Um, Is the Apocalypse Coming?

OK, two years ago, or even a year ago, would anyone have seen this coming? On the same day that Bank of America announces it wll cut 3,000 jobs (following an announcement from Wachovia that it would cut 200 positions), US Airways reports a third-quarter profit of $177 million! A year ago, US Airways lost $78 mil in the same time period. (more)

 

What's going on? Global warming? I mean, we're happy and all for US Airways, and we hope this means they'll spring for some new seats that don't poke us in the rear with worn-out springs, but since when does an airline outperform a bank?

To be fair, it's not like BofA is losing money. Its investment bank made $100 mil in the Q3 (it made $1.4 BILLION last year) and the bank overall made $3.7 billion in the third quarter. That is some serious coin. But CEO Ken Lewis has been determined to render BofA a player in the investment banking market (which is largely in New York), and these results hurt. We'll be watching as he decides whether to keep fishing or cut bait. This is what he told the New York Times: “I’ve had all the fun I can stand in investment banking." It certainly isn't fun times for about 3,000 soon-to-be-ex BofA employees.

In the meantime, it looks like Charlotte will lose about 200 combined jobs from BofA and Wachovia, and in the well-paid investment banking field. And US Airways will add 350 pilots in unspecified locations. If anyone out there knows anything else, or is willing to share what it's like right now on the inside at the local big banks, feel free to leave a comment.

Oh, and by the way, there's a reason we linked above to the New York Times stories about these subjects. By now, you've likely read the the local paper's version of events. Now read the Times. We bet you'll notice a difference. 

UPDATE: The Wall Street Journal has an interesting story today on BofA . It requires a subscription to read, but here are the first three paragraphs:

CHARLOTTE, N.C. — Bank of America Corp., in a reversal of a decade-long effort to reach the top tier of Wall Street, is forcing out the top executive at its investment-banking unit and launching a strategic review that is likely to shrink parts of the operation.

The moves include eliminating about 3,000 jobs, with the cuts coming largely from the company's global corporate and investment bank, which currently has about 20,000 employees. The bank said the cuts are spread throughout the unit, which includes commercial banking and treasury services in addition to capital markets and investment banking. Bank of America, known colloquially as BofA, announced the shake-up late yesterday.

The top-to-bottom assessment of the investment bank, coming less than a week after the company reported $1.45 billion in third-quarter trading losses that caused its overall profit to tumble 32%, is the strongest indication yet that the nation's largest consumer bank may face insurmountable hurdles in its quest to compete against giants such as Goldman Sachs Group Inc. and Merrill Lynch & Co. on Wall Street.

Also, if you have a subscription or know someone who does, be sure to check out the comments to this WSJ blog post about BofA. 

It's amazing the perspective one gets on our hometown banks from reading the national media. 

 

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