Day after day, whenever anyone challenges the TBTF banks' scale, they are slammed down with a mutually assured destruction message that limitations would impair profitability and weaken the country's position in global finance. So what if you were to discover, based on Bloomberg's calculations, that the largest banks aren't really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S.
By Simon Johnson
Goldman Sachs is investing $450 million of its own money in Facebook, at a valuation that implies the social networking company is now worth $50 billion. Goldman is also apparently launching a fund that will bring its own high net worth clients in as investors for Facebook.
Richard Suttmeier submits: The Number of Deadbeat Banks is on the rise - TARP money was intended to increase business lending and to help homeowners avoid foreclosure. Unfortunately these objectives have not been achieved, and now 55 out of almost 700 TARP recipients have reneged on their dividend payments due on November 16th.
Quite a few readers excitedly sent a link to a Bloomberg editorial, “Why Should Taxpayers Give Big Banks $83 Billion a Year?” which summarizes a study by Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz that the editors used to extrapolate that the five biggest US banks are “barely profitable” if they weren’t able to borrow
Large banks risk getting caught in "perpetual" cycle of bankruptcy like aerospace companies and carmakers unless they radically alter the way they do business, according to a leading industry consultant.
TORONTO — Mark Carney’s move to take the top job at the Bank of England will be “a loss” for Canada, one of this country’s top bankers said Monday.
Mr. Carney’s departure is “obviously a loss for the country as he was an outstanding central banker,” said Gord Nixon, chief executive of Royal Bank of Canada.
He was very upfront and outspoken around debt levels and other [economic] issues
Mr. Carney’s decision to leave his job as Bank of Canada governor, while rumoured for some time, nonetheless caught Bay Street by surprise.
The Good News Economist submits: You may remember that last year Citigroup (C) got a $25B bailout that was much bigger than the rest of the big banks. Now -- about a year later -- the company is about to pay dearly for the taxpayer provided lifeline.