Wednesday, September 1, 2010

Crony capitalism revived our big banks, hobbled and is killing our little banks, but the chickens …

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(Source: businessinsider.com)

“The FDIC's latest quarterly banking profile generally shows an industry nursing itself back to health. Total quarterly earnings of $21.6 billion compared to losses of $4.4 billion in the year-ago quarter. And the $40.3 billion that banks set aside for loan-losses is the lowest level since Q1 2008.”

So if earnings are improving, why are there so many banks in trouble? Easy! The only ones who have been improving were the big banks that Obama bailed out. The little banks have had to fend for themselves while fighting off closure and tight capital.

The only problem is that the chickens are coming home to roost - toxic debt that was supposed to be retired by the big banks hasn’t been. Read TARP and the Continuing Problem of Toxic Assets.

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