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Friday, 13 March 2009

US bank performance

I confess I am a little bemused by the market reaction to US bank profitability. First of all we heard Vikram Pandit (Citi) and Jamie Dimon (JP Morgan) tell us that they had made money since the beginning of the year, and yesterday whoever is running BofA these days felt he had to do the same. Perhaps that is easier to do, Vikram, if you pay yourself 1 dollar every blue moon or whatever the deal was that you took to hang onto your job.

But banks do make money for 99.9% of the time. It is just that the losses, when they do happen, tend to be rather big, and get announced just before year end. Still the boss gets a whole years pay before he gets fired.

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