If the big banks continue to set aside money for future losses wouldn't that suggest a downturn is coming? I guess other question is when do the big banks decrease those allowances, then stock prices off to the races?
The Fed, Treasury and Congress pumped trillions (10 years worth of money supply in two years) of dollars into the economy to keep consumers and businesses solvent - forming a direct backstop (protection) against loan losses.
The loan loss reserves will ultimately become earnings for the big banks, to be realized at their discretion - earnings to distribute to shareholders.
If the big banks continue to set aside money for future losses wouldn't that suggest a downturn is coming? I guess other question is when do the big banks decrease those allowances, then stock prices off to the races?
The Fed, Treasury and Congress pumped trillions (10 years worth of money supply in two years) of dollars into the economy to keep consumers and businesses solvent - forming a direct backstop (protection) against loan losses.
The loan loss reserves will ultimately become earnings for the big banks, to be realized at their discretion - earnings to distribute to shareholders.