Below are two facts that seem to indicate we’ve got a problem. The MSM has been dutifully reporting that Bernanke, Geithner and Obama saved the country by saving Wall Street with our money. The MSM has also been dutifully reporting that those very same beloved Wall Street banks have been generating hundreds of billions in profits over the last three years. Relieving loan loss reserves does wonders for the bottom line. A critical thinking individual might wonder why the bank stock index is at the same level it was in 2009, if we have truly had three years of awesome profits. One also might wonder why in the world would Citicorp be laying off 11,000 employees if the economy is improving and Wall Street banks are solvent.
The truth is that all of the Too Big To Succeed Wall Street Criminal Banks are INSOLVENT!!!!
If they were forced to use Mark to Market accounting, as they were required to do up until Bernanke forced the FASB to bend over, they would be BANKRUPT.
If a bank cannot make a real profit when having unlimited access to Federal Reserve fiat dollars at 0%, you know the jig is up.
Citi Firing 11,000
Submitted by Tyler Durden on 12/05/2012 09:04 -0500
Big news ahead of this Friday’s NFP report:
- CITI TO CUT OVER 11,000 JOBS, TAKE PRETAX CHARGE $1B IN 4Q
“Sandy’s fault?” Or maybe the economy is collapsing despite all the propaganda one is spoonfed. Considering the recent termination of over 50,000 by UBS we think we know the answer. And while C stock may jump on the news, the end result is that New York and the US have both just lost 11,000 less key taxpayers most of whom are almost certainly in the $250,000+ bucket. That said we can’t wait for the BLS to take this data as somehow beneficial for the unemployment rate.
For some perspective into the all-important banking sector, today’s chart presents the current trend of the KBW Bank Index. As today’s chart illustrates, banking stocks peaked back in early 2007. The impact of an already weakening real estate market began to take its toll and banking stocks began to trend lower at an ever-increasing rate. This weak banking sector performance ultimately preceded the recent financial crisis. Following a post-financial crisis rally into early 2010, banking stocks have traded in a fairly flat/choppy manner (though with a slight downward bias — see red resistance line). Since late 2011, however, the trend has been up (see green line). With banking stocks having recently pulled back from resistance and currently testing support, this all-important sector is fast approaching a critical decision point.