And They ( Banks ) Are Still Whining......

Add to the chart the "brutal" accounting standards surpressing every leeway in showing the "real" earnings power, the draconian bailout terms, etc & i can understand them........ ;-)

Nachdem man sich den folgenden Chart ansieht kann man schon verstehen das die Banken momentan bei dem kleinsten regulatorischen Eingriff das große Wehklagen einsetzt...Muß zudem an den mehr als strengen Bilanzierungsrichtlinien, die ja seit Ausbruch der Krise nochmals drakonisch "verschärft" worden sind, sowie wie den wirklich unfairen Bedingungen der Bailouts liegen .... ;-)

The bank problem in a single chart FT Alphaville

"In all honesty 12 months ago we felt that the banks would likely become more utility-like in their profitability and their earnings would oscillate around their longrun trend – a level they had reverted back to after all the write downs.

So the size of the surge in profitability in 2009 perhaps surprised us more than the ’shock’ writedowns did in 2008"

AMEN!

UPDATE:

Financial Services: From Servant to Lord of the Economy Jesse

ATA Truck Tonnage Index Fell To A 7 Month Low

This index is a good real time indicator what is going on in the US economy. I find it interesting but not surprising ( because i don´t trust the GDP numbers) that despite a 7 month low and tonnage down over 3 percent yoy the government numbers show a overall GDP growth of 3.4 percent.

Dieser Index ergibt aufgrund seiner Aussagekraft ein zeitnahes Bild über die Verfassung der US Wirtschaft ab. Wen man den GDP Zahlen der Regierung glauben mag ergibt sich ein gewaltiger Unterschied des Truckindex der auf Jahressicht über 3% nachgibt und dem gesamten GDP von einem Zuwachs mit 3,4%.

Trucking serves as a barometer of the U.S. economy because it represents nearly 70 percent of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods.

Arlington, VA — The American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 0.1 percent in June, marking the third consecutive month-to-month drop. Tonnage fell 1.3 percent in May and has dropped 3.5 percent since March. The not seasonally adjusted index dropped 3.3 percent from May to 114.1.

On a seasonally adjusted basis, the tonnage index declined to a seven-month low of 110.5 (2000 = 100) in June from 110.6 the previous month. Compared with a year earlier, tonnage was down 3.4 percent in June, which is just a slight improvement from the 3.6 percent year-over-year decrease in May.

ATA Chief Economist Bob Costello said that while the government reported the economy grew at a 3.4 percent annualized rate in the second quarter, that strength did not filter into the transport sector. “Our tonnage index fell 1.8 percent during the second quarter from the first quarter and was 3.2 percent lower than the same quarter in 2006,” he said.

Costello attributed this difference to several trends. First, the so-called “goods” economy, which is more pertinent for transportation companies and excludes services and adds in imports of goods, unlike the GDP calculation by the government, grew at a slower 2.6 percent annualized rate in the second quarter compared with the overall growth of 3.4 percent.

Second, the housing sector continues to be a bigger drag on motor carriers than the economy at large. Residential investment fell 9.3 percent during the second quarter, according to Bureau of Economic Analysis. Third, manufacturing production, once adjusted for the weight of the goods instead of the value, continues to contract on a year-over-year basis.

Trucks hauled 10.7 billion tons of freight in 2005. Motor carriers collected $623 billion , or 84.3 percent of total revenue earned by all transport modes.

Credit Crunch: Will This Time Be For Real? / Richard Berner

Some interesting details what is happening especially at the lower end of the credit quality. Overall Richard Berner is still optimistic that there won´t be a credit crunch in general.(click on headline). But it is clear that the times are getting tougher......And with the junk market being the dominant issuer the last few years i won´t rule out a crunch in the junk market. We have already seen in the subprime market how quick the risk appetite can diminish.

Einige interessante Details was sich insbesondere im riskanteren Kreditbereich abspielt. Da verschlechtern sich einige Parameter doch bedenklich. Insgesamt ist Richerd Berner von Morgan Stanley aber immer noch optimistisch das es keinen Zusammenbruch der Kreditmärkte insgesamt gibt (Überschrift klicken). Klar ist jedoch das wir hier die besten Zeiten gesehen haben. Und wenn man bedenkt wie hoch der Anteil der Junk Finanzierungen in den letzten Jahren gewesen ist würde ich die Möglichkeit einer Kreditklemme in diesem Segment nicht so voreilig ausblenden. Wie schnell die Risikoneigung steigen kann hat man ja gerade im Subprimesegment bewündern können.

Nonetheless, the tails of the credit quality distribution are getting fatter. Look more closely at the high-yield market in the first quarter, and the picture is quite different from the aggregate.

As my colleagues Brian Arsenault and Jocelyn Chu noted recently, the fundamentals were already deteriorating significantly last quarter (see “1Q07 Fundamentals — Got Cash?” June 15, 2007).

• What had been a cash horde has dwindled; cash/debt has fallen a full percentage point over the past year to a below-average level.



• Leverage (debt to EBITDA) rose to 3.64x as debt outpaced earnings for the second quarter on a row. Slower economic growth and fading operating leverage hurt.



• In the high-yield universe, top-line growth has turned negative for the first time since 2002,



• and half the sectors saw margin compression.



• Finally, these companies are reinvesting aggressively in their businesses, with capex budgets rising by 20%. Such expansion augurs further erosion of returns and margin compression.

That deterioration in fundamentals has yet to show up in delinquencies and chargeoffs at banks. They are still close to record lows despite a deceleration in lending, while junk and leveraged-loan default rates are at eight-year lows.

Yet Morgan Stanley bank analyst Betsy Graseck and I agree that corporate credit quality has begun to weaken.

She is expecting chargeoffs to remain flat this year, but loan provisions to rise 30% as falling recoveries spell the end to the long previous improvement in credit quality. For their part, lenders may now back further away from extending credit for buyout deals. In part, that’s because even a slight reduction in market liquidity will make it more difficult for lenders and underwriters efficiently to lay off risk, so lending standards will likely tighten.

Monetary policy "Closing the valve" / Economist

thanks in large part to the action that was not taken in the past the world and the financial markets are now in better shape than ever............sracasm off......

dank der zögerlichen haltung in der vergangenheit gibt es momentan weltweit sicher erheblich mehr ungleichgewichte als nötig und die verschuldung liegt auf nie dagewesenen höhen......

Central banks around the world still have some tightening to do

TO THE surprise of no one who was watching, on June 14th the Swiss National Bank raised interest rates by a quarter point. Next week Sweden's central bank will probably do the same. Central banks almost everywhere are in a similar mood. Last week the European Central Bank (ECB) put rates up for the eighth time in 18 months. The Bank of England refrained but will probably continue tightening policy this summer. And the Reserve Bank of New Zealand (RBNZ) lifted its official rate to no less than 8%.

>of course Japan refuses to raise......
>selbstverständlich hat sich Japan diesem trend widersetzt....

BOJ Keeps Rate at 0.5%

http://tinyurl.com/ysjrcr

America, where the federal funds rate has stood at 5.25% for almost a year, is an exception. But even there markets have gradually accepted that the Federal Reserve is not about to ease policy. The plummeting bond market is one obvious sign.

The path of Fed futures is a more explicit one. In March the market was pricing in a quarter-point cut by September and another by December. Now it says rates will be flat all year.

Despite all the rate increases, monetary policy globally is still on the loose side.
The chart above, supplied by Julian Callow of Barclays Capital, shows the gap between nominal GDP growth and official interest rates, a common gauge of policy, for a group of big economies: America, Britain, Canada, China, the euro area, India and Japan.

In the past few years interest rates have been lower than the nominal growth rate—ie, policy has been loose, by this measure—for the longest period for 30 years. The slack is being reduced but there is still some to be taken up. In America and Canada rates are roughly equal to nominal GDP growth; elsewhere, they are below. The gap is widest in China and India. ......