"WHY banks are reporting strong and profitable operations this year?

lovehutong9

WHY banks are reporting strong and profitable operations this year?      17-Mar-09 12:44 am   
It's really simple, the widening interest margin. Their cost of funds (from the Fed and deposit base) is getting ever closer to 0% while their loan interest rates are still high and in many cases going up.

Compared to last quarter, their interest margin has widened by about 2%. It used to be 3 to 4%, now their interest margin stands at a fat 5 to 6%.

WHAT DOES THIS MEAN to these banks?

Take the Big Four (JPM BAC C WFC) with about $1T loan book each, a 2% widER interest margin means $20BN ***EXTRA*** profits per year or $5BN EXTRA per quarter.

So if they used to be already profitable (JPM WFC) their profits will now be $5BN MORE, on top of whatever profit levels, per quarter, or if not in q4 (C BAC), these $5BN extra profits make them profitable now.

Shorts are trying so very hard to bash it away, but profits are profits.

$5BN MORE per quarter, $20BN MORE per year.

NICE!

deaf

profit是用纳税人的钱做本金去赚纳税人的利息。美国的国库更空虚，赤字更大，典型的饮鸩止渴。
从总体长远的角度，这种做法只能深化危机。加速整个经济体系崩溃的速度。削弱政府的资金运作能力
so profit is NOT profit at this point.
短期股票升个十天半个月，可是一旦情况恶化，覆巢之下，焉有完卵

风清扬

政治原因

weigoodone01

xxtrader