Bank of America reported $3.2 billion in first-quarter earnings, almost entirely on the strength of bond and stock trading on Wall Street. If you're looking for evidence of a top-heavy economic recovery, consider these two statistics. BofA made $7 billion from trading revenues on Wall Street alone. It also lost $36 million on all non-investment banking profits, including $2.1 billion lost in the housing market. Total loans continue to decline, and nearly 13% of credit card balances were deemed uncollectible. Investing in Wall Street, where stocks are up 70 percent in a year, is a winner. Collecting from Main Street, where broad unemployment has stopped growing at 17 percent, is a loser. Ladies and gentlemen, your recovery.
The Wall Street Journal write-up has a good summary of the bank's big quarter. One thing that might go under-reported is that the once vilified merger with Merrill Lynch is (to use a Tiger-ism) paying off huge, quickly. The $50 billion merger cost Bank of America $15 billion in write-downs in the last quarter of 2008. It cost both CEOs their jobs. The deal was a scandal wrapped in fraud wrapped in ignominy. But in hindsight, it might have helped to save the financial sector and it's keeping Bank of America in the black.