U. S. Banks: here we go again.

Beside the slowing in manufacturing, the US faces a serious deterioration in the health of its biggest banks. Wells Fargo's mortgage initiation dropped from 112B to 80B in the latest quarter. Bank of America has suffered a $1B drop in its consumer (mortgage) credits and had to lay off 9,000 workers.

Net Interest Margins (the difference between what the bank is charged and what the bank charges for lending) has gone from 4.1% to 3.3%. I know this does not sound all that much, but even the 4.1% margin was near cost of overhead.

Worst of all, the six biggest banks have litigation costs of $100B and growing. Expect bailout talks to begin.