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Yesterday we got wind of an extended whine by the elites of the financial world, angered by the President… calling them mean names, or suggesting they might have had a role to play in the crashing of the economy, or something. Certainly, they could not be lamenting about the Administration hindering their profitability, because that’s going along just fine, thank you:
Bank profits jumped 21 percent last quarter to nearly $22 billion, the highest level in three years, as banks put away less money to cover future losses, fewer borrowers fell behind on payments and lenders paid the least for their funds in perhaps 50 years, a government report released Tuesday shows.
Lending also dropped by about $96 billion, or 1.3 percent, as borrowers continue to remain skittish about the “slow recovery,” Federal Deposit Insurance Corporation Chairman Sheila Bair told reporters Tuesday in Washington. “Consumers and businesses need to have confidence in the recovery before they will start making decisions on credit,” Bair said, according to a transcript of her remarks [...]
It also helps that banks’ cost of funds — the money they pay to garner deposits and other funds that are then used to lend, invest or trade — dropped to the lowest rate in 26 years of FDIC quarterly records. Banks paid 0.97 percent in interest for their funds, the first time they’ve paid less than one percent during a quarter since at least 1984, FDIC documents show.
Historical records on commercial banks’ cost of funds going back to the inception of the agency in 1934 show that the last time banks paid less than one percent for the year was 1960.
Community banks have started to increase their lending a bit, but the mega-firms haven’t – they’re basically using cheap money to profit while the economy stagnates. And these are the people angry at the President!
Meanwhile, if you get to the nitty-gritty of what perturbs the Masters of the Universe so, you’d find that it’s more about their personal financial situations, and what they stand to lose if the Bush tax cuts gets repealed (aside from a little bit of working the refs to achieve favorable outcomes). On that front, Wall Street has started to prepare by secreting out bonuses early:
Banks are considering paying annual bonuses early this year to lessen the impact of the increased tax rates expected in January, when bonuses are traditionally paid out, reports the Wall Street Journal.
Rumors of the hurry-up bonuses on Wall Street come on the heels of Credit Suisse’s reported plan to pay 400 managing directors in its London office a cash reward next month in lieu of a chunk of their 2009 bonuses. The bank’s aim, according to a Bloomberg report, was to spread the cost of a one-time 50 percent tax levied on bank bonuses in the U.K.
Again, if you want to understand the motivations of people who trade money for a living, money’s a good place to start.
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If you want to understand the world’s current financial system, it is all based on the concept of looting. It really has no other purpose.
Savvy businessmen.
Personally, I take this as good news.
They must think there is a chance the Bush tax cuts will not be extended.
David wrote;” And these are the people angry at the President!”
Surely David you can’t be serious,it’s a “flea-flicker”,…you know pretend that you are at odds with the guy who has been indulging you, so that the public won’t see the con….this is to throw the scent hounds off.
The Banksters are trying to cover their facilitator’s (Obama) rear end, plain & simple.
Remember from the Prez own lips, “I admire savvy businessmen.”
Even a one percent chance would do it.
Story on HP says congress will not allow the tax cuts to lapse. Not enough support. So they may not need to pay the bonuses out early.
“…if you want to understand the motivations of people who trade money for a living, money’s a good place to start…” and end. It’s their sole motivation and their reason for being. Human life? Meh. You can’t make an omelette without breaking a few eggs.
Not much chance of that. Dem congressmen are afraid to allow them to expire for fear of losing the elections. See article on HP.
I didn’t bother reading the HP story.
When the headline said “repeal tax cuts” I knew it was BS.
Please. It’s not a tax cut repeal. It’s a tax cut not-extended.
Current tax policy, to borrow from Mitch McConnell, is to sunset the tax cuts. They were supposed to end according to Bush.
Let’s not help them play their games.
You really should read it. It makes perfect sense. A lot of dems are afraid of the elections if they let the tax cuts expire on anyone including the wealthy. So there are not enough votes to stick it to the wealthy alone. And no congressman wants to face his constituents after letting the tax cuts lapse – - rich or poor.
I know that.
When they claimed it was a “repeal”, I knew they were lying.
It blew there credibility so I didn’t waste my time reading it.
the article says ” a small but growing number of moderate democrats are balking at boosting taxes on the rich.” So the article says congress is unlikely to repeal the Bush tax cuts by which one must surmise they will not allow them to lapse. That will require some sort of vote. There is no way they will extend the tax cuts on the middle class without doing so for the rich ala the balking at boosting taxes and some believe raising taxes now is not the right thing to do. Obama may be trapped by this turn of events. He cannot allow the taxes to go up on the middle class and so he may have to go along. Possible, I suppose he can horse trade something. We’ll see.
I was hoping they would trade the SS cut for the extensions.
And they’re waiting to see if the commercial mortgage paper begins to default in droves so they can buy up businesses and commercial properties at fire sale prices. Then they can sell them at cost-plus plus whatever the market deems worth it. Xtreme mad money.