In the first three quarters of 2009, profits at financial institutions soared 198 percent, the biggest nine-month gain since records began in 1948. Earnings were down 65 percent in the nine months ended in December 2008, the biggest such decrease on record. "The financials were a basket case," said Naroff. "The companies are coming off such a low basis that it's easy to get a big increase." The Standard & Poor's Financial Supercomposite Index has climbed 123 percent since March 9, compared with a 63 percent gain in the S&P 500 Index. The S&P 500 fell to a 12-year low on March 9. The jump in profits is probably not evenly distributed among banks, said Naroff, making it less likely that the money will find its way back into the economy in the form of loans. "Unfortunately, not every company is a Goldman," Naroff said. "Not everyone is going to make tons of money." The banking system's ability to boost lending and spur business investment "will look more like a slow stream than a river."
In the first three quarters of 2009, profits at financial institutions soared 198 percent, the biggest nine-month gain since records began in 1948. Earnings were down 65 percent in the nine months ended in December 2008, the biggest such decrease on record.
"The financials were a basket case," said Naroff. "The companies are coming off such a low basis that it's easy to get a big increase."
The Standard & Poor's Financial Supercomposite Index has climbed 123 percent since March 9, compared with a 63 percent gain in the S&P 500 Index. The S&P 500 fell to a 12-year low on March 9.
The jump in profits is probably not evenly distributed among banks, said Naroff, making it less likely that the money will find its way back into the economy in the form of loans.
"Unfortunately, not every company is a Goldman," Naroff said. "Not everyone is going to make tons of money." The banking system's ability to boost lending and spur business investment "will look more like a slow stream than a river."
