Big bank earnings ‘are not good numbers’ for the economy, chief strategist warns

Reacting to a mixed bag of big bank earnings reports and futures sliding down slightly, Odeon Capital Group chief financial strategist Dick Bove argued people are paying attention to the wrong numbers on "Mornings with Maria" Friday, claiming loan loss provisions and common equity are "not good" and "getting slammed."

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DICK BOVE: It doesn't [get better] from the perspective of the banks. And again, the loan loss provision is an estimate that the bank makes of what it expects to see in the economy over the next few quarters, possibly even the next year or so. And when the loan loss provision goes from a massive, if you will, return of money to a massive cut in money, then you know that the banks believe that things are exactly what Jamie Dimon said in the last few comments that he's made, that they don't see good things happening.

Now, what's happened to the earnings is loans have been very strong, but they're not going to continue to be very strong if, in fact, the economy slows down. Margins have been very high and they'll stay high because interest rates are not coming down. The cost of running the banks have gone up somewhat. Pretax income is down across the board year-over-year, even though it's better than estimated, it doesn't matter. Pretax income is down, and non-interest income is getting slammed. Whether it's investment banking or whether it's mortgage, it's mostly doing extraordinarily poorly. So those are not good numbers.

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