Terrific rant by Russ Daggatt on Mark Anderson’s blog.
You may have noticed that the big banks have been reporting upbeat “earnings” figures in recent days. Just yesterday, Bank of America reported a staggering $4.2 billion in first quarter “earnings.” But it’s share price declined by an also staggering 24% What’s up? Surely investors saw the impressive “earnings” numbers. Of course they did. Which is why Bank of America’s share price went down. Those “earnings” are just more of the financial gimmickry that got us into this financial crisis. Bank of America’s deposit base (excluding acquisitions) actually declined and defaults on every kind of loan increased sharply. Its credit card division lost $1.8 billion; it’s mortgage division lost $500 million. But it resorted to every trick in the book to manufacture “earnings.”
Can anyone explain to me why Ken Lewis is still chairman and CEO of Bank of America?
Great piece, worth reading in full.