If you look hard enough, you can just about find evidence of the US economy moving in the right direction.
Figures released yesterday highlighted that US banks re-possessed 17 per cent fewer homes in 2012 than in 2011. Meantime, a report from the US Commerce Department showed that housing stats rose by 12.1 per cent in December year-on-year to hit their highest monthly level since June 2008.
The slow rebound in US house prices provides further evidence of possible green shoots of recovery. The huge tide of negative equity has been a disaster for the US economy. Almost 11m US homes, or about 22 per cent of all residential properties with a mortgage were in negative equity at the end of the third quarter. The recent slight rise in US house prices meant that around 100,000 mortgage customers slipped back into positive equity in the quarter running up to Christmas with scope for a further 1.8m US homeowners estimated to have some equity in their homes during 2012.
From the evidence of the first banks to post annual results as the reporting season kicked off this week, US banks are already coining it in.
The largest US bank, JPMorgan Chase reported its highest ever annual profit after tax, $21.3bn, up 12 per cent for the year.
The country’s fourth-largest lender, Wells Fargo also hit a record high net profit: $18.9bn, up 19 per cent from 2011.
Hot on its heels, the fourth-largest lender, US Bank, posted a record full year profit of $5.6bn, up 16 per cent year-on-year.
Stand by, perhaps in a year or two, for commentators and politicians to express moral indignation at excessive bank profits if and when the US economy really does start to recover.
US unemployment remains stubbornly high at almost 8 per cent, but just a 1 per cent fall will feed through into a further sharp rise in US bank profits. At JPMorgan, 2012 earnings would have been even higher but for a $6bn trading loss at the bank last year.
Chase “punished” CEO Jamie Dimon by slashing his 2012 pay package to a mere $11.5m from $23.1m the previous year. He should however be able to jog along on his reduced pay package. At the last count, he owned bank shares worth $263m.