The Wall Street Journal recently published a front-page article (titled “Strong Economy Boosts Bank Results”) in which the authors said that consumers and businesses drove a rise in earnings at the largest U.S. banking firms, yet I found nothing in the article that indicated that the economy is strong (a blog I wrote on that observation can be found here).

Now here is an article from the WSJ on January 24th—it did not make the front page, and it wasn’t titled “Weak Economy Hurts Regional Bank Results” even though that is what the article shows:

Regional Banks Had Another Ugly Quarter

The 2023 bank crisis is over, but the worst may be yet to come for some regional and community lenders.

Instead, author Gina Heeb stated that higher interest rates caused the “ugly” results, despite that being absolutely untrue; this article was titled “Rising Interest Rates Hit Regional Lenders” in the print edition.

These banks, like the big “boosted” banks, had the same benefit of a Federal Reserve doling out huge amounts of money for their excess deposits, but somehow their earnings sucked. Per Heeb, 

KeyCorp’s profit was down 90%; Citizens was down 70%; PNC was down 40%; Truist Financial had a loss; Comerica was down 90%; and Zions was down 50%.

Here is an excerpt from the article that shows the real reason their profits tanked:

Many this past quarter had to set aside hundreds of millions of dollars each for special Federal Deposit Insurance Corp. fees, which go towards a fund to make uninsured depositors whole, after Silicon Valley Bank and Signature Bank collapsed. A number of them also took big severance changes to cut staff and stashed away money for loan losses.

None of these expenses were because of higher interest rates. The federal regulators screwed up by not properly regulating the banks that failed, and then decided to pay big depositors for all their deposits instead of taking a haircut. Instead of uninsured depositors losing some money, like they should, the federal government decided all other banks, their shareholders, and employees should absorb the losses. They essentially sent the message to the market that no deposits will ever be uninsured.

The loan losses are because the economy is getting weaker, not stronger. Commercial real estate loans are especially at risk, and much of that risk has occurred because of the dictatorial edicts on COVID forcing remote work. (Anthony Fauci recently admitted that the six-foot separation requirement was, as he says, pulled from thin air; we all know it came from the CCP.) It is a shame that banks and investors will have to eat all these losses because of dictatorial edicts based on lies, and communist saboteurs. The whole economy suffers because of the out-of-control government, and yet no one gets fired at the federal level for their lies.

So why would the WSJ put out a headline that the reason the big banks earned so much money was because of a strong economy when they knew that it was the Federal Reserve paying them so much money on their deposits and not a strong economy that caused the big jump?

Why would the WSJ claim that high interest rates caused the massive reduction in earnings at smaller banks when it was clearly high regulation costs and loan losses?

The only reason I can think of for the WSJ to put out such misleading headlines is that facts don’t matter to them anymore than they do to most of the media. That makes them an unreliable source, just like the NYT and WaPo.

Image: Public domain.