FOMC – Who Is Happy Now ?
Who says the Fed does not work for the banks ? And their AFS books into the 3Q end in less than a fortnight. Bless those profits, coming back in time for book closing and bonus numbers !
“The last time we looked at the impact of the ongoing rates blow out on banks’ “available for securities” books, we found the biggest monthly drop in unrealized gains……This is the most negative the AFS number for the commercial banks operating in the US, has been since late 2009.” 2 Sep Source : http://www.zerohedge.com/news/2013-09-02/unrealized-losses-commercial-bank-available-sale-securities-plunge-2009-levels
But all this QE is not going to make JP Morgan re-open their student loan business which they just closed or their mortgage business ! Wells Fargo following suit and BOA already did.
By Dakin Campbell
Sept. 18 (Bloomberg) — Wells Fargo & Co., the biggest U.S.
mortgage lender, is cutting about 1,800 jobs in its home-loan
production business as an increase in mortgage rates curtails
borrower refinancing demand.
“Oct 12, 2013 onwards, JPMorgan will cease taking new student loan applications, having already restricted its student loans to Chase customers since the past year. ” 6 Sep.
JPMorgan Chase & Co. says it plans to close its mortgage call center in Albion, putting about 400 people out of work. 7 Jun. http://news.wbfo.org/post/jpmorgan-chase-closing-400-person-albion-office
TAMPA, FL-JPMorgan Chase plans to close several business units whose mission is to provide assistance to distressed homeowners by this fall. The job cuts will be divided between two locations near Tampa International Airport. 12 Aug. http://www.globest.com/news/12_668/tampa/finance/JP-Moran-Chase-Closing-Mortgage-Aid-Units-in-Tampa-336529.html
JPMorgan Chase said Thursday it plans to lay off 730 San Diego workers from its loan-servicing business as home refinances and foreclosures dry up. 8 Aug. http://www.utsandiego.com/news/2013/aug/08/realestate-chase-layoffs-jobs-mortgage-underwater/
“Bank of America Corp. (BAC:US), which fell to fourth in U.S. mortgages last year as it scaled back after buying Countrywide Financial Corp., is reducing capacity further as surging interest rates crimp demand. The Charlotte, North Carolina-based firm is eliminating 2,100 jobs and closing 16 offices by Oct. 31, said two people with direct knowledge of the plan. ” 10 Sep.
But NOT TO WORRY BECAUSE “Even as the rest of America pulls back on mortgages, the wealthy are going on a borrowing binge.” http://www.cnbc.com/id/101022158 The wealthy are too big to fail and cheaper to service. Sell 1 jumbo mortgage = 20 mini mortgages.
But before you think this is bad. Look at the UK.
“Communities across the UK have lost more than 40% of their bank and building society branches since 1989, according to a new report.” 19 Aug http://www.bbc.co.uk/news/business-23759025
SO WHAT IS BERNANKE TRYING TO DO ?
JP Morgan has $6.9 billion in fines (excluding London Whale losses) and $16 billion in legal fees to settle. http://www.ritholtz.com/blog/2013/08/jp-morgan-6-9-billion-in-fines-unknown-billions-in-legal-costs/
We need results that look like this.
WSJ 13 Jul : JP Morgan Chase’s second-quarter earnings rose 31%: $1.60 a share versus $1.21 a share last year.
I think we have an end goal in sight here.