It was never realistic to expect the problem to go away in 3-5 years. It took years to create the problem (and the excess) and will take many more years to sort it out. Jamie Dimon is blaming everyone else for the problem but we all know that his complaints are more about
his own wallet and typical corporate CYA. Between the radical austerity plans by the GOP and the public's disgust with the banking industry, there should not be much interest in helping the banks during this rocky period. The QE2 program is about helping the banks but that won't last forever. Hopefully, at least.
The banks created this problem so let them find a way out of it, on their own.
Certainly the market’s not thrilled about the deteriorating mortgage picture. JPMorgan’s shares closed at $44.89 Friday, down 3.5 percent from when earnings were announced.
The story’s no better at Bank of America — actually a bit worse. The country’s biggest bank took $3.8 billion in charges related to mortgages.
BofA took a $1.4 billion dollar hit to revenue, about $1 billion of which came from underestimating the number of bad mortgages it would have to buy back from various parties. About half of that came from bigger-than-expected demands from Fannie Mae and Freddie Mac to buy back mortgages. The other half covered part of BofA’s buyback settlement with monoline insurer Assured Guaranty.
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