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Why are the banks claiming to have made a profit?

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posted on Apr, 17 2009 @ 02:07 PM
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I'm not trying to be snide here and I really am hoping someone can explain it to me... I mean I just don't get how the financial markets can say what there saying

So mega bank "A" takes one gazillion dollars from the government as a so called loan, (Troubled Asset Relief Program (TARP)) ...hasn't paid it off yet... but tells everyone it made a profit in this quarter?

Somehow I'm missing something here... how can they report a profit when they haven't repaid debts??? With outstanding debts wouldn't they still be in the red? or was all that money returned to "we the people" and I just missed that little news blip?
Surly my understanding of what's going on is lacking, but what???




posted on Apr, 17 2009 @ 02:09 PM
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Originally posted by DaddyBare
I'm not trying to be snide here and I really am hoping someone can explain it to me... I mean I just don't get how the financial markets can say what there saying

So mega bank "A" takes one gazillion dollars from the government as a so called loan, (Troubled Asset Relief Program (TARP)) ...hasn't paid it off yet... but tells everyone it made a profit in this quarter?

Somehow I'm missing something here... how can they report a profit when they haven't repaid debts??? With outstanding debts wouldn't they still be in the red? or was all that money returned to "we the people" and I just missed that little news blip?
Surly my understanding of what's going on is lacking, but what???


I think essentially what they are claiming is that aside from the bailout funds, the rest of their books are in the black. Thats why they are preparing to start paying off the debt.

You're right though, the whole thing is fishy.



posted on Apr, 17 2009 @ 02:28 PM
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Its because they weren't having a problem. they just increased all the fees to make you feel like they are in trouble so they can ask the government for money.



posted on Apr, 17 2009 @ 02:46 PM
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Another big part of their profits are in the fact that they have jacked up the interest rates on most of the credit cards they supply. The company I work for has a visa that we offer through BofA. Within the last 3 week, I have been getting overloaded with calls about the interest rates hitting over 35% and because they were late making a payment by a day. The cards instruct the holders to call BofA reguarding any questions, but they are being told to call us. I cannot understand why the Fed interest rates were slashed, these companies (banks) given billions of dollars, and the world in an economic recession, but by being late for the first time on a payment in their life, these slimebags are jacking the rates through the roof. I guess corp. greed is still in full effect.



posted on Apr, 17 2009 @ 02:50 PM
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the big banks borrow to each other all the time. When they got bailed out they where able to pay each other off and hence turn a profit. All that really happend was some fancy book keeping and a electronic transfers that where not tied to any real money. Also people using tax refunds to pay off their bills helped produce "record profits" since we have record debt that everyone is trying to pay off.

Lets see what the next quarter looks like after everyone has spent any refund money they received and the banks have finished swapping numbers with each other.



posted on Apr, 17 2009 @ 03:01 PM
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Yeah this hit me as bizarre, they are doing fantastic while credit is still lagging and the economy sucks. Maybe people are putting their expenses on credit because they are running out of money (sure, inflate the credit bubble even more). Plus there is the jacking up of rates, even on people with no delinquencies ever.

Why don't people get that debt is slavery?



posted on Apr, 17 2009 @ 03:04 PM
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reply to post by raz24400
 


Just a little side note to your post.. BofA cancelled my card I paid it off each and every month... apparently they don't like it if you don't have a balance because for no reason they just closed the account??? go figure..



posted on Apr, 17 2009 @ 03:15 PM
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reply to post by DaddyBare
 


Part 1 of Elizabeth Warren on the The Daily Show

www.thedailyshow.com...

They discuss this. A bank gets 10 billion interest-free, gives back something that is worth 2/3rds of that, and then says they made 1.5 billion in the last quarter. Sounds like a scam to me.



posted on Apr, 17 2009 @ 03:17 PM
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I don't remeber what article it was that I read. But the banks changed there accounting method this year and they say the month of december dissapeared in many of the banks records. So there is no telling what happened. You just have to ask yourself did you enjoy the shell game the government just played with the banks. Hopefully the government wont be completely fooled and let them hide the bailout funds when its time for them to pay up.



posted on Apr, 17 2009 @ 03:19 PM
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reply to post by DaddyBare
 


I've been scratching my head on this one as well. My take ...

They had all these "toxic assets" and were "failing" so the government gives them billions of $'s.

The sudden infusion of billions of $'s inflates the money they show on the books. The "toxic assets" have been segregated to a "seperate entity" therefore they are no longer "on the books" therefore it appears they've made a billion dollar profit.



posted on Apr, 17 2009 @ 03:26 PM
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Originally posted by DaddyBare
I'm not trying to be snide here and I really am hoping someone can explain it to me... I mean I just don't get how the financial markets can say what there saying

So mega bank "A" takes one gazillion dollars from the government as a so called loan, (Troubled Asset Relief Program (TARP)) ...hasn't paid it off yet... but tells everyone it made a profit in this quarter?

Somehow I'm missing something here... how can they report a profit when they haven't repaid debts??? With outstanding debts wouldn't they still be in the red? or was all that money returned to "we the people" and I just missed that little news blip?
Surly my understanding of what's going on is lacking, but what???


I would call this a false profit does this have a double meaning or what. You can candy coat what has taken place with the banks and you can show funny made up profits to pump up the markets but the deal is they had gotten a massive government loan as simple as that and any institution could show a profit given enough money.



posted on Apr, 17 2009 @ 03:28 PM
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reply to post by DaddyBare
 


You could take an hour or two, using about five pages, to explain these profits using financial accounting methods and ballance sheets. OR you can just forget all that and see it for what it really is....a complete and utter truck load of male cow excrement. We've been ripped off my friend. No doubt these companies will be paying dividends to their shareholders, paying off their debt to the Gov. a few dollars at a time.

I believe NO INSTITUTION should be allowed to keep a single penny of profit until ALL the TARP money is repaid....WITH INTEREST.

Gonna go for a run now...this makes me so angry lol!

kiwi



posted on Apr, 17 2009 @ 03:29 PM
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Originally posted by pluckynoonez
reply to post by Daddy Bare
 


Part 1 of Elizabeth Warren on the The Daily Show

www.thedailyshow.com...

They discuss this. A bank gets 10 billion interest-free, gives back something that is worth 2/3rds of that, and then says they made 1.5 billion in the last quarter. Sounds like a scam to me.


I watched the video... My thoughts.. well I'm more confused now than before... if this lady who's the watchdog... doesn't understand where all the money went (PPIT? What the "H" was that?) I sure don't stand a chance of ever understanding this mess... but to be fair my wife cant balance her check book either, maybe there's a government job out there for her???



posted on Apr, 17 2009 @ 03:38 PM
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Heres a link to the ny times blog where I seen tem talking about Goldman Sachs Missing month and untold bail out story.The Case of the Missing Month


Where’s December?: Goldman Sachs reported a profit of $1.8 billion in the first quarter, and plans to sell $5 billion in stock and get out of the government’s clutches, if it can.

How did it do that? One way was to hide a lot of losses in not-so-plain sight.

Goldman’s 2008 fiscal year ended Nov. 30. This year the company is switching to a calendar year. The leaves December as an orphan month, one that will be largely ignored. In Goldman’s earnings statement, and in most of the news reports, the quarter ended March 31 is compared to the quarter last year that ended in February.

The orphan month featured — surprise — lots of write-offs. The pretax loss was $1.3 billion, and the after-tax loss was $780 million.

Would the firm have had a profit if it had stuck to its old calendar, and had to include December and exclude March?





posted on Apr, 17 2009 @ 03:53 PM
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reply to post by JBA2848
 


That's just crazy... missing month... If I pulled that they'd put me in the same cell as Wesley Snipes...maybe we could tick off the years working on a sequel to the blade movies?



posted on Apr, 17 2009 @ 03:58 PM
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Here is your reason.

The government allowed an accounting change that helped the banks to realize profits that would have probably not materialized if there had been no change.

www.abovetopsecret.com...



posted on Apr, 17 2009 @ 04:15 PM
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The way I see it is since the Fed has been printing trillions of $ and not disclosing the recipients of that "money", there can be no doubt that large banking institutions in the U.S. and elsewhere have been getting some % of it. Combine that with the accounting changes (which were already crooked, deceitful, and misleading), these banks should be showing nice "profits" for some time, or until the whole fraudulent scheme collapses, whichever comes first.



posted on Apr, 17 2009 @ 05:02 PM
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reply to post by pluckynoonez
 


First off it isnt interest free. Those banks had to dish out preferred stock to secure those loans. Those share pay a hefty dividend. Kind of like BOA. They got 45 billion. Now they have to pay an 8% dividend on that loan to the governement. They have already made two payments equaling about 1.2 billion dollars. They will eventually pay the government over 2 billion a year in dividends (interest on the loan) until the pay that 45 billion back. And those dividend payment do not bring the principal of the loan down. They have to make those payment and still pay the full 45 billion back. So the loan is far from interest free.

Also to the person who claimed they are profiting from credit cards because of the fee increases, that is also false. They are losing money on those accounts. Really the only profitable part of the banks are through the fixed income trading. Same with all the banks.

Citi's North American cards business swung to a $209 million loss in the first quarter, reversing the year-earlier $537 million profit. Credit costs - reflecting loans gone bad and expenses tied to reserving against future losses - nearly doubled
source

So you see they are not bringing in a profit from raising their rates. They are just trying to dull the loses.

[edit on 17-4-2009 by tide88]



posted on Apr, 17 2009 @ 05:06 PM
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Originally posted by jam321
Here is your reason.

The government allowed an accounting change that helped the banks to realize profits that would have probably not materialized if there had been no change.

www.abovetopsecret.com...


Actually first quarter profits had nothing to do with that change.

Accounting changes aimed at helping the balance sheets of banks with toxic assets appear to be providing little or no help so far with earnings reports.

source

Now the second quarter will be a different story.

[edit on 17-4-2009 by tide88]



posted on Apr, 17 2009 @ 07:56 PM
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Originally posted by cnichols
reply to post by DaddyBare
 


I've been scratching my head on this one as well. My take ...

They had all these "toxic assets" and were "failing" so the government gives them billions of $'s.

The sudden infusion of billions of $'s inflates the money they show on the books. The "toxic assets" have been segregated to a "seperate entity" therefore they are no longer "on the books" therefore it appears they've made a billion dollar profit.


That is exactly right they are not having to show the toxic debts on the accounts anymore. That is why they are showing a profit and it is a scam to get the peoples confidence up.... Liars and Thieves!!!



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