[vox_mundi]

Soured Corporate Loans Surge at Biggest U.S. Banks on Oil

$this->bbcode_second_pass_quote('', ' ') Soured loans to companies jumped 67 percent at the three biggest U.S. banks in the first quarter, the latest sign that corporate credit quality is eroding after energy prices plunged.

At Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co., bad loans to companies reached their highest levels since at least 2013. For now, weakness is mainly confined to oil and gas and related industries, executives said. U.S. crude has tumbled more than 60 percent since June 2014, although they have rallied since February.

... Charles Peabody, a banking analyst at Portales Partners, downgraded JPMorgan to "underperform" from "market perform" in February in part because of concerns about the potential for mounting credit losses.

"We’re at the very early stages of an inflection point in corporate credit quality, and it’s getting worse from here," Peabody said.

[Plantagenet]

$this->bbcode_second_pass_quote('vox_mundi', '
')"This Sucker Could Go Down" - Bush the Lesser - Sep. 26, 2008

[ennui2]

Another day, another Obama cartoon. So tiresome.

[Plantagenet]

[Paulo1]

Nice sarcasm, Plant. Very Subtle.

[efarmer]

A fractional banking system is a confidence game, a necessary one, a productive and vital one indeed, but a con game. The people at the very top of the pyramid in the Federal Reserve, the US Treasury, the Ratings agencies, and the monster investment banks all have to play inside of the rules and schemes so that they do not break the perceived value of money. The events leading up to 2008 saw Ratings Agencies stamping AAA on crap insured by shell companies in the Cayman Islands to be sold to foreign central banks, it saw the big investment banks unload Freddie and Fannie to turn the horse manure loans after they were chopped up into fine particles into road apple pate' in gold wrappers. This same period witnessed the investment banks shrewdly work the subprime money pump while betting the economy would tank, and then profiting hugely while the investment fund investments of the working Americans got a third of their value lopped off with a chainsaw.

This sucker could go down, and did go down a bunch, and it is always that precarious because it is fractional banking and requires that there is widespread confidence in the system or else it is immediately on fire and sinking. Blaming this on one or both of the whorish political parties on the dole from corporate interest is similar in deciding if crime is caused by the Cripps or the Bloods and pretending that the argument is mutually exclusive.

The real danger is that when the entire financial system is so obviously gamed and benefits a bunch of insiders in New York, Washington, London, and Greenwich Ct., the incentive to work and invest is poisoned for an entire nation. This is not Liberal or Conservative, this is the underpinning that allows people to exist, and then arise as they see fit to express themselves and participate in their society and community instead of scrambling and tumbling in the chaos of economic distress and having no clear vision of what to do to improve themselves.

[ennui2]

You guys have your head in the sand. Here is what's really going on with the economy.

reports-of-us-economic-demise-are-greatly-exaggerated-pt-3-t70804-400.html

The US is the last bright spot in the world right now. The glass is half full.

[evilgenius]

I don't go for the conspiratorial invective. In the end it will blind you to the truth. People need to make more in order to sustain their consumption. Without those increases all consumable commodity's prices will fluctuate while markets adjust to people's attempts to live within the constraints that unreasonable economic management forces upon them. Under an inflationary paradigm real wages have to rise over time. If they don't people will supplement their income disparity with borrowing. That additional borrowing ought to be a signal to policy makers like the Fed. If the signal is not received, however, then that borrowing must become a bubble.

Without an increase in real wages there will be cycles of bubbles. They will be worse for those who might normally be insulated from such things according to how much the borrowing that working class people have to enter into in order to stay abreast within the economy are artificially sustained using various tactics such as offshoring of mid to upper class investment money so as to curtail its affect upon the rate of inflation. What will change that is not financial, nor labor market related, in terms of immigrant or outsourced labor. Eventually additional labor streams have to be included in the average over all time. Their biggest impact is their initial and trailing to the initial impact. Once they exist for long enough they too are subject to the same circumstances which all working class people toil under. No, what will change the equation for good is artificial intelligence. Bots don't borrow money. That's what will really and truly bring the sucker down.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('ennui2', 'A')nother day, another Obama cartoon. So tiresome.

[Plantagenet]

$this->bbcode_second_pass_quote('Paulo1', 'N')ice sarcasm, Plant. Very Subtle.

[ennui2]

$this->bbcode_second_pass_quote('Outcast_Searcher', '')$this->bbcode_second_pass_quote('ennui2', 'A')nother day, another Obama cartoon. So tiresome.

[Tanada]

$this->bbcode_second_pass_quote('efarmer', 'A') fractional banking system is a confidence game, a necessary one, a productive and vital one indeed, but a con game. The people at the very top of the pyramid in the Federal Reserve, the US Treasury, the Ratings agencies, and the monster investment banks all have to play inside of the rules and schemes so that they do not break the perceived value of money. The events leading up to 2008 saw Ratings Agencies stamping AAA on crap insured by shell companies in the Cayman Islands to be sold to foreign central banks, it saw the big investment banks unload Freddie and Fannie to turn the horse manure loans after they were chopped up into fine particles into road apple pate' in gold wrappers. This same period witnessed the investment banks shrewdly work the subprime money pump while betting the economy would tank, and then profiting hugely while the investment fund investments of the working Americans got a third of their value lopped off with a chainsaw.

This sucker could go down, and did go down a bunch, and it is always that precarious because it is fractional banking and requires that there is widespread confidence in the system or else it is immediately on fire and sinking. Blaming this on one or both of the whorish political parties on the dole from corporate interest is similar in deciding if crime is caused by the Cripps or the Bloods and pretending that the argument is mutually exclusive.

The real danger is that when the entire financial system is so obviously gamed and benefits a bunch of insiders in New York, Washington, London, and Greenwich Ct., the incentive to work and invest is poisoned for an entire nation. This is not Liberal or Conservative, this is the underpinning that allows people to exist, and then arise as they see fit to express themselves and participate in their society and community instead of scrambling and tumbling in the chaos of economic distress and having no clear vision of what to do to improve themselves.

[onlooker]

"The remainder of the statement I take full issue with. You have to ask yourself, necessary for whom? Productive for whom? Vital for whom? In all cases the answer is the same, it is all those things for the people running the con, not for the 99 percent of the population who are being conned by the way the current system is structured." That is a great observation. Yes, the economic system has slowly but surely been concentrating wealth at the top at the expense of all below. That is not just in this country but throughout the world. Look at the Panama papers revelations as a side note, they are about the corruption endemic within the system. Fractional banking in the end is corrupt along with compound interest and I would go as far as to say the stock markets. They all are about sucking the system dry. About utilizing and leveraging the productive economy to the end of aggrandizing the benefits to the elite/wealthy. So then not about the general main st. economy but wall st. and the oligarchs and financial wheelers and dealers. The planet in case any of us has not noticed is under the weight of enormous onerous debt. Oh and Plant not my post, it is Vox.

[EdwinSm]

Back to the bank loans of the Original Post. One more bank shows falling profits.

$this->bbcode_second_pass_quote('', 'U')S bank Citigroup has reported a 27% fall in first quarter profits compared with a year earlier.

It came as Citi said it had set aside more cash to cover losses on energy loans, and as the cost of shrinking some of its businesses increased.

[Plantagenet]

$this->bbcode_second_pass_quote('ennui2', '.').. Obama.

[onlooker]

troll.jpg

[Tanada]

$this->bbcode_second_pass_quote('pstarr', 'T')anada, isn't full-reserve banking impossible without total complete government oversight of every loan and every account? Otherwise a black market would arise and someone (like a loanshark) will always lend out their money twice. This increases the money supply for good or worse, even without government regulation. Might as well have a government around to at least try to manage the inflation?

[Plantagenet]

$this->bbcode_second_pass_quote('Tanada', ' ')One thing I would do to fix banking is something strongly supported by many libertarians, which is to completely separate commercial banking and consumer banking like it was back before the S&L crisis. My funds, if any, should not be available for my consumer bank to loan out to businesses that may or may not be successful. It wasn't all that long ago that consumer and commercial banks were required to be completely separate entities and we managed to survive as a country with that system. Now we have the issue of 'too big to fail' because if one of the big banks goes under all the FDIC insured consumer deposits in that bank instantly become a federal taxpayer burden. That is just a really really bad idea.

[onlooker]

It would take more than Bernie to repeal Glass-Steagall. It would take a cooperating Congress. I do not see that happening anytime soon.