Just when we thought the banking crisis was finished, we get another jolt. The U.S. Federal Reserve denied Bank of American (BAC) permission to raise its dividend.

If you recall, Bank of America is still struggling to absorb toxic assets it acquired with its purchase of Countrywide Mortgage. It has been on a slow climb back to fiscal health. At the end of 2010 the company was still bleeding, with a net loss of $1.2 billion.

Continue reading Fed Says No to Bank of America Dividend Increase

Fed Says No to Bank of America Dividend Increase originally appeared on BloggingStocks on Wed, 23 Mar 2011 12:00:00 EST. Please see our terms for use of feeds.

When dealing with large companies, have you ever felt you were living through a scene from a Seinfeld episode?

In January Wells Fargo (WFC) completed a majority of its integration with Wachovia, and I fear it will take years working out the bugs in the system. I say this because I am a major client, shareholder and trader dealing with the company on numerous levels, and the past few weeks would be comedic if not so infuriating.

Continue reading Chasing Value: Wells Fargo, a Seinfeld Episode?

Chasing Value: Wells Fargo, a Seinfeld Episode? originally appeared on BloggingStocks on Thu, 10 Mar 2011 12:00:00 EST. Please see our terms for use of feeds.

According to William Dudley, the president of the New York Federal Reserve Bank, the U.S. economy is becoming healthy. Dudley did caution that it is too early to say we are out of the woods.

The New York Fed president stated that the recovery is "looking sustainable," adding that the capital markets (with the exception of certain securitization markets) "are now generally open for business." Dudley added, "We currently expect that the economy will keep expanding, but at a somewhat slower growth rate than during the second half of 2009 as the temporary boost from the inventory cycle fades and the effects of the stimulus bill gradually weaken."

Continue reading According to Fed's Dudley, the U.S. Economy Is Becoming Healthy

According to Fed's Dudley, the U.S. Economy Is Becoming Healthy originally appeared on BloggingStocks on Fri, 19 Feb 2010 11:30:00 EST. Please see our terms for use of feeds.

• JPMorgan Chase (JPM): earnings of 74 cents per share; expectations for 60 cents per share
• Citigroup (C): a loss of six cents per share; expectations for a loss of 33 cents per share
• Goldman Sachs (GS): earnings of $8.20 per share; expectations for earnings of $5.20

Continue reading What Do Earnings from the Big Banks Signal for the Economy?

What Do Earnings from the Big Banks Signal for the Economy? originally appeared on BloggingStocks on Fri, 22 Jan 2010 12:00:00 EST. Please see our terms for use of feeds.

Is this the first time you've heard about the Financial Crisis Inquiry Commission? Probably. It seems that Treasury Secretary Geithner organized the commission to investigate what went wrong during the financial crisis of 2008! That's right 2008! Can you imagine -- the public has been clamoring for answers as to what happened during the meltdown, and now a year later they decided to open an investigation.

The Commission was created by Congress to examine the causes of the collapse that roiled global markets and led to a $700 billion U.S. bailout of the nation's banks.

Continue reading Bank Executives to Testify Before the Financial Crisis Inquiry Commission

Bank Executives to Testify Before the Financial Crisis Inquiry Commission originally appeared on BloggingStocks on Sun, 27 Dec 2009 14:20:00 EST. Please see our terms for use of feeds.

Monday morning has greeted the Street on an optimistic note toward large banks, as Goldman Sachs (NYSE: GS) has upped its coverage on the banking sector to "attractive" from "neutral." Goldman went as far as to name some specific banks, including Wells Fargo (NYSE: WFC), which it upped to "buy."

Goldman believes that Wells Fargo's capital position is improving, with it eventually benefiting from its takeover of Wachovia. The brokerage stated that Wells Fargo purchased Wachovia at a "distressed price" and that will help its assets increase 70% from the second quarter of 2007 to the second quarter of 2009.

Continue reading Goldman Sachs upgrades banks, Wells Fargo rallies

Goldman Sachs upgrades banks, Wells Fargo rallies originally appeared on BloggingStocks on Mon, 05 Oct 2009 11:20:00 EST. Please see our terms for use of feeds.

The U.S. Treasury and Congress are putting pressure on the Fed to disclose its governance policies.

Almost three months ago, on June 17, the Obama administration proposed a regulatory overhaul including a "comprehensive review of the Fed's ability to accomplish its existing and proposed functions."

There is some confusion as to why the Treasury is undertaking this task. The Fed was created by Congress to be independent of the executive branch and Congress.

Continue reading The Fed under fire! Geithner wants to study Fed governance

The Fed under fire! Geithner wants to study Fed governance originally appeared on BloggingStocks on Wed, 23 Sep 2009 13:20:00 EST. Please see our terms for use of feeds.

A look at NYSE short interest as of February 15 shows that short sellers are still willing to make very large bets that bank stocks will go lower.

Shares sold short in Wachovia (NYSE: WB) rose 16.3 million between January 31 and February 15. For Citigroup (NYSE: C) shares short rose 10.9 million to 92.8 million. At Bank of America (NYSE: BAC) the number was up 6.3 million to 68.8 million.

Even with bank stocks trading near multi-year lows, a number of investors are anticipating more bad news as banks file their 10Ks for 2007 and announce their 2008 first quarter results. The short sellers have a fairly good chance of making a killing.

Big banks still have several things going against them. As the mortgage market gets worse, they may have more subprime write-downs. A drop in the credit rating at a bond insurer like MBIA (NYSE: MBI) could force the banks to write-down securities that rely on AAA ratings for some of their value. Perhaps the most important liability banks have not faced is the declining value of financial instruments based on auto loans and credit card balances.

The world is likely to get much worse for big banks and short-sellers are likely to make money on that.

Douglas A. McIntyre is an editor at 247wallst.com.

Short sellers keep betting against big banks originally appeared on BloggingStocks on Sun, 24 Feb 2008 13:10:00 EST. Please see our terms for use of feeds.