Bank fees = Anti Business

The message sent from the banking industry to businesses and consumers has been received. Their need to feed their bonus machine is more important than allowing businesses and consumers to keep their money and be better capitalized to expand the economy. Consumers and businesses that use their debit cards are now going to pay for a bank executive's bonus instead of paying more for expenses or saving.

The idea that banks will not be able to function or make plenty of money without this fee is a lie. The idea that they are doing this because of restrictions on fees they charge businesses totally and completely validates the argument that they are looking out for their own profits before anyone else's. It is another scheme to protect their bonuses and will as has been the pattern of the last 7-8 years be detrimental to the economy as a whole.

I just hope bank executives remember that they took away money from the economy and individuals in order to receive their bonus. Congratulations.

Another revenue gimmick for Banking Industry

In another move to take away money from business and consumers, the banking industry is about to put on a fee for simply using a debit card. The story is from AP via Yahoo!.

This is just another example of how banks are more in business for themselves than in it to grow business. Ridiculous!!!!!

Bank of America Mortgage Securitization Problem

There is a big problem brewing at Bank of America. It turns out that some mortgages that were thought to be securitized actually were never given to the trustee. The story below from Abigail Field through AOL Daily Finance explains this issue in better detail.

B of A/Countrywide Mortgage Problem

Banks close to doing right

After reading this story below, it makes me wonder again, how much better financially the country would be if they EVER did the right thing instead of the most profitable thing. Their blatant disregard at times while receiving that ridiculous sum of tax money is unbelievable. When will they realize they just have to own up, take the hurt that is coming to their company quickly, and move forward.

But then again, that would hurt their stock price, which reminds me of another company worried about its stock price..........It is no wonder Jeff Skilling is hopping mad about having to be in jail while these executives still are working and receiving million dollar bonuses.

CNBC foreclosure story

Banks will be lending soon

It looks like the retail banks will begin lending more in the near future. There are a few reasons for this idea. The banks' last quarter's earnings showed a lessening of loan losses. The banks' trading gains have also come back to earth now, eliminating that outlier. Companies also will be looking to expand their business as their balance sheets are cleaned up and their efficiencies are almost at an all time high.

The banks loan loss totals are getting smaller. This is obviously a positive for the banks in a couple of ways. Primarily, the banks can lessen the amount of money they hold back in order to cover loan losses. Last quarter, the banks used this money to pad earnings. But this is a bad long term strategy and can not be used for very long. The banks also have to replenish the amount of actual loans that were dramatically lessened in the last three to four years to their balance sheet. Consumer credit is increasing, allowing banks to feel more comfortable lending. Businesses have straightened out there balance sheets and set up their businesses to grow.

The ridiculous trading profits that were provided by the government funding through TARP is basically over. The market will not increase 50% like it did in the last two years. This will force the banks to find other forms of revenue in order to keep their shareholders happy. Lending is something that the banks are rumored to do from time to time.

Companies will have to expand their business in order to grow their profits. The ability to cut more is almost over. Production is quite high right now. Their balance sheets are set up to handle loans. They will be looking to the banks in order to provide loans to expand their business.

bank earnings and your safety

Hey

Earnings for the previous quarter revealed something very interesting and transparent about the big banks and how they continue to make their money. It is primarily through trading and not through banking activities such as lending. Overall, loan losses were down this quarter at the major banks which should provide a boost to their stocks. But the banks' slowdown in trading and other activities had them lowering earnings levels for the quarter.

The New York Times came out with an article stating how banks such as Citigroup and Bank of America took big hits because their trading desks made less money than desired. JP Morgan Chase released good earnings because they released funds meant for possible loan losses. And anyone who thinks Goldman Sachs is a retail bank needs to explain it to me. They are an Investment Bank that had to switch to retail when the crash occured.

As mentioned before, all of these banks were able to pad earnings this quarter with money previously designated for loan losses that didn't occur. This is not a good development. Why didn't they loan the money out instead? This type of action either shows a lack of confidence in the US economy and you as a possible loanee or they are worried about their stock price and put that above helping to drive the needed growth in the U. S. economy. Son't be surprised if it is the latter.

Where are the loans? We gave these firms 700 billion dollars not just to trade and make money for their shareholders but to be a partner in bringing the economy back by making loans to deserving Americans and their businesses that create jobs. The interest received from those loans is a mere pittance for the government and the country as a whole compared to the long term earnings the government would receive in payroll and other taxes had the banks loaned that money out to deserving businesses instead of trading it.

These activities by the mega banks has brought on a movement of going to local banks because people (myself partially included) know they will see their money in work in their communities creating jobs and revenue. This movement needs to continue to grow until the big banks get the message that not loaning money out to deserving businesses is not acceptable. You will hear the banks say their clients are afraid to expand and at the same time hear those same clients complain about a restiction in credit from banks. I believe the businesses, not the banks.

This post is not a desire to eliminate the big banks. They have some great financial products and an important role in the U.S. economy. It is to get them to realize that there is a public needing its partnership to expand our economy.

Refund to people works

I am attaching a Bloomberg story about how Bank of America noticed that credit card defaults went DOWN because of tax refunds. This is a great example of how the government made a mistake giving that money to the banks directly and not the people. When money is given to the people, it tends to end up at the banks anyway in the form of mortgage payments or refund checks thereby not only saving the system, but saving credit ratings of consumers also.

A thank you goes out to Peter Eichenbaum from Bloomberg.

Anyway, here is the story.

Bank of America credit card story

Great Article on B of A

There is a great article on Bank of America's new CEO written by Bloomberg. Congrats to authors Julianna Goldberg and Hans Nichols. Click on the link below:

Bloomberg Article.

Bank of America does well again

Who is this new CEO Brian Moynihan and what does he think he is doing to the bank America loves to hate? First Bank of America decides to make people more responsible with their finances by not allowing debit purchases for accounts without the cash to cover the purchases. Now they are putting together a program for home debt forgiveness. This is beginning to sound like a big turn around for Bank of America.

The program is designed to get homeowners out from being underwater because of the real estate crash. It shows a willingness on the bank's part to help citizens fight for their financial welfare. You can read more about it by clicking on the link.

I guess maybe someone in the Bank of America hierarchy finally realized programs like these end up creating a long term value.

Bank of America does well

Hey

For all my bashing of Bank of America, I do have to finally give them credit.

Yesterday they imposed a rule not allowing debit card purchases if the customer does not have the funds to cover the transaction. This is a bold move that could win back my business. It shows that they are willing to sacrifice short term profits by decreasing revenue from overdraft fees in order to run the business of banking correctly.

Thank you Bank of America.

Bank of America

Hey

I am going through a short sale that took Bank of America seven months to resolve. They in turn gave a two day notice to accept or the house goes to foreclosure. So nice of them. They have their jobs because of us.

Step on up Citi

So now Citi is trying to pay back the government its remaining 20 billion dollars of US Government TARP aid. They plan to do this by issuing out more stock.

Now, since the government owns one third of the bank's common shares, wouldn't a new issue of shares hurt that investment? The government needs to play hardball on this and not let that sale happen.

This is simply a reactionary plan.Citi is simply jealous that Bank of America was allowed to pay back their debt. But I'm sure the government will roll over. Seems like they are good at that when it comes to the banks.

Bank of America

I am troubled by the news today that Bank of America will be allowed to pay back the full amount of TARP bailout money it owes to the government. The reason why I am troubled by this is that the bank is doing this solely because it cannot seem to find a CEO that is willing to accept the government's pay restrictions. The fact that the government is allowing this shows that the banks are still in solid control and that the government still does not have principles for this policy.

Does this put the bank back in failure risk? I will have to check the balance sheet and the effect this move will have on it. I believe that this will have a terrible effect on the ability for consumers to get a loan. The bank will be tighter than ever with loans because they will have to be. In the meantime they will pay ridiculous amounts to their executives.

This allowance by the government clearly shows that the banks are still in control. They knew that Bank of America was having trouble finding a new CEO. Allowing this will shrink loans given out to consumers. Once again the government is putting us at risk. Now maybe Bank of America can pay this back and continue giving out loans. That most certainly can be the truth. But this situation is showing more clearly how the government is mismanaging the program.

Bank of America...literally

Hey

It was recently reported in a story from Bloomberg Magazine that Blackrock has been given a lot of the management contracts for the bank bailout.

The conspiricy theorist in me wonders whether this was because of the fact that Bank of America took on Merrill Lynch. I would have thought that JP Morgan or Goldman Sachs would have been a better fit.

Anyway, I think this is a positive area of revenue and profits overall for Bank of America as they figure out the Merrill Lynch mess.

Dislosure - I do not own any of the stocks mentioned in this story at this time.

Bank of Black Rock America?

Hey

I just read a story in the New York Times talking about Black Rock's role with managing government programs and private funds during the bailout. As you will read, Bank of America OWNS 47% of Black Rock! I'm thinking the likely hood that Bank of America will survive is pretty good because of this.