The Back Alley Archives

So Wells comes out this morning and says they're going to make a "record" profit, claiming an expected 55 cents (.vs. mid 30s expectation)

It must be nice to be able to keep loans on the books at whatever price you feel like, receive billions of taxpayer money including "assistance" in rolling up Wachovia, and then turn out to not need it, right?

That is, if these numbers are accurate.

Wells premarket is ramping from $14.89 at the close yesterday and now trading premarket at $18.10, up over $3 or some 30%.

This leads one inescapably to the following:

* Either Wells is lying (obfuscating losses through unrealistic marks, etc) OR
* These "bailouts" were no such thing - they were a simple and transparent looting operation by the banks that is now showing up directly in "earnings" (and will shortly show up in the bonuses of executives too!)

So which is it folks?

Are the banks really that healthy? Because if they are, you've been robbed to the tune of tens of thousands of dollars per person in this country, and it is long past the time that you act to stop it.

If they aren't, then how is it that these banking executives are not residing in the graybar motel for cooking their books? Again, it is long past the time that you, the citizens of this country, act to stop it.

And while we're at it, perhaps you'd like to tally up the income you're NOT making on savings (CDs, etc) through the much lower rates of interest you're being PAID so that these guys can post "record earnings"? Naw, we don't want to hold The Fed accountable for their monetary policy - a backdoor way of looting the public even further - do we?

That is, the banks are exploiting the dislocation in pricing and the credit markets to screw you and post what Wells now says are record profits.

Are you being told about this? Of course not.

Are regulators stomping on this? Of course not.

Are you being looted to pay for this? Of course you are.

You are seeing near-zero (or actual zero) interest earned on money you loan to the bank (when you make a deposit or buy a CD you are loaning money to the bank) and yet when you go to borrow money you're being screwed with record-high spreads that the bank is pocketing - in mortgage and credit card interest rates charged.

How much does this add up to?

About $4,000 in extra profits per mortgage on top of the "usual" $1,000 profit.

That's right - the banks are making five times the "usual and customary" profit per loan, and it is coming right out of your hide.

I've been hollering about this for months (as has Mish Shedlock) but it appears that both our intrepid lawmakers and the mainstream media simply refuses to talk about it.

When does this stop?

When you, America, are tired of being ripped off and demand that it stop.

Remember, the mantra of both government and The Banks is "never waste a crisis."