Just while we are talking about allocation of capital, here are the data on current earnings;

If you actually examined the Banks margins from 1991 to the current, or peak of their share prices, it was very easy to see the massive deterioration in their margins. Compare the deterioration in margins to their “increased” earnings, and it was only one step to the question…how?

The answer was of course leverage. The rest would have been fairly obvious.

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