Posts Tagged ‘bank losses’
Bank Loan Losses Rise to Record Levels
What’s going on in the “real economy”, the economic reality faced by all but a small percentage of Americans? As a result of job losses causing the highest unemployment level since 1983, millions of people are struggling just to survive week to week. Unemployment payments can only go so far, especially when people have become targets or predatory lenders of mortgage and personal loans as well as credit card companies. After all, our economy is based on debt. The more debt people are in, the more interest and fees the banks collect, and the more the public sinks into a perpetual downward spiral, unable to pay off the principal of our collective debt.
However, it would seem there has to be a breaking point. After years of bombarding the masses with credit offers and misleading them to take on adjustable rate mortgages, otherwise known as subprime, it doesn’t take Einstein to figure out that millions of jobless Americans would get terribly overextended.
Now, the inevitable is occurring. Banks are being forced to write off ever higher levels of bad paper. The nation’s largest lender, Bank of America, is about to report a 10% rise in bad loans totaling $7.6 billion for the 2nd Quarter. The bank expects these figures to increase in coming months. See story here. It should be noted that Bank of America was a recipient of the recent federal bailout program.
