Months following banking industry's nuclear catastrophy around the world's stock exhanges, the first rays of hope come to light. Wells Fargo announced significant profit, others smaller loss than predicted and although euphoria has not hit wall street yet, there is some elation.
Wells Fargo registered record profits in the midst of the worst economic crisis in banking - probably ever. Stock price went up by 32%. Others followed.
Citi was up 13%
USB 23%
Bank of America 35%
JP Morgan 19%
PNC Financial 20%
There is still speculation if they forecasted accurately bad debt or revenue
Wells Fargo mortgage loans went up. And the cheaper interbanking borrowing after government regulation helped. So it helped the financial aid.
The reasons for this recovery are definitely more complicated than I present here and not the same for all. Whether the sun will shine away the storm and this recovery will be sustainable not sure.
What is clear in my mind is that extreme positions can lead to chaos. So was extreme deregulation I think. Some balance is needed. Even in economics - it is called equilibrium and is usually forgotten - or so it seems.
1 comment:
Surprised Zeta that you are posting on the financial meltdown. Your take that equilibrium is needed as far as market regulation vs deregulation is dead on. I think that we are not out of the woods yet. There are still toxic assets in the books of major financial institutions that need to be painfully written off before a turnaround would sustainably commence.
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