Fortunately, Dick Bove's predictions are wrong about as often as they're right because the Rochdale analyst told his firm's clients that banks are likely to see another 150,000 layoffs in 2012 due to government regulations and a weak economy. That's not even counting this year's bank layoffs that range somewhere between 200,000 and 230,000. As far as grim predictions go, this one is right up there with the Mayan Calendar's prediction that the world as we know it will end in December 2012. In fact, that's when the Mayan calendar simply runs out of days. Others have interpreted that as meaning the world was ending, and not simply the Mayan calendar.
CNBC.com reports that Bove, vice president of equity research at Rochdale, told clients, "What no one has figured out as yet is that the big government cannon is harming more than the big banks… Small banks are hurt far more than the large ones due to the various restrictions on rate and balance sheet size plus government price fixing."
Bove pointed to low interest rates, higher capital requirements, price fixing on debit and credit cards, the elimination of proprietary trading and other investment vehicles and a higher cost structure as impediments for the banking industry.
He took particular aim at President Obama for wanting to put Wall Streeters behind bars and New York Governor Andrew Cuomo for “seeking to increase taxes on those people he spent so many years trying to put in jail when he was the state’s attorney general."
Singles out Bank of America
Bove has been outspoken in the past. Early last month when Bank of America confirmed it had begun layoffs as part of a plan previously announced by CEO Brian Moynihan to eliminate 30,000 jobs at the bank over the next few years, he asserted that the firm should be cutting business lines to achieve savings. Bove, whose firm is based in Stamford, Conn., said then that infrastructure and support systems "always get cut back when you're reducing the size of an entity in trouble, but that's not where they're going to get the big savings in people. It's getting rid of the whole foreclosure group, selling business lines. That's how you really cut people effectively, not taking 10 percent of the people who work in the mailroom."
Also, he said, he hopes the Bank of America cuts are not related to risk management because "their risk management sucks; their loan losses should tell you that."