US Bancorp profit falls 18%, credit loses triple(this is very bad news)

Reuters via yahoo ^ | 7/15/2008 | Jonathan Stempel

[janetjanet998]

NEW YORK (Reuters) - U.S. Bancorp (NYSE:USB - News) posted a larger-than-expected 18 percent decline in quarterly profit due to mounting housing-related credit losses, and said that tough economic conditions will cause bad loans to increase further. The results, from a bank that has avoided the massive credit losses afflicting many rivals, do not augur well for the rest of the nation's banks,

[janetjanet998]

This is very very very bad. This Bank has very little subprime loans..In fact Warren Buffet was loading up on the low 30's becuase of the above.

If USB is like this then most other banks with are in deep Sh*t

[whitedog57]

Banks made money by extending credit on mortgages and credit cards. Party ended. Hell to pay.

That is about it.

[television is just wrong]

they are crushing the banks, and the dollar they want to bring in the amero.

[Brian S. Fitzgerald]

Wamu lost 30% yesterday.

[NVDave]

When will people here on FR get it through their heads that the assertion that this “would not spread beyond sub-prime” is so much nonsense and twaddle?

The “it won’t spread beyond sub-prime” has been proven false by mortgage stats as of this past spring. The evidence that prime paper would be affected has been available for months.

So this isn’t a surprise - or it shouldn’t be.

At some point, some event will finally crystallize and focus people’s attention on the problems of the financial house of cards that is the US and the Bush cheerleaders here on FR will finally “get” it — that the Bush administration is a year late and a trillion dollars short. The economy isn’t fine, and it doesn’t matter what the cooked government stats say: when the debt markets melt down, the macro-econ indicators soon won’t be able to hide anything.

The GOP could have been out in front on this issue, if only they’d been willing to quit putting their fingers in their ears and chanting “the economy is fine! Unemployment is low!” and other such nonsense.

[KarlInOhio]

Are there any banks out there which were smart enough to avoid this whole mess? I would like to find a bank that isn't vulnerable to Chuck Schumer's rumor mill.

[palmer]

That is about it.

Total credit would need to contract from the current 40+ trillion by 5 or 10 trillion to get back in the reasonable range. The contraction of a trillion or so has been too painful, so the Fed is trying to prolong the binge instead. It won't work since we have no ability to pay (out of 14 trillion but stagnant GDP)

[AxelPaulsenJr]

So, are we talking total economic collapse?

[STONEWALLS]

“Banks made money by extending credit on mortgages and credit cards.”
...and not only that they gave credit to illegal aliens and felons who ran up the tab even more.

[dblshot]

18% decline in quarterly profit still means they made a profit. If we applied the excess profits mentality of the Libs about the oil companies we wouldn't care about Bancorp’s reduced profits.

We'd expect a slight reduction in a banks profits given the current economic environment anyway. Just wait until Schumer or someone connected starts screaming bailout and you'll see how badly the banking industry is politically influenced. If the Arabs ever pulled all their assets out of the US financial system we'd be hosed big time. I'm starting to wonder if Howard Ruff was right about keeping old silver coins on hand. At any rate when you have a system based on faith, you better pray, and pray hard!

[AxelPaulsenJr]

Gosh, Maybe you should run for office, you seem to have all the answers.

[janetjanet998]

USB was supposed to be that bank...very consrvative to whom they lended money too...that’s why Buffet and many other bought it becuase it was “a good bank getting dragged down with the subprimers

its the nations 6th largest

[Mark was here]

“Investors” bought mortgage bundles offering huge returns, aka “free money”, knowing the folks taking out the loans never intended to pay the higher rates, with the common wisdom on the street being not to worry about the higher rates as “you can always re-fi”.

The investors and the borrowers should both get what they deserve, and it is not a bailout.

[milwguy]

I believe it was under Clinton that Fannie and Freddie ramped up their alt a and sub prime lending. Franklin Raines, Jeannie Gorelick, and The Messiahs VP vetter Johnson all made fortunes working for Fannie and Freddie. The Dems required banks to loan to minorities who were not otherwise credit worthy or risk being publicly humiliated.

Both parties have blame here, but the two catalysts are the total lack of lending standards by the banks and the lack of ANY energy policy. Energy=prosperity. If gas was a buck a gallon, the economy would still be rolling along, but the dimwits in Washington have kneeled to the Branch Algorians and their enviorwacko/marxist allies to ruin our country. The ethanol whores at ADM have driven up our food prices, Nancy Pelosi and Harry Reid shold be impeached for refusing to allow us to access the resources we need to power our economy. Everyone in washington is to blame here, not just the GOP.

[tubebender]

We are stock holders in a small local bank that has no sub-prime loans but many of their loans are shaky because the borrowers have had their income reduced as a result of the trickle down effect...

[Perdogg]

No. Please people, get a grip.

[STONEWALLS]

Karl, check out the following link to find banks with good ratings:
http://www.bankrate.com/brm/safesound/ss_home.asp
best of luck to all,
Stonewalls

[PeterPrinciple]

Maybe I am missing something here. If the loans are guaranteed by the federal government, why would they stocks drop? I realize not all loans are guaranteed but many of these loans were also sold at a discount. Some one is still buying these loans and there is a reason for that..................................... The lower the price, the better. Maybe I need to become a specialist is collecting on the federal guarantees.

[rovenstinez]

We ALL know that if things get bad, we’ll get another rebate check from Uncle Sam, to pump up and stimulate the economy. Bail outs, are expected, no one has to live or plan wisely, because Uncle Sam will ALWAYS be there...

[Perdogg]

Who is they??