Stealing From Customers to Pay Shareholders

This June marks five years since the financial sector’s XLF fund peaked. Let’s see how several of the “dead men walking” have fared since then.

The chart below shows the 5-year performance of retail banks: Bank of America, Citibank, Wells Fargo and JP Morgan Chase. I included XLF (in blue) for comparison.

As you can see, the share prices of Wells Fargo and JP Morgan have recovered. They’re just slightly off 5-year highs (3% and 7.5%, respectively).

However, the whole financial sector, represented by XLF, is still 58% lower than it was five years ago.

And it’s much worse for Bank of America and Citigroup. Both banks have failed to make a meaningful comeback.

Watch for Bank of America to continue its reverse-Robin Hood scheme: stealing from customers to pay shareholders.

We’ll see how long it can last.

Editor’s Note: Last Thursday, Adam took a look at the job market, comparing the total nonfarm employment numbers to the healthcare industry employment numbers. Unfortunately, the chart of what the job market looked like for the class of ‘o8, ’09 and 2010 was accidentally switched with a chart of TBF. You can see the correct graph here.

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Categories: Economy

About Author

Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.