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

Yes, We Can´t..... GMAC Scores Bailout Hattrick.....

This kind of taypayer generosity / backstop is one of the main reasons ( add to this ZIRP & QE ) the "smart money" has increased the risk appetite to the highest point since April 2006 ( just in time after one of the biggest rallies ever .....without any meaningfull pullback) , so far they have almost perfectly manage to go "ALL IN"close to the recent market top, with cash levels at the lowest point since Jan 2004! not an overstatement, taking the latest market action into account the post is looking better on a daily basis..... )..... Stories like this are one of many reasons why i´m bullish on GOLD......

Denke das genau diese Art der "Problemlösung" zu Lasten der Steuerzahler einer der entscheidenden Gründe ( neben Nullzinspolitik und "Quatitive Easing" ) ist das weltweit die professionellen Investoren Ihren Risikoappetit auf den höchsten Stand seit April 2006 hochgefahren haben ( gerade noch rechtzeitig nachdem die Märkte einen der größten Kursanstiege der Geschichte ( ohne eine nennenswerte Korrektur ) hingelegt haben, aktuell sieht es so aus als wenn Die "Profis" es fast punktgenau geschafft haben zum Markettop "All In" zu gehen, oder wie sonst soll man es bezeichnen wenn man bedenkt das die Cashlevels auf dem niedrigsten Stand seit Januar 2004! sind, mir persönlich bereitet besonders dieser Link tagtäglich mehr "Freude") ..... Erinnere im Angesicht solch "dollen" Meldungen noch einmal an mein gestriges Posting zum Thema Gold.....

GMAC Asks for Fresh Lifeline WSJ

The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into the Detroit company, on top of the $12.5 billion that GMAC has received since December 2008, these people said.

The latest infusion would come in the form of preferred stock. The government's 35.4% stake in the company could increase if existing shares eventually are converted into common equity.

Federal officials also are moving to shore up GMAC's ability to fund its daily operations, with the Federal Deposit Insurance Corp. telling the company Tuesday the agency will guarantee an additional $2.9 billion in debt, according to people familiar with the discussions. The FDIC guarantee will make it easier for the company to sell debt to investors. The FDIC backed $4.5 billion in GMAC-issued debt earlier this year.

The FDIC approval came just four days before the expiration of the regulator's program that guarantees debt issued by certain banks. It ended months of tense negotiations between GMAC and regulators.

At GMAC, the likelihood of a third infusion increased when the government's stress-test results were released in May. The tests were conducted to determine whether banks would need more capital to continue lending if the economy deteriorated in 2009 and 2010. The test concluded GMAC needed $11.5 billion in common equity to continue lending in a stressed economy.

GMAC raised some of the money directly from the government, but a significant hole remains. The company hasn't been able to attract much capital from private investors because it isn't listed as a public company, forcing GMAC to begin negotiating with the government to find the remaining funds. GMAC and Treasury officials are now negotiating about exactly how much capital the company needs.

People close to GMAC said they don't expect the government to call for changes in management as a result of the likely infusion. The company posted a second-quarter loss of $3.9 billion amid rising loan delinquencies and the continued U.S. auto slump. It expects to release third-quarter earnings next week.

Mr. de Molina's search for capital brought him to the government's door.

The Fed awarded GMAC status as a bank-holding company and Treasury injected $5 billion in December 2008. It came back with an additional $7.5 billion on May 21. The Fed also waived rules to allow the bank to pass assets down into its bank division, and the FDIC reluctantly agreed to issue "up to" $7.4 billion in government-backed debt. The FDIC approval issued Tuesday brings GMAC to the full amount authorized in May.

In May, GMAC also launched a new brand for its online bank, called Ally Bank. Its pursuit of deposits at high rates became a key leg of its strategy, since deposits provide a cheap form of funding, but the taxpayer-assisted approach rankled competitors and the FDIC.

The dispute nearly cost GMAC its chance at the final $2.9 billion in FDIC debt guarantees. The two sides were able to hammer out an agreement that requires GMAC to keep its rates at certain amounts in exchange for the support, according to people familiar with the situation.

Rolfe Winkler

Taxpayers are lending themselves money to buy cars (via GMAC). To buy houses (via Fannie, Freddie and very soon FHA). To buy anything and everything that has to be financed.

Chris Whalen : Zombie Love: Barack Obama, GMAC and Ally Bank

If Citigroup (NYSE:C) is the Queen of the Zombie Dance Party and AIG (NYSE:AIG) the King, then GMAC is certainly one of the children. In relative terms, GMAC has received far more subsidies than any other zombie and seemingly has no access to the private markets in terms of raising new equity.....

Looking at the latest 10-Q from GMAC filed with the SEC, the only question we have is why isn't GMAC already in bankruptcy?

While GMAC's total consoldiated assets are down, Ally Bank's assets have grown by nearly 25% in the past quarter, fueled by copious television advertising and federal subsidies. The term "moral hazard" comes to mind. By propping up GMAC and Ally Bank with taxpayer dollars, the Treasury is hurting sound, well-managed banks.....

Note too that as of Q2 2009, Ally Bank was funding more than 17% of its now $42 billion in assets via the Federal Home Loan Banks -- yet another subsidy and another striking indcator of growing moral harzard......

Federal bank regulations generally identify 15% as the threshold for unsafe and unsound practices with respect to the use of FHLB advances for funding, but it seems that GMAC is exempt from these rules as well.....

Mean Street: GMAC = Insanity Deal Journal

Well, we didn’t really need it, but now we have it. Today’s WSJ piece on the bailout of auto-lender GMAC is yet further proof that there is no end to the insanity of the “Great Detroit Bailout.”

We’re not just saving failed carmakers. We’re saving GMAC, the failed financier of failed mortgages and failed carmakers…for the third time.

Last winter, we had to “help” Detroit with some temporary loans. By spring, we had to “save” Detroit with tens of billions in fresh equity. By summer, we had to “kick-start” Detroit with the Cash for Clunkers. And here we are in autumn, still at it. By winter, we’ll be in a strait-jacket we can’t get out of.

And for what? To save GMAC?

This is a business that for years lent money to lots of Americans to buy homes and cars they couldn’t afford. Remember the unsustainable housing boom? GMAC.

The unsustainable Hummer and Escalade boom? GMAC. Our unsustainable economy? GMAC.

And after the boom, comes the bust — which is exactly what GMAC is.

BANANA REPUBLIC ....... ;-)

Most Americans Fear Recession in the Next 12 Months

slightly different view than wall street, fed, cnbc......

leichte diskrepanz zwischen den normalen leuten und wall street, fed, den medien....

Most Americans expect a recession within a year and disapprove of President George W. Bush's handling of the economy even though the unemployment rate is at a five-year low, a new Bloomberg/Los Angeles Times poll found.

Six in 10 who were surveyed predicted a recession, similar to the 64 percent who anticipated the economy would contract in a December 2000 poll by the Los Angeles Times three months before the last decline. In the current survey, 71 percent of those earning less than $40,000 said they expect a recession compared with about half for those making more than $100,000. .....

.... Nonetheless, 57 percent said the economy is doing well. That was down 11 points from January.

Sixty-four percent of those polled said their own finances are very or fairly secure compared with 35 percent who described them as shaky.

Pessimism
``People tend to be pretty optimistic about their own situation, but when it comes to the larger economy they're much more pessimistic,'' said Karlyn Bowman, a polling expert at the American Enterprise Institute in Washington. ``The public's just in a very sour mood because Iraq continues to cast a pall over everything.''

Americans are split on Bush's call to make permanent the $2 trillion in tax cuts he has pushed through Congress. About four in 10 favor extending the cuts when they expire in 2010, slightly more than those who oppose that idea. ....

In short, the current recovery looks weak on all measures except profit growth. As a policy lesson, the large tax cuts of 2001 and 2003, which have hadample time to affect the economy by now, have failed to deliver economicperformance that even matches up to the past average.

http://tinyurl.com/3x4ajg

Almost three in five said the Federal Reserve should hold interest rates steady, twice the number who said the Fed should cut rates to stimulate the economy. Only 6 percent called on the Fed to raise rates to stymie inflation.

The poll also asked who is mostly to blame for the wave of defaults among so-called subprime mortgages that are extended to borrowers with poor or limited credit history. Due to rising interest rates, the adjustable-rate mortgages threaten many homeowners with foreclosure. Fewer than three in 10 respondents said borrowers were mostly to blame and almost four in 10 blamed the lenders.

Government Intervention
One in five surveyed blamed government regulators for the subprime crisis. Half of those polled said the government should intervene to assist low-income borrowers facing foreclosure. Among those who earn $100,000 or more, 36 percent called for the government to take action and 63 percent of those earning less than $40,000 favored government action.

The poll of 1,373 adults was taken April 5-9 and had a margin of error of plus or minus 3 percentage points.

Most Americans remain sanguine about home prices, the poll showed, with more than half expecting homes in their neighborhood to hold their value over the next six months. Twice as many respondents said home prices will increase as those who predicted a decline. A majority said slowing home sales nationwide will hurt the economy.