U.S Now Land of Two Economies - U.S Bank Titans and the Rest of US

Discussion in 'Economics' started by ByLoSellHi, Oct 15, 2009.

  1. U.S Now Land of Two Economies - U.S Bank Titans and the Rest of US

    by: Matthew Goldstein
    October 15, 2009


    It’s a tale of two economies — one for the titans of U.S. banking and one for the rest of us.

    Yes, JPMorgan Chase’s (JPM) third-quarter results were impressive and a testament to the strength of its still solid investment bank. Much of the credit, however, falls to JPMorgan’s bond trading desk, which accounted for nearly 20 percent of the bank’s $28 billion in net .

    And expect much the same on Thursday, if not even more impressive results, from that other Wall Street colossus — Goldman Sachs (GS).

    But draw back the curtain and you’ll see that without its resurgent investment bank, Jamie Dimon’s banking empire looks rather ordinary.

    JPMorgan’s credit card division lost $700 million, even as the bank overall posted a net profit of $3.59 billion. Retail financial services eked out a mere $7 million in net income. There’s no evidence that JPMorgan, despite its surprising earning prowess, is stepping up its commercial lending-especially to mid-sized businesses. The commercial bank’s portfolio of loans has held fairly steady over the past year.

    That’s no doubt an indication of lax demand from companies still trying to navigate the Great Recession. But it is also an indication of the still-tight credit markets for many companies.

    Of course, if companies can’t borrow money, it’s difficult for them to grow and create jobs. You know, the kind of jobs that help middle-class families put food on the table — not the kind of Wall Street jobs that generate fat year-end bonuses from pushing blips of light around a trading terminal.

    The real economy, meanwhile, continues to weigh on the bank. In the quarter, JPMorgan set aside $2 billion to cover losses on troubled consumer loans, raising the total money the bank put aside for all bad loans to $31.5 billion. That’s a lot of loans the banks expects to go sour.

    Still, JPMorgan can afford to be aggressive when it comes to setting up reserves for bad loans because of its scale and dominance. Many other banks simply can’t replicate that feat and also churn out a handsome profit. So expect banks smaller than JPMorgan to report far more mediocre third-quarter numbers.

    That’s what living in a land of two economies has come to mean.
  2. achilles28


    Without speculating, flipping and market making (for speculators and flippers), JPM's gain would be a loss.

    Now I get why profits at Investment Banks have little bearing on economic health. They do what I do! TRADE. Doesn't mean squat. But it looks great.
  3. Who owns the federal reserve system?

    We spend trillions fighting other peoples wars and trillions more funneled into their bank accounts in the guise of bailing out large banks.

    We are now seeing the bold actions of the parasitic infestation that has been chewing away at American values and the American economy since reagan was propped up into office.

    It's Not the US bank titans and the rest of US.

    It's a small number of well organized parasites against the rest of humanity.
  4. Well organized parasites, (Priest Kings) have managed to rule large populations for thousands of years.

    Look at the Olmecs, the Egyptians, the Chinese. They get into power, (often by controling the water) and then propagate legal doctrines that make it death to question them.

    We havn't gotten to that point yet, but the cult of the teabag is carrying a golden calf.

    I kinda think we need to nip this in the bud.
  5. The "cult of the teabag" are the only ones doing the questioning.
    Are you saying you wish to save them from certain death?