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April 16th, 2009
12:29 PM ET

Financial Dispatch: Banks on the mend

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/POLITICS/02/23/poll.economy/art.wall.st.gi.jpg]
Andrew Torgan
CNN Financial News Producer

Following in the footsteps of Wells Fargo and Goldman Sachs, JPMorgan Chase this morning reported a better-than-expected profit of $2.1 billion in the latest quarter, even as the bank aggressively set aside money to cope with rising loan losses. And although profits fell 10% from a year ago, earnings still beat Wall Street’s expectations.

JPMorgan is among a handful of banks that have expressed interest in repaying taxpayer bailout funds, given the increasing restrictions imposed on banks participating in the rescue program.

Goldman Sachs announced earlier this week that it would sell new stock to help pay back the government, and JPMorgan CEO Jamie Dimon says the bank would like to repay its bailout money "as soon as possible."

We’ve got mixed news yet again on the unemployment front today.

The number of Americans filing initial claims for jobless benefits dropped last week while the number of people continuing to claim benefits set a record high for the 12th straight week.

First-time claims for unemployment insurance fell by 53,000 to 610,000 from the previous week revised figure of 663,000. But the number of people receiving benefits for one week or more rose by 172,000 to 6.02 million - the highest number on records dating back to 1967.

New home construction plunged to the second-lowest level on record in March, a sign that the worst housing slump in decades is not yet over.

Construction of new homes and apartments dropped nearly 11%. That was the second-lowest construction pace on records that go back 50 years.

And building permits, an indicator of future construction activity, fell 9%.

Foreclosure activity skyrocketed in March and the first quarter of 2009 to their highest levels on record as banks lifted moratoria on filings.

Total foreclosure filings - which include default papers, auction sale notices and repossessions - jumped 24% over the year earlier and 9% compared to the previous quarter.

The one bright spot was that fewer homes were lost to bank repossessions in March and the first quarter, falling 3% from February and 13% from the previous quarter.

General Growth Properties - the nation’s second-largest mall operator - has filed for Chapter 11 bankruptcy protection, making it one of the biggest victims of the credit crisis yet.

General Growth owns and manages more than 200 malls scattered across 44 states, including high-profile venues such as Water Tower Place in Chicago, Faneuil Hall in Boston and South Street Seaport in New York City.

Harley-Davidson says it expects to cut up to 400 more jobs as its first-quarter profit tumbled 37% due to a sluggish motorcycle market.

Weak consumer spending and credit markets have pinched demand for big-ticket items like Harley’s iconic bikes.

Southwest Airlines reported a surprisingly large loss in the first quarter as traffic fell in what the CEO called the carrier's toughest revenue environment ever.

Southwest also says it will offer buyouts to employees to trim its work force and was also imposing a hiring freeze.

Finally, United Airlines says will require obese passengers bumped from full flights to purchase two seats on a subsequent flight, matching the policy of some other carriers.

The change brings the carrier in line with eight other airlines including Continental, Delta, JetBlue and Southwest.

Under the new policy, obese passengers - defined as passengers unable to lower the arm rest and buckle a seat belt with one extension belt - will still be re-accommodated at no extra charge to two empty seats if there is space available. If the flight is full, United said it will try to find a later flight with open seats or sell the customer a second seat on a later flight at the same fare.

Southwest Airlines has had a similar policy for the last 28 years.


Filed under: Andrew Torgan • Economy • Raw Politics
soundoff (8 Responses)
  1. AG

    Andrew... What's your point? It sounds like a laundry list of issues with no clear thesis in your article. Journalism 101... It does sound like you might have been at a TEA Party yesterday. Oh... how about reporting that the so called bank profits are merely tied to the money and interest made off TARP money that was funneled to the banks in the previous quarter. So if your article is illustrating that the “good” economic news and indicators is smoke and mirrors, then I got it.

    April 16, 2009 at 9:35 pm |
  2. Annie Kate

    The Chase figures are encouraging and the lower unemployment claims are as well – but the number of people continuning to receive unemployment seems to me to indicate that the job market is still bad with no job growth for those who are desperately seeking employment. I wish the foreclosure situation would calm and that banks and mortgage companies would work more with the people who cannot pay their mortgages to see if a restructured mortgage would allow these people to pay the bill and stay in their home.

    April 16, 2009 at 6:19 pm |
  3. Mike in NYC

    There must be a hell of a lot of obese Americans to merit mentioning airline seating policies re: the overweight in an article about the economy.

    April 16, 2009 at 5:05 pm |
  4. JC- Los Angeles

    Here in California, Wells Fargo along with Countrywide, Bank of America, WAMU and countless others were nothing short of mortgage fraud factories.

    With each egregious rate cut by the fedspeakian octogenarian, the fraud factories ratcheted up production to staggering levels.

    While Timothy Geithner's Wall Street friends cashed in, banks crashed under their own fraud with taxpayers paying the price.

    Stating that these banks are on the mend is one of the most hilarious comments ever recorded; without taxpayer bailouts and one big national do-over, these banks are nothing short of dead man lending.

    April 16, 2009 at 3:13 pm |
  5. Mike Syracuse, NY

    All these bad economic statistics make you wonder where Obama sees these signs of a turnaround. Everything good is down, everything bad is up. What stats is Obama looking at? Some specifics on his part wouild be nice.

    April 16, 2009 at 2:44 pm |
  6. Lisa in CA

    Banks may be on the mend - but what will happen as the number of personal bankruptcies continue to grow (you know, those credit cards) and the next wave of mortgage ARM flips happens. The current programs aren't in place to help those of us on the edge - only those who have fallen off. I know, I tried to get a mortgage modification – I hadn't missed a payment so I didn't qualify.

    April 16, 2009 at 2:09 pm |
  7. dina212

    We have to keep the jobs. I'm concerned that retail spending is down. Their should be an ongoing task force to monitor job loss. Make sure the jobs aren't being outsourced (for 1) and for 2 make sure all businesses are being properly managed and 3) all jobs should forecast their sustainability and disclose that information so that their employees can plan ahead in the event the business should go under. That should be a mandatory directive from the govt. (No money involved in that either).

    April 16, 2009 at 2:07 pm |
  8. Michael "C" Lorton, Virginia

    We still have a long and difficult road to travel--we are not out of the woods by any means-–let's just hope that we don't get deeper into the forrest-–but eventually we will be able to see the trees through the forrest--it is just, "when?"

    April 16, 2009 at 1:37 pm |