Bank Earnings Are Due To Their Investment In The Stock Market

[JohnyMac]

Bank Earnings Are Due To Their Investment In The Stock Market

Since the bust of 1928-29, I though it was illegal for banks to invest in the stock market. Well apparently it is not and big banks are making money hand over fist, not with business or mortgage loans but with speculating in the market.

I ran a cross an article today predicting that big banks are going to have record first quarter earning's over at The Motley Fool in an article titled, Why the Stock Market Made Bank Wednesday Morning written by, Dan Caplinger.

After reading the article I did some additional research and found that big banks are shying away from loaning money to businesses and for home mortgages because they are making so much money in the stock market. This might explain why the stock market continues to grow post the Chinese virus with earning's down across the board in many businesses.

Currently, when a business goes to a big bank for a business loan, the bank is telling the business to go to the government for a loan.  WOW! Now the government is in the business of making loans? Sounds a bit like the Fascist Trilogy I wrote about a week back.

So, the questions are,
1) What happens to the big banks and ultimately your deposited moneys if the market crashes to any global event?
2) If the market crashes can the banks go back to restructure your loan so they do not have such a deep haircut?
3) Will the Federal government be forced to jump in with your borrowed money newly printed USD to bail the banks
     out? After all, the big banks are to big to fail?
4) What happens if the global economy shifts from the Petro Dollar to another form of payment? At minimum, the effect
    would be a crash of the stock market. 

Maybe it is time to move your money from your big bank to a local bank, that DOES NOT invest in the stock market.

Last, work double time to having no debt.

[Jackalope]

    The SBA has been making loans for many years.  I trust my local credit union more than I trust any of the local banks.

[JohnyMac]

Amen to that Jackalope. Credit Unions are great!

My bank is a small area bank BUT I just sent them an email asking if they are investing in the stock market. If they are, I will be moving.

[DMCakhunter]

JM,

I don't know about the banks investing in the stock market but I do know that fewer businesses are getting loans due to the uncertainty surrounding covid-19 and state shutdowns/restrictions. This is not an environment to take on debt if you aren't sure that you can continue operating at a positive capacity.
Home buyers may be taking on debt, and many of them will suffer when the financial rocket ship runs out of fuel.

On another note, what will people do for money when the crash comes? There are not enough precious metals on the planet to serve as currency. Precious metals have their place for sure, but it is difficult to make change on an ounce of gold or a 10 ounce bar of silver when you need to buy a 12 pack of beer. Maybe all currencies remain, just devalued even more.
Think of all the stuff we have to pay for - property taxes, vehicle registrations, fuel, electricity and food. Maybe this is where you and others have pointed out the potential digital currency may replace cash.

[JohnyMac]

All good stuff DM. Just a few comments/questions.

How come JP Morgan-Chase has showed great first quarter numbers but are not loaning moneys to business?

The first quarter earnings results from the biggest U.S. banks have now started to come out. These results tell us a lot about where the economy is and where it might go.

First of all, JPMorgan Chase & Co. (NYSE:JPM), the first of the biggest banks to report, produced a landslide of profits.

You are 100% correct that, "This is not an environment to take on debt if you aren't sure that you can continue operating at a positive capacity. Home buyers may be taking on debt, and many of them will suffer when the financial rocket ship runs out of fuel."

Yupper, digital will work as long as we have a power and information grid. Just think of it... How many people have nothing. They may live in a McMansion, drive a fancy car, etc. but really have nothing like; food, some PM's, seeds, alternate energy sources, etc. In my opinion, within 90-days of a total collapse 50% of America's will be dead. Within 365-days, 80% dead would not be out of the equation through starvation, medical, hypothermia, and lead poisoning.

Then for kicks & giggles, lets have one of our enemies drop an EMP or two on top of the fun in the streets. Get ready, here come the blue helmets.

[DMCakhunter]

Would be the first in the book series One Second After. A very good read, as well as the other 2, One Year After & The Final Day.

[JohnyMac]

Yupper and "Lights Out" by David Crawford. I have a bootleg PDF version from around 2012 kicking around. If anybody wants a copy drop me a PM and I will send to you.