As a sneak preview of what's coming, here's a story that appeared today on Bloomberg:
On television, in interviews and in meetings with investors, executives of the biggest U.S. banks -- notably JPMorgan Chase & Co. Chief Executive Jamie Dimon -- make the case that size is a competitive advantage. It helps them lower costs and vie for customers on an international scale. Limiting it, they warn, would impair profitability and weaken the country’s position in global finance.
So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?
Granted, it’s a hard concept to swallow. It’s also crucial to understanding why the big banks present such a threat to the global economy.That was the program note. Now the market survey part: suppose I told you that the situation in the banking industry is even worse, perhaps even a good deal worse, than what the Bloomberg story indicates, would you be inclined to believe me, or dismiss me as being paranoid?
The reason I want to know is that this story needs to be told differently depending on whether I writing for a sympathetic or a skeptical audience, and because so many of you seem to be lurking I really don't know. So please take a moment to do the following: down at the bottom of this post you will find four checkboxes labelled "Reactions:" Please click on one of them depending on how you reacted to the question I posed above. And if you don't have a strong feeling about it one way or the other, please click on "Read it" so that I can get some idea of how big my audience is. (And please feel free to use those buttons on other posts as well. It really helps me when I try to come up with things to write about.)
Thanks in advance.
[UPDATE] If you're reading this on a newsfeed, the link to the Blogger page with the reaction buttons is here.