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If Only All Businesses Were Lucky Enough To Be Big Banks
Stunning Goldman Sachs and JP Morgan profits mask the real problem
The half-dozen or so banks that became too big to fail have had it good. They received $billions in taxpayer bailout money and loan guarantees, were hand-fed lucrative deals to take over the choicest parts of less fortunate competitors, were allowed to exchange some of the toxic waste assets on their books with the Fed for Treasury bonds, and have been able to hire the best of the many, newly-unemployed bankers and traders.
Lucky dogs. They haven’t been forced to return to lending as a primary source of business, leaving…
By Relaxing “Market-to-Market†Rules, Has the U.S. Switched Off its Financial Crisis Early Warning System?
By relaxing the U.S. financial system’s mark-to-market accounting standards, the U.S. government is effectively deactivating the financial “early warning system” that let investors know that a global credit crisis was brewing – and kept it from turning into a total global meltdown, professional investors warn.
As part of the just-passed U.S. bailout bill, the government has reiterated the Securities and Exchange Commission’s authority to relax the mark-to-market standards. If the SEC actually follows through on that directive, many professional investors worry that we won’t catch on to the next leg of the ongoing credit crisis until it’s way too late.
While politicians…
8Oct2008 | Money Morning | Comments Off | ContinuedHigh Yields Raise Red Flags for Bank Stocks
Fifth Third Bancorp (FITB) just became the latest in a string of hard-hit financial firms to slash its dividend to preserve much-needed cash.
Yesterday (Wednesday),the Ohio-based regional bank slashed its dividend to 15 cents down from 44 cents, becoming the 17th company to reduce or eliminate its dividend completely this year, Bloomberg News reported.
Fifth Third certainly wasn’t the first bank to have to resort to this unpopular measure, nor will it be the last.
Financial firms of every stripe have taken a beating from the subprime mortgage crisis that has accounted for $396 billion in write-downs so far. From national consumer banks such…
19Jun2008 | Money Morning | Comments Off | Continued
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