The financial sector has been through the ringer, but has also been bailed out with business loans, so their numbers shouldn’t be as bad as they have been in recent years. Banks get a large majority of their profits from fees and interest, so they make quite a bit even though they are losing money on other ventures. When speaking of banks, you have to mention the mortgage crisis that recently occurred. There are many that believe the mortgage crisis was created by banks, while others think it was the government. While there are several different schools of thought regarding this issue, it can be said that all of us were guilty in some manner. Those who bought homes that were simply too expensive were to blame as were the mortgage companies that allowed these purchases to go through. A couple making $70,000 a year simply cannot afford a home that costs $500,000. Many were duped into believing that when their adjustable rate mortgages ballooned, they could simply sell the house for a profit. The government maybe should have regulated the mortgage industry better to prevent this from happening. Either way, banks lost billions and require a bailout from the government.

JPMorgan Chase is a bank that had some exposure to all of this mess, but has been doing very well this year. They just posted a profit of over $5 billion. With the huge amount of bad mortgages, that is hard to fathom, but there is a lot of money to be made in banking. They are continuing their old ways and have continued to well even against the odds. There first quarter profits were a bit higher, but this quarter’s profits are in line with those earnings. Overall, they are stable, but may have to find other ways to make money as fees are being regulated tin the customer’s favor and their losse4s keep[ mounting. Many are looking to smaller banks and credit unions and are jumping ship from large banks like Chase. The investment side of the company is also doing well, but things are not getting better on the markets, so they may face some obstacles in the upcoming months. Because JPMorgan is so diversified, they can often offset many of their losses with gains in other areas, but may are concerned that they will not be able to grow due to all of the obstacles they will face in the coming months.

When a financial company as large as JPMorgan is doing this well, it is indicative of the entire industry, which is doing well overall. That is both a good and bad sign. It is good because even though fees have been reduced, they can still make money and bad because many are clearly making mistakes that are resulting in these high fees. Every time a client overdrafts, they have to pay, so hopefully all this revenue isn’t people screwing up and going under. That would be horrible as the financial institution needs its clients to spend and save to make money.