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Munis, Bank Layoffs, and Anti-Bailout Fervor

By Implode-Explode Heavy Industries

``As for the banks: they were no more clever in 2009 than they were in 2007. After the huge bounceback in bank profits (as banks scuppered up cheap assets which then appreciated), bank management assumed that happy days were there again and begin hiring. By the second quarter of 2010, banks figured out that no such rosy scenario would ensue and began laying off. Ms. Whitney?s 80,000 number is pulled out of thin air. It could easily be more. The one way that banks can make profits is to reduce compensation costs. Instead of the old 80/20 rule (80% of profits are made by 20% of bank employees), it?s more like 99/1. ?All the banks need is one guy to make sure that the firehouse is attached to the pump at the Fed, and a couple of guys to point the other end into the swimming pool? of bank assets, says one senior manager. How many credit officers do you need to NOT make loans?''

Full post as published by Mortgage Lender Implode-o-Meter on September 10, 2010 (boomark / email).