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JEREMY HOBSON: Now let’s get to the banks. Bank of America said this morning mortgage problems led it to a $1.2 billion loss last quarter, bringing an end to a week of bank earnings that have been all over the place.

Chris Low is chief economist at FTN Financial. He’s with us live. Good morning.

CHRIS LOW: Good morning.

HOBSON: So looking at these earnings, I don’t really know what to make of them. We’ve got Bank of America reports a loss, Goldman Sachs had a profit but a much smaller one than before, Wells Fargo — a record profit. What’s the message?

LOW: Look, it boils down to two things I guess. One of them is that banks are scrambling to confirm with Dodd-Frank, that’s the financial reform that was done by Congress last year. Those banks that were not really banks before — like Goldman — essentially a trading shop, are really struggling under this one because proprietary trading is no longer allowed.

HOBSON: Trading that banks do themselves with their own money?

LOW: That’s exactly right. Now, a bank like Wells Fargo which is essentially — they do have a trading operation but it’s owned by half of customers — Morgan Stanley also — they did very well, because customer trading is fine. As for Bank of America, well, Bank of America this was luckily for them a one time expense. It reflects their purchase of Countrywide, and that was just flat out mortgage fraud.

HOBSON: Alright, Chris — give me the 10 second answer here — why do we care if we’re not invested in the banks.

LOW: Well, unfortunately the reason we really care is Dodd-Frank is going to take away a lot of the ways that banks were making money in the past, which means they’re going to be finding all kinds of ways to stick us with new fees over the next couple of years.

HOBSON: Oh great. Something to look forward to in 2011, Chris Low — chief economist at FTN Financial. Thanks so much.

LOW: You’re welcome.