Posted on 04/17/2009 12:10:02 PM PDT by Scanian
The nation's largest banks have made quite a comeback. Having nearly brought the market to its knees a few months ago, the financial sector has surprised experts with impressive profits.
Citigroup -- widely considered to be the country's weakest big bank -- reported this morning net first-quarter income of $1.6 billion, beating analyst expectations and making it the bank's best quarter since 2007, Citi CEO Vikram Pandit said.
Citi's news comes on the heels of reports showing better-than-expected, first-quarter profits by three other major banks: $2.1 billion for JPMorgan Chase, $1.7 billion for Goldman Sachs and $3 billion for Wells Fargo.
Since the beginning of March, most major banks have seen their stock prices soar. Citigroup saw the most dramatic increase; its share price shot up 75 percent.
"I think the American banks are healthy," said said Dick Bove, a banking analyst at Rochdale Securities. "In the fourth quarter, we saw people put over 100 billion a month in net new deposits into the banking system and that's never happened before."
In addition to record deposits coming from U.S. consumers, financial firms are also benefiting from low-cost loans from the Federal Reserve, as well as stronger performance from their investment banking arms.
(Excerpt) Read more at abcnews.go.com ...
It is all a shell game. I am not convinced.
Dont they still own the “the toxic assets”?
Some of these profits come from the inclusion of TARP money on the bottom line. Let’s see what next quarter profits are before we get too jumpy. On the other side of the token, if you have a few thousand to risk, buy Citigroup. I wish I had at $1.87 a share.
“I think the American banks are healthy,”
Why? They still have toxic liability AND the goobermint is cutting pay to the top performers.
How will punishing performers benefit the recovery of the banks?
It really annoys me when they use the term “taxpayer payback”, like the taxpayer is going to get a check from these banks. It’s bonds that are funding all of this.
The current market “stinks on ice”
Hard assets is the place to be
Yeah but the toxic liability has been massively written down, why do think Citi has posted losses for the past year? Its not for lack of income.
Anyone want to buy some bridge stock!!!!
I almost bought Freddie and Fannie thinking the hard assets will go up in value.
Then an AG Edwards guy reminded me that the goobermint owns them.
Companys are in the business of making money for the shareholders. When has the goobermint EVER made money?
The Goobermint is a model of inefficiency and now they run the banks
One thing is certain: Dick Bove is an idiot.
Written down? what does that mean?
Its all a shell game
True, and the little runt, at treasury, using tax payers dollars to buy their bad debt for 100% and who know how much money the federal reserve has let them have. All of the current profit reports are nothing more than bovine waste.
No you have been buying those toxic assets under the table for 100% of prior face valve.
What we need is the passage of the Congressional Recovery Act Program...
Yeah..CRAP is the ticket..
Mark to market accounting, the value of the subprime assets have been written down over the past year, creating the losses. Over the past year the size of these writedowns have been larger than other income creating net losses. Its reached a point where other income is now larger than the writedowns, creating net income. As you may have seen there are funds being set up to buy these assets now because they are being perceived as being too depressed. Some argue that mark to market accounting caused this problem because it forces banks to take all the loss upfront on an asset that may be held thirty years.
I thought deposits were liabilities for the bank...especially when they are not lending them.
Yes, there is an accounting rule that allows them to do that. The idea is that they could now pay down the debt by buying back for less than what was borrowed... but they don't have to actually buy it back in order to claim it on the balance sheet!
Ridiculous.
All of these "great" quarter reports from the banks are scams. The Wells Fargo announcement was particularly so. And all of them are still carrying loans on their balance sheet at ridiculously high prices. Commercial real estate at 100 cents on the dollar? Yeah, right. Fantasyland.
It all smells like claptrap to me.
Let the market correct it self.
Barama is bilking us of trillions with the notion that we can avoid the pain.
Tear off the band~aid I say
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