And for good reason. The Obama administration is trying to negotiate a $20 billion slush fund from the banks to fund potential Democrat voters in 2012.
Banks are one of those rare businesses which can’t invest as they see fit. Instead, banks are hyper-regulated and they must invest in money-losing areas such as crime-ridden minority neighborhoods in inner cities.
Healthy banks under President Bush were forced in September 2008 to take bailout money and directions from politicians.
Many Americans see bankers as pariahs and can’t understand why so few industry executives have faced prosecution for the excesses of the mortgage-bubble era.
But if the bankers have avoided jail, their stocks haven’t: After bouncing since 2009, bank shares are the biggest losers of any major industry sector this year, even as the market overall has rallied.
The KBW index of 24 major U.S. bank stocks is down nearly 5% year to date, while the Standard & Poor’s 500 index is up 5.8%.
The declines have been most severe among the largest banks. Shares of Bank of America Corp. are down 12% in 2011. Citigroup’s stock is off 13%, Wells Fargo & Co. has fallen 9% and Goldman Sachs Group Inc. has plunged 17%.
JPMorgan Chase & Co. has the best performance of the lot, flat for the year.
The megabanks “have the tobacco-company tinge,” said David Ellison, a veteran bank-stock investor at money manager Friedman Billings Ramsey in Boston.