The Bank Bubble

Public policy has benefited the oligopoly at the cost of hurting some of the other 980 bank holding companies in the nation. The financial overhaul bill unfairly penalizes any bank with more than $50 billion--even if it is a retail bank serving Main Street, making loans to small business and mortgages to ordinary people, not billionaire hedge fund managers.
So says Bob Lenzner of Forbes in Six Giant Banks Made $51 Billion Last Year; The Other 980 Lost Money

The article has a great chart which shows how large trading revenue is compared to the firms profit. (The article doesn't break down how much of that revenue translated into profits.) This brings to mind the chart I posted a few days ago:
The Federal Reserve wanted to get the markets up. The money created by the Federal Reserve first went onto the balance sheets of the big banks. The big banks put that money into the market and made huge trading profits. Traditional banking services were a money loser and 980 banks lost money in 2009. Now the money created by the Federal Reserve is being recalled, the money supply is declining. The result is the end of the stock market rally.

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