Dismal year-to-date performance of some of the major global banking stocks

Here's a little overview of the year-to-date performance of some of the major global banking stocks on December 29, 2011, before the opening bell:

BofA: -60.38%
Citi: -44.76%
Goldman Sachs: -46.41%
JPMorgan: -23.03%
Morgan Stanley: -45.24%
RBS: -50%
Barclays: -34.32%
Lloyds: -63.02%
UBS: -29.33%
Deutsche Bank: -28,55%
Crédit Agricole: -56.04%
BNP Paribas: -37.67%
Société Générale: -59.57%

These are just some of the Too Big To Fail institutions. And while your governments have enough faith in them - or so they want you to believe - to prop them up with trillions of dollars of your money, investors are fleeing them, even if they can expect them to be propped up further.

That doesn't just say something about confidence in the individual banks, it shouts loud and clear from the rooftops on confidence in the banking system as a whole, and indeed on governments' ability to continue bailing them out. In other words: bailouts don’t build confidence, they are taken as a sign that trouble's on the way. More...

Stingy megabanks swimming in cash

Image by Rainforest Action Network via FlickrIf the megabanks are so big on lending, why do their loan books keep shrinking?

The biggest U.S. banks tell us they have spent the past quarter writing loans, renewing credit lines and generally being upstanding economic citizens. Bank of America (BAC) says it provided consumers and businesses with $144 billion in credit in the first quarter, Wells Fargo (WFC) ponied up $151 billion and JPMorgan Chase (JPM), swinging for the PR fences, claims to have lent out an improbable-looking $450 billion.

Yet loan balances actually shrank from a year ago at all three banks in the first quarter, just as they did at their old pal Citi (C). This at a time when the too-big-to-fail four are being drenched with new deposits (see chart, right).

All told, average loans outstanding at the fearsome four dropped 7% from a year earlier – a decline of $210 billion -- even as deposits rose 5%.

If this is what the bailed-out captains of the financial sector call supporting the recovery, no wonder the economy is going nowhere fast. More...