FORTUNE -- Consumers are still getting crunched.
In the past week, the nation's biggest banks reported their results for the first three months of the year. Earnings were disappointing. But the numbers also showed a significant increase in lending, which many economists said was a welcome sign for the economy.
The problem: Every additional dollar, and then some, that the nation's biggest banks have lent out in the past year has gone to corporations. So, while corporate lending was up by 7%, or $101 billion, from a year ago, that masked the fact that consumer lending at the nation's five biggest lenders has continued to drop, by $12 billion in the past year alone.
Economists have been waiting for an increase in lending after the credit crunch that, in part, brought on the recession. And the fact that companies are borrowing more could signal that they have become more confident in the economy and are looking to raise dollars so they can do more hiring or somehow expand their business.
But others worry about how lopsided the volume of new loans has become. The lack of an increase in consumer credit could be a hangover from the financial crisis, which was mostly caused by an avalanche of consumer loan defaults, mostly from not being able or willing to pay their home loans. Corporate lending did not suffer the same losses.
This may have led banks to conclude that lending to corporations is not nearly as risky as lending to individuals. Jamie Dimon, CEO of JPMorgan Chase (JPM), told analysts during a recent conference call that individuals who either have good credit or are buying a very expensive house are able to get mortgage loans. But, he said, his bank and others are still reluctant to make any home loan with "any hair on it."
Corporate lending may not be as risk-free as banks seem to think. Recently, regulators have expressed concerns that as banks rush to lend to corporations, they may become overly lax, like they were in the run-up to the housing bubble. What's more, it's not clear that corporations are using the money they are borrowing to expand.
Some companies may simply be locking in low rates and putting the money in the bank. Corporations have also been buying back massive amounts of their own stock, a lot of it with borrowed funds.
Consumers almost always use the money they borrow, with credit cards and when they take out a new mortgage, for an immediate purchase.
The economy has become more uneven in general since the financial crisis. Corporate profits have reached record highs as a percentage of GDP, even as the economy in general still seems far from recovery. The stock market has made back all it lost in the recession and then some. Yet millions of more people are out of work today compared to before the financial crisis. The lopsided lending market is just one more sign of our stilted economy.
CEO James Gorman proves that there are, in fact, second acts on Wall Street.
FORTUNE -- James Gorman appears to have found Wall Street's secret sauce.
In a quarter when nearly all of its rivals struggled, Morgan Stanley (MS) reported better-than-expected earnings for the first three months of the year. Profits from continuing operations rose to $1.39 billion, up from $1.18 billion a year ago. Analysts had expected the company to earn MOREStephen Gandel, senior editor - Apr 17, 2014 11:04 AM ET
JPMorgan CEO Jamie Dimon got either a 74% raise or a 37% pay cut, depending on the source. In fact, neither stat correctly reports his 2013 take-home pay.
By Paul Hodgson
FORTUNE -- In January, news stories claimed that JPMorgan CEO Jamie Dimon got a 74% pay increase in 2013. But in April, now that the proxy is out, his pay is reported as declining by 37%.
One thing is certain, it MOREApr 16, 2014 1:14 PM ET
That's bad news for the housing market and the economy in general.
FORTUNE -- If you are wondering why you can't get a mortgage, here's an answer: Every time JPMorgan Chase makes a home loan, it loses money, $1,500 on average. That might not make JPMorgan want to make so many loans.
That helps explain why banks are lending so little, and why the housing recovery, which seemed to be zooming along just a MOREStephen Gandel, senior editor - Apr 11, 2014 3:37 PM ET
The JPMorgan CEO says QE worked.
FORTUNE -- Jamie Dimon, the CEO of America's biggest bank, says it's time to stop worrying about the Fed. After all, he's not worried.
In his annual letter to shareholders, which was released on Wednesday afternoon, the CEO of JPMorgan Chase (JPM) said there is "little question" that the Federal Reserve's signature stimulus program boosted the economy and hastened the recovery. What's more, he says the MOREStephen Gandel, senior editor - Apr 10, 2014 5:00 AM ET
The nation's biggest bank is parting ways with one of its most controversial bankers.
FORTUNE -- Blythe Masters, one of the highest-profile female investment bankers, is leaving JPMorgan Chase after 27 years.
JPMorgan (JPM) announced the departure in a memo on Wednesday in which CEO Jamie Dimon and Daniel Pinto, who heads the firm's investment bank, called Masters' career "remarkable." They said Masters will be taking some "well-deserved" time off and that MOREStephen Gandel, senior editor - Apr 2, 2014 3:18 PM ET
The Fed approves the capital plans of 25 others. Goldman and Bank of America were forced to resubmit.
FORTUNE -- The Federal Reserve approved the capital plans of 25 of the nation's 30 largest banks on Wednesday as part of the final leg of its annual required stress tests.
Citigroup was the most notable bank among those that had their capital plans rejected. The Fed said it was troubled by Citi's inability to MOREStephen Gandel, senior editor - Mar 26, 2014 4:00 PM ET
That figure is smaller than what similar studies have found. There's also been a big jump in the shadow banking system, which, if you're worried about large banks, is good news.
FORTUNE -- The Federal Reserve finally got around to stating the obvious.
On Tuesday, the New York Fed, through a series of research papers, said the nation's largest banks borrow more cheaply, and take on more risks, than smaller banks and MOREStephen Gandel, senior editor - Mar 26, 2014 10:56 AM ET
A civil complaint filed in federal court in Missouri Thursday accuses JPMorgan of allowing the Millennium Bank Ponzi scheme to operate right under its nose.
FORTUNE -- The ghosts of financial crises past continue to haunt JPMorgan.
Just months after the bank settled with federal authorities over allegations that it turned a blind eye to Ponzi-schemer Bernie Madoff, the bank is facing fresh accusations that it failed to do anything about yet MOREChristopher Matthews - Mar 14, 2014 2:01 PM ET
Despite recovery, key lending measure is still down.
FORTUNE -- Not only have the nation's banks fully recovered from the financial crisis, their bottom lines are now healthier than ever.
On Wednesday, the Federal Deposit Insurance Corp. said profits at U.S. lenders hit an all-time high in 2013. For the year, the nation's banks made a collective $155 billion. That's up 10% from a year ago, and it was more than the MOREStephen Gandel, senior editor - Feb 26, 2014 10:21 AM ET
|GM's recalled Cobalt was a failure from the start|
|Michaels hack hit 3 million|
|Walmart offers cheaper money wire service|
|Americans have fallen in love with real estate once again|
|Why you should pay off your car loan ASAP|