Arezou

What do bank earnings tell us about the economy?

By Mitchell Hartman

It’s the second week of April, which means spring is in the air and daffodils, cherry trees and lilacs are blooming. Here at Marketplace, it also means earnings season is starting. Corporate profit-and-loss reports for the January-to-March quarter kicked off in earnest Wednesday with Delta Air Lines, which did quite well. Revenue rose 6% and earnings per share nearly doubled from a year ago. ..“Banks really are bellwethers of the economy,” said Karen Petrou, managing partner at Federal Financial Analytics. “Biggest issues for the larger banks: interest rates, which we — at least, I — know are going to be higher for longer. And that helps to improve bank earnings.” That’s because the banks make more money on the interest they charge borrowers. But Petrou said there’s also a downside to interest rates staying high: credit losses. As consumers keep spending, their credit card balances are rising….“We know that the low-wage earners are having difficulty. What we’re looking for now: Has it crept up the wage scale, middle-income wage earners with late payments or delinquencies?” she said.

https://www.marketplace.org/2024/04/11/what-do-bank-earnings-tell-us-about-the-economy/…

Buy the People: Why everyone loves to hate the Fed

By Kyle Campbell

Click the link below to listen to Kyle Campbell’s podcast on economic  populism.  It’s a terrific survey of Fed history with authoritative insiders including Federal Financial Analytics‘ managing partner Karen Petrou, and then – my bit – an assessment of why recent monetary  policy has made so many Americans so angry and how that affects the political outlook , especially this November.

https://www.americanbanker.com/podcast/buy-the-people-why-everyone-loves-to-hate-the-fed…

By MICHAEL STRATFORD and ZACHARY WARMBRODT

First look: A bank merger rethink — MM has a preview of a provocative bank M&A talk that Federal Financial Analytics managing director Karen Petrou will give at a Kansas City Fed workshop today.

As banking agencies signal tougher scrutiny of proposed mergers, Petrou makes the case that regulators are failing to use tools they already have to address conflicts of interest, concentration and unfair competition ahead of M&A reviews.

“How much of this is necessary in merger review and how much could be accomplished by better prudential regulation along with vigilant supervision and meaningful enforcement?” she says in remarks prepared for her talk, which you can read here.

https://www.politico.com/newsletters/morning-money…