How Banks Shirked The Bill For The Crisis And Emerged Richer Than Ever

There are many myths surrounding the “American banking industry” as it relates to its health and well-being. In that regard, the banking analysis that follows is an attempt to bring clarity as to where the U.S. banking industry currently stands at the end of 2011 and to explain what really took place in the banking environment over the past five years since our latest financial crisis began in 2007.

The facts show that the bank bill for the banking industry’s ill-begotten ways of approximately $600 billion has been paid for using three primary methods: (1) by passing less of the bank’s interest spread between lending and borrowing over to its customers; (2) by paying less dividends out to its stockholders; and (3) paying less taxes to the government.

The facts also show that bank equity and bank salaries are now above pre-crisis levels and bank cash on hand is up 150%. Seemingly only bank lending is down.

So don’t cry for me, Argentina. Who ever said that bankers did not know what they were doing?

Presentation by Jim Boswell of Quanta Analytics. The source of the financial information appearing in this presentation is the Federal Financial Institution Examination Council (FFIEC) Call Reports and the Office of Thrift Supervision (OTS) Thrift Financial Reports submitted quarterly to the Federal Government by the more than 7,000 U.S. FDIC-insured depository institutions, including Bank of America, Citigroup, JP Morgan/Chase, and Wells Fargo. All data presented reflects the highest level of consolidation (e.g., domestic and foreign operations). This information is stored in and can be easily retrieved and confirmed by going to the FDIC’s Research Information system database available to the public.

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1 Comment

  • M. Louis


    ?????????? Why isn’t anyone making a HUGE! noise about how “conservatives” want government out of economic policy and economic happenings, then run to the government, i.e. our tax-paying pockets – I didn’t vote for that in our “democracy”/republic, . . . they run straight for the gov’t they told “stay away!” for money when everything they did screwed (screwing) the entire country out of horrific amounts of tax dollard mainly paid for by lower income levels? No accountability?

    I am so confused about what this country is doing for the people who pay for the screw-ups of big business. The message is clear: large businesses can keep government out of their business, charge huge fees and interest, but cry “help us – or it will be bad for all” when it all blows up. What’s my motivation now to pay taxes if I’m always working to pay for screw ups by those who say we must not have any social systems in gov’t? Socialism is OK for the wealthy? They make money no matter what they do? How do I get a business like that?

    TAX THOSE GREEDY SOBS! THEY MUST PAY FOR THEIR SCREW-UPS! TAX AT A RATE OF AT LEAST 75% – BUT THAT WILL BACKFIRE . . . I’LL/WE’LL BE BUYING GOODS AND SERVICES AT A MUCH HIGHER PRICE SO THE GREEDY RECAPTURE TAXES PAID. Something has to happen with taxes. They talk as if higher taxes would make being rich unpopular. They’ve proved themselves more dangerous than any “social program”. Are we not going to do something? Anything!?

    There’s no way out for us poor saps. We have no choice – and the “conservatives” know it. So they are given a free pass as long as they do things in extreme amounts. That’s obviously the new target. Build business/profit systems that, when – yes, WHEN! – when things fall apart, the gov’t will always be there to take advantage of. That’s my goal today forward. I will hire a city of people, take in lots of money, screw-up, and go to the gov’t to get things going again – and I’ll make more money than I did before screwing things up! The template has been made, I will simply follow it – use it! . . . and very, very! intelligently!

    The rewards for this are out there for the taking. I announce to the entire country: follow the examples of the “conservative”/wealthy. That successful business plan is free and it will pay-off immensely!

    ML

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