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(The Year 2012 In Review)
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|User Info||Watch The Birdie! (Bank Earnings Forecasts); entered at 2012-01-04 10:54:11|
For those who are unaware, banks make money by making loans, primarily.
Well, that's the idea, anyway. The way the banks make money now is by hiding their losers off balance-sheet, or by forcing them on the taxpayers, and after having themselves declared "systemically important," adjusting their on balance-sheet exposures accordingly, crashing the system and cashing out on their leveraged derivative bets, also at the taxpayers' expense.
In real life, if there is such a thing anymore, all of the major banks are arguably insolvent. So, in reality, they're not making any money at all, they are merely having it transferred to them by their political operatives in Congress and the Federal Reserve Bank. This, after all, is the modern purpose of the Congress, and has always been the purpose of the Federal Reserve System.
Talking about "bank earnings" is silly, unless one factors in all of the market distortions caused by all of the interventions, and all of the bailouts, and all of the dead-fish-hiding, rehypothecation, etc.
What the hell are "assets," anyway? How can anyone make an informed investment decision in markets like these, where virtually no data has been untouched by intervention? The economy is a sham, projected earnings are a sham, balance sheets are a sham, capital positions are a sham, contract law can't be enforced reliably, the capital structure has been laughed at by BK courts, corporate welfare is rampant, and the government is locked on an unsustainable path.
All of these shams are condoned openly. OPENLY.