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11 04, 2024

Marketplace, Wednesday, April 11, 2024

2024-04-12T09:22:02-04:00April 11th, 2024|Press Clips|

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.

5 04, 2024

Marketplace, Friday, April 5, 2024

2024-04-05T15:37:25-04:00April 5th, 2024|Press Clips|

When is strong hiring too strong?

Hiring in the month that just ended was quite a bit stronger than expected, with more than 300,000 jobs added to payrolls and the unemployment rate falling slightly to 3.8%. That’s continuing the Fed’s interest rate predicament. We’ll discuss with Karen Petrou, co-founder and managing partner at Federal Financial Analytics.

4 04, 2024

American Banker, Podcast, April 4, 2025

2024-04-04T15:04:14-04:00April 4th, 2024|Press Clips|

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.

2 04, 2024

Politico Morning Money, Tuesday, April 2, 2024

2024-04-02T10:37:12-04:00April 2nd, 2024|Press Clips|


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.

1 04, 2024


2024-04-02T10:35:46-04:00April 1st, 2024|Speeches & Testimony|

Horizontal Bank Mergers:
Critical Industry Infrastructure in Harm’s Way
Karen Petrou
Managing Partner
Federal Financial Analytics, Inc.
Prepared for Federal Reserve Bank of Kansas City
April 2, 2024

Read remarks

25 03, 2024

Time, March 25, 2024

2024-03-27T10:31:30-04:00March 25th, 2024|Press Clips|

Why Is Trump’s Truth Social Worth Billions? Experts Have Theories

By Eric Cortellessa

On the cusp of a financial crisis, Donald Trump got help from an unlikely source: His struggling social media platform. Investors approved a plan on Friday to take Truth Social public, increasing his net worth by billions as he’s drowning in legal expenses and owes New York state half a billion dollars in a civil fraud case. The company will start trading on the ​​Nasdaq exchange on Tuesday. But the financial statements of Trump’s firm show scant evidence of a booming business worthy of the $4.7 to $5.6 billion market capitalization reported on Monday. Trump Media & Technology Group, which owns Truth Social, lost money last year, according to regulatory filings….It’s not the first time that markets have embraced social media companies at levels that appear to exceed their value, according to Karen Petrou, managing partner of Federal Financial Analytics. Other examples, she cites, include Uber and WeWork.“These kinds of valuations that seem insane are surprisingly common,” says Petrou, “They’re less common than they used to be when interest rates were low. All sorts of firms have been financed significantly, or capitalized through IPO, well above their estimated value. Some of them had no revenues for years. But the markets were chasing yield.”In other words: they were taking high risks they thought could lead to high rewards. That could also be the case with the lagging Truth Social, where shareholders are betting that a …

17 03, 2024

Barron’s, Sunday, March 17, 2024

2024-03-18T10:00:45-04:00March 17th, 2024|Press Clips|

The U.S. Economy Is Booming, But Only for a Few

“Our economy is literally the envy of the world,” President Biden declared in his recent State of the Union address. There’s some truth to this exceptionalism talk. However, the U.S. economy seems to be doing better than other advanced economies thanks also to data badly distorted by U.S. economic inequality. Here, we’re also exceptional, just in the bad way of being less equal than all other advanced democracies. Big-picture numbers show the U.S. economy beating much of the rest of the world. Gross domestic product grew 2.5% in 2023, compared to 1.9% in Japan, 0.5% in the U.K., and negative 0.3%—a mild recession—in Germany. Unemployment numbers are similar. What these apparently favorable comparisons miss, however, is how spending and investing by the few Americans who own so much of American wealth and receive so much of its income drive an economy that leaves almost everyone else farther and farther behind. Unequal economies are also unduly vulnerable to recessions and financial crises. The seeming strength of the U.S. economy is a brittle platform for growth or, as the White House hopes, political support….

13 03, 2024

American Banker, Wednesday, March 13, 2024

2024-03-14T09:44:17-04:00March 13th, 2024|Press Clips|

Banks knock FDIC over growing tab for last year’s failures

By Polo Rocha

One year after Silicon Valley Bank and Signature Bank failed in the span of three days, big banks are miffed about their growing tab from last March’s wild weekend. The gripes stem from decisions made between March 10-12, 2023, when the Federal Deposit Insurance Corp. stopped deposit runs by taking over the two banks and declaring a systemic risk exception to ensure that the vast quantities of uninsured deposits at those failed banks were covered….Karen Petrou, the co-founder of the consulting firm Federal Financial Analytics, said the $4 billion difference is a “very significant mistake” that calls into question the FDIC’s credibility in gauging the costliness of bank resolutions. “When an agency gets something this wrong, it’s not unreasonable for those picking up the tab to ask,” Petrou said. The agency has been gradually getting rid of certain assets that First Citizens Bank and New York Community Bancorp did not acquire when they bought many of the remnants of the two failed banks. First Citizens bought much of SVB, and New York Community acquired parts of Signature…


6 03, 2024

Marketplace, Wednesday, March 6, 2024

2024-03-06T15:15:40-05:00March 6th, 2024|Press Clips|

How November’s election could shape antitrust policy

It’s the morning after Super Tuesday primaries, and for people making money decisions large and small, the election results are not a paradigm shift. We’ll discuss why with Karen Petrou, managing partner at Federal Financial Analytics.

8 02, 2024

Politico Morning Money, Thursday, February 8, 2024

2024-02-08T12:31:26-05:00February 8th, 2024|Press Clips|

The latest on NYCB

By Zachary Warmbrodt

…. MM has a first look at the political and policy impacts to watch from Federal Financial Analytics. A few highlights:

  • The bank reported deposit inflows but what they are and how long they last is uncertain. A big factor: The government will likely be hard-pressed to do anything resembling a bailout or a systemic designation.
  • Details about NYCB’s reliance on Federal Home Loan Banks will be key. The FHFA – the agency overseeing the FHLBs — is taking a sterner view of troubled bank advances than it once did.
  • GOP lawmakers may focus on the FDIC’s decision to sell Signature Bank’s assets to NYCB, given it had yet to integrate Flagstar Bank and already had significant concentrations in New York-area commercial real estate. It could feed into Republicans’ push to force out FDIC Chair Martin Gruenberg.

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