Investing to Wealth

The recent rally in equity markets -- the largest for decades -- was predicated in part on the improving fortune of banks.Banks reported better-than-expected profits. US banks seem likely to pass the stress test. Repayment of taxpayer funds by some institutions at least seemed imminent. Scrutiny suggests that the episode reflected Adlai Stevenson’s logic: "These are conclusions on which I base my facts." Banks beat "well-managed" low-ball expectations. In the last quarter of 2008 publicly traded banks lost $52 billion. Despite a return to profitability for some institutions in the first quarter of 2009 banks are still expected to lose around ...