approve the federal-backed financing for home loans going to people who were bad credit risks from the start. Once Pandora’s box was open, the sky became the limit for everyone else who had decent or good credit. The bad loans got passed around and around and around like a giant game of musical chairs. Now the music has stopped and everyone needs someone to blame. So, blame the “fat cat banker” since he/she doesn’t really have a face, or a name…
I chose a small home with low payments that I knew I could afford if I were to lose my job and have to work for minimum wage. I drive a 9 year old car that is paid-off. I put 22% of my income into savings and investments because I live frugally and I fully expect to never get a dime from that giant ponzi scheme called Social Security.
On top of all of this, I did my best to advise family, friends, and clients against many of the stupid financial things they went right ahead and did anyway. You didn’t NEED that vacation home. You didn’t NEED that luxury car. You didn’t NEED to send your kid to the uber-expensive private school that you knew damn well they’d have a hell of a time paying the loans on with their English degree or Education degree. you didn’t NEED that extra three bedrooms in your home.
In the last 6 years, you can’t believe the heat I was put under to “produce” as much as my peers in all of the loan types that are now in foreclosure and collections’ status. You’d think that I’d be treated like a hero now. I am, by a select few of my clients who listened and were responsible.
I know that it will be a cold day in hell when everyday Americans will start to point the fingers at themselves and accept accountability for the financial mess they themselves had a hand in creating.
Which is exactly why we are where we are. I’m a banker. There have been days I wished I were a “fat cat banker”, but I live in the Midwest, and the company has never had to pay us “fat cat” wages or giant bonuses out here in fly-over country. I’m giving the company another year to see how things trend. I just may go back to teaching…and fighting the teachers’ union. We’ll see…
Spot on, #1. Thanks.