Banking Industry Has Not Run Low On Surprises

By Douglas A. McIntyre Updated Apr 27, 5:17PM EDT · Published Feb 13, 9:46AM EST

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It is always heartening to hear the British describe a disaster. Their cool makes it seem as though almost nothing had happened.

In the UK, shares of Lloyds shed a third of their value after it said the financial firm, HBOS which it purchased last year, would lose 12.3 billion before taxes in 2008.

The head of Llyods commented “Whilst we recognize that the short term outlook is more challenging, Lloyds Banking Group has the largest U.K. financial services franchise, with excellent long-term earnings potential.”

It sounded as if the bank had made a record profit.

But the big loss did happen. And, it happened after every government in every major nation in the world has gone over every big bank’s balance sheet. Huge problems are obviously still floating around undetected.

The Lloyds news is a warning signal that major US banks may not have booked all of the losses that the market expects. It is also shows that it is impossible to measure the real sum that the federal government will have to put into the banking system to make it solvent again.

A brief look at estimates from the IMF to US bank analysts to pessimists like Meredith Whitney and Nouriel Roubini shows that the spread of expectations about bank earnings, losses, and viability is incredible. So little is known about the future of the financial system that trying to get to the bottom of the trouble it is like looking for a white rabbit in a blizzard.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.