Recent Losses at Financial Companies Cancel Out Years of Unprecedented Growth
- Jun 16, 2008
New York–From 2004 to mid-2007, Wall Street saw a period of historic wealth; but almost half of the record profits banks reaped last year are gone, according to the New York Times.Seven of the largest U.S. financial companies made a total of $254 billion in profits from 2004 to mid-2007. However, Bank of America, Citigroup, Lehman Brothers, JPMorgan Chase, Merrill Lynch, Goldman Sachs and Morgan Stanley have reduced their assets’ value by $107.2 billion since July 2007.Banks have lost $380 billion globally, due mostly to mortgage investment losses, the Times said.In addition, several large banks are expected to announce negative news this week when they report quarterly results.As banks such as Citigroup post additional writedowns, they are essentially eating up their huge profits from the past few years, according to the Times. Citigroup reduced its mortgage and other loan investments by $37.3 billion, which is about half of its profit from 2004 to mid-2007.