Money Minute: Big Banks Ring Up Big Profits; Mortgage Rules Get Stricter

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Too big to fail and getting bigger.

The nation's big banks had their best year in 2013 since before the financial crisis. Thomson Reuters estimates the six biggest banks will report a combined profit of $73 billion. That's up 22 percent from the year before. JPMorgan Chase (JPM) and Wells Fargo (WFC) report earnings next Tuesday. Citigroup (C), Bank of America (BAC), Goldman Sachs (GS) and Morgan Stanley (MS) all report later in the week.

bank profits
Sue Ogrocki/AP
The New York Times says the huge profits could allow those and other big banks pay up to $50 billion to settle charges arising from their role in the mortgage crisis. If that happens, it could benefit some homeowners by reducing the size of their monthly loan payments.

Meanwhile, new rules take effect today designed to protect consumers against the risky lending practices that led to the housing crisis. The intent is to make sure borrowers can afford to make the payments on the mortgages they take out.

The Dow Jones industrial average (^DJI) fell 18 points Thursday, and even though it may seem that the market has had a rough ride so far this year, the Dow is down less than 1 percent. The Nasdaq composite (^IXIC) fell 9 points and the Standard & Poor's 500 index (^GPSC) was virtually flat for the second day in a row.

A generation ago, Sears and J.C. Penney were two of the most popular retailers around. But they've both fallen on hard times -- with consumers and with investors. Sears (SHLD) reports a key measure of sales over the holidays tumbled by 7 percent from a year ago, and it now expects a big loss. As for J.C. Penney (JCP), it barely avoided bankruptcy last year, but hasn't been able to reestablish a positive identify with shoppers. Over the past year, Penney's stock has fallen nearly 60 percent, and Sears is likely to take a big hit Friday.

Analysts say many retailers marked down prices so much during the holiday season that they cut deeply into potential profits.

-Produced by Drew Trachtenberg.


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43 Comments

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Greg and Mel

Chase only gets FINED AGAIN for breaking all financial laws! every month they get FINED and never charged with their continuing CRIMES against the people of this country, and the people never get their homes or hard earned money returned to them when banks illegally steal all of it, because the banks turn around pay a portion of it to our government renamed "fines" for robbing over and over again, instead of prison time and.........are never shut down and stopped! Banks no longer are qualified to service loans, filing false documents full of lies with courts continually as if legal, not applying received or taken payments to designated loans just losing them then demanding "late payment"! Its Unbelievable this has been allowed to happen for so long with nobody doing anything about it. Legendary business failures and no one is telling them otherwise like they are successful and wont lose all of their fortune. Did Yale and Harvard teach them anything? Bring honest and qualified banks to consumers applying for these loans or it will never work. Period!

January 11 2014 at 7:10 AM Report abuse +1 rate up rate down Reply
Danaman

Leftist are useless

January 11 2014 at 4:52 AM Report abuse rate up rate down Reply
1 reply to Danaman's comment
phillyboy

Better than the RIGHTIES that were in office when the economy TANKED.

January 11 2014 at 4:24 PM Report abuse rate up rate down Reply
Danaman

Big Banks have government by the short hairs

January 11 2014 at 4:45 AM Report abuse +1 rate up rate down Reply
kindheart4you1

Name ONE banking official who went to jail for the housing mortgage loan fraud, foreclosure document fraud or any other major economy impacting scam. There aren't any because they pay off the thieves in Washington....you know...our "leadship" who are there to provide their leadership to the public who they know how to bend and lube of so very well.

January 11 2014 at 12:27 AM Report abuse +3 rate up rate down Reply
JB MASTERSON

The only thing that is going to change things is for Our jobs to come back Home to the USA AN hire Americans Only you know we the people !!! Invest in us !!! Does anyone know that when they were Building the pipeline in Alaska they had to hire the local natives FIRST !!!! sounds like the plan for all working middle class !! in the USA !!! So you want to make It over seas Hope you can sell it over there !!! to the people making $ 5.00 aday because we the PEOPLE WILL NOT BE Buying We will be boycotting you !!! WE THE PEOPLE ARE GOING TO TAKE BACK CONTROL OF OUR GOVERMENT !! BECAUSE YOU ALL IN WASHINGTON DC HAVE FORGOTTEN WHO YOU WORK FOR AND IT IS NOT THE LOBBIEST !!! AN WHEN IT COMES TO YOU ALL GET A RAISE WE THE PEOPLE WILL VOTE AN LET YOU KNOW !!! FOR A CHANGE !!! THE MAN WITH THE GOLD MAY RULE !!!! (FOR NOW) BUT YOU LET WE THE PEOPLE STAY HOME , POLICE, FIREMAN , ALL BUILDING TRADES PEOPLE, THE WORKING POOR MIDDLE CLASS !! FOOD SERVERS ,TRUCK DRIVERS !!! AND ALL HOURLY PAID PEOPLE SO THE TIME IS NOW TO SHARE THE AMERICAN DREAM !! FOR ALL NOT JUST THE TOP 1 % AFTER ALL WE THE WORKING PEOPLE BUILT AMERICA AS WELL AS KEEP IT RUNNING !!!!! YOU 1 % NEED TO THINK ABOUT IT !!! WE ARE GETTING TIRED OF DOING THE CRAPPY JOBS FOR CRAPPY PAY !!! THAT YOU ALL DON'T WANT TO SOIL YOUR HANDS WITH !!!!!

January 10 2014 at 3:17 PM Report abuse +1 rate up rate down Reply
3 replies to JB MASTERSON's comment
perrdino

CRAPOLA We get 0.01 % interest on savings and check accounts. The banks are raking it all in. Thanks Obama for keeping bankers in check. period

January 10 2014 at 3:04 PM Report abuse -6 rate up rate down Reply
1 reply to perrdino's comment
peckart

Do you really think this started with Obama??? Ever heard a man named Reagan mention the words "deregulation" or "trickle down". That being said.....I don't think Obama has corrected the mess that he was handed very effectively partially due to a do nothing congress.

January 10 2014 at 3:09 PM Report abuse -3 rate up rate down Reply
peckart

It's a bit of a dilemma isn't it? I mean we should all want to see a healthy Wall Street . If you live in a capitalistic society, then investments by individuals and corporations are essential. The problem seems to be the "trickle down" bologna. It's a myth..... and the sooner some people admit it, the sooner we can regulate banks to the benefit of all instead of the few

January 10 2014 at 3:01 PM Report abuse rate up rate down Reply
2 replies to peckart's comment
kolblh

Wall Street runs this country. The Street has more influence than any President ever had on financial matters.

January 10 2014 at 3:38 PM Report abuse +3 rate up rate down Reply
Ken

The late 1800\'s is PROOF that Capitalism eventually only produces some monopolies, and some mega rich, while the most of the rest of society are only working poor.....More proof is the idea that \"greed is good\"...

January 10 2014 at 5:00 PM Report abuse +2 rate up rate down Reply
hsenpfeffer

Things will not improve till thousands of hedge fund managers, mortgage brokers, investment advisers, bank CEOs and others of these assorted scammers and CON artistes see long, extended, hard prison sentences.

January 10 2014 at 2:47 PM Report abuse +3 rate up rate down Reply
1 reply to hsenpfeffer's comment
Ken

On PBS, the show Frontline, showed how it took the FBI to catch a few illegal insider \"traders\" that resulted in jail sentances. The FBI said this was only the tip of the iceberg(of illegal trading). By the way, Martha Stewart went to jail for only selling one stock based on inside information in order to stop a lss!!!....

January 10 2014 at 5:07 PM Report abuse +1 rate up rate down Reply
demigoff1

Of course they are making money with low interists loans paid for by the American taxpayer

January 10 2014 at 2:38 PM Report abuse +5 rate up rate down Reply
1 reply to demigoff1's comment
Ken

Higher bank fees also and rates on credit cards also....

January 10 2014 at 5:10 PM Report abuse +1 rate up rate down Reply
Pat Knox

Great Bank of America is having a great year, well here in Englewood they just laid off 7 of their employees who have over 30 years each with them. Of course they kept their new employees. What is wrong with this picture??

January 10 2014 at 2:33 PM Report abuse +5 rate up rate down Reply