NEW YORK ( TheStreet) -- In normal times, the biggest banks trade at around twice their book value.
This makes sense. One would assume that a bank could make money on assets. What else are they there?
But these are not normal times. Since the collapse of 2008, three of the four biggest banks have been consistently selling at a discount to book, often a substantial discount.
These institutions had bad assets -- loans they could never collect on -- so the price-to-book marker, for me, is a measure of just how far we've come in working out the rot from that era. But there's more to this than just asset value. There remains an assumption the big banks are crooked. Events like the Libor scandal, which Suttmeier wrote about last year, and the "London Whale" trade, for which JPMorgan CEO Jamie Dimon apologized in a letter to shareholders, merely confirm what most people assume. It's what I assume, too. I learned recently I needed a commercial business checking account for my LLC, which I decided to form after 30 years of freelancing because my wife is doing well and I don't want people going after her assets if they sue me. (So far, knock on wood, no one has.) But I found myself yelling at her that I would not, no, never put my money into one of these banks, because they had "gone to the dog track" with depositors' funds, and I eventually found a local bank instead.