Every time I read an article like the one below, I get a flashback to that scene towards the end of Animal House, when Kevin Bacon yelling to the crowd "All is Well . . . ALL IS WELL" — just before the mob pancakes him . . .
The beginning is the Pollyanna portion . . . further down, we get to the meat of the issue:
"Few analysts say the banking industry as a whole has turned the
corner. Nearly every major institution is wrestling with surging losses
tied to real estate, credit card and construction loans. But investors
are starting to recognize that the losses may not be as severe as they
had initially feared. They are also realizing that banks may have the
earnings power to offset bad loans and absorb further write-downs.
“It is too early to say things are getting better, but this is
coming off extreme fears,” said Mark Fitzgibbon, the director of
research at Sandler O’Neill & Partners in New York.
Financial shares have swung erratically during the last week and a
half as the Bush administration moved to bolster the nation’s two
largest mortgage finance companies, Fannie Mae and Freddie Mac, and
federal regulators seized a large California lender, IndyMac Bancorp.
But the sector roared back late last week after Wells Fargo, JPMorgan
Chase and Citigroup reported strong results.
Bank of America has another reason for optimism: The Countrywide
Financial Corporation, the troubled mortgage lender it recently
acquired, is now expected to turn profit this year, Bank of America
said Monday. When the acquisition was announced in January, Bank of
America said the deal would have no impact on earnings this year.
Still, investors fear that losses from Countrywide’s $111 billion
loan portfolio could spiral higher, and that Bank of America could be
saddled with billions of dollars in litigation costs stemming from
Countrywide’s business practices."
Now if I can only find that video clip of just him at the end . . .
Bank Beats Forecasts, Reassuring Investors
NYT, July 22, 2008
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