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Bank Losses Q3 What will Wall St do now ?

This is the week when the Banks step out from behind the curtain and lay it all bare and it's not a pretty picture at all. But, it never was going to be anyway. Here's the losses for the third quarter alone.
  • Wachovia:  $29 Billion
  • ING Group NV:  $2.2 Billion in asset writedowns. Report to be published soon.
  • Northern Trust Corp:  $129.4 Million
  • Fifth Third:  $81 million
  • VIST Financial Corp:  $4.6 Million
  • Sun Life Financial Inc:  $396 Million
  • JP Morgan Chase:  83% drop in year on year profit. $3.6 Billion writedown in Mortgage assets
  • Washington Federal:  $39.3 Million
  • Credit Suisse:  $1.7 Billion
  • National City:  $729 Million
  • Citigroup:  $13 billion in write-downs and credit losses
  • Allstate Corp: $923 Million on insurance payouts and $1 Billion Investment losses
  • Etrade:  $50.5 Million
  • Merril Lynch:  $8.5 Billion
  • Colonial Bank Group:  $71 Million
These are just a handful. Losses have included charges on preferred stock in Freddie Mac and Fanny Mae, an increase in provisions for loan losses and payouts on derivatives, etc etc. This is where the government handouts are actually going. Banks are shoring themselves up for future losses. They are not lending to business as they have so many loan losses to cover for at this stage, they just are not in a position to reduce their capital holdings.Their net income has fallen dramatically during the last year and their operating costs have risen. As the Housing and credit markets worsen, they will have to add even more money to Loan Loss Provisions, further reducing their lending.In other words, all that bailout money just postponed the inevitable demise of these  institutions and contributed absolutely nothing to a long term cure. The underlying basis for recovery still lies with main St as it always has and no amount of "Incentives" will address the problem. The only beneficiaries in this wholesale rape of the taxpayers will be that the Banks will survive a bit longer than we will.

What has Wall St to cheer about now ? With the remaing Q3 reports coming out over the next few days Wall St won't be getting much good news to shout about in order to pump up the vapid stock index again. The chips will start to fall as they were always destined to. No more bailouts, no more lies, no more money left to throw down the drain along with what went before. The domino effect has just received more impetus. As I have been saying, each loss and each failure leads to a systemic reaction as every part is shaken. When this butterfly flaps it's wings, it does actually cause a draft on the other side of the World.


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