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Non-Tech : Bank of America -- Ignore unavailable to you. Want to Upgrade?

To: Qualified Opinion who wrote (1904)	1/22/2010 9:36:12 AM
From: Keith Feral	Read Replies (1) \| Respond to of 4366

The White House is trying to talk down inflation since the FED has their hands tied behind their back. This is all part of a long term plan to probably get the banks to make more loans. MS said they are going to raise capital for hedge funds for a fee. Hedge funds are probably sick of competing with prop bank trading for limited amounts of capital market liquidity. Citi said this might crimp JPM's peak earnings by 2%. Basically, this is the same scenario the banks were facing the other day by paying back $117 billion, but from a different angle. By the time the legislation takes effect, most of the profits from the banks will be client driven anyways. The banks have probably filled in the gaps in trading volumes this past year, but it seems quite obvious that prop trading profits won't make much of an impact on the bottom line a year from now as loan losses begin to normalize and earnings get back to normal. GS is going to reduce their comp from peak levels by 10% to sustain earnings growth, which will offset the 10% prop trading profits.