If 'Too Big To Fail' Banks Fail, We'd Be Greece
Last Friday both JPMorgan Chase
JPMorgan, which closed Tuesday at $52.31, actually lost 17 cents a share, but after adjusting for $7.2 billion in legal fees it beat EPS estimates by 14 cents earning $1.42 per share on revenue of $23.9 billion. With such a huge balance sheet a "too big to fail" bank can just about report earnings at will given its great team of accountants. JPMorgan also disclosed it set aside $23 billion for expected future fines and settlement legal fees. JPMorgan expects to lose money on its mortgage operations in the second half of 2013.
Wells Fargo, which closed Tuesday at $41.54, beat EPS estimates by 2 cents earning 99 cents a share. Their earnings were boosted by a $900 billion reduction in reserves for losses, but the bank reported that revenues from their mortgage origination business fell by 35% year over year in the third quarter.
Bank of America
The "too big to fail" banks began their growth spurts after the Glass-Steagall Act, also known as the U.S. Banking Act of 1933, was declared no longer appropriate by President Clinton in 1998 after the Federal Reserve approved Citibank's affiliation with investment banking firm Salomon Smith Barney.
Beginning in the year 2000, the four 'too big to fail' banks began their dramatic growth through acquisitions.