t has been five years since the banking industry experienced a gigantic crisis stemming from the housing market, derivatives, and an overall lack of risk control. In the aftermath, the U.S. taxpayer footed the $800 billion bill for TARP as well as a few other extreme measures in order to keep these large banks operating. Due to their massive size and equally large risk appetite, the U.S. government was forced to shoulder their burden in order to prevent further cataclysmic events from unfolding. None of this is news.
What may be surprising to some however is the fact that these large institutions have merely gotten larger since then. Those monstrosities deemed too big to fail and supposedly kept in check through that very confusing Dodd-Frank Act, have only grown. In fact, total assets of the four biggest U.S. banks; JPMorgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC) , Wells Fargo & Co (NYSE:WFC) , and Citigroup Inc (NYSE:C) have grown from $6.4 trillion to $7.8 trillion and rather than comprising 43% of GDP, they now account for 47% of it. What’s more, if you include the next two largest banks, Goldman Sachs Group Inc (NYSE:GS) and Morgan Stanley (NYSE:MS), the totals become $9.6 trillion and 58% of GDP. It’s worth noting that despite these huge numbers, American banks still aren’t the largest in the World.
Yarra Square Partners returned 19.5% net in 2020, outperforming its benchmark, the S&P 500, which returned 18.4% throughout the year. According to a copy of the firm's fourth-quarter and full-year letter to investors, which ValueWalk has been able to review, 2020 was a year of two halves for the investment manager. Q1 2021 hedge fund Read More