The State Of Banking In America Explained In One Sentence

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Net income is improving thanks to better credit quality, and revenue is weak because the economy is in the tank.

That’s basically how we’d summarize what we’ve seen so far from JPMorgan, Citigroup, and now Bank of America.

Yes, in each case, we saw decent numbers on the bottom line, largely thanks to improving credit quality and lower charge-offs. That’s all well and good.

But the business of banking is still ugly, because there isn’t actually that much real world economic activity to facilitate and lend into.

That’s why all those same banks that are doing fine on the bottom line are producing pretty weak numbers on the top line.

Hence, as David Goldman pointed out yesterday, the business of banks is still just buying more government Treasuries, which are earning less and less.

And it’s why we’re seeing more and more layoffs across finance >

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