10/12/12, "JPMorgan Chase Reports Record Profits, But Homeowners Say They Are Left Out In The Cold
," Huffington Post
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10/12/12, "Fed actions to reduce mortgage rates may be helping banks more than borrowers," Washington Post, D. Douglass
"JPMorgan Chase and Wells Fargo, the nation’s largest mortgage lenders, said Friday they won’t make home loans much cheaper for consumers, even as they reported booming profits from that business. Those bottom lines have been padded by federal initiatives to stimulate the economy. The Federal Reserve is spending $40 billion a month to reduce mortgage rates to encourage Americans to buy homes. Instead, its policies may be generating more benefits for banks than borrowers.
“The government can’t force banks to give out loans at lower rates any more than they can force Macy’s to sell me sheets for a dollar,” said Karen Shaw Petrou, managing partner at...Federal Financial Analytics.
Since the Fed announced its mortgage initiative, rates have ticked down. But banking analysts say the cost of issuing the loans has fallen much more, significantly boosting bank profits.
Timothy Sloan, chief financial officer at Wells Fargo, said...that lowering prices would not be “a good decision from a profit standpoint.” Asked whether the company was concerned about losing market share once demand for refinancing declines, he said, “We don’t run the business based upon share; we run the business based on profitability.”
At JPMorgan, chief financial officer Doug Braunstein largely echoed those sentiments....
One official added that he even expects mortgage rates to rise next year....
The reason why mortgage bankers are seeing so much green is that the gap has widened between what banks charge a homeowner in interest rates and what they must pay those who finance mortgage lending. The latter has dropped significantly, largely as a result of the Fed’s actions, analysts said.
With such large profit margins, government officials hope banks will eventually drop rates for homeowners. But they cannot force the companies to do so.
“Banks are in the business of making money and are not going to cut their profit margins for the social good,” said Paul Miller, a former examiner with the Federal Reserve Bank of Philadelphia and an analyst at FBR Capital Markets....
Miller noted that mortgage and refinance applications would explode if banks lowered rates further. When Wells cut rates in mid-September, the bank was flooded with more customers than it could handle and promptly raised rates to slow the volume."...via Drudge
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Big banks made more in 2 and a half years with Obama ($83 billion) than they made in 8 years with George Bush ($77 billion). (as of 11/6/2011). "
Both sides face an inconvenient fact: During Obama’s tenure, Wall Street has roared back, even as the broader economy has struggled." The reality of Dodd-Frank "frustrates" claims of both Wall St. and Obama that big banks have been chastened. Obama even added bailouts for derivatives clearinghouses.
Nov. 6, 2011, "Wall Street’s resurgent prosperity frustrates its claims, and Obama’s," Washington Post, Zachary A. Goldfarb
"Profits have also rebounded. The largest banks, including Bank of America, Citigroup and Wells Fargo, earned $34 billion in profit in the first half of the year (2011), nearly matching what they earned in the same period in 2007 and more than in the same period of any other year.
Securities firms — the trading arms of big banks and hundreds of other independent firms — have fared even better. They’ve generated at least $83 billion in profit during the past 2 and a half years, compared with $77 billion during the entire Bush administration, according to data from the Securities Industry and Financial Markets Association."...
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7/26/10, "Obama signs a bill that lets banks have US over a barrel once more," Telegraph UK, by Liam Halligan
"What the US political establishment's non-response to the credit crunch illustrates is this: such is the lobbying power of the big Wall Street institutions that they not only caused a global economic crisis and then forced the US government to pay for a massive bail-out, but then used a slice of that bail-out cash to bribe politicians with campaign donations in order to block rule changes that might prevent a repeat performance.
That leaves the politicians and high-flying bankers happy, of course, while regular citizens – and their children and grandchildren – foot the multi-billion dollar bill....
What we've created, instead, is a group of institutions that between them comprise nothing less than a financial oligarchy. These guys have Western taxpayers over a barrel. And what's alarming is that there is almost nothing in this bill that will stop yet more too-big-to-fail calamities. Mr President, you have missed a historic opportunity and, for that, history's judgment will be severe."...
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12/10/2009, "Obama's Big Sellout," Rolling Stone by Matt Taibbi
Obama sold out to big banks from day one. He did the exact opposite his supporters had been led to believe he'd do.
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