SOURCE: The Bedford Report

The Bedford Report

December 21, 2010 11:25 ET

Job Creation Is Vital to the Banking Sector

The Bedford Report Provides Analyst Research on KeyCorp & Bank of America

NEW YORK, NY--(Marketwire - December 21, 2010) - Stocks have been making an impressive run this December as investors have been encouraged by positive economic data on retail sales, consumer confidence and factory production. Then last week the Dow Jones Industrial Average hit a 2010 high with momentum being driven by a freshly signed tax "cut" package. Republicans, as well as President Obama, claim that extending Bush era tax cuts will boost the economy and stimulate jobs. Paul Zemsky, the head of asset allocation at ING Investment Management, argues that "The U.S. economy is all about jobs and anything that leads folks to believe that there's a better job market will be good for equities." This is especially true for Banks. When the Obama Administration administered the much publicized stress tests on the banking sector, banks were tested for their ability to withstand the pressure stemming from a hefty 10% unemployment rate. High unemployment has led to a wave of foreclosures, a series of delinquencies in consumer lending and has compressed most banks' bottom lines. Surely any signal that that the unemployment rate will fall is welcome by the banks. The Bedford Report examines the outlook for companies in the Major Banking Industry and provides research reports on KeyCorp (NYSE: KEY) and Bank of America Corporation (NYSE: BAC). Access to the full company reports can be found at:

There is much debate whether or not extending Bush era tax cuts will actually stimulate job growth. Many economists and democrats point to the simple fact these tax cuts to the rich haven't done much to create jobs since they were instated in 2003. Sen. Sherrod Brown (D-Ohio) argues "there is no real history illustrating that these tax cuts for the rich result in jobs. It's extending unemployment benefits that creates economic activity that creates jobs, not giving a millionaire an extra ten or twenty or $30,000 in tax cuts that they likely won't spend."

Bank of America's CEO, Brian Moynihan, believes that extending tax cuts will, in fact, create jobs. Moynihan claims tax cuts "can shift attitudes among business. At the end of the day, that's probably what is most important, is to have the attitude that yes I will hire more, yes I will do more, because I think I'm being supported."

The Bedford Report releases regular market updates on the Major Banking Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous analyst reports and industry newsletters.

Already banks have begun to post improving credit quality. More thorough and cautious credit checks have led to fewer delinquent loans and greater financial stability. As such, Banks are setting aside less money to cover bad loans, and some are seeing loan losses recede. While credit quality improved, the high unemployment rate has been damaging to banks' long term loan growth. Improving employment numbers will hopefully, in time, lead to a boost in loan growth across the banking sector.

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