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Big 6 Banks Worth 64% of Nation’s GDP…up from 17% in 1995

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The Straight Story Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 08:45 AM
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Big 6 Banks Worth 64% of Nation’s GDP…up from 17% in 1995
Big 6 Banks Worth 64% of Nation’s GDP…up from 17% in 1995

How big is too big when it comes to banks? Maybe when a mere half dozen institutions are worth more than 60% of the American economy.

The latest financial data from the third quarter of last year shows the assets of the six largest banks—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley—were worth 64% of the gross domestic product. Fifteen years ago, these banks represented only 17% of GDP.

JPMorgan Chase alone controls 46% of all bank deposits in the U.S. Here is the approximate asset value of each of the Big 6 Banks:
· JPMorgan Chase--$2 trillion
· Bank of America--$2 trillion
· Citigroup--$2 trillion
· Well Fargo--$1 trillion
· Goldman Sachs--$880 million
· Morgan Stanley--$820 million.

Neil Barofsky, the special inspector general put in charge of monitoring the 2008 bailout of Wall Street, wrote in his latest report that the government needs to consider letting too-big-to-fail banks suffer some pain, unless the nation wants to deal with another financial crisis in the future.

http://www.allgov.com/Where_is_the_Money_Going/ViewNews/Big_6_Banks_Worth_64_Percent_of_Nations_GDP__up_from_17_Percent_in_1995_110117
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BzaDem Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 08:49 AM
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1. ... no. A bank's "worth" is not determined by the sum of it's bank deposits. Those deposits are
actually liabilities.
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ProdigalJunkMail Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 08:52 AM
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2. author of this article needs to study the word 'worth'
and then contrast it with 'controls' as related to deposits.

sP
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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 09:13 AM
Response to Original message
3. Written by someone who doesn't have a clue.
Edited on Mon Jan-17-11 09:15 AM by Statistical
Maybe smaller numbers will help.

I open the Bank oF Statistical. Someone deposits $100 into the bank. What is the "worth" of the bank. $0.00.

Why? Because while I have $100 I also have a $100 liability (depositer can withdraw money at anytime). $100 in cash - $100 liability = $0.00 net worth.

Also conflating wealth with GDP is silly. GDP is the aggregate output for one year (think of it as the nation's income). While wealth is the accumulation of assets over time.
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kenny blankenship Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 09:36 AM
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4. Everyone who has responded to the article so far has confused assets with deposits
and then accused the article of doing the same thing. What a larf.
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Bigmack Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jan-17-11 10:46 AM
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5. Beyond the banks...
... what happened to the rest of the GDP?

How much is "service related"? How much is stuff that we export/manufacture/build? We sell each other a lot of lattes and fast food, but that ain't serious GDP.

If the banks fold, we can't bail them out again... no money. So if they fail, our GDP will drop to 3rd World levels.
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