Banks Are Profiting! So Why Are People Mad?
EmailThe big banks are reporting profits! Good, right? A sign things might be turning around? Then why are some folks mad?
Citigroup joins a growing crowd of banks doing a little bit better these days. JPMorgan Chase, Goldman Sachs and Wells Fargo all are reporting profits.
These are banks that took billions of dollars worth of taxpayer loans, very "low cost" loans. And that is what has some people mad. The banks were given lots of money with little charge in order to get them lending again. Today, they are reporting profits but the lending is still stuck in the mud. That means consumers and businesses are not benefiting.
And then there is this question: If the banks are back on solid footing, making money, why aren’t they returning the loans (with interest!)? But it’s tricky. JP Morgan wants to give the money back. Goldman Sachs says the same. But others have been quiet. And it is unclear whether the government is in a rush to take the money back.
But there is another way to look at it. Since you and I own a big chunk of these places (for the time being) maybe it is not so bad that they are doing well. At least on paper. Right?
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OBVIOUSLY it is good they are doing better – that’s what all the money doled out by Bush and Obama was SUPPOSE to do! But it is incredibly rash to say they are doing well. The dust from all the mergers, retrenching, regulation tweaks, and TARP money is still being made, never mind needing to settle. A few more quarters and we can call it a success, all this news says is that it is certainly not a failure (yet – still a ways to go).
Posted by: jhw539 | April 17, 2009, 12:58 pm 12:58 pm
If the banks are back on solid footing, making money, why aren’t they returning the loans (with interest!)? But it’s tricky. JP Morgan wants to give the money back. Goldman Sachs says the same. But others have been quiet. And it is unclear whether the government is in a rush to take the money back.
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Because the banks carry more from the Feds than the TARP money. So they want to return the TARP money, but not the loans that the Government have gaurnteed. That is they don’t have to worry about defaulting on. I am not sure I buy there balance books anyway.
Posted by: Thinking | April 17, 2009, 1:16 pm 1:16 pm
Charlie, I think the main reason why Americans are mad is that the banks’ announcements portray their return to profitability as if it were a result of organic operations, rather than as a result of the virtually cost-less injections of hundreds of billions of taxpayer dollars.
Now it is being reported that the banks which are reporting profits and a desire to return the TARP funds, want to do so without paying to repurchase the warrants which the government received on behalf of taxpayers as collateral for the TARP grants.
If people seem angry now, wait till they see banks get away without making full restitution for their bailout.
Jim
Posted by: Jim Wells | April 17, 2009, 1:36 pm 1:36 pm
The average angry person out there isn’t mad about banks or TARP funds or taxes or spending. They are angry people because democrats won the election and the republicans didn’t.
Posted by: hang | April 17, 2009, 1:45 pm 1:45 pm
I am in the mortgage industry as my other job.
Everyone got mad at the oil companies for making a few billion dollars per quarter. Why isn’t anyone getting mad at the Banks for making a few billion dollars per quarter? Everyone needs gas, who needs a bank? There are thousands of them. Where are the banks making the money? 30% interest rates on everyones credit cards. $ 35 dollar over draft fees on check cards. If the banks were making the money honestly, I would be behind them But they are making the money off the backs of the American People. Doesn’t anyone see this? Doesn’t Congress see this? In my opinion, who ever took tarp money should have to lower their interest rates down to prime plus 2. and lower alll bank fees down to 0 since they actaully work for the people now. I think everyone should buy a safe and put two months worth of savings in the safe. When the banks and the Treasury see no money is coming in, they may change their practices. But the people are the only ones that can do this. Since Congress won’t. If I had my own Bank, I would put all loans at 4%. Since the Banks get it at 0%.
Posted by: maynezfoundation | April 17, 2009, 2:00 pm 2:00 pm
To maynezfoundation…people who work for or depend on the government or not-for-profit organizations for a check don’t understand how private business works. I am with a private for-proft business, but I used to be the head of a sizable non-profit agency and have some knowledge on the subject. People in my former world don’t understand how operating costs are meassured against revenue, how fees and rates are established, and what profit margins are. In other words, people like you don’t know how the real world works. You think that your problems will go away as long as someone in government, a foundation or individual donor gives you some money so you can give it away to someone else. Your ideas are overly simplistic and unrealistic. Of course banks and other businesses are making money off the American people…they are called customers. The purpose of a private company is to make money. But if a customer determines that a business is charging more than they want to pay and/or is being dishonest in their dealings, they go to another business for a better deal and better service. It’s called competition and it is exactly what drives our economy…and may I add, pays the taxes and makes the charitable donations so government and non-profits can exist. Instead of being angry about it, be glad that someone is making some money these days.
Posted by: bkm | April 17, 2009, 2:22 pm 2:22 pm
maynezfoundation:”I think everyone should buy a safe and put two months worth of savings in the safe. When the banks and the Treasury see no money is coming in, they may change their practices. ”
Well, that would certainly provide a major stimulus to America’s safe manufacturers. Go for it.
Posted by: jhw539 | April 17, 2009, 2:22 pm 2:22 pm
Does ‘hang’ speak from experience?
Were you angry when the repubs won?
There’s nothing like a poor attitude when someone ‘wins’.
Posted by: ok | April 17, 2009, 2:23 pm 2:23 pm
No seriously, who is John Galt?
Posted by: Ben | April 17, 2009, 2:32 pm 2:32 pm
People are mad because Obama and Bush bailed out the millionaire, and billionaire, banksters and didn’t help the working men, middle class, small business people, students, troops, charities, churches, farmers, and ranchers who are often screwed over by these banks with almost usurious interest rates, constant solicitations, horrible collection schemes, awful customer service, and contracts/rates/fees that can change on a bankster’s whim. First these banksters cripple the economy by bad investments and hurting people and then their cronys Bush and Obama give them trillions! And tell us to “spend more”! That is why we are mad. Bring back firewalls between investment, commerical, insurance, underwriting! Bring back interest control! Bring back FAIR bankruptcy rules! Bring back oversight and auditing! Treat white collar criminal banksters as good as you treat a poor person who robs someone!
Posted by: Ed | April 17, 2009, 3:41 pm 3:41 pm
Ed, it is healthy to be open about your feelings and not hold in your anger, but please make sure you are directing both toward the correct parties. I agree that the bailouts were premature, knee-jerk reactions based on uncertainty, fear and politics. They weren’t handled well and we see the results now. Blame the elected officials (from the president to Congress) who pushed it through so quickly. And, look at the big investors, insurance companies, and investment bankers for letting their greed overcome their better decision making. But, I hope you don’t refer to all people in the financial services industry as quasi-criminals as you use the term “bankster” (a presumed hybrid of banker and gangster). Your local community bankers are still the same good people you live and work around. They care about their customers and, most of the time, are very conservative and protective of your money.
Posted by: bkm | April 17, 2009, 5:51 pm 5:51 pm
to “bkm”: I agree whole-heartedly that small, community banks, credit unions, savings&loans, building societies, etc are, for the most part, good and the people that work there are good. I go so far as saying that most people who work for the big, international banks are likely good. Credit, and banking, is necessary for growth, business, and strengthens communities, as long as there is proper oversight and true responsibility. As you know in the past even “community” banks and smaller institutions have had troubles (recall the “savings&loan” scandals).
But my main gripe is with the large, faceless banksters who usually operate nationally and internationally. Care nothing about their clients. Change contracts/fees/rates on a whim. Take trillions in bailouts. Pay off politicians or get appointed to Treasury, Federal Reserve, WTO, IMF, Internation Bank of Settlements, etc to make policy….for their former/future firms! Trick soldiers, students, and minorities into usurious credit cards,mortgages, and loans. “Sell” debts, and get a tax break, to unscrupulous debt collectors. Who bribed Congress to take out firewalls between insurance, banking, investment banking, commerical banking. Who gets jobs in SEC and don’t audit their friends effectively. Create complex financial instruments without understanding them….then ask their customer to bail them out!
Posted by: Ed | April 17, 2009, 6:29 pm 6:29 pm
I don’t trust the government or the banks. I think they are counting the taxpayer bailout as profits. Why are we angry? they get billions and we get the shaft.
Posted by: Td | April 17, 2009, 11:45 pm 11:45 pm
I would just like to know that if these banks do pay back all these funds they have received then why are taxes being put in place for us to pay off this money. Also I didn’t see any bank exe’s being asked to step down or get fired like the auto maker exe’s did. What’s wrong with this!!!
Posted by: Tina | July 2, 2009, 4:51 pm 4:51 pm
Wow. If the federal government did one thing for the people other then, “Medicare and SSI”. Wait till the commercial Real Estate paper hits adjusted rates next year on all those bad loans. Oh, Retail store fronts. How many closed store fronts do you see in your neighborhood? Having said that the federal government could have bought those foreclosed houses for thirty to ten cents on the dollar weather it be CDO, CMO, SIV not cdswap. Then let the owner that lost that home, stay under section eight while looking for a job.( local sheriffs and tax assesors could have done this task) Would have done greater good then giving the cash to buch of idiots (banks) that created this man made crisis in the first place. For those whom cried out about helping your neighbor “Rick Santani in Chicago MSNBC” not his style to help out neighbor. Do wave at those dark houses “Rick” as you drive or walk by. No one lives there to wave back.
Posted by: Joemamabush | September 22, 2009, 9:47 pm 9:47 pm