Monday, May 03, 2010

Commercial Bank Profits

Thought this chart would make those of you in the Capposphere a little smiley today.

Now imagine if banks were to have just paid the ole Captain a mere $10 billion to tell them not to make bad loans as a consulting fee.


Anonymous said...

Here is a great idea!
1)Lets give billions of tax dollars to failing banks that made bad business decisions.
2)Lets put a billion dollar tax on successful profitable banks that made smart decisions.

Marx and Engels would have been impressed!

Captain Capitalism said...

There were banks that made smart decisions?

CBMTTek said...

Am I the only one that noticed this?

Doesn't the knee in that graph coincide with Dems winning a majority in Congress?

Maybe I have a bit of a bias, tough to tell...

Anonymous said...

Small US banks and large Canadian banks, avoided most of the recent downturn.
Also, the big Wall Street investment banks used to be partnerships. The partners had their own money at risk in their firm, so things were managed with a little more prudence.The former partners never even dreamed of getting government bailouts, for bad investments. The current CEOs of the modern investment banks, have no personal money at risk. They are encouraged to take wild gambles with shareholder funds. Even failures such as; CEO Stanley O`Neal at Merrill Lynch, resulted in a huge payout for the CEO.
Handing over government funds to failed investment banks, was not a wise use of tax payer money.

Ryan Fuller said...

I remember reading about some privately owned bank run by a guy who thought the housing loans being made were insane, so he basically had his bank cut back its activities to golf and checking accounts sometime around 2005-2006 until the bubble imploded. I wish I could remember the name of it. Oh well.

Hot Sam said...

There are many good banks that didn't drink the flavor aid, but too many did and they're bringing down profits at the good banks. Most of the banks acquiring failed banks are in good condition.

The closed banks come in all shapes and sizes.

The total profits from the boom are still greater than the losses so it still seems like a good deal. Obama and the Demon Rats are allowing banks to write current losses off against past profits. Isn't that generous of them?

Anonymous said...

I live between two small towns - the bank in one of the small towns was recently forced to agree to a consent order by the Feds.

The other has a well-run local bank, that just doesn't make bad loans. This bank isn't as profitable during growth years, but it has weathered the financial crisis very well because they don't offer any of the zero-down, unsecured, uncollateralized mortgages and loans. They also don't loan more money to those struggling with paying other loans.

My wife stopped in a few weeks ago and asked them about a car loan. The banker came out and said yes - no application, no credit check necessary - just knowing my wife's reputation and knowing that she has deposits in the bank far exceeding the loan were good enough.